<PAGE>
As filed with the Securities and Exchange Commission on October 8, 1997.
Registration No. ___________________
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________________
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
____________________________
BUCKHEAD COMMUNITY BANCORP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<CAPTION>
GEORGIA 6021 58-2265980
----------- --------- ------------
<S> <C> <C>
(STATE OR OTHER JURISDICTION (PRIMARY STANDARD INDUSTRIAL (I.R.S. Employer
OF INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) Identification No.)
</TABLE>
415 EAST PACES FERRY ROAD, N.E., ATLANTA, GEORGIA 30305-3398
(404) 812-0440
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
______________________________________
MARVIN COSGRAY
PRESIDENT AND CHIEF EXECUTIVE OFFICER
415 EAST PACES FERRY ROAD, N.E.
ATLANTA, GEORGIA 30305-3398
(404) 812-0440
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
______________________________________
Copies of all communications, including copies of all communications
sent to agent for service, should be sent to:
Larry W. Shackelford, Esq.
Morris, Manning & Martin, L.L.P.
1600 Atlanta Financial Center
3343 Peachtree Road, N.E.
Atlanta, Georgia 30326
(404) 233-7000
(404) 365-9532 (Fax)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon
as practicable after this Registration Statement becomes effective.
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering.[_]33-_________________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.[_]33-_________________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.[_]
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CALCULATION OF REGISTRATION FEE
===========================================================================================================================
TITLE OF EACH CLASS OF AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM Amount of
Securities to be Registered REGISTERED Price Per Share Aggregate Price(1) Registration Fee
===========================================================================================================================
<S> <C> <C> <C> <C>
Common Stock, $.01 par value 2,400,000 $5.00 $12,000,000 $3,540.00
===========================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(a) under the Securities Act of 1933.
The registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to such Section 8(a),
may determine.
===============================================================================
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED OCTOBER 8, 1997
PROSPECTUS
BUCKHEAD COMMUNITY BANCORP, INC.
A PROPOSED HOLDING COMPANY FOR
[BUCKHEAD NATIONAL BANK LOGO]
NATIONAL ASSOCIATION
(PROPOSED)
2,400,000 SHARES OF COMMON STOCK
----------
This Prospectus relates to the offer of a minimum of 1,600,000 and a maximum
of 2,400,000 shares of common stock, par value $.01 per share (the "Common
Stock"), to be issued by BUCKHEAD COMMUNITY BANCORP, INC., a Georgia
corporation (the "Company"), which has been organized to own and control all of
the capital stock of THE BANK OF BUCKHEAD, N.A. (Proposed) (the "Bank"). The
Company's mailing address and telephone number are currently P.O. Box 53299,
Atlanta, Georgia 30355, (404) 812-0440. The Organizers (as hereinafter defined)
filed an application to organize the Bank as a national banking association
with the United States Office of the Comptroller of the Currency on November 8,
1996. It is currently anticipated that there will be no active trading market
for the Common Stock.
----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMIS-
SION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADE-
QUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMI-
NAL OFFENSE. THE SHARES OF COMMON STOCK OFFERED HEREBY ARE NOT DEPOS-
ITS OR SAVINGS ACCOUNTS OR SAVINGS DEPOSITS AND ARE NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY
OTHER GOVERNMENTAL AGENCY.
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<TABLE>
<CAPTION>
UNDERWRITING DISCOUNTS PROCEEDS TO THE
PRICE TO PUBLIC(1) AND COMMISSIONS(2) COMPANY(3)
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share........... $5.00 None $5.00
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Total (Minimum)..... $8,000,000 None $8,000,000
(Maximum)........... $12,000,000 None $12,000,000
</TABLE>
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- --------------------------------------------------------------------------------
(1) The offering price has been arbitrarily established by the Company. See
"Risk Factors--Determination of Offering Price Without Regard to Market
Price."
(2) This offering is expected to be made on behalf of the Company solely by
certain of its directors and executive officers, to whom no commission or
other compensation will be paid on account of such activity, although they
will be reimbursed for reasonable expenses incurred in the offering. The
Company believes such participating officers and directors shall not be
deemed brokers under the Securities Exchange Act of 1934 (the "Exchange
Act") based on reliance on Rule 3a4-1 of the Exchange Act.
(3) Before deducting expenses related to this offering, estimated to be
approximately $40,000. See "Use of Proceeds--By the Company."
----------
INVESTMENT IN THESE SECURITIES INVOLVES SIGNIFICANT RISK. SEE "RISK FACTORS"
ON PAGE 7. AFTER COMPLETION OF THE OFFERING, BUT PRIOR TO THE COMPANY OBTAINING
ALL FINAL REGULATORY APPROVALS FOR THE BANK TO COMMENCE BANKING OPERATIONS AND
RECEIPT OF ITS CHARTER, IT IS POSSIBLE THAT THE BANK MAY NOT BE ABLE TO
COMMENCE BANKING OPERATIONS, AND IN SUCH EVENT UPON LIQUIDATION OF THE COMPANY
SHAREHOLDERS COULD RECEIVE LESS THAN THEIR ORIGINAL SUBSCRIPTION PRICE. SEE
"RISK FACTORS--RETURN OF LESS THAN SUBSCRIPTION AMOUNT."
Sale of the Common Stock will commence on or about November 10, 1997. This is
a "best efforts" offering by the Company, and it will be terminated by the
Organizers upon the sale of 2,400,000 shares or September 30, 1998, whichever
occurs first, unless the offering is extended, at the discretion of the
Company, for additional periods ending no later than March 31, 1999. However,
the Organizers reserve the right to terminate the offering at any time after
the sale of the minimum offering of 1,600,000 shares.
This Prospectus sets forth information which a prospective investor should
know about the Company before investing. Prospective investors should carefully
review the Prospectus before subscribing for shares. Subscribers must warrant
in the Subscription Agreement that they have received a copy of this
Prospectus. See "The Offering--How to Subscribe." The Company has established a
minimum subscription of 2,000 shares. However, the Organizers reserve the right
to waive this limit without notifying any subscriber. The Organizers (together
with members of their immediate families) intend to purchase an aggregate of at
least 690,000 shares (43.1% if the minimum number of shares is sold and 28.8%
if the maximum number is sold) of the Common Stock to be sold in the offering.
In addition, the Organizers reserve the right to purchase up to 100% of the
shares of stock being offered hereunder if necessary to complete the offering.
Proceeds of the offering will be deposited in an escrow account under the
control of SunTrust Bank, Atlanta, as escrow agent, pending receipt of
subscriptions and subscription proceeds for a minimum of 1,600,000 shares and
satisfaction of certain other conditions of the offering. See "The Offering--
Conditions of the Offering and Release of Funds." If the offering is terminated
prior to completion, subscription payments will be promptly returned by the
Company to the subscribers with interest actually earned on subscription
payments. Any subscription proceeds accepted after satisfaction of the
conditions set forth above but before termination of this offering will not be
deposited in escrow but will be available for immediate use by the Company to
fund offering and organizational expenses and for working capital.
The date of this Prospectus is , 1997
<PAGE>
REPORTS TO SHAREHOLDERS
The Company is not a reporting company as defined by the Securities and
Exchange Commission (the "SEC"). The Company will furnish its shareholders with
annual reports containing audited financial information for each fiscal year and
will distribute quarterly reports for the first three quarters of each fiscal
year containing unaudited summary financial information. The Company's fiscal
year ends on December 31.
ADDITIONAL INFORMATION
The Company has filed with the SEC a Registration Statement under the
Securities Act of 1933 with respect to the Common Stock offered hereby. This
Prospectus does not contain all of the information set forth in the Registration
Statement, certain parts of which are omitted in accordance with the rules and
regulations of the SEC. For further information with respect to the Company and
the Common Stock, reference is hereby made to the Registration Statement and the
exhibits thereto. Statements contained in this Prospectus concerning the
provisions of such documents are necessarily summaries of the material
provisions of such documents and each such statement is qualified in its
entirety by reference to the copy of the applicable document filed with the SEC.
The Registration Statement may be inspected and copied at, and copies of the
Registration Statement may be obtained at prescribed rates from, the public
reference facilities of the Commission, Room 1024, 450 Fifth Street, N.W.,
Washington, DC 20549, as well as the SEC's Regional Offices at 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661 and 75 Park Place, Room 1400, New
York, New York 10007. Copies of such material can be obtained at prescribed
rates from the Public Reference Section of the SEC at 450 Fifth Street, N.W.,
Washington, DC 20549. In addition, the Company is required to file electronic
versions of the documents with the SEC through the SEC's Electronic Data
Gathering, Analysis and Retrieval (EDGAR) system. The SEC maintains a World
Wide Web site at http://www.sec.gov that contains reports, proxy and information
statements and other information regarding registrants that file electronically
with the SEC.
The Company and the Organizers have filed or will file various applications
with the Office of the Comptroller of the Currency, the Federal Deposit
Insurance Corporation, the Federal Reserve Bank of Atlanta and the Georgia
Department of Banking and Finance. Prospective investors should rely only on
information contained in this Prospectus and in the Company's related
Registration Statement in making an investment decision. To the extent that
other available information not presented in this Prospectus, including
information in public files and records maintained by the Office of the
Comptroller of the Currency, the Federal Deposit Insurance Corporation, the
Federal Reserve Bank of Atlanta and the Georgia Department of Banking and
Finance, is inconsistent with information presented in this Prospectus, such
other information is superseded by the information presented in this Prospectus.
Projections appearing in the applications were based on assumptions that the
Organizers believed were reasonable, but as to which no assurances can be made.
The Company specifically disaffirms those projections for purposes of this
Prospectus and cautions prospective investors against placing any reliance on
them for purposes of making an investment decision.
<PAGE>
- --------------------------------------------------------------------------------
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information contained elsewhere in this Prospectus.
- --------------------------------------------------------------------------------
THE SHARES OF COMMON STOCK OFFERED HEREBY ARE NOT DEPOSITS OR SAVINGS
ACCOUNTS OR SAVINGS DEPOSITS AND ARE NOT INSURED OR GUARANTEED BY THE FDIC OR
ANY OTHER GOVERNMENTAL AGENCY.
- --------------------------------------------------------------------------------
THE COMPANY
Buckhead Community Bancorp, Inc. (the "Company") was incorporated under the
laws of the State of Georgia on October 15, 1996, primarily to hold all of the
capital stock of its proposed national banking subsidiary, The Bank of Buckhead,
N.A. (Proposed) (the "Bank"). The Company may not acquire the capital stock of
the Bank without the prior approval of the Federal Reserve Bank of Atlanta (the
"Federal Reserve"), as the delegate of the Board of Governors of the Federal
Reserve System (the "Federal Reserve Board"), and the Georgia Department of
Banking and Finance (the "Georgia Department"). The Company will file an
application for Federal Reserve approval once it obtains preliminary approval of
the application for a charter from the United States Office of the Comptroller
of the Currency (the "OCC"). The Company initially will engage in no business
other than owning and managing the Bank.
