EXHIBIT 99.1
AGREEMENT AND PLAN OF MERGER BY AND BETWEEN
FIRST BANK OF DOTHAN, INC.
AND
COMMUNITY CAPITAL BANCSHARES, INC.
DATED
JULY 2, 2003
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
FIRST BANK OF DOTHAN, INC.
AND
COMMUNITY CAPITAL BANCSHARES, INC.
EXECUTION COPY DATED JULY 2, 2003
TABLE OF CONTENTS
Page
LIST OF EXHIBITS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV
AGREEMENT AND PLAN OF MERGER. . . . . . . . . . . . . . . . . . . . . . . .1
ARTICLE 1. TRANSACTIONS AND TERMS OF THE MERGER . . . . . . . . . . .1
1.1 Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
1.2 Time and Place of Closing. . . . . . . . . . . . . . . . . . . . .2
1.3 Effective Time. . . . . . . . . . . . . . . . . . . . . . . . . . . .2
1.4 Execution of Support Agreement. . . . . . . . . . . . . . . . . . .2
ARTICLE 2. TERMS OF MERGER . . . . . . . . . . . . . . . . . . . . . . .2
2.1 Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
2.2 Articles of Incorporation. . . . . . . . . . . . . . . . . . . . . .2
2.3 Bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
2.4 Directors and Officers . . . . . . . . . . . . . . . . . . . . . . .3
2.5 Business of Surviving Bank. . . . . . . . . . . . . . . . . . . . .3
2.6 Assumption of Rights . . . . . . . . . . . . . . . . . . . . . . . .3
2.7 Assumption of Liabilities. . . . . . . . . . . . . . . . . . . . . .3
ARTICLE 3. MANNER OF CONVERTING SHARES. . . . . . . . . . . . . . . . .3
3.1 Conversion of Shares . . . . . . . . . . . . . . . . . . . . . . . .3
3.2 Allocation Procedures . . . . . . . . . . . . . . . . . . . . . . . .4
3.3 Anti-Dilution Provisions. . . . . . . . . . . . . . . . . . . . . . .5
3.4 Shares Held by First Bank or Community Capital. . . . . . . . .5
3.5 Dissenting Shareholders . . . . . . . . . . . . . . . . . . . . . . .5
3.6 Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . .6
3.7 Election of Consideration. . . . . . . . . . . . . . . . . . . . . .6
ARTICLE 4. EXCHANGE OF SHARES. . . . . . . . . . . . . . . . . . . . . .6
4.1 Exchange Procedures . . . . . . . . . . . . . . . . . . . . . . . . .6
4.2 Rights of Former Shareholders of First Bank. . . . . . . . . . .7
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF FIRST BANK . . . . . . .8
5.1 Organization, Standing, and Power . . . . . . . . . . . . . . . . .8
5.2 Authority; No Breach By Agreement. . . . . . . . . . . . . . . . .8
5.3 Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
5.4 First Bank Subsidiaries. . . . . . . . . . . . . . . . . . . . . . .9
5.5 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
5.6 Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . .9
5.7 Absence of Undisclosed Liabilities. . . . . . . . . . . . . . . . 10
5.8 Absence of Certain Changes or Events. . . . . . . . . . . . . . 10
5.9 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.10 Allowance for Possible Loan Losses . . . . . . . . . . . . . . . 11
5.11 Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.12 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . 12
5.13 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . 12
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5.14 Labor Relations . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.15 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . 13
5.16 Material Contracts. . . . . . . . . . . . . . . . . . . . . . . . . 15
5.17 Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.18 Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.19 Statements True and Correct . . . . . . . . . . . . . . . . . . . 16
5.20 Accounting, Tax and Regulatory Matters . . . . . . . . . . . . . 16
5.21 Charter Provisions. . . . . . . . . . . . . . . . . . . . . . . . . 17
5.22 Derivatives Contracts . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE 6. REPRESENTATIONS AND WARRANTIES OF COMMUNITY CAPITAL. . . 17
6.1 Organization, Standing, and Power . . . . . . . . . . . . . . . . 17
6.2 Authority; No Breach By Agreement. . . . . . . . . . . . . . . . 17
6.3 Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.4 Community Capital Subsidiaries . . . . . . . . . . . . . . . . . . 19
6.5 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.6 Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . 19
6.7 Absence of Undisclosed Liabilities. . . . . . . . . . . . . . . . 20
6.8 Absence of Certain Changes or Events. . . . . . . . . . . . . . 20
6.9 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.10 Allowance for Possible Loan Losses . . . . . . . . . . . . . . . 21
6.11 Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.12 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . 22
6.13 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . 22
6.14 Labor Relations . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.15 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . 23
6.16 Material Contracts. . . . . . . . . . . . . . . . . . . . . . . . . 24
6.17 Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.18 Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.19 Statements True and Correct . . . . . . . . . . . . . . . . . . . 25
6.20 Accounting, Tax and Regulatory Matters . . . . . . . . . . . . . 25
6.21 Charter Provisions. . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE 7. CONDUCT OF BUSINESS PENDING CONSUMMATION. . . . . . . . . 26
7.1 Affirmative Covenants of First Bank. . . . . . . . . . . . . . . 26
7.2 Negative Covenants of First Bank . . . . . . . . . . . . . . . . 26
7.3 Affirmative Covenants of Community Capital . . . . . . . . . . . 28
7.4 Adverse Changes in Condition. . . . . . . . . . . . . . . . . . . 28
7.5 Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE 8. ADDITIONAL AGREEMENTS. . . . . . . . . . . . . . . . . . . . 28
8.1 Shareholder Approval. . . . . . . . . . . . . . . . . . . . . . . . 28
8.2 Applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
8.3 Filings with State Offices. . . . . . . . . . . . . . . . . . . . 29
8.4 Agreement as to Efforts to Consummate . . . . . . . . . . . . . 29
8.5 Investigation and Confidentiality. . . . . . . . . . . . . . . . . 29
8.6 Press Releases . . . . . . . . . . . . . . . . . . . . . . . 30
8.7 Acquisition Proposals . . . . . . . . . . . . . . . . . . . . . . . 30
8.8 Tax Treatment . . . . . . . . . . . . . . . . . . . . . . . 31
8.9 Certain Modifications . . . . . . . . . . . . . . . . . . . . . . . 31
8.10 Employee Benefits and Contracts . . . . . . . . . . . . . . . . . 31
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8.11 Security Law Matters . . . . . . . . . . . . . . . . . . . . . . . 31
8.12 Registration Statement. . . . . . . . . . . . . . . . . . . . . . . 32
8.13 Nasdaq SmallCap Market Listing. . . . . . . . . . . . . . . . . . 32
ARTICLE 9. CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE. . . . 33
9.1 Conditions to Obligations of Each Party . . . . . . . . . . . . 33
9.2 Conditions to Obligations of Community Capital. . . . . . . . . 34
9.3 Conditions to Obligations of First Bank . . . . . . . . . . . . 35
ARTICLE 10. TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . . 36
10.1 Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
10.2 Effect of Termination. . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE 11. SURVIVAL; DIRECTORS' AND OFFICERS' PROTECTION. . . . . . 37
11.1 Survival of Representations and Warranties . . . . . . . . . . . 37
11.2 Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE 12. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . 38
12.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
12.2 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
12.3 Brokers and Finders. . . . . . . . . . . . . . . . . . . . . . . . 45
12.4 Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . 45
12.5 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
12.6 Waivers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
12.7 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
12.8 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
12.9 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
12.10 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
12.11 Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
12.12 Enforcement of Agreement . . . . . . . . . . . . . . . . . . . . . 47
12.13 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
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LIST OF EXHIBITS
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EXHIBIT NUMBER DESCRIPTION
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1. Form of Support Agreement (Preamble)
2. Form of Claims/Indemnification Letter
(Section 9.2(d)).
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AGREEMENT AND PLAN OF MERGER
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THIS AGREEMENT AND PLAN OF MERGER (the "Agreement") is made and entered
into as of the 2nd day of July, 2003, by COMMUNITY CAPITAL BANCSHARES, INC.
("Community Capital"), a Georgia corporation and FIRST BANK OF DOTHAN, INC.
("First Bank"), an Alabama banking corporation.
PREAMBLE
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The respective Boards of Directors of First Bank and Community Capital are
of the opinion that the transactions described herein are in the best interests
of the Parties to this Agreement and their respective shareholders. This
Agreement provides for the acquisition of First Bank by Community Capital,
pursuant to the merger of First Bank with and into Interim. Interim will be an
Alabama Corporation and wholly owned subsidiary of Community Capital that
Community Capital will form prior to the Closing date for the purpose of
effecting the merger in accordance with this Agreement. Following the merger,
First Bank will become a wholly owned subsidiary of Community Capital. At the
effective time of the merger, the outstanding shares of the common stock of
First Bank shall be converted into the right to receive cash and shares of the
common stock of Community Capital (except as provided herein). As a result,
some shareholders of First Bank shall become shareholders of Community Capital.
The transactions described in this Agreement are subject to (a) approval of the
shareholders of First Bank, (b) approval of the Alabama State Banking
Department, (c) approval of the Georgia Department of Banking and Finance, (d)
approval of the Board of Governors of the Federal Reserve, and (e) satisfaction
of certain other conditions described in this Agreement. It is the intention of
the Parties to this Agreement that the merger, for federal income tax purposes,
shall qualify as a "reorganization" within the meaning of Section 368(a) of the
Internal Revenue Code.
As a condition and inducement to Community Capital's willingness to
consummate the transactions contemplated by this Agreement, each member of the
Board of Directors of First Bank will execute and deliver to Community Capital
an agreement (a "Support Agreement") within ten (10) calendar days of the date
of this Agreement, in substantially the form of Exhibit 1 to this Agreement.
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Certain terms used in this Agreement are defined in Section 12.1 hereof.
NOW, THEREFORE, in consideration of the above and the mutual warranties,
representations, covenants, and agreements set forth herein, the Parties agree
as follows:
ARTICLE 1.
TRANSACTIONS AND TERMS OF THE MERGER
------------------------------------
1.1 MERGER. Subject to the terms and conditions of this Agreement, at
------
the Effective Time, First Bank will merge with and into Interim in accordance
with the provisions of Section 5-7A-1 of the ABC and in accordance with the
Alabama Interstate and International Banking Act of 1995. Interim shall be the
Surviving Bank resulting from the Merger and shall continue to be governed by
the Laws of the State of Alabama. The Merger shall be consummated pursuant to
the terms of this Agreement, which has been approved and adopted by the
respective Boards of Directors of First Bank and Community Capital, as set forth
herein.
1.2 TIME AND PLACE OF CLOSING. The closing of the transactions
-----------------------------
contemplated hereby (the "Closing") will take place at 10:00 a.m. Central Time
on the date that the Effective Time occurs (or the immediately preceding day if
the Effective Time is earlier than 10:00 a.m. Central Time), or at such other
time as the Parties, acting through their authorized officers, may mutually
agree. The Closing shall be held at such location as may be mutually agreed
upon by the Parties.
1.3 EFFECTIVE TIME. The Merger and other transactions contemplated by
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this Agreement shall become effective on the date and at the time the
Certificate of Merger reflecting the Merger shall become effective with the
Secretary of State of the State of Alabama (the "Effective Time"). Subject to
the terms and conditions hereof, unless otherwise mutually agreed upon in
writing by the authorized officers of each Party, the Parties shall use their
reasonable efforts to cause the Effective Time to occur on or before the fifth
business day following the last to occur of (i) the effective date (including
expiration of any applicable waiting period) of the last required Consent of any
Regulatory Authority having authority over and approving or exempting the
Merger, and (ii) the earliest date on which the shareholders of First Bank have
approved this Agreement to the extent such approval is required by applicable
Law; provided, however, that the date of the Effective Time shall not extend
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past the termination date set forth in Section 10.1(e) hereof.
1.4 EXECUTION OF SUPPORT AGREEMENT. Within ten (10) calendar days of
--------------------------------
the execution of this Agreement and as a condition hereto, each member of the
Board of Directors of First Bank will execute and deliver to Community Capital a
Support Agreement, in substantially the form of Exhibit 1 to this Agreement.
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ARTICLE 2.
TERMS OF MERGER
---------------
2.1 NAME. The name of the Surviving Bank shall be "First Bank of
----
Dothan, Inc." or any other legally permissible name as Community Capital may in
its sole discretion elect.
2.2 ARTICLES OF INCORPORATION. The Articles of Incorporation of First
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Bank in effect immediately prior to the Effective Time shall be the Articles of
Incorporation of the Surviving Bank until duly amended or repealed.
2.3 BYLAWS. The Bylaws of First Bank in effect immediately prior to
------
the Effective Time shall be the Bylaws of the Surviving Bank until duly amended
or repealed.
2
2.4 DIRECTORS AND OFFICERS.
------------------------
(a) The directors of the Surviving Bank shall be the directors of
First Bank immediately prior to the Effective Time. Such persons shall serve as
the directors of the Surviving Bank from and after the Effective Time in
accordance with the Bylaws of the Surviving Bank.
(b) The executive officers of the Surviving Bank shall be (i) the
executive officers of First Bank immediately prior to the Effective Time and
(ii) such additional persons as may thereafter be elected. Such persons shall
serve as the executive officers of the Surviving Bank from and after the
Effective Time in accordance with the Bylaws of the Surviving Bank.
2.5 BUSINESS OF SURVIVING BANK. The business of the Surviving Bank
-----------------------------
from and after the Effective Time shall continue to be that of a commercial bank
organized under the laws of the State of Alabama. The business of the Surviving
Bank shall be conducted from its main office located in Dothan, Alabama.
2.6 ASSUMPTION OF RIGHTS. At the Effective Time, the separate
----------------------
existence and corporate organization of First Bank shall be merged into and
continued in the Surviving Bank. All rights, franchises, and interests of both
Interim and First Bank in and to every type of property (real, personal, and
mixed), and all choses in action of both Interim and First Bank shall be
transferred to and vested in the Surviving Bank without any deed or other
transfer. The Surviving Bank, upon consummation of the Merger and without any
order or other action on the part of any court or otherwise, shall hold and
enjoy all rights of property, franchises, and interests, including appointments,
designations, and nominations, and all other rights and interests as trustee,
executor, administrator, registrar of stocks and bonds, guardian of estates,
assignee, receiver, and committee of estates of competent persons, and in every
other fiduciary capacity, in the same manner and to the same extent as such
rights, franchises, and interests were held or enjoyed by either Interim or
First Bank.
2.7 ASSUMPTION OF LIABILITIES. All liabilities and obligations of both
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Interim and First Bank of every kind and description shall be assumed by the
Surviving Bank, and the Surviving Bank shall be bound thereby in the same manner
and to the same extent that Interim and First Bank were so bound at the
Effective Time.
ARTICLE 3.
MANNER OF CONVERTING SHARES
---------------------------
3.1 CONVERSION OF SHARES. Subject to the provisions of this Article 3,
--------------------
at the Effective Time, by virtue of the Merger and without any action on the
part of the holders thereof, the shares of each of the Parties shall be
converted as follows:
(a) Each share of Community Capital Common Stock issued and
outstanding immediately prior to the Effective Time shall remain issued and
outstanding from and after the Effective Time.
3
(b) Each share of Interim Common Stock issued and outstanding
immediately prior to the Effective Time shall remain issued and outstanding from
and after the Effective Time.
(c) Subject to the allocation provisions of Section 3.2, each share of
First Bank Common Stock (excluding shares held by either First Bank or any
Community Capital Company, in each case other than in a fiduciary capacity or as
a result of debts previously contracted, and excluding shares held by
shareholders who perfect their statutory dissenters' rights as provided in
Section 3.5) issued and outstanding immediately prior to the Effective Time
shall cease to be outstanding and shall be converted into and exchanged for the
right to receive either $18.72 in cash (the "Cash Consideration") or 1.44 shares
(the "Stock Consideration") of Community Capital Common Stock (the "Exchange
Ratio"), subject to adjustment as provided in Section 3.1(d); provided that the
total Cash Consideration (the "Allocable Cash") shall be $1,872,000 less $18.72
times the number of shares held by shareholders who have perfected their
statutory dissenters' rights as provided in Section 3.5 (subject to a maximum
reduction of $234,000).
(d) If the Market Value (as defined below) of Community Capital
Common Stock is below $13.00, then the Exchange Ratio for the Stock
Consideration shall be equal to $18.72 divided by the Market Value, rounded to
the fourth decimal place, and if the Market Value of Community Capital Common
Stock is above $14.50, then the Exchange Ratio for the Stock Consideration shall
equal $20.88 divided by the Market Value, rounded to the fourth decimal place.
For purposes of this Section 3.1(d). "Market Value" shall be the average of the
closing prices of the Community Capital Common Stock as quoted on the automatic
quotation system of National Securities Dealers Association, Inc. on each of the
twenty trading days ending on the trading day five trading days immediately
preceding the Closing date.
(e) Notwithstanding the above, it is understood and agreed by the
Parties that the aggregate Cash Consideration of $1,872,000 shall be deemed to
be consideration for 100,000 shares of First Bank Common Stock and that such
consideration shall not be changed by any fluctuation in the Market Value or
Exchange Ratio.