THE BANK
The Organizers (as defined below) filed an application with the OCC on
November 8, 1996, to charter the Bank as a national banking association. The
Organizers also filed an application on November 8, 1996, with the Federal
Deposit Insurance Corporation (the "FDIC") for insurance by the FDIC of the
deposits of the Bank. The Bank may not conduct any banking business until the
OCC grants final approval of the Bank's application and issues the Bank a
charter and the FDIC grants deposit insurance to the Bank. The issuance of a
charter will depend, among other things, upon compliance with certain legal
requirements that may be imposed by the OCC, including initial capitalization of
the Bank of an amount which the Organizers believe will be not less than
$8,000,000. In order to receive deposit insurance, the Bank must also comply
with certain legal requirements that may be imposed by the FDIC. See "The
Offering" and "Supervision and Regulation." Additionally, the Company must
obtain the approval of the Federal Reserve and the Georgia Department to become
a bank holding company before acquiring the capital stock of the Bank.
The Bank will engage in a general commercial banking business, emphasizing
the needs of small businesses and professionals primarily in the Buckhead area
of Atlanta, Georgia (the "Buckhead Area"). The Organizers expect that the Bank
will be located near the center of the Buckhead Area, on East Paces Ferry Road
between Peachtree Road and Piedmont Road. The Buckhead Area is an affluent
section of the City of Atlanta about five miles north of downtown. The Buckhead
market area extends roughly from the convergence of I-75 and I-85 at the north
end of the downtown connector, northward to the northern city limits of Atlanta,
bounded on the east by the DeKalb County line and on the west by the Cobb County
line. The Bank will not initially have trust powers. The Bank may in the future
offer a full-service trust department, but it cannot do so without the prior
approval of the OCC. See "Proposed Business."
- --------------------------------------------------------------------------------
3
<PAGE>
- --------------------------------------------------------------------------------
Marvin Cosgray, the proposed President of the Bank, has over 26 years of
experience in the commercial banking industry. The Organizers believe that the
proposed President's banking experience and the extensive business experience
and contacts of the Organizers in the Buckhead Area should create immediate
business opportunities for the Bank. See "Management." The Organizers
presently are engaged in completing the tasks necessary to open the Bank,
although no assurances can be given that the Bank will open for business or that
the projected opening date can be achieved.
The principal executive offices of the Company are located at 415 East
Paces Ferry Road, N.E., Atlanta, Georgia 30305-3398. The Organizers currently
plan for the Bank to be located at the same address.
THE ORGANIZERS
The organizers of the Company and the Bank (the "Organizers") are Hugh C.
Aldredge, Marvin Cosgray, J. Rex Fuqua, Julian LeCraw, Sr., R. Charles
Loudermilk, Sr., Larry P. Martindale and William T. Towles. Additional
individuals may be added as Organizers, subject to regulatory approval. All of
the Organizers will serve as directors of the Company and the Bank. See
"Management."
The Organizers (together with members of their immediate families) intend
to purchase an aggregate of at least 690,000 shares of the Common Stock to be
sold in this offering. The Organizers may subscribe for up to 100% of the
shares in the offering if necessary to help the Company achieve the minimum
subscription level necessary to release subscription proceeds from escrow, and
some Organizers may decide to purchase additional shares even if the minimum
subscription amount has been achieved. Any shares purchased by the Organizers
in excess of their original commitment will be purchased for investment and not
with a view to the resale of such shares. Because purchases by the Organizers
may be substantial, investors should not place any reliance on the sale of a
specified minimum offering amount as an indication of the merits of this
offering or that an Organizer's investment decision is shared by unaffiliated
investors. See "The Offering" and "Management."
THE OFFERING
Security Offered Common Stock of the Company, par value $.01
per share
Offering Price $5.00 per share
Number of Shares Offered Minimum: 1,600,000
Maximum: 2,400,000
Use of Proceeds The Company will use the net proceeds of the
offering (gross proceeds less offering
expenses, which are estimated to be $40,000)
to capitalize the Bank through the purchase
of capital stock of the Bank, subject to
regulatory approval; to pay organizational
expenses of the Company; and to provide
working capital. The Company will use a
minimum of $7,960,000 of the net proceeds,
together with $40,000 of existing capital,
to capitalize the Bank of a minimum of
$8,000,000. The Company plans to retain sums
in excess of the minimum necessary to
capitalize the Bank at the Company and
initially invest the sums in United States
government securities or as a deposit at the
Bank. The Company may be required by the OCC
to capitalize the Bank at a level in excess
of the minimum of
- --------------------------------------------------------------------------------
4
<PAGE>
- --------------------------------------------------------------------------------
$8,000,000, in which case the Company would
have to receive net proceeds in the offering
in excess of the minimum or obtain
additional capital from other sources. If
the OCC requires that the Bank be
capitalized with an amount in excess of the
minimum of $8,000,000, the Company plans to
seek additional subscriptions up to the
maximum subscription of $12,000,000. The
Bank will use the capital received from the
sale of its stock to the Company to provide
working capital to be used for business
purposes, including making loans and
investments. See "Use of Proceeds - By the
Bank."
Return of Less Than If the conditions for releasing subscription
Subscription Amount funds from escrow are met and such funds are
released but final regulatory approval to
commence banking operations is not obtained
from the OCC or the FDIC or the Bank does
not open for any other reason, it is
possible that subscribers could be returned
an amount less than their original
investment. See "Risk Factors - Return of
Less Than Subscription Amount."
Conditions to Offering This offering will be terminated and all
subscription funds, together with interest
actually earned thereon, will be returned
promptly to subscribers unless on or before
September 30, 1998 (or such later date if
the offering is extended by the Company for
additional periods not to extend beyond
March 31, 1999), (i) the Company has
accepted subscriptions and payment in full
for a minimum of 1,600,000 shares; (ii) the
Company has obtained approval of the Federal
Reserve and the Georgia Department to
acquire the capital stock of the Bank and
thereafter to become a bank holding company;
and (iii) the Bank has received preliminary
approval of its application for a charter
from the OCC and of its application for
deposit insurance from the FDIC.
Subscription proceeds for shares will be
deposited promptly in an escrow account with
SunTrust Bank, Atlanta, as escrow agent (the
"Escrow Agent"), under the terms of an
escrow agreement (the "Escrow Agreement"),
pending the satisfaction of the conditions
set forth above or the termination of the
offering. Subscriptions are binding on
subscribers and may not be revoked by
subscribers except with the consent of the
Company. Any subscription proceeds accepted
after satisfaction of the conditions set
forth above but before termination of this
offering will not be deposited in escrow but
will be available for immediate use by the
Company to fund offering and organizational
expenses and for working capital. See "The
Offering."
Plan of Distribution Offers and sales of the Common Stock will be
made on behalf of the Company primarily by
certain of its officers and directors. The
officers and directors will receive no
commissions or other remuneration in
connection with such activities, but they
will be reimbursed for reasonable expenses
incurred in the offering.
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5
<PAGE>
- --------------------------------------------------------------------------------
RISK FACTORS
An investment in the shares offered hereby involves certain risks,
including, among others, lack of an operating history, dependence on key
employees of the Bank, significant control of the Company by the Organizers,
absence of an existing market for the Common Stock and lack of assurance that an
active trading market in the Common Stock will develop, no intention to pay
dividends in the foreseeable future, and competition from a number of other
financial institutions with substantially greater financial and other resources
than the Bank will have. See "Risk Factors."
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6
<PAGE>
RISK FACTORS
An investment in the shares offered hereby involves certain risks. A
subscription for shares should be made only after careful consideration of the
risk factors set forth below and elsewhere in this Prospectus and should be
undertaken only by persons who can afford an investment involving such risks.
THE SHARES OF COMMON STOCK OFFERED HEREBY ARE NOT DEPOSITS OR SAVINGS ACCOUNTS
OR SAVINGS DEPOSITS AND ARE NOT INSURED OR GUARANTEED BY THE FDIC OR ANY OTHER
GOVERNMENTAL AGENCY.
RETURN OF LESS THAN SUBSCRIPTION AMOUNT. The amounts paid by subscribers
in this offering will be held in escrow until (i) the Company has accepted
subscriptions and payment in full for a minimum of 1,600,000 shares; (ii) the
Company has obtained approval of the Federal Reserve and the Georgia Department
to acquire the capital stock of the Bank and thereafter to become a bank holding
company; and (iii) the Bank has received preliminary approval of its application
for a charter from the OCC and of its application for deposit insurance from the
FDIC. If these conditions are not met by September 30, 1998, or by such
subsequent date, not beyond March 31, 1999, to which the offering may be
extended by the Company, all subscriptions will be returned promptly in full
along with interest actually earned thereon. If these conditions are satisfied,
the subscription amounts held in escrow may be paid to the Company and shares
issued to subscribers, and all interest earned on the subscription proceeds will
be retained by the Company. Once the Company has met the conditions for the
offering, the Escrow Agreement will be terminated and any subscription proceeds
accepted after satisfaction of the conditions set forth above but before
termination of this offering will not be deposited in escrow but will be
available for immediate use by the Company to fund offering and organizational
expenses and for working capital.
Under the OCC's policies, a newly chartered national bank must open for
business within eighteen months of receipt of preliminary approval of its
application for a charter. The OCC's standard conditions for opening a bank
include, but are not limited to: (i) raising sufficient capital, (ii) forming
the corporate body, and (iii) passing a pre-opening examination. The OCC has
substantial discretion in determining whether all of the conditions to opening
the Bank have been met. In addition, the FDIC has substantial discretion in
determining whether the Bank will be granted federal deposit insurance, which is
a prerequisite to the Bank's opening. Therefore, even if the Company meets the
conditions for release of the subscription funds from escrow, there is no
assurance that the Bank will open for business. If the conditions for releasing
subscription funds from escrow are met and such funds are released but final
regulatory approval to commence banking operations is not obtained from the OCC
or the FDIC or the Bank does not open for any other reason, the Company's board
of directors (the "Board of Directors") intends to propose that the shareholders
approve a plan to liquidate the Company. Upon such a liquidation, the Company
would be dissolved and the Company's net assets (generally consisting of the
amounts received in this offering plus any interest earned thereon, less the
amount of all costs and expenses incurred by the Company and the Bank, including
the salary of the President and Chief Executive Officer of the Company and the
Bank and other pre-opening expenses) would be distributed to the shareholders.
In such event, the Company will have incurred numerous expenses related to the
organization of the Company and the Bank, and the amount distributed to
shareholders may be substantially less than the subscription amount, and in an
extreme case shareholders may not be returned any amount.
LACK OF OPERATING HISTORY; LACK OF INITIAL PROFITABILITY. The Company and
the Bank currently are in the organizational stage, and neither has any
operating history. As a consequence,
7
<PAGE>
prospective purchasers of the shares have limited information on which to base
an investment decision. As a bank holding company, the Company's profitability
will depend upon the Bank's operations. The Bank's proposed operations are
subject to the risks inherent in the establishment of any new business and,
specifically, of a new bank. The Company expects that the Bank will incur
substantial initial expenses and may not be profitable for several years after
commencing business, if ever. Shareholders are likely to experience additional
dilution in the book value of the Common Stock due to operating losses expected
to be incurred during the initial years of the Bank's operations. See "Proposed
Business" and "Management's Discussion and Analysis of Financial Condition and
Results of Operations."
DEPENDENCE ON KEY EMPLOYEE. As a new enterprise, the Company and the Bank
will be materially dependent on the performance of Marvin Cosgray, who will be
President and Chief Executive Officer of the Company and the Bank. The loss of
the services of Mr. Cosgray or his failure to perform his management functions
in the manner anticipated by the Organizers could have a material adverse effect
on the Company and the Bank. The Company has entered into an employment
agreement with Mr. Cosgray (the "Employment Agreement") pursuant to which Mr.
Cosgray will be employed as President and Chief Executive Officer of the Bank.
The Employment Agreement provides for the employment of Mr. Cosgray for a three-
year term, subject to earlier termination by the Company for cause, upon the
death or disability of Mr. Cosgray, or otherwise if a termination payment equal
to six months of Mr. Cosgray's base salary is made, and by Mr. Cosgray upon 60
days written notice. The Employment Agreement restricts Mr. Cosgray's ability to
compete with the Company or the Bank for a period of one year following his
termination. See "Management - Employment Agreement."
CONTROL OF THE COMPANY; PURCHASES BY ORGANIZERS. The Organizers, all of
whom will serve as directors of the Company and the Bank, and members of their
immediate families intend to purchase an aggregate of at least 690,000 shares,
equal to 43.1% of the minimum number of shares offered hereby and 28.8% of the
maximum number of shares offered hereby. Organizers may purchase additional
shares in the offering and additional persons may be named as Organizers,
subject to regulatory approval. The Organizers presently own all 60,000
outstanding shares of the Company. As a result of the anticipated stock
ownership in the Company by the Organizers, together with the influence which
may be exerted by such persons due to their positions as directors of the
Company and the Bank, the Organizers as a group will have substantial control of
the Company and the Bank following the offering. The Organizers may subscribe
for up to 100% of the shares in this offering if necessary to help the Company
achieve the minimum subscription level necessary to release subscription
proceeds from escrow, and some Organizers may decide to purchase additional
shares even if the minimum subscription amount has been achieved. Any shares
purchased by the Organizers in excess of their original commitment will be
purchased for investment and not with a view to the resale of such shares.
Because purchases by the Organizers may be substantial, investors should not
place any reliance on the sale of a specified minimum offering amount as an
indication of the merits of this offering or that an Organizer's investment
decision is shared by unaffiliated investors. See "The Offering" and
"Management."
ANTITAKEOVER EFFECTS. Certain provisions of the Company's Articles of
Incorporation and Bylaws may have the effect of discouraging attempts to
takeover the Company, including: (i) provisions requiring prior notice of
matters to be brought before meetings of shareholders; (ii) provisions requiring
prior notice of nominees for election as directors; (iii) the ability of the
Board of Directors to issue additional shares of common stock and special stock
authorized in the Articles of Incorporation without shareholder approval; and
(iv) a provision of the Articles of Incorporation
8
<PAGE>
granting the Board of Directors the discretion, when considering whether a
proposed merger or similar transaction is in the best interests of the Company
and its shareholders, to take into account the effect of the transaction on the
employees, customers, and suppliers of the Company and upon the communities in
which the offices of the Company are located. Any of these measures may impede
the takeover of the Company without the approval of the Board of Directors. See
"Description of Capital Stock of the Company - Certain Antitakeover Effects."
DETERMINATION OF OFFERING PRICE WITHOUT REGARD TO MARKET PRICE. Because
the Company and the Bank are in organization, the offering price of $5.00 per
share was determined by the Organizers without reference to traditional criteria
for determining stock value such as book value or historical or projected
earnings since such criteria are not applicable to companies with no history of
operations. The price per share was set to enable the Company to raise gross
proceeds of between $8,000,000 and $12,000,000 in this offering through the sale
of a reasonable number of shares, and the price per share is essentially
equivalent to the initial book value per share prior to the payment of the
Company's and the Bank's organizational expenses. No assurance is or can be
given that any of the shares could be resold for the offering price or any other
amount.
ABSENCE OF TRADING MARKET. There currently is no market for the shares and
it is not likely that any trading market will develop for the shares in the
future. There are no present plans for the Common Stock to be traded on any
stock exchange or in the over-the-counter market. Furthermore, the development
of any trading market for the shares may be adversely affected by purchases of
large amounts of shares in this offering by the Organizers since shares
purchased by the Organizers will generally not be freely tradable. Furthermore,
in the event that a small number of Organizers or other persons acquire
substantial additional amounts of the Common Stock, a trading market for the
Common Stock will be even less likely to develop. As a result, investors who
may need or wish to dispose of all or part of their shares may be unable to do
so except in private, directly negotiated sales. In addition, sales of
substantial amounts of the Common Stock after the offering, by the Organizers or
others, could adversely affect prevailing market prices. See "Description of
Capital Stock of the Company - Shares Eligible for Future Sale."
ESTABLISHED COMPETITION. The banking business is highly competitive, and
the Bank will encounter strong competition from other commercial banks, as well
as from savings institutions, mortgage banking firms, consumer finance
companies, securities brokerage firms, insurance companies, money market mutual
funds, and other financial institutions operating in the Atlanta area. As of
August 1997, the Buckhead market measured by 11 commercial banks with a total of
35 branches and one credit union. A number of these competitors are well
established in the Buckhead Area. Most of them have substantially greater
resources and lending limits and a lower cost of funds than the Bank will have
initially and may offer certain services, such as extensive and established
branch networks and trust services, that the Bank either does not expect to
provide or will not provide initially. As a result of these competitive factors,
the Bank may have to pay higher rates of interest to attract deposits. In
addition, non-depository institution competitors are generally not subject to
the extensive regulations applicable to the Company and the Bank. Federal
legislation in recent years has removed restrictions on the establishment of
nationwide operations by commercial banks, further increasing competition from
out-of-state financial institutions. Although the Organizers believe that the
Bank will be able to compete effectively with these institutions, no assurances
can be given in this regard. See "Proposed Business- Competition" and
"Supervision and Regulation."
9
<PAGE>
SUPERVISION AND REGULATION. The banking industry is heavily regulated.
The success of the Company and the Bank depends not only on competitive factors
but also on state and federal regulations affecting banks and bank holding
companies. These regulations are primarily intended to protect depositors, not
shareholders. Regulation of the financial institutions industry is undergoing
continued changes, and the ultimate effect of such changes cannot be predicted.
Over the last 10 years, legislative enactments and the regulations thereunder
have substantially increased the regulatory and supervisory requirements for
financial institutions, which have resulted and will continue to result in
increased operating expenses. Additional statutes affecting financial
institutions have been proposed and may be enacted. Regulations now affecting
the Company and the Bank may be modified at any time, and there is no assurance
that such modifications will not adversely affect the business of the Company
and the Bank. See "Supervision and Regulation."
ECONOMIC CONDITIONS. The success of the Company and the Bank will depend,
to a certain extent, upon economic and political conditions, both local and
national, as well as governmental monetary policies. Conditions such as
inflation, recession, unemployment, high interest rates, short money supply, and
other factors beyond the control of the Company and the Bank may adversely
affect the Bank's deposit levels and loan demand and, therefore, the earnings of
the Bank and the Company. Although the Organizers expect favorable economic
development in the Bank's market area, there is no assurance that favorable
economic development will occur or that the Bank's expectation of corresponding
growth will be achieved. See "Proposed Business."
LACK OF PLANS TO PAY DIVIDENDS. The Company has no plans to pay any cash
dividends to its shareholders in the foreseeable future. Since the Company and
the Bank are both start-up operations and may incur initial losses, both the
Company and the Bank intend to retain any earnings for the period of time
management believes necessary to ensure the success of their operations. The
Company will be dependent upon the Bank for its earnings and funds to pay
dividends on the Common Stock. The payment of dividends by the Company and the
Bank is also subject to legal and regulatory restrictions. Any payment of
dividends by the Company in the future will depend on the Bank's earnings,
capital requirements, financial condition, and other factors considered relevant
by the Board of Directors. See "Dividend Policy," "Proposed Business," and
"Supervision and Regulation."
LENDING LIMIT. Under the National Bank Act, the Bank is limited in the
amount it can loan a single borrower (including the borrower's related
interests) by the amount of the Bank's capital. These limits will increase and
decrease as the Bank's capital increases and decreases as a result of the Bank's
earnings or losses, among other reasons. Unless the Bank is able to sell
participations in its loans to other financial institutions, the Bank will not
be able to meet all of the lending needs of loan customers requiring aggregate
extensions of credit above these limits. See "Supervision and Regulation."
10
<PAGE>
THE COMPANY AND THE BANK
The Company was incorporated under the laws of Georgia on October 15, 1996,
for the purpose of becoming a bank holding company by acquiring all of the
capital stock of the Bank upon its formation. The Bank is being organized as a
national banking association under the laws of the United States. On November
8, 1996, the Organizers of the Bank filed an application for a charter for the
Bank with the OCC and an application for insurance of the deposits of the Bank
with the FDIC. Upon receipt by the Organizers of preliminary approval of the
application for a charter from the OCC, the Company will file an application
with the Federal Reserve and the Georgia Department seeking approval to become a
bank holding company by acquiring all of the capital stock to be issued by the
Bank. If and when the Company and the Bank receive required regulatory
approvals, the Company will use a minimum of $8,000,000 of the aggregate net
proceeds of this offering (together with up to $40,000 of existing capital) to
purchase all of the shares of the capital stock of the Bank. See "Use of
Proceeds." The Company initially will engage in no business other than owning
and managing the Bank.
The Bank will engage in a general commercial banking business, emphasizing
the needs of small businesses and professionals primarily in the Buckhead Area.
The Bank will not initially have trust powers. The Bank may in the future offer
a full-service trust department, but it cannot do so without the prior approval
of the OCC. See "Proposed Business." Marvin Cosgray, the proposed President
and Chief Executive Officer of the Bank, has over 26 years experience in the
commercial banking industry. See "Management."