3.2 ALLOCATION PROCEDURES. The Allocable Cash shall be allocated to
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the holders of shares of First Bank Common Stock as follows:
(a) SMALL SHAREHOLDERS. Each share of First Bank Common Stock
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held of record by a shareholder who is the record owner of less than 300 shares
of First Bank Common Stock ("Small Shareholders") shall be converted into the
right to receive the Cash Consideration; provided, however, if the amount of
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Cash Consideration payable pursuant to this Section 3.2(a) exceeds the amount of
Allocable Cash, the Allocable Cash shall first be allocated to the Small
Shareholders who hold the fewest number of shares of First Bank Common Stock.
Any shares of First Bank Common Stock held by a Small Shareholder, which are not
converted into the Cash Consideration, shall be converted into the Stock
Consideration. Any Allocable Cash remaining after the payment of Cash
Consideration to Small Shareholders pursuant to this Section 3.2(a) shall be the
"Remaining Allocable Cash."
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(b) ELECTION TO RECEIVE CASH CONSIDERATION. Each holder of First
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Bank Common Stock, other than Small Shareholders and shareholders who perfect
their statutory dissenters' rights as provided in Section 3.5 (the "Electing
Shareholders"), may elect to Cash Consideration (the "Cash Elections") in
exchange for all or a portion of the shares of First Bank Common Stock that the
shareholder holds; provided:
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(1) if the total amount of the Cash Elections exceeds the Remaining
Allocable Cash, the Remaining Allocable Cash shall be allocated in a manner
whereby all Electing Shareholders who elect to exchange any percentage of their
First Bank Common Stock for Cash Consideration will be paid no less of a
percentage of their First Bank Common Stock in Cash Consideration than any other
Electing Shareholder who elects to receive Cash Consideration, unless such
Electing Shareholder specifically elects to exchange a smaller percentage of his
or her First Bank Common Stock in Cash Consideration than such Electing
Shareholder might have otherwise been entitled to receive under this Section
3.2(b)(1).
(2) if the total amount of the Cash Elections is less than the
Remaining Allocable Cash, the Remaining Allocable Cash shall first be allocated
to those Electing Shareholders who made a Cash Election, and the amount of
Remaining Allocable Cash in excess of the total amount of Cash Elections shall
be allocated to each of the Electing Shareholders pro rata, based on the number
of shares held by each Electing Shareholder less the number of shares for which
a Cash Election was made.
(c) STOCK CONSIDERATION. Each share of First Bank Common Stock
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which is not converted into the right to receive Cash Consideration pursuant to
Sections 3.2(a) or (b) shall be converted into the right to receive Stock
Consideration.
3.3 ANTI-DILUTION PROVISIONS. In the event Community Capital changes
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the number of shares of Community Capital Common Stock issued and outstanding
prior to the Effective Time as a result of a stock split, stock dividend, or
similar recapitalization with respect to such stock and the record date therefor
(in the case of a stock dividend) or the effective date thereof (in the case of
a stock split or similar recapitalization for which a record date is not
established) is prior to the Effective Time, the Exchange Ratio shall be
proportionately adjusted.
3.4 SHARES HELD BY FIRST BANK OR COMMUNITY CAPITAL. Each of the shares
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of First Bank Common Stock held by any First Bank Company or by any Community
Capital Company, in each case other than in a fiduciary capacity or as a result
of debts previously contracted, shall be canceled and retired at the Effective
Time and no consideration shall be issued in exchange therefor.
3.5 DISSENTING SHAREHOLDERS. Any holder of shares of First Bank Common
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Stock who perfects his or her dissenters' rights in accordance with and as
contemplated by Article 13 of the ABCA, shall be entitled to receive the value
of such shares in cash as determined pursuant to such provision of law;
provided, that no such payment shall be made to any dissenting shareholder
unless and until such dissenting shareholder has complied with the applicable
provisions of the ABCA and surrendered to Community Capital the certificates or
certificates representing the shares for which payment is being made. In the
event that after the Effective
5
Time, a dissenting shareholder of First Bank fails to perfect, or effectively
withdraws or loses, his or her right to appraisal of and payment for his or her
shares, Community Capital shall issue and deliver the consideration to which
such holder of shares of First Bank Common Stock is entitled under this Article
3 (without interest) upon surrender by such holder of the certificate or
certificates representing shares of First Bank Common Stock held by him or her.
3.6 FRACTIONAL SHARES. Notwithstanding any other provision of this
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Agreement, each holder of shares of First Bank Common Stock exchanged pursuant
to the Merger who would otherwise have been entitled to receive a fraction of a
share of Community Capital Common Stock (after taking into account all
certificates delivered by such holder) shall receive, in lieu thereof, cash
(without interest) in an amount equal to such fractional part of a share of
Community Capital Common Stock multiplied by $13.00. No such holder will be
entitled to dividends, voting rights, or any other rights as a shareholder in
respect of any fractional shares.
3.7 ELECTION OF CONSIDERATION. With its proxy materials, First Bank
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shall mail or deliver to each holder of record of First Bank Common Stock
appropriate election materials. The election materials shall include an
Election Form (with instructions) which Electing Shareholders may use to elect
to receive Cash Consideration, Stock Consideration or a mixture of both.
Electing Shareholders may change their election with a written notice to First
Bank up and until five business days prior to the Closing Date, after which no
Electing Shareholder may change an election. Four days prior to the anticipated
Closing Date, First Bank shall deliver the election information to Community
Capital. An Electing Shareholder that does not deliver an election to First
Bank prior to five business days before the Closing Date will be deemed to have
elected 100% Stock Consideration and no Cash Consideration.
ARTICLE 4.
EXCHANGE OF SHARES
------------------
4.1 EXCHANGE PROCEDURES. Promptly after the Effective Time, Community
--------------------
Capital shall mail or deliver to each holder of record of a certificate or
certificates which represented shares of First Bank Common Stock immediately
prior to the Effective Time (the "Certificates") appropriate transmittal
materials and delivery instructions. The delivery instructions shall specify
that delivery shall be effected, and risk of loss and title to such Certificates
shall pass, only upon proper delivery of such Certificates to Community Capital.
The Certificate or Certificates of First Bank Common Stock so delivered shall be
duly endorsed as Community Capital may require. In the event of a transfer of
ownership of shares of First Bank Common Stock represented by Certificates that
are not registered in the transfer records of First Bank, the consideration
provided in Section 3.1 may be issued to a transferee if the Certificates
representing such shares are delivered to Community Capital, accompanied by all
documents required to evidence such transfer and by evidence satisfactory to
Community Capital that any applicable stock transfer taxes have been paid. If
any Certificate shall have been lost, stolen, mislaid or destroyed, upon receipt
of (a) an affidavit of that fact from the holder claiming such Certificate to be
lost, mislaid, stolen or destroyed, (b) such bond, security or indemnity as
Community Capital may reasonably require, and (c) any other documents necessary
To
6
evidence and effect the bona fide exchange thereof, Community Capital shall
issue to such holder the consideration into which the shares represented by such
lost, stolen, mislaid or destroyed Certificate shall have been converted.
Community Capital may establish such other reasonable and customary rules and
procedures in connection with its duties as it may deem appropriate. After the
Effective Time, each holder of shares of First Bank Common Stock (other than
shares to be canceled pursuant to Section 3.4 or as to which statutory
dissenters' rights have been perfected as provided in Section 3.5) issued and
outstanding at the Effective Time shall surrender the Certificate or
Certificates representing such shares to Community Capital and shall promptly
upon surrender thereof receive in exchange therefor the consideration provided
in Section 3.1, together with all undelivered dividends or distributions in
respect of such shares (without interest thereon) pursuant to Section 4.2.
Community Capital shall not be obligated to deliver the consideration to which
any former holder of First Bank Common Stock is entitled as a result of the
Merger until such holder surrenders such holder's Certificate or Certificates
(or such evidence of such Certificate's loss or destruction as described above)
for exchange as provided in this Section 4.1. Any other provision of this
Agreement notwithstanding, Community Capital shall not be liable to a holder of
First Bank Common Stock for any amounts paid or property delivered in good faith
to a public official pursuant to any applicable abandoned property, escheat or
similar Law.
4.2 RIGHTS OF FORMER SHAREHOLDERS OF FIRST BANK. At the Effective
------------------------------------------------
Time, the stock transfer books of First Bank shall be closed as to holders of
First Bank Common Stock immediately prior to the Effective Time and no transfer
of First Bank Common Stock by any such holder shall thereafter be made or
recognized. Until surrendered for exchange in accordance with the provisions of
Section 4.1, each Certificate theretofore representing shares of First Bank
Common Stock (other than shares to be canceled pursuant to Sections 3.4 and 3.5)
shall from and after the Effective Time represent for all purposes only the
right to receive the consideration provided in Section 3.1 in exchange therefor,
subject, however, to the Surviving Bank's obligation to pay any dividends or
make any other distributions with a record date prior to the Effective Time
which have been declared or made by First Bank in respect of such shares of
First Bank Common Stock in accordance with the terms of this Agreement and which
remain unpaid at the Effective Time. To the extent permitted by Law, former
shareholders of record of First Bank shall be entitled to vote after the
Effective Time at any meeting of Community Capital shareholders the number of
whole shares of Community Capital Common Stock into which their respective
shares of First Bank Common Stock are converted, regardless of whether such
holders have exchanged their Certificates for certificates representing
Community Capital Common Stock in accordance with the provisions of this
Agreement. Whenever a dividend or other distribution is declared by Community
Capital on the Community Capital Common Stock, the record date for which is at
or after the Effective Time, the declaration shall include dividends or other
distributions on all shares of Community Capital Common Stock issuable pursuant
to this Agreement, but no dividend or other distribution payable to the holders
of record of Community Capital Common Stock as of any time subsequent to the
Effective Time shall be delivered to the holder of any Certificate until such
holder surrenders such Certificate for exchange as provided in Section 4.1.
However, upon surrender of such Certificate, both the Community Capital Common
Stock certificate (together with all such undelivered dividends or other
distributions without interest) and any undelivered dividends and cash payments
payable hereunder
7
(without interest) shall be delivered and paid with respect to each share
represented by such Certificate.
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES OF FIRST BANK
-------------------------------------------------
First Bank hereby represents and warrants to Community Capital as follows:
5.1 ORGANIZATION, STANDING, AND POWER. First Bank is a commercial bank
---------------------------------
duly organized, validly existing, and in good standing under the Laws of the
State of Alabama. First Bank has the power and authority to carry on its
business as now conducted and to own, lease, and operate its Assets. First Bank
is duly qualified or licensed to transact business as a foreign corporation in
good standing in the states of the United States and foreign jurisdictions where
the character of its Assets or the nature or conduct of its business requires it
to be so qualified or licensed, except for such jurisdictions in which the
failure to be so qualified or licensed is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on First Bank.
First Bank is an "insured institution" as such term is defined in the Federal
Deposit Insurance Act and applicable regulations thereunder, and the deposits
therein are insured by the Bank Insurance Fund to the maximum extent permitted
by law.
5.2 AUTHORITY; NO BREACH BY AGREEMENT.
-------------------------------------
(a) First Bank has the power and authority necessary to execute,
deliver and perform its obligations under this Agreement and to consummate the
transactions contemplated herein, including the Merger. The execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized by all necessary
corporate action on the part of First Bank, subject to approval of this
Agreement by the holders of two-thirds of the outstanding voting stock of First
Bank. Subject to shareholder approval and approvals required of Regulatory
Authorities, this Agreement represents a legal, valid and binding obligation of
First Bank, enforceable against First Bank in accordance with its terms (except
in all cases as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or similar Laws affecting the
enforcement of creditors' rights generally and except that the availability of
the equitable remedy of specific performance or injunctive relief is subject to
the discretion of the court before which any proceeding may be brought).
(b) Neither the execution and delivery of this Agreement by First
Bank, nor the consummation by First Bank of the transactions contemplated
hereby, nor compliance by First Bank with any of the provisions hereof will (1)
conflict with or result in a breach of any provision of First Bank's Articles of
Incorporation or Bylaws, or (2) constitute or result in a Default under, or
require any Consent pursuant to, or result in the creation of any Lien on any
Asset of First Bank under, any Contract or Permit of First Bank, where such
Default or Lien, or any failure to obtain such Consent, is reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on First Bank,
or (3) subject to receipt of the requisite approvals referred to in Section
9.1(b) of this Agreement, violate any Law or Order applicable to First Bank or
any of its Assets.
8
(c) Other than in connection or compliance with the provisions of
the Securities Laws, applicable state corporate and securities Laws, and rules
of the NASD, and other than Consents required from Regulatory Authorities, and
other than notices to or filings with the Internal Revenue Service or the
Pension Benefit Guaranty Corporation with respect to any employee benefit plans,
and other than Consents, filings or notifications which, if not obtained or
made, are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on First Bank, no notice to, filing with, or Consent of
any public body or authority is necessary for the consummation by First Bank of
the transactions contemplated in this Agreement.
5.3 CAPITAL STOCK.
--------------
(a) The authorized capital stock of First Bank consists of 500,000
shares of First Bank Common Stock, of which 250,000 shares are issued and
outstanding as of the date of this Agreement. All of the issued and outstanding
shares of capital stock of First Bank are duly and validly issued and
outstanding and are fully paid and nonassessable. None of the outstanding
shares of capital stock of First Bank has been issued in violation of any
preemptive rights of the current or past shareholders of First Bank.
(b) Other than as set forth in Section 5.3(a), there are no shares
of capital stock or other equity securities of First Bank outstanding and no
outstanding Rights relating to the capital stock of First Bank.
5.4 FIRST BANK SUBSIDIARIES. First Bank has no subsidiaries.
-------------------------
5.5 INSURANCE. First Bank has provided Community Capital a complete
---------
list and description (including the expiration date, premium amount and coverage
thereunder) of all policies of insurance and bonds presently maintained by, or
providing coverage for, First Bank or any of its respective officers, directors
and employees, all of which are and will be maintained through the Closing Date,
in full force and effect, together with a complete list of all pending claims
under any of such policies or bonds. All terms, obligations and provisions of
each of such policies and bonds have been complied with, all premiums due
thereon have been paid, and no notice of cancellation with respect thereto has
been received. Except as set forth in the First Bank Disclosure Memorandum,
--------------------------------
such policies and bonds provide adequate coverage to insure the properties and
businesses of First Bank and the activities of the officers, directors and
employees of First Bank against such risks and in such amounts as are prudent
and customary. First Bank will not, as of the Closing Date, have any liability
for premiums or for retrospective premium adjustments for any period prior to
the Closing Date. First Bank has heretofore made, or will hereinafter make,
available to Community Capital a true, correct and complete copy of each
insurance policy and bond currently in effect with respect to the business and
affairs of First Bank.
5.6 FINANCIAL STATEMENTS. First Bank has included in Section 5.6 of
---------------------
the First Bank Disclosure Memorandum or previously provided to Community Capital
--------------------------------
copies of all First Bank Financial Statements for the periods ended on or before
the date hereof and will deliver to Community
9
Capital copies of all First Bank Financial Statements prepared subsequent to the
date hereof. First Bank Financial Statements (as of the dates thereof and for
the periods covered thereby) (a) are, or if dated after the date of this
Agreement, will be, in accordance with the books and records of First Bank,
which are or will be, as the case may be, complete and correct and which have
been or will have been, as the case may be, maintained in accordance with good
business practices, and (b) present or will present, as the case may be, fairly
the financial position of First Bank as of the dates indicated and the results
of operations, changes in shareholders' equity, and cash flows of First Bank for
the periods indicated, in accordance with GAAP (subject to any exceptions as to
consistency specified therein or as may be indicated in the notes thereto or, in
the case of interim financial statements, to normal recurring year-end
adjustments that are not material in amount or effect).
5.7 ABSENCE OF UNDISCLOSED LIABILITIES. First Bank does not have any
------------------------------------
Liabilities that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on First Bank except Liabilities which are
reflected or otherwise accrued or reserved against in the balance sheets of
First Bank as of December 31, 2002 and March 31, 2003, included in First Bank
Financial Statements or reflected in the notes thereto. First Bank has not
incurred or paid any Liability since March 31, 2003, except for such Liabilities
reflected or otherwise accrued or reserved against in First Bank Financial
Statements, or as may have been incurred or paid in the ordinary course of
business consistent with past business practice and which are not reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
First Bank.
5.8 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since March 31, 2003, except
------------------------------------
as disclosed in Section 5.8 of the First Bank Disclosure Memorandum, (a) there
--------------------------------
have been no events, changes or occurrences which have had, or are reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
First Bank, and (b) First Bank 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 material breach
or violation of any of the covenants and agreements of First Bank provided in
Article 7 of this Agreement.
5.9 TAX MATTERS.
------------
(a) All Tax returns required to be filed by or on behalf of First
Bank have been timely filed or requests for extensions have been timely filed,
granted, and have not expired for periods ended on or before March 31, 2003,
except to the extent that all such failures to file, taken together, are not
reasonably likely to have a Material Adverse Effect on First Bank and all
returns filed are complete and accurate in all material respects to the
Knowledge of First Bank. All Taxes shown as due on filed returns have been
paid. There is no audit examination, deficiency or refund Litigation with
respect to any Taxes that is reasonably likely to result in a determination that
would have, individually or in the aggregate, a Material Adverse Effect on First
Bank, except as reserved against in First Bank Financial Statements delivered
prior to the date of this Agreement or as disclosed in Section 5.9(a) of the
First Bank Disclosure Memorandum. All material Taxes and other Liabilities due
---------------------------------
with respect to completed and settled examinations or concluded Litigation have
been paid.