The Organizers believe that the banking experience of the proposed
President and the extensive business experience and contacts of the Organizers
in the Buckhead Area should create immediate business opportunities for the
Bank. The Organizers presently are engaged in completing the tasks necessary to
open the Bank, although no assurance can be given that the Bank can be opened by
a particular date. See "Proposed Business."
The Organizers of the Bank are Hugh C. Aldredge, Marvin Cosgray, J. Rex
Fuqua, Julian LeCraw, Sr., R. Charles Loudermilk, Sr., Larry P. Martindale, and
William T. Towles. Additional individuals may be added as Organizers, subject
to regulatory approval. All of the Organizers will serve as directors of the
Company and the Bank. The Organizers (together with members of their immediate
families) intend to purchase an aggregate of at least 690,000 shares of the
Common Stock to be sold in this offering. The Organizers may subscribe for up
to 100% of the shares in the offering if necessary to help the Company achieve
the minimum subscription level necessary to release subscription proceeds from
escrow, and some Organizers may decide to purchase additional shares even if the
minimum subscription amount has been achieved. Any shares purchased by the
Organizers in excess of their original commitment will be purchased for
investment and not with a view to the resale of such shares. Because purchases
by the Organizers may be substantial, investors should not place any reliance on
the sale of a specified minimum offering amount as an indication of the merits
of this offering or that an Organizer's investment decision is shared by
unaffiliated investors. See "Management."
The principal executive offices of the Company are located at 415 East
Paces Ferry Road, N.E., Atlanta, Georgia 30305-3389, and the Organizers expect
that the Bank's initial office will be at that address. The Company's telephone
number is (404) 812-0440.
11
<PAGE>
THE OFFERING
GENERAL
The Company is offering for sale a minimum of 1,600,000 shares and a
maximum of 2,400,000 shares of its Common Stock at a price of $5.00 per share to
raise gross proceeds of between $8,000,000 and $12,000,000 for the Company. The
minimum purchase for any investor (together with the investor's affiliates) is
2,000 shares unless the Company, in its sole discretion, accepts a subscription
for a lesser number of shares. Subscribers should be aware that beneficial
ownership of as little as 5% of the outstanding shares could obligate the
beneficial owner to comply with certain reporting and disclosure requirements of
federal and state securities and banking laws.
It is expected that the Organizers as a group will purchase a total of
690,000 of the shares offered hereby; however, the Organizers may, subject to
regulatory approval, elect to purchase up to 100% of the shares offered hereby,
and additional persons may be named as Organizers. Any shares purchased by the
Organizers in excess of their original commitment will be purchased for
investment and not with a view to the resale of such shares. Because purchases
by the Organizers are expected to be substantial, investors should not place any
reliance on the sale of the specified minimum offering amount as an indication
of the merits of this offering or that an Organizer's investment decision is
shared by other unaffiliated investors.
Subscriptions to purchase shares will be received until September 30, 1998,
unless all of the shares are earlier sold or the offering is earlier terminated
or extended by the Company. See "Conditions to the Offering and Release of
Funds." The Company reserves the right to terminate the offering at any time or
to extend the expiration date for additional periods not to extend beyond March
31, 1999. The date the offering terminates is referred to herein as the
"Expiration Date." No written notice of an extension of the offering period
need be given prior to any extension, and any such extension will not alter the
binding nature of subscriptions already accepted by the Company. Extension of
the Expiration Date might cause an increase in the Company's organizational and
pre-opening expenses and in the expenses incurred with this offering. The
Company and the Bank may find it necessary to utilize the services of brokers or
dealers in order to effectuate the sales of these securities in certain
jurisdictions.
Following acceptance by the Company, subscriptions will be binding on
subscribers and may not be revoked by subscribers except with the consent of the
Company. In addition, the Company reserves the right to cancel accepted
subscriptions at any time and for any reason until the proceeds of this offering
are released from escrow (as discussed in greater detail in "Conditions to the
Offering and Release of Funds" below), and the Company reserves the right to
reject, in whole or in part, and in its sole discretion, any subscription. The
Company may, in its sole discretion, allocate shares among subscribers in the
event of an oversubscription for the shares. In determining which subscriptions
to accept, in whole or in part, the Company may take into account any factors it
considers relevant, including the order in which subscriptions are received, a
subscriber's potential to do business with, or to direct customers to, the Bank,
and the Company's desire to have a broad distribution of stock ownership.
In the event the Company rejects all, or accepts less than all, of any
subscription, the Company will refund promptly, with interest actually earned
thereon, the amount remitted that corresponds to $5.00 multiplied by the number
of shares as to which the subscription is not accepted. If the Company accepts
a subscription but in its discretion subsequently elects to cancel all or part
of
12
<PAGE>
such subscription, the Company will refund promptly the amount remitted that
corresponds to $5.00 multiplied by the number of shares as to which the
subscription is canceled, together with interest actually earned thereon.
Certificates representing shares duly subscribed and paid for will be
issued by the Company promptly after the offering conditions are satisfied and
escrowed funds are delivered to the Company.
CONDITIONS TO THE OFFERING AND RELEASE OF FUNDS
Subscription proceeds accepted by the Company for the initial 1,600,000
shares subscribed for in this offering will be promptly deposited in an escrow
account with the Escrow Agent until the conditions to this offering have been
satisfied or the offering has been terminated. The offering will be terminated,
no shares will be issued, and no subscription proceeds will be released from
escrow to the Company unless on or before the Expiration Date: (i) the Company
has accepted subscriptions and payment in full for a minimum of 1,600,000
shares; (ii) the Company has obtained approval of the Federal Reserve and the
Georgia Department to acquire the capital stock of the Bank and thereafter to
become a bank holding company; and (iii) the Bank has received preliminary
approval of its application for a charter from the OCC and of its application
for deposit insurance from the FDIC.
If the above conditions are satisfied, the subscription amounts held in
escrow may be paid to the Company and shares issued to subscribers. Once the
Company has met the conditions for the offering, the Escrow Agreement will be
terminated and any subscription proceeds accepted after satisfaction of the
conditions before termination of this offering will not be deposited in escrow
but will be available for immediate use by the Company to fund offering and
organizational expenses and for working capital. When the subscription funds
are released to the Company, the Company will use a portion of the proceeds to
repay the Organizers for amounts advanced by them for organizational and
offering expenses.
If the conditions for releasing subscription funds from escrow are met and
such funds are released but final regulatory approval to commence banking
operations is not obtained from the OCC or the Bank does not open for any other
reason, the Board of Directors intends to propose that the shareholders approve
a plan to liquidate the Company. Upon such a liquidation, the Company would be
dissolved and the Company's net assets (generally consisting of the amounts
received in this offering plus any interest earned thereon, less the amount of
all costs and expenses incurred by the Company and the Bank, including the
salary of the President) would be distributed to the shareholders. In such
event, the Company will have incurred numerous expenses related to the
organization of the Company and the Bank, and the amount distributed to
shareholders may be substantially less than the subscription amount, and in an
extreme case shareholders may not be returned any amount.
If the above conditions are not satisfied by the Expiration Date or the
offering is otherwise earlier terminated, accepted subscription agreements will
be of no further force or effect, and the full amount of all subscription funds
will be returned promptly to subscribers together with any interest actually
earned on such subscription funds.
The Escrow Agent has not investigated the desirability or advisability of
an investment in the shares by prospective investors and has not approved,
endorsed, or passed upon the merits of an investment in the shares.
Subscription funds held in escrow will be invested in the deposit accounts or
short-term certificates of deposit which are fully insured by the FDIC or
another agency of the United
13
<PAGE>
States Government, short-term securities issued or fully guaranteed by the
United States government (or money market funds consisting entirely thereof) or
federal funds until released from escrow. The Organizers do not intend to invest
the subscription proceeds held in escrow in instruments that would mature after
the Expiration Date of the offering.
PLAN OF DISTRIBUTION
Offers and sales of the Common Stock will be made on behalf of the Company
primarily by certain of its officers and directors. The officers and directors
will receive no commissions or other remuneration in connection with such
activities, but they will be reimbursed for reasonable expenses incurred in the
offering. Although it is not currently anticipated, the Company and the Bank
reserve the right to use brokers or dealers to effectuate sales of the Common
Stock in the offering.
HOW TO SUBSCRIBE
Shares may be subscribed for by delivering the subscription agreement (the
"Subscription Agreement") attached hereto as Exhibit A, completed and executed,
to the Company, on or prior to the Expiration Date. Subscribers should retain a
copy of the completed Subscription Agreement for their records. The
subscription price is due and payable when the Subscription Agreement is
delivered. Payment must be made in United States dollars by cash or by check,
bank draft or money order drawn to the order of SunTrust Bank, Atlanta, Escrow
Account for Buckhead Community Bancorp, Inc., in the amount of $5.00 multiplied
by the number of shares subscribed for.
14
<PAGE>
USE OF PROCEEDS
BY THE COMPANY
Upon satisfaction of all of the conditions discussed in "The Offering -
Conditions to the Offering and Release of Funds," all subscription funds held in
escrow will be released and will become capital of the Company. The gross
proceeds to the Company from the sale of the shares offered hereby will be
between $8,000,000 and $12,000,000. The Company will use $40,000 of the gross
proceeds to pay the expenses of this offering, which will consist primarily of
legal, accounting, marketing and printing expenses. Thereafter, the Company
will use a minimum of $7,960,000 and a maximum of $10,000,000 of the gross
proceeds to purchase all of the capital stock of the Bank. The Company will
retain any balance of the proceeds, which may be up to $1,960,000 in the case of
the maximum offering, for working capital and other general corporate purposes,
including payment of expenses of the Company and the provision of additional
capital for the Bank in the future, if necessary.
The following table sets forth the anticipated use of proceeds by the
Company based on the sale of the minimum number and maximum number of shares in
this offering.
<TABLE>
<CAPTION>
Minimum Maximum
Offering (1) Offering (2)
------------ -----------
<S> <C> <C>
Gross proceeds from offering..................... $ 8,000,000 $ 12,000,000
Expenses for organization and issuance and (40,000) (40,000)
distribution of Common Stock....................
Investment in capital stock of the Bank(3)....... (7,960,000) (10,000,000)
----------- ------------
Remaining proceeds(4)............................ $ --- $ 1,960,000
=========== ============
</TABLE>
____________________
(1) Assumes that 1,600,000 shares of Common Stock are sold in this offering.
(2) Assumes that 2,400,000 shares of Common Stock are sold in this offering.
(3) To the extent that the net proceeds of the offering are less than
$8,000,000, the Company will invest a portion of its existing capital in
the Bank so that the Bank's initial capital is at least $8,000,000.
(4) This amount will be used by the Company for working capital and may be used
to provide additional capital for the Bank, if necessary.