(b) Except as disclosed in Section 5.9(b) of the First Bank
----------
Disclosure Memorandum, First Bank has not executed an extension or waiver of any
---------------------
statute of limitations on the
10
assessment or collection of any Tax due that is currently in effect, and no
unpaid tax deficiency has been asserted in writing against or with respect to
First Bank, which deficiency is reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on First Bank.
(c) Adequate provisions for any Taxes due or to become due for
First Bank for the period or periods through and including the date of the
respective First Bank Financial Statements has been made and is reflected on
such First Bank Financial Statements.
(d) Deferred Taxes of First Bank have been provided for in
accordance with GAAP.
(e) First Bank is in compliance in all material respects with, and
its records contain all information and documents (including, without
limitation, properly completed IRS Forms W-9) necessary to comply in all
material respects with, all applicable information reporting and Tax withholding
requirements under federal, state and local Tax Laws, and such records identify
with specificity all accounts subject to backup withholding under Section 3406
of the Internal Revenue Code, except for such instances of noncompliance and
such omissions as are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on First Bank.
(f) Except as disclosed in Section 5.9(f) of the First Bank
----------
Disclosure Memorandum, First Bank does not have a pending application for, nor
-----------------------
has there been approved, a change in method of accounting and as a result of
which, if such application has been or is approved, there will be required to be
made an adjustment to the taxable income First Bank, or its successor(s) for tax
purposes, for any taxable period subsequent to consummation of the Merger
contemplated by this Agreement.
(g) There are no Liens with respect to Taxes upon any of the
Assets of First Bank.
5.10 ALLOWANCE FOR POSSIBLE LOAN LOSSES. Except as disclosed in
--------------------------------------
Section 5.10 of the First Bank Disclosure Memorandum, the allowance for possible
--------------------------------
loan or credit losses (the "Allowance") shown on the balance sheet of First Bank
included in the most recent First Bank Financial Statements dated prior to the
date of this Agreement was, and the Allowance shown on the balance sheets of
First Bank included in First Bank Financial Statements as of dates subsequent to
the execution of this Agreement will be, as of the dates thereof, adequate
(within the meaning of GAAP and applicable regulatory requirements or
guidelines) to provide for losses relating to or inherent in the loan and lease
portfolios (including accrued interest receivables) of First Bank and other
extensions of credit (including letters of credit and commitments to make loans
or extend credit) by First Bank as of the dates thereof except where the failure
of such Allowance to be so adequate is not reasonably likely to have a Material
Adverse Effect on First Bank.
5.11 ASSETS. Except as disclosed in Section 5.11 of the First Bank
------ ----------
Disclosure Memorandum or as disclosed or reserved against in First Bank
----------------------
Financial Statements, First Bank has good and marketable title, free and clear
of all Liens, to all of its Assets. All material tangible properties used in
the businesses of First Bank are in good condition, reasonable wear and tear
excepted, and are usable in
11
the ordinary course of business consistent with First Bank's past practices. All
Assets which are material to First Bank's business, held under leases or
subleases by First Bank, are held under valid Contracts enforceable in
accordance with their respective terms (except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or other Laws
affecting the enforcement of creditors' rights generally and except that the
availability of the equitable remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any proceedings
may be brought), and each such Contract is in full force and effect. The
policies of fire, theft, liability and other insurance maintained with respect
to the Assets or businesses of First Bank provide adequate coverage under
current industry practices against loss or Liability, and the fidelity and
blanket bonds in effect as to which First Bank is a named insured are reasonably
sufficient. The Assets of First Bank include all assets required to operate the
business of First Bank as presently conducted.
5.12 ENVIRONMENTAL MATTERS.
----------------------
(a) Except as disclosed in Section 5.12(a) of the First Bank
----------
Disclosure Memorandum, to the Knowledge of First Bank, First Bank, its
----------------------
Participation Facilities and its Loan Properties 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 First Bank.
(b) To the Knowledge of First Bank, there is no Litigation pending
or threatened before any court, governmental agency or authority or other forum
in which First Bank or any of its Loan Properties or Participation Facilities
has been or, with respect to threatened Litigation, may be named as a defendant
or potentially responsible party (1) for alleged noncompliance (including by any
predecessor) with any Environmental Law or (2) relating to the release into the
environment of any Hazardous Material or oil, whether or not occurring at, on,
under or involving a site owned, leased or operated by First Bank or any of its
Loan Properties or Participation Facilities, except for such Litigation pending
or threatened that is not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on First Bank and to the Knowledge of First
Bank, there is no reasonable basis for any such Litigation.
(c) To the Knowledge of First Bank, there have been no releases of
Hazardous Material or oil in, on, under or affecting any Participation Facility
or Loan Property, except such as are not reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on First Bank.
5.13 COMPLIANCE WITH LAWS. First Bank has in effect all Permits
----------------------
necessary for it to own, lease or operate its Assets and to carry on its
business as now conducted, except for those Permits the absence of which are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on First Bank, and there has occurred no Default under any such Permit,
other than Defaults which are not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on First Bank. Except as disclosed in
Section 5.13 of the First Bank Disclosure Memorandum, First Bank:
-----------------------------------
12
(a) is not in violation of any Laws, Orders or Permits applicable
to its business or employees conducting its business, except for violations
which are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on First Bank; and
(b) has not received any notification or communication from any
agency or department of federal, state, or local government or any Regulatory
Authority or the staff thereof (1) asserting that First Bank is not in
compliance with any of the Laws or Orders which such governmental authority or
Regulatory Authority enforces, where such noncompliance is reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on First Bank,
(2) threatening to revoke any Permits, the revocation of which is reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
First Bank, or (3) requiring First Bank to enter into or consent to the issuance
of a cease and desist order, formal agreement, directive, commitment or
memorandum of understanding, or to adopt any Board resolution or similar
undertaking, which restricts materially the conduct of its business, or in any
manner relates to its capital adequacy, its credit or reserve policies, its
management, or the payment of dividends.
5.14 LABOR RELATIONS. First Bank is not the subject of any Litigation
----------------
asserting that it has committed an unfair labor practice (within the meaning of
the National Labor Relations Act or comparable state law) or seeking to compel
it to bargain with any labor organization as to wages or conditions of
employment, nor is there any strike or other labor dispute involving First Bank,
pending or, to its Knowledge, threatened, nor, to its Knowledge, is there any
activity involving First Bank's employees seeking to certify a collective
bargaining unit or engaging in any other organization activity.
5.15 EMPLOYEE BENEFIT PLANS.
------------------------
(a) First Bank has disclosed in Section 5.15(a) of the First Bank
----------
Disclosure Memorandum and delivered or made available to Community Capital prior
---------------------
to the execution of this Agreement copies in each case of all pension,
retirement, profit-sharing, deferred compensation, stock option, employee stock
ownership, severance pay, vacation, bonus, or other incentive plans, all other
written employee programs, arrangements, or agreements, all medical, vision,
dental, or other health plans, all life insurance plans, and all other employee
benefit plans or fringe benefit plans, including, without limitation, "employee
benefit plans" as that term is defined in Section 3(3) of ERISA, currently
adopted, maintained by, sponsored in whole or in part by, or contributed to by
First Bank or ERISA Affiliate thereof for the benefit of employees, former
employees, retirees, dependents, spouses, directors, independent contractors, or
other beneficiaries and under which employees, former employees, retirees,
dependents, spouses, directors, independent contractors, or other beneficiaries
are eligible to participate (collectively, the "First Bank Benefit Plans"). Any
of the First Bank Benefit Plans which is an "employee pension benefit plan," as
that term is defined in Section 3(2) of ERISA, is referred to herein as a "First
Bank ERISA Plan."
(b) Except as to those plans disclosed in Section 5.15(b) of the
First Bank Disclosure Memorandum as tax-qualified First Bank ERISA Plans (the
-----------------------------------
"First Bank Qualified Plans"), First Bank does not maintain and has not
previously maintained during the six years preceding the date of this Agreement
a First Bank Plan which meets or was intended to meet the requirements of Code
Section 401(a). The Internal Revenue Service has issued favorable determination
letters to the effect
13
that each First Bank Qualified Plan qualifies under Code Section 401(a) and that
any related trust is exempt from taxation under Code Section 501(a), and such
determination letters remain in effect and have not been revoked. Copies of the
most recent determination letters and any outstanding requests for a
determination letter with respect to each First Bank Qualified Plan have been
delivered or made available to Community Capital. Except as disclosed in Section
5.15(b) of the First Bank Disclosure Memorandum, no First Bank Qualified Plan
--------------------------------
has been amended since the issuance of each respective determination letter.
First Bank Qualified Plans currently comply in form with the requirements under
Code Section 401(a), other than changes required by statutes, regulations and
rulings for which amendments are not yet required. No issue concerning
qualification of First Bank Qualified Plans is pending before or is threatened
by the Internal Revenue Service. First Bank Qualified Plans have been
administered according to their terms (except for those terms which are
inconsistent with the changes required by statutes, regulations, and rulings for
which changes are not yet required to be made, in which case First Bank
Qualified Plans have been administered in accordance with the provisions of
those statutes, regulations and rulings) and in accordance with the requirements
of Code Section 401(a). First Bank, nor any ERISA Affiliate, nor any fiduciary
of any First Bank Qualified Plan has done anything that would adversely affect
the qualified status of First Bank Qualified Plans or the related trusts. Any
First Bank Qualified Plan which is required to satisfy Code Section 401(k)(3)
and 401(m)(2) has been tested for compliance with, and has satisfied the
requirements of, Code Section 401(k)(3) and 401(m)(2) for each plan year ending
prior to the date of this Agreement.
(c) All First Bank Benefit Plans are in compliance in all material
respects with the applicable terms of ERISA, the Internal Revenue Code, and any
other applicable Laws the breach or violation of which are reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on First Bank.
To the Knowledge of First Bank, neither First Bank nor any other party has
engaged in a transaction with respect to any First Bank Benefit Plan that,
assuming the taxable period of such transaction expired as of the date hereof,
would subject First Bank to a tax or penalty imposed by either Section 4975 of
the Internal Revenue Code or Section 502(i) of ERISA in amounts which are
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on First Bank.
(d) Neither First Bank nor any ERISA Affiliate of First Bank
maintains or has during the six years preceding the date of this Agreement
maintained an "employee benefit pension plan," within the meaning of Section
3(2) of ERISA that is or was subject to Title IV of ERISA.
(e) Neither First Bank nor any ERISA Affiliate of First Bank has
any past, present or future obligation or liability to contribute to any
multi-employer plan, as defined in Section 3(37) of ERISA.
(f) Except as disclosed in Section 5.15(f) of the First Bank
----------
Disclosure Memorandum, (1) First Bank has no obligations for retiree health and
----------------------
life benefits under any First Bank Benefit Plans and (2) there are no
restrictions on the rights of First Bank to amend or terminate any such Plan
without incurring any Liability thereunder, which Liability is reasonably likely
to have a Material Adverse Effect on First Bank, other than for benefits accrued
before the date of such termination or amendment.
14
(g) Except as disclosed in Section 5.15(g) of the First Bank
----------
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, without limitation, severance, unemployment compensation,
golden parachute or otherwise) becoming due to any director or any employee of
First Bank from First Bank under any First Bank Benefit Plan or otherwise, (2)
increase any benefits otherwise payable under any First Bank Benefit Plan, or
(iii) result in any acceleration of the time of payment or vesting of any such
benefit.
(h) Except as disclosed in Section 5.15(h) of the First Bank
----------
Disclosure Memorandum, the actuarial present values of all accrued deferred
----------------------
compensation entitlements (including, without limitation, entitlements under any
executive compensation, supplemental retirement, or employment agreement) of
employees and former employees of First Bank and their respective beneficiaries,
other than entitlements accrued pursuant to funded retirement plans subject to
the provisions of Section 412 of the Internal Revenue Code or Section 302 of
ERISA, have been reflected on First Bank Financial Statements to the extent
required by and in accordance with GAAP.
(i) First Bank and each ERISA Affiliate of First Bank has complied
in all material respects with applicable continuation of coverage requirements
of Section 1001 of the Consolidated Omnibus Budget Reconciliation Act of 1985,
as amended, and ERISA Sections 601 through 608.
(j) Except as disclosed in Section 5.15(j) of the First Bank
----------
Disclosure Memorandum, neither First Bank nor any ERISA Affiliate of First Bank
----------------------
is obligated, contingently or otherwise, under any agreement to pay any amount
which would be treated as a "parachute payment," as defined in Section 280G(b)
of the Internal Revenue Code (determined without regard to Section
280G(b)(2)(A)(ii) of the Internal Revenue Code).
(k) Other than routine claims for benefits, there are no actions,
audits, investigations, suits or claims pending, or threatened against any First
Bank Benefit Plan, any trust or other funding agency created thereunder, or
against any fiduciary of any First Bank Benefit Plan or against the assets of
any First Bank Benefit Plan.
5.16 MATERIAL CONTRACTS. Except as disclosed in Section 5.16 of the
-------------------
First Bank Disclosure Memorandum or otherwise reflected in First Bank Financial
---------------------------------
Statements, neither First Bank nor any of its Assets, businesses or operations,
is a party to, or is bound or affected by, or receives benefits under, (a) any
employment, severance, termination, consulting or retirement Contract providing
for aggregate payments to any Person in any calendar year in excess of $25,000,
excluding "at will" employment arrangements, (b) any Contract relating to the
borrowing of money by First Bank or the guarantee by First Bank of any such
obligation (other than Contracts evidencing deposit liabilities, purchases of
federal funds, Federal Home Loan First Bank advances, fully secured repurchase
agreements, trade payables, and Contracts relating to borrowings or guarantees
made in the ordinary course of business), and (c) any other Contract (excluding
this Agreement) or amendment thereto that would be required to be filed as an
exhibit to a Form 10-K if First Bank were required to file such forms under the
1934 Act (together with all Contracts referred to in Sections 5.11 and 5.15(a)
of this Agreement, the "First Bank Contracts"). First Bank is not in Default
under any First Bank Contract, other than Defaults which are
15
not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on First Bank. Except as to FHLB advances, all of the
indebtedness of First Bank for money borrowed is prepayable at any time by First
Bank without penalty or premium.
5.17 LEGAL PROCEEDINGS. Except as disclosed in Section 5.17 of the
------------------
First Bank Disclosure Memorandum, there is no Litigation instituted or pending,
---------------------------------
or, to the Knowledge of First Bank, threatened (or unasserted but considered
probable of assertion) against First Bank, or against any Asset, interest, or
right of any of them, that is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on First Bank, nor are there any Orders of
any Regulatory Authorities, other governmental authorities, or arbitrators
outstanding against First Bank, that are reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on First Bank.
5.18 REPORTS. Since January 1, 2000, First Bank has timely filed all
-------
reports and statements, together with any amendments required to be made with
respect thereto, that it was required to file with (a) the Regulatory
Authorities, and (b) any applicable state securities or banking authorities. As
of their respective dates, each of such reports and documents, including the
financial statements, exhibits, and schedules thereto, complied in all material
respects with all applicable Laws. As of its respective date, each such report
and document to First Bank's Knowledge did not, in any material respect, contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements made therein,
in light of the circumstances under which they were made, not misleading.
5.19 STATEMENTS TRUE AND CORRECT. No statement, certificate,
------------------------------
instrument or other writing furnished or to be furnished by First Bank to
Community Capital pursuant to this Agreement contains or will contain any untrue
statement of material fact or will omit to state a material fact necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. None of the information supplied or to be supplied by
First Bank for inclusion in the documents to be filed by First Bank or Community
Capital with any Regulatory Authority in connection with the transactions
contemplated hereby, will, at the respective times such documents are filed, be
false or misleading with respect to any material fact, or omit to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. All documents that
First Bank is responsible for filing with any Regulatory Authority in connection
with the transactions contemplated hereby will comply as to form in all material
respects with the provisions of applicable Law.
5.20 ACCOUNTING, TAX AND REGULATORY MATTERS. Neither First Bank nor,
----------------------------------------
to the Knowledge of First Bank, any Affiliate thereof has taken any action, or
agreed to take any action, or has any Knowledge of any fact or circumstance that
is reasonably likely to materially impede or delay receipt of any Consents of
Regulatory Authorities referred to in Section 9.1(b) of this Agreement or result
in the imposition of a condition or restriction of the type referred to in the
second sentence of such Section. To the Knowledge of First Bank, there exists
no fact, circumstance, or reason attributable to First Bank why the requisite
Consents referred to in Section 9.1(b) of this Agreement cannot be received in a
timely manner without the imposition of any condition or restriction of the type
described in the second sentence of such Section 9.1(b).