BY THE BANK
The Bank currently plans to use approximately $250,000 of the proceeds it
receives from the sale of its stock to the Company to reimburse the Company for
amounts advanced by it to pay organizational and pre-opening expenses of the
Bank. Organizational expenses of the Bank, estimated at $125,000, include
consulting fees, expenses for market analysis and feasibility studies,
application fees, and legal fees and expenses. Pre-opening expenses, estimated
at $125,000, include officers' and employees' salaries and benefits estimated at
$75,000 and estimated lease expenses of $26,000. The Bank will use
approximately $250,000 for furniture, fixtures and equipment for its banking
office. The Bank expects to pay approximately $160,000 during the first year to
rent the location of the Bank office from Longpoint Investors, Ltd., which is
not affiliated with any of the Organizers. The balance of the funds to be
received by the Bank and available for use in the first year, estimated at
15
<PAGE>
$7,340,000 if the minimum number of shares is sold and $9,340,000, if the
maximum number of shares is sold, will be used for loans to customers,
investments, and other general corporate purposes.
The following table depicts the anticipated use of proceeds by the Bank
based on the sale of the minimum number and maximum number of shares in the
offering. All proceeds received by the Bank will be in the form of an
investment by the Company in the Bank's capital stock.
<TABLE>
<CAPTION>
Minimum Maximum
Offering (1) Offering(2)
------------ -----------
<S> <C> <C>
Investment by the Company in the Bank's Capital Stock.......... $ 8,000,000 $ 10,000,000
Reimbursement of the Company for amounts advanced for
organizational and pre-opening expenses of the Bank........... (250,000) (250,000)
Furniture, Fixtures and Equipment.............................. (250,000) (250,000)
Lease Expense (First Year)..................................... (160,000) (160,000)
Other Occupancy Expenses....................................... (80,000) (80,000)
----------- ------------
Remaining Proceeds(3).......................................... $ 7,260,000 $ 9,260,000
=========== ============
</TABLE>
______________________________
(1) Assumes that 1,600,000 shares of Common Stock are sold in this offering.
(2) Assumes that 2,400,000 shares of Common Stock are sold in this offering.
(3) This amount is to be used by the Bank for loans to customers, investments,
and other general corporate purposes.
Although the amounts set forth above provide an indication of the proposed
use of funds based on the plans and estimates of the Organizers of the Company
and the Bank, actual expenses may vary from the estimates. The Organizers
believe that the estimated minimum net proceeds of $7,960,000 from the offering,
together with $40,000 of existing capital of the Company, will satisfy the cash
requirements of the Company and the Bank for their respective first five years
of operations and that neither the Company nor the Bank will need to raise
additional funds for operations during this period, but there can be no
assurance that this will be the case.
16
<PAGE>
CAPITALIZATION
The following table sets forth (i) the capitalization of the Company as of
June 30, 1997, (ii) the pro forma capitalization of the Company as of June 30,
1997, to reflect the redemption of the shares of two former organizers of the
Company and the Bank, and (iii) the pro forma capitalization of the Company at
June 30, 1997, as adjusted to give effect to the sale of the minimum of
1,600,000 shares in this offering and the estimated pre-opening expenses of the
Company and the Bank. See "Use of Proceeds."
<TABLE>
<CAPTION>
Pro Forma
Shareholders' Equity Actual Pro Forma As Adjusted
-------------------- ------ --------- -----------
<S> <C> <C> <C>
Common Stock, par value $.01 per share; 10,000,000 shares
authorized; 80,000 shares issued and outstanding; 60,000
shares issued and outstanding pro forma; 1,660,000 shares
issued and outstanding pro forma as adjusted (minimum
offering)................................................. $ 800 $ 600 $ 16,600
Special Stock, no par value per share; 1,000,000 shares
authorized; no shares issued and outstanding.............. -- -- --
Additional paid-in capital(1).............................. 399,200 299,400 8,243,400
Deficit accumulated during the developmental stage......... (43,699) (43,699) (125,000)
-------- --------- ----------
Total shareholders' equity(2).............................. $356,301 $ 256,301 $8,135,000
======== ========= ==========
</TABLE>
_____________________________
(1) The expenses of the offering will be charged against this account. These
expenses are estimated to be $40,000, and this amount has been used in the
calculation of the amount shown in the "As Adjusted" column.
(2) The shareholders are likely to experience additional dilution due to
operating losses expected to be incurred during the initial years of the
Bank's operations.
17
<PAGE>
SELECTED FINANCIAL DATA
The following selected financial data for the Company for the period from
inception until June 30, 1997, is derived from the financial statements and
other data of the Company.
<TABLE>
<CAPTION>
Period Ended
June 30, 1997
-------------
<S> <C>
INCOME STATEMENT DATA:
Noninterest expense $ 48,887
Net (loss) (43,699)
BALANCE SHEET DATA:
Assets 360,349
Cash and interest bearing deposits in banks 196,161
Deferred stock offering and organizational costs
capitalized 159,608
(Deficit) accumulated during development stage (43,699)
Stockholders' Equity 356,301
PER SHARE DATA
Net (loss) per share (.57)
</TABLE>
DIVIDEND POLICY
The Board of Directors expects initially to follow a policy of retaining
any earnings to provide funds to operate and expand the business. Consequently,
it is unlikely that any cash dividends will be paid in the near future. The
Company's ability to pay any cash dividends to its shareholders in the future
will depend primarily on the Bank's ability to pay dividends to the Company. In
order to pay dividends to the Company, the Bank must comply with the
requirements of all applicable laws and regulations. See "Supervision and
Regulation - The Bank - Dividends" and "Supervision and Regulation - Capital
Regulations." In addition to the availability of funds from the Bank, the
future dividend policy of the Company is subject to the discretion of the Board
of Directors and will depend upon a number of factors, including future
earnings, financial condition, cash needs, and general business conditions.
PROPOSED BUSINESS
GENERAL
The Company was incorporated as a Georgia corporation on October 15, 1996,
primarily to own and control all of the capital stock of the Bank. The Company
initially will engage in no business other than owning and managing the Bank.
The Organizers have chosen a holding company structure under which the Company
will acquire all of the capital stock of the Bank because, in the judgment of
the Organizers, the holding company structure provides flexibility that would
not otherwise be available.
The holding company structure can assist the Bank in maintaining its
required capital ratios because, subject to compliance with Federal Reserve
Board debt guidelines, the Company may borrow money and contribute the proceeds
to the Bank as primary capital. Moreover, a holding company
18
<PAGE>
may engage in certain non-banking activities that the Federal Reserve Board has
deemed to be closely related to banking in which the Bank cannot engage
directly. See "Supervision and Regulation." Although the Company has no present
intention of engaging in any of these activities, if circumstances should lead
the Company's management to believe that there is a need for these services in
the Bank's market area and that such activities could be profitably conducted,
management of the Company would have the flexibility of commencing these
activities upon filing a notice or application with the Federal Reserve.
The Bank is being organized as a national banking association under the
laws of the United States, and, subject to regulatory approval, the Bank will
engage in a commercial banking business from its location in the Buckhead Area,
with deposits insured by the FDIC. By virtue of being a national bank, the Bank
will be a member of the Federal Reserve System. The Bank may not commence
business until the OCC issues a charter for the Bank and the FDIC grants deposit
insurance to the Bank. There is no assurance that the Bank will be successful
in receiving regulatory approval and satisfying any conditions that may be
imposed upon the Bank by the OCC or the FDIC prior to the commencement of its
business.
MARKETING FOCUS
Most of the banks in the Buckhead Area are local branches of large regional
banks. The Organizers believe that there is a void in the community banking
market in the Buckhead Area and believe that the Bank can successfully fill this
void. However, size gives the larger banks certain advantages in competing for
business from large corporations. These advantages include higher lending
limits and the ability to offer services in other areas of Atlanta and the
region. As a result, the Company generally will not attempt to compete for the
banking relationships of large corporations, but will concentrate its efforts on
small businesses and on professionals.
The Bank plans to emphasize the Company's local ownership, community bank
nature and ability to provide more personalized service than its competition.
The Organizers believe that the proposed community bank focus of the Bank is
likely to succeed in the Buckhead market. The Organizers believe that the area
will react favorably to the Bank's emphasis on service to small businesses and
professionals. However, no assurances in this respect can be given.
LOCATION AND SERVICE AREA
The Bank will be located on East Paces Ferry Road between Peachtree Road
and Piedmont Road. See "Facilities." The Bank will primarily serve the
Buckhead Area, which is in the northern part of the Atlanta city limits and the
central part of Fulton County. The Buckhead Area is generally bounded by the
Atlanta city limits and the DeKalb County line on the east, the Atlanta city
limits line on the north, the Atlanta city limits and Cobb County line on the
west, and Peachtree Creek from the Chattahoochee River to Interstate 75,
Interstate 75 to Interstate 85, and Interstate 85 to the DeKalb County line on
the south. The total area contains approximately 28 square miles and is about 5
miles from Atlanta's central downtown.
The Buckhead Area is characterized by a large population base concentrated
in a relatively small area and a very high level of household and per capita
income. The resident population of the Buckhead Area exceeded 61,000 as of
1995, and its daytime population is at least twice that number. The Buckhead
Area has approximately 16,500 multi-family units and 15,600 homes. In each
category, it consistently experiences the highest occupancy rates in the city.
Most of the growth in population,
19
<PAGE>
employment and housing in the city of Atlanta in the last 5 years has taken
place in Buckhead. Over 48 mid-rise high-rise apartments and condominiums, with
nearly 9,000 units, are located in Buckhead.
The two largest sources of employment in Buckhead are the services and
retail industries. There are an estimated 1,045 businesses in Buckhead and
nearly 1,400 professionals of various types. Total employment in 1995 was over
84,000, approximately 48.6% of which was in the services segment and
approximately 20.9% of which was in the retail segment. There is at least 12.5
million feet of office space in the Buckhead Area, with very low vacancy rates
in the "Class A" space market segment. Much of this space is concentrated
within two miles of the proposed bank site. The Buckhead Area has over 6.2
million square feet of retail space spread among two large, well-known retail
centers (Lenox Square and Phipps Plaza) and over 70 additional multi-tenant
locations. The market also contains over 2.2 million square feet of industrial
space.
DEPOSITS
The Bank intends to offer a full range of deposit services that are
typically available in most banks and savings and loan associations, including
checking accounts, NOW accounts, savings accounts and other time deposits of
various types, ranging from daily money market accounts to longer-term
certificates of deposit. The transaction accounts and time certificates will be
tailored to the Bank's principal market area at rates competitive to those
offered in the Buckhead Area. In addition, the Bank intends to offer certain
retirement account services, such as Individual Retirement Accounts (IRAs). All
deposit accounts will be insured by the FDIC up to the maximum amount allowed by
law (generally, $100,000 per depositor subject to aggregation rules). The Bank
intends to solicit these accounts from individuals, businesses, associations and
organizations, and governmental authorities.
LENDING ACTIVITIES
General. The Bank intends to emphasize a range of lending services,
including commercial, real estate, and consumer loans, to small- to medium-sized
businesses and professional concerns and individuals that are located in or
conduct a substantial portion of their business in the Bank's market area.
Commercial Loans. The Organizers currently anticipate that loans for
commercial purposes in various lines of businesses will be one of the primary
components of the Bank's loan portfolio. Equipment loans will typically be made
for a term of five years or less at fixed or variable rates, with the loan fully
amortized over the term and secured by the financed equipment and with a
loan-to-value ratio of 80% or less. Working capital loans will typically have
terms not exceeding one year and will usually be secured by accounts receivable,
inventory, or personal guarantees of the principals of the business. For loans
secured by accounts receivable or inventory, principal will typically be repaid
as the assets securing the loan are converted into cash, and in other cases
principal will typically be due at maturity. The principal economic risk
associated with each category of anticipated loans, including commercial loans,
is the creditworthiness of the Bank's borrowers, which in turn is affected by
general economic conditions and the strength of the services and retail market
segments. Commercial loans may require more careful management in order to limit
the risks associated with them. The well established banks in the Buckhead Area
will make proportionately more loans to medium- to large-sized businesses than
the Bank. Many of the Bank's anticipated commercial loans will likely be made to
small- to medium-sized businesses who may be less able to withstand competitive,
economic, and financial conditions than larger borrowers.
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Real Estate Loans. The Bank will make commercial real estate loans,
construction and development loans, and residential real estate loans in the
Buckhead Area. These loans include certain commercial loans where the Bank takes
a security interest in real estate out of an abundance of caution and not as the
principal collateral for the loan, but will exclude home equity loans, which are
classified as consumer loans. Loan terms generally will be limited to five years
or less, although payments may be structured on a longer amortization basis.
Interest rates may be fixed or adjustable, and will more likely be fixed in the
case of shorter term loans. The Bank will generally charge an origination fee.
Management will attempt to reduce credit risk in the commercial real estate
portfolio by emphasizing loans on owner-occupied office and retail buildings
where the loan-to-value ratio, established by independent appraisals, does not
exceed 80%. In addition, the Bank may require personal guarantees of the
principal owners of the property backed with a review by the Bank of the
personal financial statements of the principal owners. The principal economic
risk associated with each category of anticipated loans, including real estate
loans, is the creditworthiness of the Bank's borrowers. The risks associated
with real estate loans vary with many economic factors, including employment
levels and fluctuations in the value of real estate, new job creation trends and
tenant vacancy rates. The Bank will compete for real estate loans with a number
of bank competitors which are well established in the Buckhead Area. Most of
these competitors have substantially greater resources and lending limits than
the Bank. As a result, the Bank may have to charge lower interest rates to
attract borrowers. See "Competition" below.
The Bank may also originate loans for sale into the secondary market. The
Bank intends to limit interest rate risk and credit risk on these loans by
locking the interest rate for each loan with the secondary investor and
receiving the investor's underwriting approval prior to originating the loan.
Consumer Loans. The Bank will make a variety of loans to individuals for
personal and household purposes, including secured and unsecured installment and
term loans, home equity loans and lines of credit, and revolving lines of credit
such as credit cards. These loans typically will carry balances of less than
$25,000 and, in the case of non-revolving loans, be amortized over a period not
exceeding 48 months or be ninety-day term loans, in each case bearing interest
at a fixed rate. The revolving loans will typically bear interest at a fixed
rate and require monthly payments of interest and a portion of the principal
balance. The underwriting criteria for home equity loans and lines of credit
will generally be the same as applied by the Bank when making a first mortgage
loan, as described above, and home equity lines of credit will typically expire
ten years or less after origination. As with the other categories of loans, the
principal economic risk associated with consumer loans is the creditworthiness
of the Bank's borrowers, and the principal competitors for consumer loans will
be the established banks in the Buckhead Area.
Loan Approval and Review. The Bank's loan approval policies will provide
for various levels of officer lending authority. When the amount of aggregate
loans to a single borrower exceeds that individual officer's lending authority,
the loan request will be considered and approved by an officer with a higher
lending limit or the officers' loan committee. The Bank will establish an
officers' loan committee that has lending limits, and any loan in excess of this
lending limit will be approved by the directors' loan committee. The Bank will
not make any loans to any director, officer, or employee of the Bank unless the
loan is approved by the board of directors of the Bank and is made on terms not
more favorable to such person than would be available to a person not affiliated
with the Bank.
Lending Limits. The Bank's lending activities will be subject to a variety
of lending limits imposed by federal law. While differing limits apply in
certain circumstances based on the type of loan or the nature of the borrower
(including the borrower's relationship to the Bank), in general the
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Bank will be subject to a loan-to-one-borrower limit of an amount equal to 15%
of the Bank's unimpaired capital and surplus, or 25% of the unimpaired capital
and surplus if the excess over 15% is approved by the board of directors of the
Bank and is fully secured by readily marketable collateral. Based on the
proposed minimum initial capitalization of the Bank and its projected pre-
opening expenses, the Bank's initial lending limit will be approximately
$1,181,000 for loans not fully secured plus an additional $788,000 (or an
aggregate of approximately $1,969,000) for loans for which the additional 10% is
fully secured. The Bank has not yet established any minimum or maximum loan
limits other than the statutory lending limits described above. These limits
will increase or decrease as the Bank's capital increases or decreases as a
result of the Bank's earning or losses, among other reasons. Unless the Bank is
able to sell participations in its loans to other financial institutions, the
Bank will not be able to meet all of the lending needs of loan customers
requiring aggregate extensions of credit above these limits.
OTHER BANKING SERVICES
Other anticipated bank services include cash management services, safe
deposit boxes, travelers checks, direct deposit of payroll and social security
checks, and automatic drafts for various accounts. The Bank plans to become
associated with a shared network of automated teller machines that may be used
by Bank customers throughout Georgia and other regions. The Bank plans to offer
annuities, mutual funds, and other financial services through a third party
which has not, as yet, been chosen by the Bank. The Bank also plans to offer
MasterCard and VISA credit card services through a correspondent bank as an
agent for the Bank. The Bank does not plan to exercise trust powers during its
initial years of operation. The Bank may in the future offer a full-service
trust department, but cannot do so without the prior approval of the OCC.
COMPETITION
The banking business is highly competitive. The Bank will compete as a
financial intermediary with other commercial banks, savings and loan
associations, credit unions, and money market mutual funds operating in the
Atlanta area. As of August 1997, the Buckhead Area was served by 11 commercial
banks with a total of 35 offices and one credit union. A number of these
competitors are well established in the Buckhead Area. Most of them have
substantially greater resources and lending limits than the Bank and offer
certain services, such as extensive and established branch networks and trust
services, that the Bank either does not expect to provide or will not provide
initially. As a result of these competitive factors, the Bank may have to pay
higher rates of interest to attract deposits.
FACILITIES
The Company is presently negotiating a lease agreement with Longpoint
Investors, Ltd. for space located at 415 East Paces Ferry Road, N.E., Atlanta,
Georgia, to house the Bank's office. The space is being renovated by the
landlord for use as a bank office. The lease term is expected to commence on
November 1, 1997, and expire ten years thereafter, with renewal rights. The
property includes approximately 9,179 square feet of office space. Annual rent
for the first year of the lease is approximately $160,000, and increases 3% per
year during the initial lease term.
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EMPLOYEES
The Company anticipates that, upon commencement of operations, the Bank
will have approximately 11 full-time employees and 3 part-time employees. The
Company will not have any employees other than its officers, none whom will
initially receive any remuneration for their services to the Company. Marvin
Cosgray, the proposed President and Chief Executive officer of the Bank, is
currently employed by the Company to head the organizational effort for the
Bank. See "Management - Employment Agreement."
LEGAL PROCEEDINGS
There are no material legal proceedings to which the Company or the Bank or
any of their properties are subject.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
As of June 30, 1997, the Company had total assets aggregating approximately
$360,349. These assets consisted principally of cash and interest bearing
deposits in banks of $196,161 and deferred offering expenses and organizational
costs of $159,508. The organizational costs relate to the organization of the
Company and the Bank and have been capitalized and will be amortized over a five
year period. The Company's liabilities at June 30, 1997, were $4,048, and
consisted of accounts payable. The Company had shareholder's equity of
$356,301.
The Company had a net loss from October 15, 1996 (the Company's inception
date), through June 30, 1997, of $43,699. This loss resulted from salary and
supply expenses incurred in support of activities related to the initial
organization of the Company and the Bank. These activities included (without
limitation) the preparation and filing of an application with the OCC for a
national bank charter and an application with the FDIC for federal deposit
insurance, and the preparation and filing of a registration statement for the
offering of the Common Stock.
Assuming that the offering is successfully completed, the Company's initial
activities will be devoted to organizing the Bank and opening and commencing the
business of the Bank. These organizational activities will include completing
all required steps for approval from the OCC for a national bank charter;
equipping the office of the Bank; hiring qualified personnel to work in the
various offices of the Bank; conducting public relations activities on behalf of
the Bank; developing prospective business contacts for the Bank and the Company;
and taking other actions necessary for a successful bank opening. The Company
has entered into a lease for the main office of the Bank of an initial rental
rate of $160,000 per year with 3% annual increases during the lease term.
Because the Company is in the organizational stage, it has had no
operations from which to generate revenues and, until the Bank opens for
business, the Company's only source of revenues will be interest earned on
subscriptions. Because these revenues will be less than the expenses incurred
in connection with activities related to the initial organization of the Company
and the Bank, the Company will incur a net loss through the date of the opening
of the Bank. In addition, the Company anticipates incurring continuing
operating losses during the Bank's early stages of operations.
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At least $7,960,000 of the proceeds of this offering will be used to
capitalize the Bank and any remainder will be used to pay organizational
expenses of the Company and provide working capital, including additional
capital for investment in the Bank, if needed. See "Use of Proceeds." The
Company believes that this amount will be sufficient to fund the activities of
the Bank in its initial stages of operation and that the Bank will generate
sufficient income from operations to fund its activities on an on-going basis
for at least five years. In addition, the Company believes that income from the
operations of the Bank will be sufficient to fund the activities of the Company
on an on-going basis for at least five years. However, there can be no
assurance that either the Bank or the Company will achieve any particular level
of profitability.