16
5.21 CHARTER PROVISIONS. First Bank has taken all action so that the
-------------------
entering into of this Agreement and the consummation of the transactions
contemplated by this Agreement do not and will not result in the grant of any
rights to any Person under the Articles of Incorporation, Bylaws or other
governing instruments of First Bank or restrict or impair the ability of
Community Capital to vote, or otherwise to exercise the rights of a shareholder
with respect to, shares of First Bank that may be acquired or controlled by it.
5.22 DERIVATIVES CONTRACTS. Except as set forth in Section 5.22 of the
---------------------
First Bank Disclosure Memorandum, First Bank is not a party to nor has it agreed
--------------------------------
to enter into an exchange-traded or over-the-counter swap, forward, future,
option, cap, floor or collar financial contract, or any other interest rate or
foreign currency protection contract not included on its balance sheet which is
a financial derivative contract (including various combinations thereof).
ARTICLE 6.
REPRESENTATIONS AND WARRANTIES OF
---------------------------------
COMMUNITY CAPITAL
-----------------
Community Capital hereby represents and warrants to First Bank as follows:
6.1 ORGANIZATION, STANDING, AND POWER. Community Capital is a
------------------------------------
corporation duly organized, validly existing, and in good standing under the
Laws of the State of Georgia, and is duly registered as a bank holding company
under the BHC Act. On the Closing date, Interim will be a corporation duly
organized, validly existing and in good standing under the Laws of the State of
Alabama. Community Capital has the corporate power and authority to carry on
its business as now conducted and to own, lease and operate its Assets.
Community Capital is duly qualified or licensed to transact business as a
foreign corporation in good standing in the states of the United States and
foreign jurisdictions where the character of its Assets or the nature or conduct
of its business requires it to be so qualified or licensed, except for such
jurisdictions in which the failure to be so qualified or licensed is not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Community Capital.
6.2 AUTHORITY; NO BREACH BY AGREEMENT.
-------------------------------------
(a) Community Capital has, and on the Closing date Interim will
have, the corporate power and authority necessary to execute, deliver and
perform their respective obligations under this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby have
been duly and validly authorized by all necessary corporate action in respect
thereof on the part of Community Capital. Subject to any approvals required of
Regulatory Authorities, this Agreement represents a legal, valid and binding
obligation of Community Capital, enforceable against Community Capital in
accordance with its terms (except in all cases as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium, or
similar Laws affecting the
17
enforcement of creditors' rights generally and except that the availability of
the equitable remedy of specific performance or injunctive relief is subject to
the discretion of the court before which any proceeding may be brought).
(b) Neither the execution and delivery of this Agreement by
Community Capital, nor the consummation by Community Capital of the transactions
contemplated hereby, nor compliance by Community Capital with any of the
provisions hereof will (i) conflict with or result in a breach of any provision
of Community Capital's Articles of Incorporation or Bylaws, or the Charter,
Articles of Incorporation or Bylaws of any Community Capital Company, or (ii)
constitute or result in a Default under, or require any Consent pursuant to, or
result in the creation of any Lien on any Asset of any Community Capital Company
under, any Contract or Permit of any Community Capital Company, where such
Default or Lien, or any failure to obtain such Consent, is reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on Community
Capital, or (iii) subject to receipt of the requisite approvals referred to in
Section 9.1(b) of this Agreement, violate any Law or Order applicable to any
Community Capital Company or any of their respective Assets.
(c) Other than in connection or compliance with the provisions of
the Securities Laws, applicable state corporate and securities Laws, and rules
of the NASD, and other than Consents required from Regulatory Authorities, and
other than notices to or filings with the Internal Revenue Service or the
Pension Benefit Guaranty Corporation with respect to any employee benefit plans,
and other than Consents, filings or notifications which, if not obtained or
made, are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Community Capital, no notice to, filing with, or
Consent of any public body or authority is necessary for the consummation by
Community Capital of the transactions contemplated in this Agreement.
6.3 CAPITAL STOCK.
--------------
(a) The authorized capital stock of Community Capital consists of
(1) 10,000,000 shares of Community Capital Common Stock, of which 1,499,560
shares are issued and 1,433,122 shares are outstanding as of the date of this
Agreement, and (2) 2,000,000 shares of Community Capital preferred stock, of
which no shares are issued and outstanding as of the date of this Agreement.
All of the issued and outstanding shares of capital stock of Community Capital
are, and all of the shares of Community Capital Common Stock to be issued in
exchange for shares of First Bank Common Stock upon consummation of the Merger,
when issued in accordance with the terms of this Agreement, will be duly and
validly issued and outstanding and are fully paid and nonassessable. None of
the outstanding shares of capital stock of Community Capital has been issued in
violation of any preemptive rights of the current or past shareholders of
Community Capital.
(b) Upon the incorporation of Interim, the authorized capital
stock of Interim will consist of 10,000,000 shares of Interim Common Stock, of
which 100 shares will be issued and outstanding as of the Closing date.
(c) Except as disclosed in Section 6.3(c) of the Community Capital
-----------------
Disclosure Memorandum, there are no shares of capital stock or other equity
----------------------
securities of Community Capital outstanding and no outstanding Rights relating
to the capital stock of Community Capital.
18
6.4 COMMUNITY CAPITAL SUBSIDIARIES. Community Capital has disclosed in
------------------------------
Section 6.4 of the Community Capital Disclosure Memorandum all Community Capital
---------------------------------------
Subsidiaries as of the date of this Agreement. Except as disclosed in Section
6.4 of the Community Capital Disclosure Memorandum, Community Capital or one of
---------------------------------------
its Subsidiaries owns all of the issued and outstanding shares of capital stock
of each Community Capital Subsidiary. No equity securities of any Community
Capital Subsidiary are or may become required to be issued (other than to
another Community Capital Company) by reason of any Rights, and there are no
Contracts by which any Community Capital Subsidiary is bound to issue (other
than to another Community Capital Company) additional shares of its capital
stock or Rights, or by which any Community Capital Company is or may be bound to
transfer any shares of the capital stock of any Community Capital Subsidiary
(other than to another Community Capital Company), and there are no Contracts by
which Community Capital is bound to issue (other than to another Community
Capital Company) additional shares of its capital stock. There are no Contracts
relating to the rights of any Community Capital Company to vote or to dispose of
any shares of the capital stock of any Community Capital Company. All of the
issued and outstanding shares of capital stock of each Community Capital
Subsidiary are fully paid and nonassessable under the applicable Law of the
jurisdiction in which such Community Capital Subsidiary is incorporated or
organized and are owned by a Community Capital Company free and clear of any
Lien. Each Community Capital Subsidiary is either a bank, a trust company, a
savings association or a corporation and is duly organized, validly existing,
and (as to corporations) in good standing under the Laws of the jurisdiction in
which it is organized and has the corporate power and authority necessary for it
to own, lease and operate its Assets and to carry on its business as now
conducted. Each Community Capital Subsidiary is duly qualified or licensed to
transact business as a foreign corporation in good standing in the states of the
United States and foreign jurisdictions where the character of its Assets or the
nature or conduct of its business requires it to be so qualified or licensed,
except for such jurisdictions in which the failure to be so qualified or
licensed is not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Community Capital. Each Community Capital Subsidiary
that is a depository institution is an "insured institution" as defined in the
Federal Deposit Insurance Act and applicable regulations thereunder, and the
deposits in which are insured to applicable limits by the Bank Insurance Fund or
the Savings Association Insurance Fund, as appropriate.
6.5 INSURANCE. Community Capital maintains insurance policies and/or
---------
bonds which provide adequate coverage to insure the properties and businesses of
the Community Capital Companies and the activities of the officers, directors,
and employees of such Community Capital Companies against such risks and in such
amounts as are prudent and customary. Except as disclosed in Section 6.5 of the
Community Capital Disclosure Memorandum, there are no pending claims under any
-----------------------------------------
of such policies or bonds. All terms, obligations and provisions of each of
such policies and bonds have been complied with, all premiums due thereon have
been paid, and no notice of cancellation with respect thereto has been received.
6.6 FINANCIAL STATEMENTS. The Community Capital Financial Statements
---------------------
(as of the dates thereof and for the periods covered thereby) (a) are, or if
dated after the date of this Agreement will be, in accordance with the books and
records of the Community Capital Companies, which are or will be, as the case
may be, complete and correct and which have been or will have been, as the case
may be,
19
maintained in accordance with good business practices, and (b) present or will
present, as the case may be, fairly the consolidated financial position of the
Community Capital Companies as of the dates indicated and the consolidated
results of operations, changes in shareholders' equity, and cash flows of the
Community Capital Companies for the periods indicated, in accordance with GAAP
(subject to any exceptions as to consistency specified therein or as may be
indicated in the notes thereto or, in the case of interim financial statements,
to normal recurring year-end adjustments that are not material in amount or
effect).
6.7 ABSENCE OF UNDISCLOSED LIABILITIES. No Community Capital Company
-----------------------------------
has any Liabilities that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Community Capital, except Liabilities
which are reflected or otherwise accrued or reserved against in the consolidated
balance sheets of Community Capital as of March 31, 2003 included in the
Community Capital Financial Statements or reflected in the notes thereto. No
Community Capital Company has incurred or paid any Liability since March 31,
2003, except for such Liabilities reflected or otherwise accrued or reserved
against in the Community Capital Financial Statements, or as may have been
incurred or paid in the ordinary course of business consistent with past
business practice and which are not reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on Community Capital.
6.8 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since March 31, 2003, except
------------------------------------
as disclosed in Section 6.8 of the Community Capital Disclosure Memorandum, (a)
---------------------------------------
there have been no events, changes or occurrences which have had, or are
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Community Capital, and (b) the Community Capital Companies have not
taken any action, or failed to take any action, prior to the date of this
Agreement, which action or failure, if taken after the date of this Agreement,
would represent or result in a material breach or violation of any of the
covenants and agreements of Community Capital provided in Article 7 of this
Agreement.
6.9 TAX MATTERS.
------------
(a) All Tax returns required to be filed by or on behalf of any of
Community Capital Companies have been timely filed or requests for extensions
have been timely filed, granted, and have not expired for periods ended on or
before March 31, 2003, except to the extent that all such failures to file,
taken together, are not reasonably likely to have a Material Adverse Effect on
Community Capital and all returns filed are complete and accurate in all
material respects to the Knowledge of Community Capital. All Taxes shown as due
on filed returns have been paid. There is no audit examination, deficiency or
refund Litigation with respect to any Taxes that is reasonably likely to result
in a determination that would have, individually or in the aggregate, a Material
Adverse Effect on Community Capital, except as reserved against in Community
Capital Financial Statements or as disclosed in Section 6.9(a) of the Community
---------
Capital Disclosure Memorandum. All material Taxes and other Liabilities due
-------------------------------
with respect to completed and settled examinations or concluded Litigation have
been paid.
(b) Except as disclosed in Section 6.9(b) of the Community Capital
-----------------
Disclosure Memorandum, none of the Community Capital Companies has executed an
----------------------
extension or waiver of any
20
statute of limitations on the assessment or collection of any Tax due that is
currently in effect, and no unpaid tax deficiency has been asserted in writing
against or with respect to any Community Capital Company, which deficiency is
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Community Capital.
(c) Adequate provision for any Taxes due or to become due for any
Community Capital Company for the period or periods through and including the
date of the respective Community Capital Financial Statements has been made and
is reflected on such Community Capital Financial Statements.
(d) Deferred Taxes of Community Capital have been provided for in
accordance with GAAP.
(e) Each of the Community Capital Companies is in compliance in
all material respects with, and its records contain all information and
documents (including, without limitation, properly completed IRS Forms W-9)
necessary to comply in all material respects with, all applicable information
reporting and Tax withholding requirements under federal, state and local Tax
Laws, and such records identify with specificity all accounts subject to backup
withholding under Section 3406 of the Internal Revenue Code, except for such
instances of noncompliance and such omissions as are not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on Community
Capital.
(f) There are no Liens with respect to Taxes upon any of the
Assets of any Community Capital Company.
6.10 ALLOWANCE FOR POSSIBLE LOAN LOSSES. The allowance for possible
-------------------------------------
loan or credit losses (the "Allowance") shown on the balance sheets of Community
Capital included in the most recent Community Capital Financial Statements dated
prior to the date of this Agreement was, and the Allowance shown on the balance
sheets of Community Capital included in Community Capital Financial Statements
as of dates subsequent to the execution of this Agreement will be, as of the
dates thereof, adequate (within the meaning of GAAP and applicable regulatory
requirements or guidelines) to provide for losses relating to or inherent in the
loan and lease portfolios (including accrued interest receivables) of Community
Capital and other extensions of credit (including letters of credit and
commitments to make loans or extend credit) by Community Capital as of the dates
thereof except where the failure of such Allowance to be so adequate is not
reasonably likely to have a Material Adverse Effect on Community Capital.
6.11 ASSETS. Except as disclosed in Section 6.11 of the Community
------ ---------
Capital Disclosure Memorandum or as disclosed or reserved against in Community
-------------------------------
Capital Financial Statements, each Community Capital Company has good and
marketable title, free and clear of all Liens, to all of their respective
Assets. All material tangible properties used in the businesses of each
Community Capital Company are in good condition, reasonable wear and tear
excepted, and are usable in the ordinary course of business consistent with
Community Capital's past practices. All Assets which are material to Community
Capital's business on a consolidated basis, held under leases or subleases by
Any
21
Community Capital Company, are held under valid Contracts enforceable in
accordance with their respective terms (except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or other Laws
affecting the enforcement of creditors' rights generally and except that the
availability of the equitable remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any proceedings
may be brought), and each such Contract is in full force and effect. The
policies of fire, theft, liability and other insurance maintained with respect
to the Assets or businesses of Community Capital provide adequate coverage under
current industry practices against loss or Liability, and the fidelity and
blanket bonds in effect as to which any of Community Capital Companies is a
named insured are reasonably sufficient. The Assets of Community Capital
Companies include all assets required to operate the business of Community
Capital Companies as presently conducted.
6.12 ENVIRONMENTAL MATTERS.
----------------------
(a) Except as disclosed in Section 6.12(a) of the Community
---------
Capital Disclosure Memorandum, to the Knowledge of Community Capital, each
-------------------------------
Community Capital Company, its Participation Facilities and its Loan Properties
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 Community Capital.
(b) To the Knowledge of Community Capital, there is no Litigation
pending or threatened before any court, governmental agency or authority or
other forum in which any Community Capital Company or any of its Loan Properties
or Participation Facilities has been or, with respect to threatened Litigation,
may be named as a defendant or potentially responsible party (i) for alleged
noncompliance (including by any predecessor) with any Environmental Law or (ii)
relating to the release into the environment of any Hazardous Material or oil,
whether or not occurring at, on, under or involving a site owned, leased or
operated by any Community Capital Company or any of its Loan Properties or
Participation Facilities, except for such Litigation pending or threatened that
is not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Community Capital and to the Knowledge of Community Capital,
there is no reasonable basis for any such Litigation.
(c) To the Knowledge of Community Capital, there have been no
releases of Hazardous Material or oil in, on, under or affecting any
Participation Facility or Loan Property, except such as are not reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
Community Capital.
6.13 COMPLIANCE WITH LAWS. Each Community Capital Company has in
----------------------
effect all Permits necessary for it to own, lease or operate its Assets and to
carry on its business as now conducted, except for those Permits the absence of
which are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Community Capital, and there has occurred no Default
under any such Permit, other than Defaults which are not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on Community
Capital. Except as disclosed in Section 6.13 of the Community Capital
------------------
Disclosure Memorandum, no Community Capital Company:
----------------------
22
(a) is in violation of any Laws, Orders or Permits applicable to
its business or employees conducting its business, except for violations which
are not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Community Capital; and
(b) has received any notification or communication from any agency
or department of federal, state, or local government or any Regulatory Authority
or the staff thereof (1) asserting that any Community Capital Company is not in
compliance with any of the Laws or Orders which such governmental authority or
Regulatory Authority enforces, where such noncompliance is reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on Community
Capital, (2) threatening to revoke any Permits, the revocation of which is
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Community Capital, or (3) requiring any Community Capital Company to
enter into or consent to the issuance of a cease and desist order, formal
agreement, directive, commitment or memorandum of understanding, or to adopt any
Board resolution or similar undertaking, which restricts materially the conduct
of its business, or in any manner relates to its capital adequacy, its credit or
reserve policies, its management, or the payment of dividends.
6.14 LABOR RELATIONS. No Community Capital Company is the subject of
----------------
any Litigation asserting that it or any other Community Capital Company has
committed an unfair labor practice (within the meaning of the National Labor
Relations Act or comparable state law) or seeking to compel it or any other
Community Capital Company to bargain with any labor organization as to wages or
conditions of employment, nor is there any strike or other labor dispute
involving any Community Capital Company, pending or, to its Knowledge,
threatened, nor, to its Knowledge, is there any activity involving any Community
Capital Company's employees seeking to certify a collective bargaining unit or
engaging in any other organization activity.
6.15 EMPLOYEE BENEFIT PLANS.
------------------------
(a) Community Capital has provided to First Bank in Section 6.15
of the Community Capital Disclosure Memorandum a list of all pension,
------------------------------------------
retirement, profit-sharing, deferred compensation, stock option, employee stock
ownership, severance pay, vacation, bonus, or other incentive plans, all other
written employee programs, arrangements, or agreements, all medical, vision,
dental, or other health plans, all life insurance plans, and all other employee
benefit plans or fringe benefit plans, including, without limitation, "employee
benefit plans" as that term is defined in Section 3(3) of ERISA, currently
adopted, maintained by, sponsored in whole or in part by, or contributed to by
any Community Capital Company or ERISA Affiliate thereof for the benefit of
employees, former employees, retirees, dependents, spouses, directors,
independent contractors, or other beneficiaries and under which employees,
former employees, retirees, dependents, spouses, directors, independent
contractors, or other beneficiaries are eligible to participate (collectively,
the "Community Capital Benefit Plans").
(b) All Community Capital Benefit Plans are in compliance in all
material respects with the applicable terms of ERISA, the Internal Revenue Code,
and any other applicable Laws the breach or violation of which are reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
Community Capital. To the Knowledge of Community Capital, no Community
23
Capital Company nor any other party has engaged in a transaction with respect to
any Community Capital Benefit Plan that, assuming the taxable period of such
transaction expired as of the date hereof, would subject any Community Capital
Company to a tax or penalty imposed by either Section 4975 of the Internal
Revenue Code or Section 502(i) of ERISA in amounts which are reasonably likely
to have, individually or in the aggregate, a Material Adverse Effect on
Community Capital.
(c) Except as disclosed in Section 6.15(c) of the Community
---------
Capital Disclosure Memorandum, neither the execution and delivery of this
-------------------------------
Agreement nor the consummation of the transactions contemplated hereby will (i)
result in any payment (including, without limitation, severance, unemployment
compensation, golden parachute or otherwise) becoming due to any director or any
employee of any Community Capital Company from any Community Capital Company
under any Community Capital Benefit Plan or otherwise, (ii) increase any
benefits otherwise payable under any Community Capital Benefit Plan, or (iii)
result in any acceleration of the time of payment or vesting of any such
benefit.
(d) Other than routine claims for benefits, there are no actions,
audits, investigations, suits or claims pending, or threatened against any
Community Capital Benefit Plan, any trust or other funding agency created
thereunder, or against any fiduciary of any Community Capital Benefit Plan or
against the assets of any Community Capital Benefit Plan.
6.16 MATERIAL CONTRACTS. Except as disclosed in Section 6.16 of the
-------------------
Community Capital Disclosure Memorandum or otherwise reflected in Community
------------------------------------------
Capital Financial Statements, none of the Community Capital Companies, nor any
of their respective Assets, businesses or operations, is a party to, or is bound
or affected by, or receives benefits under (a) any Contract relating to the
borrowing of money by any Community Capital Company or the guarantee by any
Community Capital Company of any such obligation (other than Contracts
evidencing deposit liabilities, purchases of federal funds, Federal Home Loan
Community Capital advances, fully-secured repurchase agreements, trade payables,
and Contracts relating to borrowings or guarantees made in the ordinary course
of business), (b) any Contracts between or among Community Capital Companies,
and (c) any other Contract (excluding this Agreement) or amendment thereto that
is required to be filed as an exhibit to a Form 10-KSB or Form 10-QSB and has
not been filed as an exhibit to any Form 10-KSB or 10-QSB as of the date of this
Agreement (together with all Contracts referred to in Sections 6.11 and 6.15(a)
of this Agreement, the "Community Capital Contracts"). None of Community
Capital Companies is in Default under any Community Capital Contract, other than
Defaults which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Community Capital. Except as to FHLB
advances, all of the indebtedness of any Community Capital Company for money
borrowed is prepayable at any time by such Community Capital Company without
penalty or premium.
6.17 LEGAL PROCEEDINGS. Except as disclosed in Section 6.17 of the
------------------
Community Capital Disclosure Memorandum, there is no Litigation instituted or
------------------------------------------
pending, or, to the Knowledge of Community Capital, threatened (or unasserted
but considered probable of assertion) against any Community Capital Company, or
against any Asset, interest, or right of any of them, that is reasonably likely
to have, individually or in the aggregate, a Material Adverse Effect on
Community Capital, nor are there any Orders of any Regulatory Authorities, other
governmental authorities, or arbitrators
24
outstanding against any Community Capital Company, that are reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on Community
Capital.
6.18 REPORTS. Since January 1, 2000, each Community Capital Company
-------
has timely filed all reports and statements, together with any amendments
required to be made with respect thereto, that it was required to file with (a)
the SEC, including but not limited to, Forms 10-KSB, Forms 10-QSB, Forms 8-K and
Proxy Statements, (b) other Regulatory Authorities, and (c) any applicable state
securities or banking authorities. As of their respective dates, each of such
reports and documents, including the financial statements, exhibits, and
schedules thereto, complied in all material respects with all applicable Laws,
including, without limitation, all certifications required pursuant to 302 and
906 of the Xxxxxxxx-Xxxxx Act and the rules and regulations of the SEC
promulgated thereunder with respect to the Community Capital SEC reports. As of
its respective date, each such report and document to Community Capital's
Knowledge did not, in any material respect, contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading.
6.19 STATEMENTS TRUE AND CORRECT. No statement, certificate,
------------------------------
instrument or other writing furnished or to be furnished by any Community
Capital Company to First Bank pursuant to this Agreement contains or will
contain any untrue statement of material fact or will omit to state a material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading. None of the information supplied or
to be supplied by any Community Capital Company for inclusion in the documents
to be filed by any Community Capital Company with any Regulatory Authority in
connection with the transactions contemplated hereby, will, at the respective
times such documents are filed, be false or misleading with respect to any
material fact, or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. All documents that any Community Capital Company is responsible
for filing with any Regulatory Authority in connection with the transactions
contemplated hereby will comply as to form in all material respects with the
provisions of applicable Law.
6.20 ACCOUNTING, TAX AND REGULATORY MATTERS. No Community Capital
------------------------------------------
Company or, to the Knowledge of Community Capital, any Affiliate thereof has
taken any action, or agreed to take any action, or has any Knowledge of any fact
or circumstance that is reasonably likely to materially impede or delay receipt
of any Consents of Regulatory Authorities referred to in Section 9.1(b) of this
Agreement or result in the imposition of a condition or restriction of the type
referred to in the second sentence of such Section. To the Knowledge of
Community Capital, there exists no fact, circumstance, or reason attributable to
Community Capital why the requisite Consents referred to in Section 9.1(b) of
this Agreement cannot be received in a timely manner without the imposition of
any condition or restriction of the type described in the second sentence of
such Section 9.1(b).
6.21 CHARTER PROVISIONS. Each Community Capital Company has taken all
-------------------
action so that the entering into of this Agreement and the consummation of the
transactions contemplated by this Agreement do not and will not result in the
grant of any rights to any Person under the Articles of Incorporation, Bylaws or
other governing instruments of any Community Capital Company or restrict
25
or impair the ability of Community Capital to vote, or otherwise to exercise the
rights of a shareholder with respect to, shares of any Community Capital Company
that may be acquired or controlled by it.
ARTICLE 7.
CONDUCT OF BUSINESS PENDING CONSUMMATION
----------------------------------------
7.1 AFFIRMATIVE COVENANTS OF FIRST BANK. Unless the prior written
---------------------------------------
consent of Community Capital shall have been obtained, and except as otherwise
contemplated herein, First Bank shall, from the date of this Agreement until the
earlier of the Effective Time or termination of this Agreement: (a) operate its
business in the usual, regular and ordinary course; (b) preserve intact its
business organization and Assets and maintain its rights and franchises; (c) use
its reasonable efforts to cause its representations and warranties to be correct
at all times; (d) comply with all agreements, covenants and representations made
under any memorandum of understanding with a Regulatory Authority or any other
Order to which it is a party and which is effective as of the date hereof; and
(e) to take no action which would (1) 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 second
sentence of Section 9.1(b) or 9.1(c) of this Agreement or (2) adversely affect
in any material respect the ability of any Party to perform its covenants and
agreements under this Agreement.
7.2 NEGATIVE COVENANTS OF FIRST BANK. Except as contemplated hereby,
----------------------------------
from the date of this Agreement until the earlier of the Effective Time or the
termination of this Agreement, First Bank covenants and agrees that it will not
do or agree or commit to do any of the following without the prior written
consent of the president of Community Capital, which consent shall not be
unreasonably withheld:
(a) amend the Articles of Incorporation, Bylaws or other governing
instruments of First Bank, or
(b) incur any additional debt obligation or other obligation for
borrowed money in excess of an aggregate of $25,000 except in the ordinary
course of the business of First Bank consistent with past practices (which shall
include creation of deposit liabilities, purchases of federal funds, advances
from the Federal Reserve Bank or Federal Home Loan Bank, and entry into
repurchase agreements fully secured by U.S. government or agency securities), or
impose, or suffer the imposition, on any Asset of First Bank of any Lien or
permit any such Lien to exist (other than in connection with deposits,
repurchase agreements, bankers' acceptances, Federal Home Loan Bank advances,
"treasury tax and loan" accounts established in the ordinary course of business,
the satisfaction of legal requirements in the exercise of trust powers, and
Liens in effect as of the date hereof that are disclosed in Section 7.2(b) of
the First Bank Disclosure Memorandum); or
-----------------------------------
(c) repurchase, redeem, or otherwise acquire or exchange (other
than exchanges in the ordinary course under employee benefit plans), directly or
indirectly, any shares, or any securities
26
convertible into any shares, of the capital stock of First Bank, or declare or
pay any dividend or make any other distribution in respect of First Bank Common
Stock; or
(d) except for this Agreement, or pursuant to the exercise of
stock options outstanding as of the date hereof and pursuant to the terms
thereof in existence on the date hereof, or as disclosed in Section 7.2(d) of
the First Bank Disclosure Memorandum, issue, sell, pledge, encumber, authorize
---------------------------------
the issuance of or enter into any Contract to issue, sell, pledge, encumber, or
authorize the issuance of or otherwise permit to become outstanding, any
additional shares of First Bank Common Stock or any other capital stock of First
Bank, or any stock appreciation rights, or any option, warrant, conversion, or
other right to acquire any such stock, or any security convertible into any such
stock; or
(e) adjust, split, combine or reclassify any capital stock of
First Bank or issue or authorize the issuance of any other securities in respect
of or in substitution for shares of First Bank Common Stock or sell, lease,
mortgage or otherwise dispose of or otherwise encumber any Asset having a book
value in excess of $25,000 other than in the ordinary course of business for
reasonable and adequate consideration; or
(f) except for purchases of U.S. Treasury securities, U.S.
Government agency securities or mortgage-backed securities of maturity or grade
consistent with past practices, purchase any securities or make any material
investment, either by purchase of stock or securities, contributions to capital,
Asset transfers, or purchase of any Assets, in any Person; or otherwise acquire
direct or indirect control over any Person, other than in connection with (1)
foreclosures in the ordinary course of business, or (2) acquisitions of control
by First Bank in its fiduciary capacity; or
(g) grant any increase in compensation or benefits to the
employees or officers of First Bank (including such discretionary increases as
may be contemplated by existing employment agreements), except in accordance
with past practice or previously approved by the Board of Directors of First
Bank, in each case as disclosed in Section 7.2(g) of the First Bank Disclosure
---------------------
Memorandum or as required by Law; pay any severance or termination pay or any
----------
bonus other than pursuant to written policies or written Contracts in effect on
the date of this Agreement and disclosed in Section 7.2(g) of the First Bank
----------
Disclosure Memorandum; enter into or amend any severance agreements with
-------------------
officers of First Bank; grant any increase in fees or other increases in
compensation or other benefits to directors of First Bank; or voluntarily
accelerate the vesting of any stock options or other stock-based compensation or
employee benefits; or
(h) enter into or amend any employment Contract between First Bank
and any Person (unless such amendment is required by Law) that First Bank does
not have the unconditional right to terminate without Liability (other than
Liability for services already rendered), at any time on or after the Closing
Date; or
(i) adopt any new employee benefit plan of First Bank or make any
material change in or to any existing employee benefit plans of First Bank other
than any such change that is required by Law or that, in the opinion of counsel,
is necessary or advisable to maintain the tax qualified status of any such plan;
or
27
(j) make any significant change in any Tax or accounting methods
or systems of internal accounting controls, except as may be appropriate to
conform to changes in Tax Laws or regulatory accounting requirements or GAAP; or
(k) settle any Litigation involving any Liability of First Bank
for money damages in excess of $25,000 or material restrictions upon the
operations of First Bank; or
(l) except in the ordinary course of business, modify, amend or
terminate any material Contract or waive, release, compromise or assign any
material rights or claims.
7.3 AFFIRMATIVE COVENANTS OF COMMUNITY CAPITAL. Unless the prior
-----------------------------------------------
written consent of First Bank shall have been obtained, and except as otherwise
contemplated herein, Community Capital shall, and shall cause each of its
Subsidiaries, from the date of this Agreement until the Closing Date or
termination of this Agreement: (a) operate its business in the usual, regular
and ordinary course; (b) preserve intact its business organization and Assets
and maintain its rights and franchises; (c) use its reasonable efforts to cause
its representations and warranties to be correct at all times; (d) take no
action which would (1) 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 second sentence of
Section 9.1(b) or 9.1(c) of this Agreement or (2) adversely affect in any
material respect the ability of any Party to perform its covenants and
agreements under this Agreement.
7.4 ADVERSE CHANGES IN CONDITION. Each Party agrees to give written
-------------------------------
notice promptly to the other Party upon becoming aware of the occurrence or
impending occurrence of any event or circumstance relating to it or any of its
Subsidiaries which (a) is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on it or (b) is reasonably likely to cause
or constitute a material breach of any of its representations, warranties, or
covenants contained herein, and to use its reasonable efforts to prevent or
promptly to remedy the same.
7.5 REPORTS. Community Capital and First Bank and their respective
-------
Subsidiaries shall file all reports required to be filed by them with the
Regulatory Authorities between the date of this Agreement and the Closing Date
and shall deliver to each other copies of all non-confidential portions of such
reports promptly after the same are filed.
ARTICLE 8.
ADDITIONAL AGREEMENTS
----------------------
8.1 SHAREHOLDER APPROVAL. First Bank shall call a Shareholders'
---------------------
Meeting, as soon as reasonably practicable, for the purpose of voting upon
approval of this Agreement and such other related matters as it deems
appropriate. In connection with the Shareholders' Meeting, the Board of
Directors of First Bank shall recommend to its shareholders, subject to the
conditions in such authorization and recommendation by the Board of Directors,
the approval of the matters submitted for approval (subject to the Board of
Directors of First Bank, after having consulted with and considered the advice
of outside counsel, reasonably determining in good faith that the making of
28
such recommendation, or the failure to withdraw or modify its recommendation,
would constitute a breach of fiduciary duties of the members of such Board of
Directors to First Bank's shareholders, under applicable law), and the Board of
Directors and officers of First Bank shall use their reasonable efforts to
obtain such shareholders' approval (subject to the Board of Directors of First
Bank, after having consulted with and considered the advice of outside counsel,
reasonably determining in good faith that the taking of such actions would
constitute a breach of fiduciary duties of the members of such Board of
Directors to the First Bank shareholders, under applicable law).
8.2 APPLICATIONS. Within 60 days of the date of this Agreement,
------------
Community Capital shall prepare and file, and First Bank shall cooperate in the
preparation and, where appropriate, filing of, any applications, including
without limitation, those with the Board of Governors of the Federal Reserve
System, the Alabama State Department of Banking and the Georgia Department of
Banking and Finance, seeking the requisite Consents necessary to consummate the
transactions contemplated by this Agreement.
8.3 FILINGS WITH STATE OFFICES. Upon the terms and subject to the
-----------------------------
conditions of this Agreement, Community Capital shall cause to be filed the
Certificate of Merger with the Secretary of State of the State of Georgia.
8.4 AGREEMENT AS TO EFFORTS TO CONSUMMATE. No Party shall take, or
-----------------------------------------
cause to be taken, any action which may reasonably be foreseen as delaying or
otherwise adversely impacting consummation of the transactions contemplated by
this Agreement. Subject to the terms and conditions of this Agreement, each
Party agrees to use, and to cause its Subsidiaries to use, its reasonable
efforts to take, or cause to be taken, all actions, and to do, or cause to be
done, all things necessary, proper or advisable under applicable Laws, as
promptly as practicable so as to permit consummation of the transactions
contemplated hereby during the third or fourth quarter of 2003 and shall
cooperate fully with the other Parties hereto to that end, including, without
limitation, using its reasonable efforts to lift or rescind any Order adversely
affecting its ability to consummate the transactions contemplated herein and to
cause to be satisfied the conditions referred to in Article 9 of this Agreement.
Each Party shall use, and shall cause each of its Subsidiaries to use, its
reasonable efforts to obtain all Consents necessary or desirable for the
consummation of the transactions contemplated by this Agreement.
8.5 INVESTIGATION AND CONFIDENTIALITY.
-----------------------------------
(a) Prior to the Closing Date, each of Community Capital and First
Bank will keep the other advised of all material developments relevant to its
business and to consummation of the transactions contemplated hereby and shall
permit the other to make or cause to be made such investigation of the business
and properties of it and its Subsidiaries and of their respective financial and
legal conditions as the other reasonably requests, provided that such
investigation shall be reasonably related to the transactions contemplated
hereby and shall not interfere unnecessarily with normal operations. No
investigation by a Party shall affect the representations and warranties of the
other Parties.