SUPERVISION AND REGULATION
The Company and the Bank are subject to state and federal banking laws and
regulations which impose specific requirements or restrictions on and provide
for general regulatory oversight with respect to virtually all aspects of
operations. These laws and regulations are generally intended to protect
depositors, not shareholders. To the extent that the following summary
describes statutory or regulatory provisions, it is qualified in its entirety by
reference to the particular statutory and regulatory provisions. Any change in
applicable laws or regulations may have a material effect on the business and
prospects of the Company. The operations of the Company and the Bank may be
affected by legislative changes and the policies of various regulatory
authorities. The Company is unable to predict the nature or the extent of the
effect on its business and earnings that fiscal or monetary policies, economic
control, or new federal or state legislation may have in the future.
THE COMPANY
Because it will own the outstanding capital stock of the Bank, the Company
will be a bank holding company within the meaning of the federal Bank Holding
Company Act of 1956 (the "BHCA") and the Georgia Financial Institutions Code
(the "Georgia Code"). The activities of the Company will also be governed by
the Glass-Steagall Act of 1933 (the "Glass-Steagall Act").
The BHCA. Under the BHCA, the Company will be subject to periodic
examination by the Federal Reserve and will be required to file periodic reports
of its operations and such additional information as the Federal Reserve may
require. The Company's activities are limited to managing or controlling banks,
furnishing services to or performing services for its subsidiaries, and engaging
in other activities that the Federal Reserve determines to be so closely related
to banking or managing or controlling banks as to be a proper incident thereto.
Investments, Control, and Activities. With certain limited exceptions, the
BHCA requires every bank holding company to obtain the prior approval of the
Federal Reserve before (i) acquiring substantially all the assets of any bank,
(ii) acquiring direct or indirect ownership or control of any voting shares of
any bank if after such acquisition it would own or control more than 5% of the
voting shares of such bank (unless it already owns or controls the majority of
such shares), or (iii) merging or consolidating with another bank holding
company.
In addition, and subject to certain exceptions, the BHCA and the Change in
Bank Control Act, together with regulations thereunder, require Federal Reserve
approval (or, depending on the circumstances, no notice of disapproval) prior to
any person or company acquiring "control" of a bank holding company, such as the
Company. Control is conclusively presumed to exist if an individual or company
acquires 25% or more of any class of voting securities of the bank holding
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company. Control is rebuttably presumed to exist if a person acquires 10% or
more but less than 25% of any class of voting securities and either the Company
has registered securities under Section 12 of the Exchange Act (which the
Company would likely be required to do with respect to the Common Stock once it
has more that 500 shareholders of record) or no other person will own a greater
percentage of that class of voting securities immediately after the transaction.
The regulations provide a procedure for challenge of the rebuttable control
presumption.
Under the BHCA, a bank holding company is generally prohibited from
engaging in, or acquiring direct or indirect control of more than 5% of the
voting shares of any company engaged in, nonbanking activities, unless the
Federal Reserve Board, by order or regulation, has found those activities to be
so closely related to banking or managing or controlling banks as to be a proper
incident thereto. Some of the activities that the Federal Reserve Board has
determined by regulation to be proper incidents to the business of a bank
holding company include making or servicing loans and certain types of leases,
engaging in approved insurance and discount brokerage activities, performing
qualifying data processing services, acting in certain circumstances as a
fiduciary or investment or financial adviser, owning savings associations, and
making investments in qualifying corporations or projects designed primarily to
promote community welfare.
The Federal Reserve Board will impose certain capital requirements on the
Company under the BHCA, including a minimum leverage ratio and a minimum ratio
of "qualifying" capital to risk-weighted assets. These requirements are
described below under "Capital Regulations." Subject to its capital
requirements and certain other restrictions, the Company will be able to borrow
money to make a capital contribution to the Bank, and such loans may be repaid
from dividends paid from the Bank to the Company (although the ability of the
Bank to pay dividends will be subject to regulatory restrictions as described
below in "The Bank - Dividends"). The Company will also be able to raise
capital for contribution to the Bank by issuing securities without having to
receive regulatory approval, subject to compliance with federal and state
securities laws.
Source of Strength; Cross-Guarantee. In accordance with Federal Reserve
Board policy, the Company is expected to act as a source of financial strength
to the Bank and to commit resources to support the Bank in circumstances in
which the Company might not otherwise do so. Under the BHCA, the Federal Reserve
Board may require a bank holding company to terminate any activity or relinquish
control of a nonbank subsidiary (other than a nonbank subsidiary of a bank) upon
the Federal Reserve Board's determination that such activity or control
constitutes a serious risk to the financial soundness or stability of any
subsidiary depository institution of the bank holding company. Further, federal
bank regulatory authorities have additional discretion to require a bank holding
company to divest itself of any bank or nonbank subsidiary if the agency
determines that divestiture may aid the depository institution's financial
condition.
The Georgia Code. All Georgia bank holding companies must register with the
Georgia Department under the Financial Institutions Code of Georgia (the
"Georgia Code"). A registered bank holding company must provide the Georgia
Department with information with respect to the financial conditions,
operations, management, and inter-company relationships of the holding company
and its subsidiaries. The Georgia Department may also require such other
information as is necessary to keep itself informed about whether the provisions
of Georgia law and the regulations and orders issued thereunder by the Georgia
Department have been complied with, and the Georgia Department may make
examinations of any bank holding company and its subsidiaries.
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Under the Georgia Code, it is unlawful without the prior approval of the
Georgia Department (i) for any bank holding company to acquire direct or
indirect ownership or control of more than five percent of the voting shares of
any bank, (ii) for any bank holding company or subsidiary thereof, other than a
bank, to acquire all or substantially all of the assets of a bank, or (iii) for
any bank holding company to merge or consolidate with any other bank holding
company. It is also unlawful for any bank holding company to acquire direct or
indirect ownership or control of more than five percent of the voting shares of
any bank unless such bank has been in existence and continuously operating or
incorporated as a bank for a period of five years or more prior to the date of
application to the Georgia Department for approval of such acquisition. In
addition, in any such acquisition by an existing bank holding company, the
initial banking subsidiary of such bank holding company must have been
incorporated for not less than two years before the holding company can acquire
another bank.
The Georgia Code and federal law allow interstate banking by permitting
banking organizations in other states to acquire Georgia banking organizations.
As a result of these provisions, banking organizations in other states, most
significantly North Carolina, Florida, and Alabama, have entered the Georgia
market through acquisitions of Georgia institutions. Those acquisitions are
subject to federal and Georgia approval as described above.
Glass-Steagall Act. The Company will also be restricted in its activities
by the provisions of the Glass-Steagall Act, which will generally limit the
ability of the Company to own subsidiaries that are engaged principally in the
issue, flotation, underwriting, public sale, or distribution of securities. The
interpretation, scope, and application of the provisions of the Glass-Steagall
Act currently are being considered and reviewed by regulators and legislators,
and may be subject to significant revision as a result.
THE BANK
General. Subject to receipt of the necessary approvals of its pending
applications, the Bank will operate as a national banking association
incorporated under the laws of the United States and subject to examination by
the OCC. Deposits in the Bank will be insured by the FDIC up to a maximum amount
(generally $100,000 per depositor, subject to aggregation rules). The OCC and
the FDIC will regulate or monitor virtually all areas of the Bank's operations,
including security devices and procedures, adequacy of capitalization and loss
reserves, loans, investments, borrowings, deposits, mergers, issuances of
securities, payment of dividends, interest rates payable on deposits, interest
rates or fees chargeable on loans, establishment of branches, corporate
reorganizations, maintenance of books and records, and adequacy of staff
training to carry on safe lending and deposit gathering practices. The OCC will
require the Bank to maintain certain capital ratios and will impose limitations
on the Bank's aggregate investment in real estate, bank premises, and furniture
and fixtures. The Bank will be required by the OCC to prepare quarterly reports
on the Bank's financial condition and to conduct an annual audit of its
financial affairs in compliance with minimum standards and procedures prescribed
by the OCC.
All insured institutions must undergo regular on-site examinations by their
appropriate banking agency. The cost of examinations of insured depository
institutions and any affiliates may be assessed by the appropriate agency
against each institution or affiliate as it deems necessary or appropriate.
Insured institutions are required to submit annual reports to the FDIC and the
appropriate agency (and state supervisor when applicable). The federal banking
regulatory agencies have established regulatory standards for all insured
depository institutions and depository institution
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holding companies relating, among other things, to: (i) internal controls,
information systems, and audit systems; (ii) loan documentation; (iii) credit
underwriting; (iv) interest rate risk exposure; and (v) asset quality.
National banks and their holding companies which have been chartered or
registered or undergone a change in control within the past two years or which
have been deemed by the OCC or the Federal Reserve Board, respectively, to be
troubled institutions must give the OCC or the Federal Reserve Board,
respectively, thirty days prior notice of the appointment of any senior
executive officer or director. Within the thirty day period, the OCC or the
Federal Reserve Board, as the case may be, may approve or disapprove any such
appointment. The Company and the Bank will meet the criteria which trigger this
additional approval during the first two years after they are registered or
chartered, respectively.
Deposit Insurance. The FDIC establishes rates for the payment of premiums
by federally insured banks and thrifts for deposit insurance. A separate Bank
Insurance Fund ("BIF") and Savings Association Insurance Fund ("SAIF") are
maintained for commercial banks and thrifts, respectively, with insurance
premiums from the industry used to offset losses from insurance payouts when
banks and thrifts fail. Insured depository institutions like the Bank pay for
deposit insurance under a risk-based premium system. Under the premium system, a
depositor institution pays premiums to BIF or SAIF ranging from almost zero to
$.27 per $100 of insured deposits depending on its capital levels and risk
profile, as determined by its primary federal regulator on a semi-annual basis.
During its initial months of operations, it is likely that the Bank's assessment
rate will be $.07 per $100 of insured deposits. Increases in deposit insurance
premiums will increase the Bank's cost of funds, and there can be no assurance
that such cost can be passed on to the Bank's customers. There is a bill pending
in Congress which would result in the merger of BIF and SAIF in 1999.
Transactions With Affiliates and Insiders. The Bank is subject to the
provisions of Section 23A of the Federal Reserve Act, which place limits on the
amount of loans or extensions of credit to, or investments in, or certain other
transactions with, affiliates and on the amount of advances to third parties
collateralized by the securities or obligations of affiliates. The aggregate of
all covered transactions is limited in amount, as to any one affiliate, to 10%
of the bank's capital and surplus and, as to all affiliates combined, to 20% of
the bank's capital and surplus. Furthermore, within the foregoing limitations as
to amount, each covered transaction must meet specified collateral requirements.
Compliance is also required with certain provisions designed to avoid the taking
of low quality assets.