29
(b) Each Party shall, and shall cause its advisers and agents to,
maintain the confidentiality of all confidential information furnished to it by
the other Parties concerning its and its Subsidiaries' businesses, operations,
and financial positions and shall not use such information for any purpose
except in furtherance of the transactions contemplated by this Agreement. If
this Agreement is terminated prior to the Closing Date, each Party shall
promptly return all documents and copies thereof and all work papers containing
confidential information received from the other Parties, except for one copy of
any materials prepared by that Party or any attorney for or other representative
of that Party based upon such confidential information.
(c) Each Party agrees to give the other Parties 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
Parties or which has had or is reasonably likely to have a Material Adverse
Effect on the other Parties.
(d) Notwithstanding Section 8.5(b), the Parties (and each emloyee,
representative or other agent of each Party) may disclose to any and all
persons, without limitation of any kind, the tax treatment and tax structure of
the transactions contemplated herein and all materials of any kind (including
opinions or other tax analyses) that are provided to such Party relating to such
tax treatment and tax structure.
8.6 PRESS RELEASES. Prior to the Closing Date, First Bank and
---------------
Community Capital shall agree with each other as to the form and substance of
any press release or other public disclosure materially related to this
Agreement or any other transaction contemplated hereby; provided, however, that
-------- -------
nothing in this Section 8.6 shall be deemed to prohibit any Party from making
any disclosure which its counsel deems necessary or advisable in order to
satisfy such Party's disclosure obligations imposed by Law.
8.7 ACQUISITION PROPOSALS. Except with respect to this Agreement and
----------------------
the transactions contemplated hereby, neither First Bank nor any director,
employee, investment banker, attorney, accountant or other representative
thereof (collectively, "Representatives") retained by First Bank shall directly
or indirectly solicit any Acquisition Proposal by any Person. Except to the
extent necessary to comply with the fiduciary duties of First Bank's Board of
Directors as advised by counsel, neither First Bank nor any Representative
thereof, shall furnish any non-public information that it is not legally
obligated to furnish, negotiate with respect to, or enter into any Contract with
respect to, any Acquisition Proposal, but First Bank may communicate information
about such an Acquisition Proposal to its shareholders if and to the extent that
it is required to do so in order to comply with its legal obligations as advised
by counsel. First Bank shall promptly notify Community Capital orally and in
writing in the event that they receive any inquiry or proposal relating to any
such transaction. Unless the prior written consent of Community Capital is
obtained, First Bank shall (a) immediately cease and cause to be terminated any
existing activities, discussions or negotiations with any Persons conducted
heretofore with respect to any of the foregoing, and
30
(b) direct and use its reasonable efforts to cause all of its Representatives
not to engage in any of the foregoing.
8.8. TAX TREATMENT. Each of the Parties undertakes and agrees to use
--------------
its reasonable efforts to cause the Merger to, and to take no action which would
cause the Merger not to, qualify as a "reorganization" within the meaning of
Section 368(a) of the Internal Revenue Code for federal income tax purposes.
8.9 CERTAIN MODIFICATIONS. Community Capital and First Bank shall
----------------------
consult with each other with respect to their loan, litigation, and real estate
valuation policies and practices (including loan classifications and levels of
reserves) and First Bank shall make such modifications or changes to its
policies and practices, if any, prior to the Closing Date, as may be mutually
agreed upon. Community Capital and First Bank also shall consult with respect
to the character, amount, and timing of restructuring and expense charges to be
taken by each of them in connection with the transactions contemplated by this
Agreement and shall take charges in accordance with GAAP, prior to the Closing
Date, as may be mutually agreed upon by them. No Parties' representations,
warranties, and covenants contained in this Agreement shall be deemed to be
inaccurate or breached in any respect as a consequence of any modifications or
charges undertaken solely on account of this Section 8.9.
8.10 EMPLOYEE BENEFITS AND CONTRACTS. Following the Closing Date,
----------------------------------
Community Capital shall provide generally to officers and employees of First
Bank who continue employment with Community Capital or its Subsidiaries
following the Closing Date employee benefits under employee benefit plans, on
terms and conditions which when taken as a whole are substantially similar to
those currently provided by the Community Capital Companies to their similarly
situated officers and employees. For purposes of participation and vesting (but
not accrual of benefits) under such employee benefit plans, (a) service under
any qualified defined contribution plans of First Bank shall be treated as
service under Community Capital's qualified defined contribution plans and (b)
service under any other employee benefit plans of First Bank shall be treated as
service under any similar employee benefit plans maintained by Community
Capital. Community Capital and its Subsidiaries also shall honor in accordance
with their terms all employment, severance, consulting and other compensation
Contracts disclosed in Section 8.10 of the First Bank Disclosure Memorandum to
--------------------------------
Community Capital between First Bank and any current or former director,
officer, or employee thereof and all provisions for vested benefits accrued
through the Effective Time under First Bank Benefit Plans; it being understood
that the Contracts to be assumed by Community Capital must be specifically
listed or cross referenced at Section 8.10 of the First Bank Disclosure
---------------------
Memorandum and that no other Contracts of the type referenced in Section 8.10 of
----------
the First Bank Disclosure Memorandum shall be deemed to be assumed by Community
--------------------------------
Capital as a result of this Section 8.10.
8.11 SECURITY LAW MATTERS. Each of the Parties undertakes and agrees
----------------------
to use its reasonable efforts to cause the shares of Community Capital Common
Stock to be issued in exchange for First Bank Common Stock in connection with
the Merger to be exempt from registration under the 1933 Act and any applicable
state securities laws. As soon as reasonably practicable upon the execution
hereof, Community Capital shall prepare a private placement memorandum with
respect to the securities to be issued to the shareholders of First Bank
pursuant to the terms of this Agreement. The private
31
placement memorandum shall be included as part of the proxy statement to be
provided to First Bank shareholders in connection with their special meeting to
be held for the purpose of approving the terms of this Agreement. First Bank
shall cooperate in the preparation of the private placement memorandum and shall
furnish all information concerning it as Community Capital may reasonably
request.
8.12 REGISTRATION STATEMENT. Community Capital shall use its
-----------------------
reasonable best efforts to prepare and file the Registration Statement with the
SEC within thirty (30) days after the Effective Date, and shall use its
reasonable efforts to cause the Registration Statement to become effective under
the 1933 Act and to remain effective for a period of one (1) year following the
Closing. Community Capital shall take any action required to be taken under the
applicable state Blue Sky or securities laws in connection with the resale of
the shares of Community Capital Common Stock upon consummation of the Merger.
First Bank shall cooperate in the preparation and filing of the Registration
Statement and shall furnish all information concerning it and the holders of its
capital stock as Community Capital may reasonably request in connection with
such action. Community Capital and First Bank shall make all necessary filings
with respect to the Merger under the Securities Laws. Without limiting
Community Capital's obligation to prepare and file the Registration Statement as
provided in this Section 8.12, as long as any current holder of First Bank
Common Stock continues to own any of the Community Capital Common Stock received
pursuant to this Agreement as to which transfer restrictions have not expired,
Community Capital will take such actions as any such holder may reasonably
request to enable the holder to sell in compliance with Rule 144 of the 1933 Act
(or any similar substitute rule adopted by the SEC) such Community Capital
Common Stock, including without limitation, filing all reports required to be
filed by Community Capital under Section 13 or 15(d) of the 1934 Act and the
rules and regulations adopted by the SEC thereunder, so as to comply with the
current public information requirements of SEC Rule 144(c)(1).
8.13 NASDAQ SMALLCAP MARKET LISTING. Community Capital shall use its
--------------------------------
best efforts to list on the Nasdaq SmallCap Market the shares of Community
Capital Common Stock to be issued to the holders of First Bank Common Stock
pursuant to the Merger (the "Community Capital Shares") and registered in the
Registration Statement, and Community Capital shall give all notices and make
all filings with Nasdaq required in connection with the transactions
contemplated herein.
32
ARTICLE 9.
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
-------------------------------------------------
9.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY. The respective
--------------------------------------------
obligations of each Party to perform this Agreement and consummate the
transactions contemplated hereby are subject to the satisfaction of the
following conditions, unless waived by both Community Capital and First Bank
pursuant to Section 12.6 of this Agreement:
(a) SHAREHOLDER APPROVAL. The shareholders of First Bank shall
---------------------
have approved this Agreement, and the consummation of the transactions
contemplated hereby, including the Merger, as and to the extent required by Law
or by the provisions of any governing instruments.
(b) REGULATORY APPROVALS. All Consents of, filings and
---------------------
registrations with, and notifications to all Regulatory Authorities required for
consummation of the transactions contemplated by this Agreement shall have been
obtained or made and shall be in full force and effect and all waiting periods
required by Law shall have expired. No Consent obtained from any Regulatory
Authority which is necessary to consummate the transactions contemplated hereby
shall be conditioned or restricted in a manner (including, without limitation,
requirements relating to the raising of additional capital or the disposition of
Assets) which in the reasonable judgment of the Board of Directors of either
Community Capital or First Bank would so materially adversely impact the
economic or business benefits of the transactions contemplated by this Agreement
as to render inadvisable the consummation of the transactions contemplated by
this Agreement.
(c) CONSENTS AND APPROVALS. Each of Community Capital and First
------------------------
Bank shall have obtained any and all Consents required for consummation of the
transactions contemplated by this Agreement (other than those referred to in
Section 9.1(b) of this Agreement) or for the preventing of any Default under any
Contract or Permit of such Party which, if not obtained or made, is reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
such Party. No Consent so obtained which is necessary to consummate the
transactions contemplated hereby shall be conditioned or restricted in a manner
which in the reasonable judgment of the Board of Directors of either Community
Capital or First Bank would so materially adversely impact the economic or
business benefits of the transactions contemplated by this Agreement as to
render inadvisable the consummation of the transactions contemplated by this
Agreement.
(d) TAX MATTERS. Each Party shall have received a written opinion
-----------
of counsel from Powell, Goldstein, Xxxxxx & Xxxxxx LLP, in form reasonably
satisfactory to such Parties (the "Tax Opinion"), to the effect that (1) the
Merger will constitute a reorganization within the meaning of Section 368(a) of
the Internal Revenue Code, (2) the exchange in the Merger of First Bank Common
Stock for Community Capital Common Stock will not give rise to gain or loss to
the shareholders of First Bank with respect to such exchange (except to the
extent of any cash received), and (3) neither First Bank nor Community Capital
will recognize gain or loss as a consequence of the Merger (except for amounts
resulting from any required change in accounting methods and any income and
deferred gain recognized pursuant to Treasury regulations issued under Section
1502 of the Internal Revenue Code). In rendering such Tax Opinion, such counsel
shall be entitled to rely
33
upon representations of officers of First Bank and Community Capital reasonably
satisfactory in form and substance to such counsel.
(e) LEGAL PROCEEDINGS. No court or governmental or regulatory
------------------
authority of competent jurisdiction shall have enacted, issued, promulgated,
enforced or entered any Law or Order (whether temporary, preliminary or
permanent) or taken any other action which prohibits, restricts or makes illegal
consummation of the transactions contemplated by this Agreement.
(f) DISSENTERS. The number of shares as to which shareholders of
----------
First Bank have perfected their statutory dissenters' rights as provided under
Section 3.5 does not exceed 5% of the outstanding shares of First Bank Common
Stock.
9.2 CONDITIONS TO OBLIGATIONS OF COMMUNITY CAPITAL. The obligations of
----------------------------------------------
Community Capital to perform this Agreement and consummate the transactions
contemplated hereby are subject to the satisfaction of the following conditions,
unless waived by Community Capital pursuant to Section 12.6(a) of this
Agreement:
(a) REPRESENTATIONS AND WARRANTIES. For purposes of this Section
-------------------------------
9.2(a), the accuracy of the representations and warranties of First Bank set
forth or referred to in this Agreement shall be assessed as of the date of this
Agreement and as of the Closing Date with the same effect as though all such
representations and warranties had been made on and as of the Closing Date
(provided that representations and warranties which are confined to a specified
date shall speak only as of such date). The representations and warranties of
First Bank set forth in Section 5.3 of this Agreement shall be true and correct
(except for inaccuracies which are de minimus in amount or effect). The
representations and warranties of First Bank set forth in Sections 5.20 and 5.21
of this Agreement shall be true and correct in all material respects. There
shall not exist inaccuracies in the representations and warranties of First Bank
set forth in this Agreement (excluding the representations and warranties set
forth in Sections 5.3, 5.20, and 5.21) such that the aggregate effect of such
inaccuracies would have, or is reasonably likely to have, a Material Adverse
Effect on First Bank; provided that, for purposes of this sentence only, those
representations and warranties which are qualified by references to "material"
or "Material Adverse Effect" shall be deemed not to include such qualifications.
(b) PERFORMANCE OF AGREEMENTS AND COVENANTS. Each and all of the
----------------------------------------
agreements and covenants of First Bank to be performed and complied with
pursuant to this Agreement and the other agreements contemplated hereby prior to
the Closing Date shall have been duly performed and complied with in all
material respects.
(c) CERTIFICATES. First Bank shall have delivered to Community
------------
Capital (1) a certificate, dated as of the Closing Date and signed on its behalf
by its chief executive officer and its chief financial officer, to the effect
that the conditions of its obligations set forth in Sections 9.2(a) and 9.2(b)
of this Agreement have been satisfied, and (2) certified copies of resolutions
duly adopted by First Bank's Board of Directors and, if applicable, First Bank's
shareholders evidencing the taking of all corporate action necessary to
authorize the execution, delivery and performance of this Agreement,
34
and the consummation of the transactions contemplated hereby, all in such
reasonable detail as Community Capital and its counsel shall request.
(d) CLAIMS/INDEMNIFICATION LETTERS. Each of the directors and
-------------------------------
officers of First Bank and First Bank shall have executed and delivered to
Community Capital letters in substantially the form of Exhibit 2.
----------
(e) OPINION OF COUNSEL. First Bank shall have delivered to
--------------------
Community Capital an opinion of Miller, Hamilton, Xxxxxx & Xxxx, L.L.C.,
counsel to First Bank, dated as of the Closing Date, in form reasonably
satisfactory to Community Capital, as to matters reasonable and customary in
transactions like the Merger contemplated by this Agreement.
9.3 CONDITIONS TO OBLIGATIONS OF FIRST BANK. The obligations of First
----------------------------------------
Bank to perform this Agreement and consummate the transactions contemplated
hereby are subject to the satisfaction of the following conditions, unless
waived by First Bank pursuant to Section 12.6(b) of this Agreement:
(a) REPRESENTATIONS AND WARRANTIES. For purposes of this Section
-------------------------------
9.3(a), the accuracy of the representations and warranties of Community Capital
set forth or referred to in this Agreement shall be assessed as of the date of
this Agreement and as of the Closing Date with the same effect as though all
such representations and warranties had been made on and as of the Closing Date
(provided that representations and warranties which are confined to a specified
date shall speak only as of such date). The representations and warranties of
Community Capital set forth in Section 6.20 of this Agreement shall be true and
correct in all material respects. There shall not exist inaccuracies in the
representations and warranties set forth in this Agreement (excluding the
representations and warranties set forth in Section 6.20) such that the
aggregate effect of such inaccuracies would have, or is reasonably likely to
have a Material Adverse Effect on Community Capital; provided that, for purposes
of this sentence only, those representations and warranties which are qualified
by reference to "material" or "Material Adverse Effect" shall be deemed not to
include such qualifications.
(b) PERFORMANCE OF AGREEMENTS AND COVENANTS. Each and all of the
----------------------------------------
agreements and covenants of Community Capital to be performed and complied with
pursuant to this Agreement and the other agreements contemplated hereby prior to
the Closing Date shall have been duly performed and complied with in all
material respects.
(c) CERTIFICATES. Community Capital shall have delivered to First
------------
Bank (1) a certificate, dated as of the Closing Date and signed on its behalf by
its chief executive officer and its chief financial officer, to the effect that
the conditions of its obligations set forth in Section 9.3(a) and 9.3(b) of this
Agreement have been satisfied, and (2) certified copies of resolutions duly
adopted by Community Capital's Board of Directors evidencing the taking of all
corporate action necessary to authorize the execution, delivery and performance
of this Agreement, and the consummation of the transactions contemplated hereby,
all in such reasonable detail as First Bank and its counsel shall request.
35
(d) OPINION OF COUNSEL. Community Capital shall have delivered to
------------------
First Bank an opinion of Powell, Goldstein, Xxxxxx & Xxxxxx LLP, counsel to
Community Capital, dated as of the Closing Date, in form reasonably satisfactory
to First Bank, as to matters reasonable and customary in transactions like the
Merger contemplated by this Agreement.
ARTICLE 10.