The Bank is also subject to the provisions of Section 23B of the Federal
Reserve Act which, among other things, prohibit an institution from engaging in
certain transactions with certain affiliates unless the transactions are on
terms substantially the same, or at least as favorable to such institution or
its subsidiaries, as those prevailing at the time for comparable transactions
with non-affiliated companies. The Bank is subject to certain restrictions on
extensions of credit to executive officers, directors, certain principal
shareholders, and their related interests. Such extensions of credit (i) must
be made on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with
third parties and (ii) must not involve more than the normal risk of repayment
or present other unfavorable features.
Dividends. A national bank may not pay dividends from its capital. All
dividends must be paid out of undivided profits then on hand, after deducting
expenses, including reserves for losses and bad debts. In addition, a national
bank is prohibited from declaring a dividend on its shares of
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common stock until its surplus equals its stated capital, unless there has been
transferred to surplus no less than one-tenth of the bank's net profits of the
preceding two consecutive half-year periods (in the case of an annual dividend).
The approval of the OCC is required if the total of all dividends declared by a
national bank in any calendar year exceeds the total of its net profits for that
year combined with its retained net profits for the preceding two years, less
any required transfers to surplus. In addition, the Bank may not pay a dividend
if, after paying the dividend, the Bank would be undercapitalized. See "Capital
Regulations" below.
Branching. National banks are required by the National Bank Act to adhere
to branch office banking laws applicable to state banks in the states in which
they are located. Under current Georgia law, the Bank may establish branches
throughout Fulton and DeKalb counties with the prior approval of the OCC, and
may establish up to three branches in additional counties with the prior
approval of the OCC. After July 1, 1998, the Bank will be permitted to establish
branches throughout Georgia with the prior approval of the OCC. With prior
regulatory approval, the Company will be able to acquire other existing banking
operations in Georgia once the Bank has been incorporated for 24 months.
Furthermore, federal law permits out of state acquisitions by bank holding
companies, interstate merging by banks (subject to veto by new state law), and
de novo branching by banks if allowed by state law. These branching powers may
result in an increase in the number of competitors in the Bank's market,
although to date they have tended to trigger consolidations in the market. The
Organizers believe the Bank can compete effectively in the market despite any
impact of these branching powers, but there can be no assurance that future
competitive developments will not impact the Bank's ability to compete
effectively. The Organizers currently have no plans or agreements whereby the
Bank would acquire other banks or thrifts.
Community Reinvestment Act. The Community Reinvestment Act requires that,
in connection with examinations of financial institutions within their
respective jurisdictions, the federal bank regulatory authorities evaluate the
record of the financial institutions in meeting the credit needs of their local
communities, including low and moderate income neighborhoods, consistent with
the safe and sound operation of those institutions. These factors are also
considered in evaluating mergers, acquisitions, and applications to open a
branch or facility.
Other Regulations. Interest and certain other charges collected or
contracted for by the Bank are subject to state usury laws and certain federal
laws concerning interest rates. The Bank's loan operations are also subject to
certain federal laws applicable to credit transactions, such as the federal
Truth-In-Lending Act, governing disclosures of credit terms to consumer
borrowers; the Home Mortgage Disclosure Act of 1975, requiring financial
institutions to provide information to enable the public and public officials to
determine whether a financial institution will be fulfilling its obligation to
help meet the housing needs of the community it serves; the Equal Credit
Opportunity Act, prohibiting discrimination on the basis of race, creed or other
prohibited factors in extending credit; the Fair Credit Reporting Act of 1978,
governing the use and provision of information to credit reporting agencies; the
Fair Debt Collection Act, governing the manner in which consumer debts may be
collected by collection agencies; and the rules and regulations of the various
federal agencies charged with the responsibility of implementing such federal
laws. The deposit operations of the Bank also are subject to the Right to
Financial Privacy Act, which imposes a duty to maintain confidentiality of
consumer financial records and prescribe s procedures for complying with
administrative subpoenas of financial records, and the Electronic Funds Transfer
Act and Regulation E issued by the Federal Reserve Board to implement that act,
which governs automatic deposits to and withdrawals from deposit accounts and
customers' rights and liabilities arising from the use of automated teller
machines and other electronic banking services.
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CAPITAL REGULATIONS
The federal bank regulatory authorities have adopted risk-based capital
guidelines for banks and bank holding companies that are designed to make
regulatory capital requirements more sensitive to differences in risk profiles
among banks and bank holding companies and account for off-balance sheet items.
The guidelines are minimums, and the federal regulators have noted that banks
and bank holding companies contemplating significant expansion programs should
not allow expansion to diminish their capital ratios and should maintain in
excess of the minimums. Neither the Company nor the Bank has received any
notice indicating that either entity will be subject to higher capital
requirements. The current guidelines require all bank holding companies and
federally-regulated banks to maintain a minimum risk-based total capital ratio
equal to 8%, of which at least 4% must be Tier 1 capital. Tier 1 capital
includes common shareholders' equity, qualifying perpetual preferred stock, and
minority interests in equity accounts of consolidated subsidiaries, but excludes
goodwill and most other intangibles and excludes the allowance for loan and
lease losses. Tier 2 capital includes the excess of any preferred stock not
included in Tier 1 capital, mandatory convertible securities, hybrid capital
instruments, subordinated debt and intermediate term-preferred stock, and
general reserves for loan and lease losses up to 1.25% of risk-weighted assets.
Under these guidelines, banks' and bank holding companies' assets are given
risk-weights of 0%, 20%, 50%, or 100%. In addition, certain off-balance sheet
items are given credit conversion factors to convert them to asset equivalent
amounts to which an appropriate risk-weight will apply. These computations
result in the total risk-weighted assets. Most loans are assigned to the 100%
risk category, except for first mortgage loans fully secured by residential
property and, under certain circumstances, residential construction loans, both
of which carry a 50% rating. Most investment securities are assigned to the 20%
category, except for municipal or state revenue bonds, which have a 50% rating,
and direct obligations of or obligations guaranteed by the United States
Treasury or United States Government agencies, which have a 0% rating.
The federal bank regulatory authorities have also implemented a leverage
ratio, which is equal to Tier 1 capital as a percentage of average total assets
less intangibles, to be used as a supplement to the risk-based guidelines. The
principal objective of the leverage ratio is to place a constraint on the
maximum degree to which a bank holding company may leverage its equity capital
base. The minimum required leverage ratio for top-rated institutions is 3%, but
most institutions are required to maintain an additional cushion of at least 100
to 200 basis points.
Federal law and regulations establish a capital-based regulatory scheme
designed to promote early intervention for troubled banks and require the FDIC
to choose the least expensive resolution of bank failures. The capital-based
regulatory framework contains five categories of compliance with regulatory
capital requirements, including "well capitalized," "adequately capitalized,"
"undercapitalized," "significantly undercapitalized," and "critically
undercapitalized." To qualify as a "well capitalized" institution, a bank must
have a leverage ratio of no less than 5%, a Tier 1 risk-based ratio of no less
than 6%, and a total risk-based capital ratio of no less than 10%, and the bank
must not be under any order or directive from the appropriate regulatory agency
to meet and maintain a specific capital level. Initially, the Organizers expect
the Bank to qualify as "well-capitalized."
Under the regulations, the applicable agency can treat an institution as if
it were in the next lower category if the agency determines (after notice and an
opportunity for hearing) that the institution is in an unsafe or unsound
condition or is engaging in an unsafe or unsound practice. The degree of
regulatory scrutiny of a financial institution will increase, and the
permissible activities of
29
<PAGE>
the institution will decrease, as it moves downward through the capital
categories. Institutions that fall into one of the three undercapitalized
categories may be required to (i) submit a capital restoration plan; (ii) raise
additional capital; (iii) restrict their growth, deposit interest rates, and
other activities; (iv) improve their management; (v) eliminate management fees;
or (vi) divest themselves of all or a part of their operations. Bank holding
companies controlling financial institutions can be called upon to boost the
institutions' capital and to partially guarantee the institutions' performance
under their capital restoration plans.
These capital guidelines can affect the Company in several ways. After
completion of this offering, the Company's capital levels will initially be more
than adequate. However, rapid growth, poor loan portfolio performance, or poor
earnings performance, or a combination of these factors, could change the
Company's capital position in a relatively short period of time, making an
additional capital infusion necessary. Failure to meet these capital
requirements would mean that a bank would be required to develop and file a plan
with its primary federal banking regulator describing the means and a schedule
for achieving the minimum capital requirements. In addition, such a bank would
generally not receive regulatory approval of any application that requires the
consideration of capital adequacy, such as a branch or merger application,
unless the bank could demonstrate a reasonable plan to meet the capital
requirement within a reasonable period of time.
ENFORCEMENT POWERS
Federal law makes strong civil and criminal penalties available for use by
the federal regulatory agencies against depository institutions and certain
"institution-affiliated parties" (primarily including management, employees, and
agents of a financial institution, independent contractors such as attorneys and
accountants and others who participate in the conduct of the financial
institution's affairs). These practices can include the failure of an
institution to timely file required reports or the filing of false or misleading
information or the submission of inaccurate reports. Civil penalties may be as
high as $1,000,000 a day for such violations. Criminal penalties for some
financial institution crimes have been increased to twenty years. In addition,
regulators are provided with considerable flexibility to commence enforcement
actions against institutions and institution-affiliated parties. Possible
enforcement actions include the termination of deposit insurance. Furthermore,
regulators have broad power to issue cease and desist orders that may, among
other things, require affirmative action to correct any harm resulting from a
violation or practice, including restitution, reimbursement, indemnifications or
guarantees against loss. A financial institution may also be ordered to restrict
its growth, dispose of certain assets, rescind agreements or contracts, or take
other actions as determined by the ordering agency to be appropriate.
FUTURE LEGISLATIVE DEVELOPMENTS
From time to time, various bills are introduced in the United States
Congress with respect to the regulation of financial institutions. Certain of
these proposals, if adopted, could significantly change the regulation of banks
and the financial services industry. The Company cannot predict whether any of
these proposals will be adopted or, if adopted, how these proposals would affect
the Company.
EFFECT OF GOVERNMENTAL MONETARY POLICIES
The earnings of the Bank will be affected by domestic economic conditions
and the monetary and fiscal policies of the United States government and its
agencies. The Federal Reserve Board's
30
<PAGE>
monetary policies have had, and will likely continue to have, an important
impact on the operating results of commercial banks through its power to
implement national monetary policy in order, among other things, to curb
inflation or combat a recession. The monetary policies of the Federal Reserve
Board have major effects upon the levels of bank loans, investments and deposits
through its open market operations in United States government securities and
through its regulation of the discount rate on borrowings of member banks and
the reserve requirements against member bank deposits. It is not possible to
predict the nature or impact of future changes in monetary and fiscal policies.
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<PAGE>
MANAGEMENT
GENERAL
The following table sets forth the respective names, ages, positions with
the Company and the