TERMINATION
-----------
10.1 TERMINATION. Notwithstanding any other provision of this
-----------
Agreement, this Agreement may be terminated and the transactions contemplated
hereby abandoned at any time prior to the Closing Date:
(a) By mutual consent of the Board of Directors of Community
Capital and the Board of Directors of First Bank;
(b) By the Board of Directors of either Community Capital or First
Bank (provided that the terminating Party is not then in breach of any
representation or warranty contained in this Agreement under the applicable
standard set forth in Section 9.2(a) of this Agreement in the case of First Bank
and Section 9.3(a) in the case of Community Capital or in material breach of any
covenant or agreement contained in this Agreement) in the event of a material
breach by the nonterminating Party of any representation or warranty contained
in this Agreement which cannot be or has not been cured within thirty (30) days
after the giving of written notice to the breaching Party of such breach and
which breach would provide the non-breaching Party the ability to refuse to
consummate the transactions contemplated by this Agreement under the standard
set forth in Section 9.2(a) of this Agreement in the case of termination by
Community Capital and Section 9.3(a) of this Agreement in the case of
termination by First Bank; or
(c) By the Board of Directors of either Community Capital or First
Bank (provided that the terminating Party is not then in breach of any
representation or warranty contained in this Agreement under the applicable
standard set forth in Section 9.2(a) of this Agreement in the case of First Bank
and Section 9.3(a) in the case of Community Capital or in material breach of any
covenant or agreement contained in this Agreement) in the event of a material
breach by the nonterminating Party of any covenant or agreement contained in
this Agreement which cannot be or has not been cured within thirty (30) days
after the giving of written notice to the breaching Party of such breach; or
(d) By the Board of Directors of either Community Capital or First
Bank (provided that the terminating Party is not then in breach of any
representation or warranty contained in this Agreement under the applicable
standard set forth in Section 9.2(a) of this Agreement in the case of First Bank
and Section 9.3(a) in the case of Community Capital or in material breach of any
covenant or agreement contained in this Agreement) in the event any Consent of
any Regulatory Authority required for consummation of the transactions
contemplated hereby shall have been denied by final nonappealable action of such
authority or if any action taken by such authority is not appealed within the
time limit for appeal; or
36
(e) By the Board of Directors of Community Capital or First Bank
in the event that the transactions contemplated by this Agreement shall not have
been consummated on or before December 31, 2003, but only if the failure to
consummate the transactions contemplated hereby on or before such date is not
caused by any breach of this Agreement by the Party electing to terminate
pursuant to this Section 10.1(e); or
(f) By the Board of Directors of Community Capital or First Bank
(provided that the terminating Party is not then in breach of any representation
or warranty contained in this Agreement under the applicable standard set forth
in Section 9.2(a) of this Agreement in the case of First Bank and Section 9.3(a)
in the case of Community Capital or in material breach of any covenant or
agreement contained in this Agreement) in the event that any of the conditions
precedent to the obligations of such Party to consummate the transactions
contemplated by this Agreement (other than as contemplated by Section 10.1(d) of
this Agreement) cannot be satisfied or fulfilled by the date specified in
Section 10.1(e) of this Agreement; or
(g) By the Board of Directors of either Community Capital or First
Bank if, after the date hereof, a Material adverse change in the financial
condition or business of First Bank or Community Capital (as applicable) shall
have occurred or First Bank or Community Capital (as applicable) shall have
suffered a Material loss or damage to any of its properties or Assets, which
change, loss or damage will result in a Material Adverse Effect on the ability
of such Party to conduct its business.
10.2 EFFECT OF TERMINATION. In the event of the termination and
-----------------------
abandonment of this Agreement pursuant to Section 10.1 of this Agreement, this
Agreement shall become void and have no effect, except that the provisions of
Sections 8.5(b), 10.2, and 12.2 of this Agreement shall survive any such
termination and abandonment.
ARTICLE 11.
SURVIVAL; DIRECTORS' AND OFFICERS' PROTECTION
---------------------------------------------
11.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The respective
----------------------------------------------
representations, warranties, obligations, covenants, and agreements of the
parties shall not survive the Effective Time except this Article 11 and Articles
1, 2, 3, 4 and 12 and Section 8.8, 8.10, 8.12 and 8.13.
11.2 INDEMNIFICATION. Community Capital or a Community Capital
---------------
Subsidiary shall indemnify, defend and hold harmless all individuals who are
directors, officers and employees of First Bank as of the date hereof (each, an
"Indemnified Party") after the Effective Time against all costs, fees or
expenses (including reasonable attorneys' fees), judgments, fines, penalties,
losses, claims, damages, liabilities and amounts paid in settlement in
connection with any Litigation as incurred, in connection with any claim, action
or proceeding arising out of actions or omissions occurring at or prior to the
Effective Time (including the transactions contemplated by this Agreement) to
the maximum extent allowable under the ABCA. Without limiting the foregoing, in
any case in which approval of Community Capital or a Community Capital
Subsidiary is required to effectuate any indemnification,
37
Community Capital shall direct or cause a Community Capital Subsidiary to
direct, at the election of the Indemnified Party, that the determination of any
such approval shall be made by independent counsel mutually agreed upon between
Community Capital and the Indemnified Party. Community Capital shall, and shall
cause all other relevant Community Capital Subsidiaries, to apply such rights of
indemnification in good faith and to the fullest extent possible by applicable
law.
(a) Prior to Closing, Community Capital shall purchase for, and on
behalf of, its current and former officers and directors, extended coverage
under the current directors' and officers' liability insurance policy maintained
by First Bank or a substantially similar policy to provide for continued
coverage of such insurance for a period of three (3) years following the Closing
with respect to matters occurring prior to the Effective Time.
(b) If Community Capital or any of its successors or assigns shall
consolidate with or merger into any other Person and shall not be the continuing
or surviving Person of such consolidation or merger or shall transfer all or
substantially all of its assets to any Person, then and in each case, proper
provision shall be made so that the successors and assigns of Community Capital
shall assume the obligations set forth in this Section 11.2.
(c) The provisions of this Section 11.2 are intended to be for the
benefit of and shall be enforceable by each Indemnified Party, his or her heirs
and representatives.
ARTICLE 12.
MISCELLANEOUS
-------------
12.1 DEFINITIONS.
-----------
(a) Except as otherwise provided herein, the capitalized terms set
forth below (in their singular and plural forms as applicable) shall have the
following meanings:
"1933 ACT" shall mean the Securities Act of 1933, as amended.
"1934 ACT" shall mean the Securities Exchange Act of 1934, as amended.
"ABC" shall mean the Alabama Banking Code.
"ABCA" shall mean the Alabama Business Corporation Act.
"ACQUISITION PROPOSAL" with respect to a Party shall mean any tender
offer or exchange offer or any proposal for a merger with, the acquisition
of all of the stock (other than the transactions contemplated by this
Agreement) or Assets of, or any other business combination involving such
Party or any of its Subsidiaries or the acquisition of a substantial equity
interest in, or a substantial portion of the Assets of such Party or any of
its Subsidiaries.
38
"AFFILIATE" of a Person shall mean any person who is an affiliate for
purposes of Rule 145 under the 1933 Act.
"AGREEMENT" shall mean this Acquisition Agreement, including the
Exhibits delivered pursuant hereto and incorporated herein by reference.
"ASSETS" of a Person shall mean all of the assets, properties,
businesses and rights of such Person of every kind, nature, character and
description, whether real, personal or mixed, tangible or intangible,
accrued or contingent, or otherwise relating to or utilized in such
Person's business, directly or indirectly, in whole or in part, whether or
not carried on the books and records of such Person, and whether or not
owned in the name of such Person or any Affiliate of such Person and
wherever located.
"BHC ACT" shall mean the federal Bank Holding Company Act of 1956, as
amended.
"CLOSING DATE" shall mean the date on which the Closing occurs.
"COMMUNITY CAPITAL COMMON STOCK" shall mean the $1.00 par value common
stock of Community Capital.
"COMMUNITY CAPITAL COMPANIES" shall mean, collectively, Community
Capital and all Community Capital Subsidiaries.
"COMMUNITY CAPITAL DISCLOSURE MEMORANDUM" shall mean the written
information entitled "Community Capital Disclosure Memorandum" delivered on
---------------------------------------
or prior to the date of this Agreement to First Bank describing in
reasonable detail the matters contained therein.
"COMMUNITY CAPITAL FINANCIAL STATEMENTS" shall mean (a) the
consolidated balance sheets (including related notes and schedules, if any)
of Community Capital as of December 31, 2002 and 2001, and the related
statements of income, changes in shareholders' equity, and cash flows
(including related notes and schedules, if any) for each of the three years
ended December 31, 2002, 2001 and 2000, audited by Community Capital's
independent public accountants and (b) the consolidated balance sheets
(including related notes and schedules, if any) of Community Capital and
related statements of income, changes in shareholders' equity, and cash
flows (including related notes and schedules, if any) prepared with respect
to quarterly periods ended subsequent to December 31, 2002.
"CONSENT" shall mean any consent, approval, authorization, clearance,
exemption, waiver, or similar affirmation by any Person pursuant to any
Contract, Law, Order, or Permit.
"CONTRACT" shall mean any written or oral agreement, arrangement,
authorization, commitment, contract, indenture, instrument, lease,
obligation, plan, practice, restriction, understanding or undertaking of
any kind or character, or other document to which any Person is a party or
that is binding on any Person or its capital stock, Assets or business.
39
"DEFAULT" shall mean (a) any breach or violation of or default under
any Contract, Order or Permit, (b) any occurrence of any event that with
the passage of time or the giving of notice or both would constitute a
breach or violation of or default under any Contract, Order or Permit, or
(c) any occurrence of any event that with or without the passage of time or
the giving of notice would give rise to a right to terminate or revoke,
change the current terms of, or renegotiate, or to accelerate, increase, or
impose any Liability under, any Contract, Order or Permit.
"ENVIRONMENTAL LAWS" shall mean all Laws pertaining to pollution or
protection of the environment and which are administered, interpreted or
enforced by the United States Environmental Protection Agency and state and
local agencies with primary jurisdiction over pollution or protection of
the environment.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"ERISA AFFILIATE" shall refer to a relationship between entities such
that the entities would, now or at any time in the past, constitute a
"single employer" within the meaning of Section 414 of the Code.
"EXHIBITS" shall mean the Exhibits marked with the number indicated,
copies of which are attached to this Agreement. Such Exhibits are hereby
incorporated by reference herein and made a part hereof and may be referred
to in this Agreement and any other related instrument or document without
being attached hereto.
"FIRST BANK COMMON STOCK" shall mean the $5.00 par value common stock
of First Bank.
"FIRST BANK DISCLOSURE MEMORANDUM" shall mean the written information
entitled the "First Bank Disclosure Memorandum" delivered on or prior to
---------------------------------
the date of this Agreement to Community Capital describing in reasonable
detail the matters contained therein.
"FIRST BANK FINANCIAL STATEMENTS" shall mean (a) the consolidated (if
applicable) balance sheets (including related notes and schedules, if any)
of First Bank as of December 31, 2002 and 2001, and the related statements
of income, changes in shareholders' equity, and cash flows (including
related notes and schedules, if any) for each of the three years ended
December 31, 2002, 2001 and 2000, audited by First Bank's independent
public accountants, and (b) the consolidated (if applicable) balance sheets
(including related notes and schedules, if any) of First Bank and related
statements of income, changes in shareholders' equity, and cash flows
(including related notes and schedules, if any) prepared with respect to
quarterly periods ended subsequent to December 31, 2002.
40
"FIRST BANK SUBSIDIARIES" shall mean the direct and indirect
subsidiaries of First Bank.
"GAAP" shall mean generally accepted accounting principles,
consistently applied during the periods involved.
"GBCC" shall mean the Georgia Business Corporation Code.
"HAZARDOUS MATERIAL" shall mean any pollutant, contaminant, or toxic
or hazardous substance, pollutant, chemical or waste within the meaning of
the Comprehensive Environment Response, Compensation, and Liability Act, 42
U.S.C. Section 9601 et seq., or any similar federal, state or local Law
(and specifically shall include asbestos requiring abatement, removal or
encapsulation pursuant to the requirements of governmental authorities,
polychlorinated biphenyls, and petroleum and petroleum products).
"INTERIM COMMON STOCK" shall mean the $1.00 par value common stock of
Interim.
"INTERNAL REVENUE CODE" shall mean the Internal Revenue Code of 1986,
as amended, and the rules and regulations promulgated thereunder.
"KNOWLEDGE" as used with respect to First Bank or Community Capital,
as the case may be, shall mean the actual knowledge of the Chairman,
President, Chief Financial Officer, Chief Accounting Officer, Chief Credit
Officer, or any Senior or Executive Vice President of such Person.
"LAW" shall mean any code, law, ordinance, regulation, reporting or
licensing requirement, rule, or statute applicable to a Person or its
Assets, Liabilities or business, including, without limitation, those
promulgated, interpreted or enforced by any of the Regulatory Authorities.
"LIABILITY" shall mean any direct or indirect, primary or secondary,
liability, indebtedness, obligation, penalty, cost or expense (including,
without limitation, costs of investigation, collection and defense and
reasonable attorneys' fees), claim, deficiency, guaranty or endorsement of
or by any Person (other than endorsements of notes, bills, checks, and
drafts presented for collection or deposit in the ordinary course of
business) of any type, whether accrued, absolute or contingent, liquidated
or unliquidated, matured or unmatured, or otherwise.
"LIEN" shall mean any conditional sale agreement, default of title,
easement, encroachment, encumbrance, hypothecation, infringement, lien,
mortgage, pledge, reservation, restriction, security interest, title
retention or other security arrangement, or any adverse right or interest,
charge, or claim of any nature whatsoever of, on, or with respect to any
property or property interest, other than (i) Liens for current property
Taxes not yet due and payable, and
41
(ii) for depository institution Subsidiaries of a Party, pledges to secure
deposits and other Liens incurred in the ordinary course of banking
business.
"LITIGATION" shall mean any action, arbitration, cause of action,
claim, complaint, criminal prosecution, demand letter, governmental or
other examination or investigation, hearing, inquiry, administrative or
other proceeding, or notice (written or oral) by any Person alleging
potential Liability or requesting information relating to or affecting
Community Capital or First Bank, its business, its Assets (including,
without limitation, Contracts related to it), or the transactions
contemplated by this Agreement, but shall not include regular, periodic
examinations of depository institutions and their Affiliates by Regulatory
Authorities.
"LOAN PROPERTY" shall mean any property owned by the Party in question
or by any of its Subsidiaries or in which such Party or Subsidiary holds a
security interest, and, where required by the context, includes the owner
or operator of such property, but only with respect to such property.
"MATERIAL" for purposes of this Agreement shall be determined in light
of the facts and circumstances of the matter in question; provided that any
specific monetary amount stated in this Agreement shall determine
materiality in that instance.
"MATERIAL ADVERSE EFFECT" on a Party shall mean an event, change or
occurrence which has a material adverse impact on (a) the financial
position, business, or results of operations of such Party and its
Subsidiaries, taken as a whole, or (b) the ability of such Party to perform
its obligations under this Agreement or to consummate the transactions
contemplated by this Agreement, provided that "material adverse impact"
shall not be deemed to include the impact of (1) changes in banking and
similar Laws of general applicability or interpretations thereof by courts
or governmental authorities, (2) changes in GAAP or regulatory accounting
principles generally applicable to banks and their holding companies, (3)
actions and omissions of a Party (or any of its Subsidiaries) taken with
the prior informed consent of the other Party in contemplation of the
transactions contemplated hereby, (4) the transactions, expenses and fees
contemplated hereby and compliance with the provisions of this Agreement on
the operating performance of the Parties or (5) changes in economic or
other conditions affecting the banking industry in general.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"ORDER" shall mean any administrative decision or award, decree,
injunction, judgment, order, quasi-judicial decision or award, ruling, or
writ of any federal, state, local or foreign or other court, arbitrator,
mediator, tribunal, administrative agency or Regulatory Authority.
"PARTICIPATION FACILITY" shall mean any facility or property in which
the Party in question or any of its Subsidiaries participates in the
management (including any property or
42
facility held in a joint venture) and, where required by the context, said
term means the owner or operator of such facility or property, but only
with respect to such facility or property.
"PARTY" shall mean either of First Bank or Community Capital, and
"Parties" shall mean both of First Bank and Community Capital.
"PERMIT" shall mean any federal, state, local, and foreign
governmental approval, authorization, certificate, easement, filing,
franchise, license, notice, permit, or right to which any Person is a party
or that is or may be binding upon or inure to the benefit of any Person or
its securities, Assets, Liabilities, or business.
"PERSON" shall mean a natural person or any legal, commercial or
governmental entity, such as, but not limited to, a corporation, general
partnership, joint venture, limited partnership, limited liability company,
trust, business association, group acting in concert, or any person acting
in a representative capacity.
"REGISTRATION STATEMENT" shall mean the registration statement on Form
S-3 (or any subsequent form adopted by the SEC to replace or supersede Form
S-3), including any pre-effective or post-effective amendments or
supplements thereto, filed with the SEC by Community Capital under the 1933
Act with respect to all the shares of Community Capital Common Stock to be
issued to the shareholders of First Bank in connection with the
transactions contemplated by this Agreement.
"REGULATORY AUTHORITIES" shall mean, collectively, the Federal Trade
Commission, the United States Department of Justice, the Board of the
Governors of the Federal Reserve System, the Office of Thrift Supervision
(including its predecessor, the Federal Home Loan First Bank Board), the
Office of the Comptroller of the Currency, the Federal Deposit Insurance
Corporation, all state regulatory agencies having jurisdiction over the
Parties and their respective Subsidiaries, the NASD and the SEC.
"RIGHTS" shall mean all arrangements, calls, commitments, Contracts,
options, rights to subscribe to, scrip, understandings, warrants or other
binding obligations of any character whatsoever relating to, or securities
or rights convertible into or exchangeable for, shares of the capital stock
of a Person or by which a Person is or may be bound to issue additional
shares of its capital stock or other Rights.
"SEC" shall mean the United States Securities and Exchange Commission.
"SECURITIES LAWS" shall mean the 1933 Act, the 1934 Act, the
Investment Company Act of 1940, as amended, the Investment Advisors Act of
1940, as amended, the Trust Indenture Act of 1939, as amended, and the
rules and regulations of any Regulatory Authority promulgated thereunder.
43
"SUBSIDIARIES" shall mean all those corporations, banks, associations,
partnerships or other entities or ventures of which the entity in question
owns or controls 50% or more of the outstanding equity securities or the
ownership interest, as the case may be, either directly or through an
unbroken chain of entities as to each of which 50% or more of the
outstanding equity securities is owned directly or indirectly by its
parent; provided, however, there shall not be included any such entity
acquired through foreclosure or any such entity the equity securities of
which are owned or controlled in a fiduciary capacity.
"SURVIVING BANK" shall mean Interim, as the surviving bank resulting
from the Merger.
"TAX" OR "TAXES" shall mean any federal, state, county, local or
foreign income, profits, franchise, gross receipts, payroll, sales,
employment, use, property, withholding, excise, occupancy and other taxes,
assessments, charges, fares or impositions, including interest, penalties
and additions imposed thereon or with respect thereto.
(a) Any singular term in this Agreement shall be deemed to
include the plural and any plural term the singular. Whenever the
words "include," "includes," or "including" are used in this
Agreement, they shall be deemed followed by the words "without
limitation."
(b) The terms set forth below shall have the meanings
ascribed to them in the referenced sections:
Allocable Cash Section 3.1(c)
Allowance Section 5.10
Cash Consideration Section 3.1(c)
Cash Elections Section 3.2(b)
Certificates Section 4.1
Closing Section 1.2
Community Capital
Benefit Plans Section 6.15(a)
Effective Time Section 1.3
Electing Shareholder Section 3.2(b)
ERISA Plan Section 5.15(a)
Exchange Ratio Section 3.1(c)
First Bank Benefit Plans Section 5.15(a)
First Bank Qualified Plans Section 5.15(b)
Indemnified Party Section 11.2
Market Value Section 3.1(d)
Merger Section 1.1
Remaining Allocable Cash Section 3.2(a)
Representatives Section 8.7
Small Shareholder Section 3.2(a)
44
Stock Consideration Section 3.1(c)
Support Agreement Preamble
Tax Opinion Section 9.1(d)
12.2 EXPENSES.
---------
(a) Except as otherwise provided in this Section 12.2, each of the
Parties shall bear and pay all direct costs and expenses incurred by it or on
its behalf in connection with the transactions contemplated hereunder, including
filing, registration and application fees, printing fees, and fees and expenses
of its own financial or other consultants, investment bankers, accountants and
counsel.
(b) Notwithstanding the provisions of Section 12.2(a) of this
Agreement, if for any reason this Agreement is terminated pursuant to Sections
10.1(b) or 10.1(c) of this Agreement, the breaching Party agrees to pay the
non-breaching Party, as liquidated damages, $300,000 if the breach is willful or
if this Agreement is terminated in contemplation of an Acquisition Proposal,
which sums represent compensation for the non-breaching Party's loss as a result
of the transactions contemplated by this Agreement not being consummated. Final
settlement with respect to payment of such fees shall be made within thirty (30)
days after the termination of this Agreement.
12.3 BROKERS AND FINDERS. Except as provided in Section 12.3 of the
---------------------
First Bank Disclosure Memorandum, each of the Parties represents and warrants
-----------------------------------
that neither Community Capital nor First Bank nor any of its officers,
directors, employees or Affiliates nor any shareholder of First Bank 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 other broker or finder based upon its
representing or being retained by or allegedly representing or being retained by
Community Capital or First Bank each of Community Capital and First Bank as the
case may be, agrees to indemnify and hold Community Capital or First Bank, as
applicable, harmless from any Liability in respect of any such claim.
12.4 ENTIRE AGREEMENT. Except as otherwise expressly provided herein,
-----------------
this Agreement (including the documents and instruments referred to herein)
constitutes the entire agreement between the Parties with respect to the
transactions contemplated hereunder and supersedes all prior arrangements or
understandings with respect thereto, written or oral. Nothing in this Agreement
expressed or implied, is intended to confer upon any Person, other than the
Parties or their respective successors, any rights, remedies, obligations, or
liabilities under or by reason of this Agreement.
12.5 AMENDMENTS. To the extent permitted by Law, this Agreement may be
----------
amended by a subsequent writing signed by each of the Parties upon the approval
of the Boards of Directors of Community Capital and First Bank.
12.6 WAIVERS.
-------
(a) Prior to or at the Closing Date, Community Capital, acting
through its Board of Directors, chief executive officer or other authorized
officer, shall have the right to waive any Default
45
in the performance of any term of this Agreement by First Bank, to waive or
extend the time for the compliance or fulfillment by First Bank of any and all
of its obligations under this Agreement, and to waive any or all of the
conditions precedent to the obligations of Community Capital under this
Agreement, except any condition which, if not satisfied, would result in the
violation of any Law. No such waiver shall be effective unless in writing signed
by a duly authorized officer of Community Capital.
(b) Prior to or at the Closing Date, First Bank, acting through
its Board of Directors, chief executive officer or other authorized officer,
shall have the right to waive any Default in the performance of any term of this
Agreement by Community Capital, to waive or extend the time for the compliance
or fulfillment by Community Capital of any and all of its obligations under this
Agreement, and to waive any or all of the conditions precedent to the
obligations of First Bank under this Agreement, except any condition which, if
not satisfied, would result in the violation of any Law. No such waiver shall
be effective unless in writing signed by a duly authorized officer of First
Bank.
(c) The failure of any Party at any time or times to require
performance of any provision hereof shall in no manner affect the right of such
Party at a later time to enforce the same or any other provision of this
Agreement. No waiver of any condition or of the breach of any term contained in
this Agreement in one or more instances shall be deemed to be or construed as a
further or continuing waiver of such condition or breach or a waiver of any
other condition or of the breach of any other term of this Agreement.
12.7 ASSIGNMENT. Except as may be expressly contemplated hereby,
----------
neither this Agreement nor any of the rights, interests or obligations hereunder
may be assigned by any Party hereto (whether by operation of Law or otherwise)
without the prior written consent of the other Party. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and be
enforceable by the Parties and their successors and assigns.
12.8 NOTICES. All notices or other communications which are required
-------
or permitted hereunder shall be in writing and sufficient if delivered by hand,
by facsimile transmission, by registered or certified mail, postage pre-paid, or
by courier or overnight carrier, to the persons at the addresses set forth below
(or at such other address as may be provided hereunder), and shall be deemed to
have been delivered as of the date so delivered:
Community Capital: Community Capital Bancshares, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxx, President
Fax: (000) 000-0000
With a copy (which shall not constitute notice) to:
Powell, Goldstein, Xxxxxx & Xxxxxx LLP
46
Sixteenth Floor
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx Xxxxxxx, Esq.
Fax: (000) 000-0000
First Bank: First Bank of Dothan, Inc.
X.X. Xxx 0000
Xxxxxx, Xxxxxxx 00000
Attn: Xxxxxx Xxx Xxxxxx, Chairman & CEO
Fax: (000) 000-0000
With a copy (which shall not constitute notice):
Miller, Hamilton, Xxxxxx & Xxxx, L.L.C.
000-000 Xxxxx Xxxxxx
X.X. Xxx 00
Xxxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx
Fax: (000) 000-0000
12.9 GOVERNING LAW. This Agreement shall be governed by and construed
--------------
in accordance with the Laws of the State of Georgia, without regard to any
applicable conflicts of Laws, except to the extent that the federal laws of the
United States may apply to the transactions contemplated hereby.
12.10 COUNTERPARTS. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
12.11 CAPTIONS. The captions contained in this Agreement are for
--------
reference purposes only and are not part of this Agreement.
12.12 ENFORCEMENT OF AGREEMENT. The Parties hereto agree that
--------------------------
irreparable damage would occur in the event that any of the provisions of this
Agreement was not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the Parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity.
12.13 SEVERABILITY. Any term or provision of this Agreement which is
------------
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such
47
invalidity or unenforceability without rendering invalid or unenforceable the
remaining terms and provisions of this Agreement or affecting the validity or
enforceability of any of the terms or provisions of this Agreement in any other
jurisdiction. If any provision of this Agreement is so broad as to be
unenforceable, the provision shall be interpreted to be only so broad as is
enforceable.
[SIGNATURES ON NEXT PAGE]
48
IN WITNESS WHEREOF, each of the Parties has executed and sealed or caused
this Agreement to be executed on its behalf and its corporate seal to be
hereunto affixed and attested by officers thereunto as of the day and year first
above written.
ATTEST: COMMUNITY CAPITAL BANCSHARES, INC.
/s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxx
----------------------- --------------------
Secretary Xxxxxx X. Xxx
President
[CORPORATE SEAL]
ATTEST: FIRST BANK OF DOTHAN, INC.
/s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxxxx Xxx Xxxxxx
------------------------- ------------------------
Secretary Xxxxxx Xxx Xxxxxx
Chairman of the Board and
Chief Executive Officer
[CORPORATE SEAL]
49
Exhibit 1
SUPPORT AGREEMENT
-----------------
THIS SUPPORT AGREEMENT ("Agreement") is made and entered into as of the
____ day of June, 2003, by and between the undersigned, _____________________, a
resident of ____________, Alabama, and Community Capital Bancshares, Inc., a
corporation organized and existing under the laws of the State of Georgia
("Community Capital").
First Bank of Dothan ("First Bank"), a banking corporation existing under
the laws of the State of Alabama, Community Capital and Interim Community
Capital Bank ("Interim"), a [BANKING CORPORATION] organized and existing under
the laws of Alabama, have entered into an Agreement and Plan of Merger, dated as
of June __, 2003 (the "Merger Agreement"). The Merger Agreement generally
provides for the merger of First Bank into Interim (the "Merger") and the
conversion of the issued and outstanding shares of the $5.00 par value common
stock of First Bank ("First Bank Common Stock") into cash and shares of the no
par value common stock of Community Capital. The Merger Agreement is subject to
the affirmative vote of two-thirds of the shareholders of First Bank, the
receipt of certain regulatory approvals, and the satisfaction of other
conditions.
The undersigned is a member of the Board of Directors of First Bank and is
the owner of ________ shares of First Bank Common Stock and has rights by option
or otherwise to acquire _______ additional shares of First Bank Common Stock
(collectively, the "Shares"). In order to induce Community Capital to enter
into the Merger Agreement, the undersigned is entering into this Agreement with
Community Capital to set forth certain terms and conditions governing the
actions to be taken by the undersigned solely in his capacity as a shareholder
of First Bank with respect to the Shares until consummation of the Merger.
NOW, THEREFORE, in consideration of the transactions contemplated by the
Merger Agreement and the mutual promises and covenants contained herein, the
parties agree as follows:
1. Without the prior written consent of Community Capital, which
consent shall not be unreasonably withheld, the undersigned shall not transfer,
sell, assign, convey, or encumber any of the Shares during the term of this
Agreement except for transfers (i) by operation of law, by will, or pursuant to
the laws of descent and distribution, (ii) in which the transferee shall agree
in writing to be bound by the provisions of paragraphs 1, 2, and 3 of this
Agreement as fully as the undersigned, or (iii) to Community Capital pursuant to
the terms of the Merger Agreement. Without limiting the generality of the
foregoing, the undersigned shall not grant to any party any option or right to
purchase the Shares or any interest therein. Further, except with respect to
the Merger, the undersigned shall not during the term of this Agreement approve
or ratify any agreement or contract pursuant to which the Shares would be
transferred to any other party as a result of a consolidation, merger, share
exchange, or acquisition.
1
2. The undersigned intends to, and will, vote (or cause to be voted)
all of the Shares over which the undersigned has voting authority (other than in
a fiduciary capacity) in favor of the Merger Agreement and the Merger at any
meeting of shareholders of First Bank called to vote on the Merger Agreement or
the Merger or the adjournment thereof or in any other circumstance upon which a
vote, consent, or other approval with respect to the Merger Agreement or the
Merger is sought. Further, the undersigned intends to, and will, surrender the
certificate or certificates representing the Shares over which the undersigned
has dispositive authority to Community Capital upon consummation of the Merger
as described in the Merger Agreement and hereby waives any rights of appraisal,
or rights to dissent from the Merger, that the undersigned may have.
3. Except as otherwise provided in this Agreement, at any meeting of
shareholders of First Bank or at any adjournment thereof or any other
circumstances upon which their vote, consent, or other approval is sought, the
undersigned will vote (or cause to be voted) all of the Shares over which the
undersigned has voting authority (other than in a fiduciary capacity) against
(i) any merger agreement, share exchange, or merger (other than the Merger
Agreement and the Merger), consolidation, combination, sale of substantial
assets, merger, recapitalization, dissolution, liquidation, or winding-up of or
by First Bank or (ii) any amendment of First Bank's Articles of Incorporation or
Bylaws or other proposal or transaction involving First Bank or any of its
subsidiaries, which amendment or other proposal or transaction would in any
manner impede, frustrate, prevent, or nullify the Merger, the Merger Agreement,
or any of the other transactions contemplated thereby.
4. The undersigned acknowledges and agrees that Community Capital could
not be made whole by monetary damages in the event of any default by the
undersigned of the terms and conditions set forth in this Agreement. It is
accordingly agreed and understood that Community Capital, in addition to any
other remedy which it may have at law or in equity, shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and specifically
to enforce the terms and provisions hereof in any action instituted in any court
of the United States or in any state having appropriate jurisdiction.
5. Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms and provisions of this Agreement or
affecting the validity or enforceability of any of the terms or provisions of
this Agreement in any other jurisdiction. If any provision of this Agreement is
so broad as to be unenforceable, the provision shall be interpreted to be only
so broad as is enforceable.
6. The covenants and obligations set forth in this Agreement shall
expire and be of no further force and effect on the earlier of: (i) December
31, 2003, or such date to which the Merger Agreement is extended; or (ii) the
date on which the Merger Agreement is terminated under Section 10.1 thereof.
2
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the undersigned as of the day and year first above written.
____________________________________
Name: __________________________
(Please print or type)
COMMUNITY CAPITAL BANCSHARES, INC.
By: _________________________________
Xxxxxx X. Xxx
President
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Exhibit 2
Claims/Indemnification Letter
_______________, 2003
Community Capital Bancshares, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxx, Xxxxxxx 00000
RE: FIRST BANK OF DOTHAN, INC.
Ladies and Gentlemen:
This letter is delivered pursuant to the Agreement and Plan of Merger (the
"Agreement"), dated as of June __, 2003, by and between First Bank of Dothan,
Inc. ("First Bank"), Community Capital Bancshares, Inc. ("Community Capital")
and Interim Community Capital Bank ("Interim"). All capitalized terms that are
not defined in this letter shall have the meaning set forth in the Agreement.
As a result of the proposed merger (the "Merger") of First Bank into and
with Interim, First Bank will cease to exist as a separate entity. Concerning
claims which I may have against First Bank, in my capacity as an officer or
director, I hereby affirm the following:
(a) Community Capital or a Community Capital subsidiary shall assume all
liability (to the extent First Bank was so liable) for claims for
indemnification arising under First Bank's Articles of Incorporation
or bylaws as existing on June __, 2003, or as may be afforded by the
laws of the State of Alabama or the United States, and for claims for
normal salaries, wages or other compensation, employee benefits,
reimbursement of reasonable expenses or worker's compensation arising
out of my employment through the effective date of the Merger;
(b) In my capacity as an officer or a director, I do not have, and am not
aware of, any claims I might have (other than routine compensation,
benefits and the like as an employee, or ordinary rights as a
customer) against First Bank; and
(c) I hereby release First Bank from any and all claims which I may now or
hereafter possess against First Bank in my capacity as an officer or a
director, other than those referred to in paragraph (a) above.
Community Capital Bancshares, Inc.
June __, 2003
page 2
By executing this letter on behalf of Community Capital, you shall
acknowledge the assumption by Community Capital of the liabilities described in
paragraph (a) above.
Sincerely,
___________________________________
Signature
____________________________
Print Name
____________________________
Title
On behalf of Community Capital, I hereby acknowledge receipt of this letter
and affirm the assumptions by Community Capital of the liabilities described in
paragraph (a) above, as of this ___ day of June, 2003.
Community Capital Bancshares, Inc.
By:_________________________________
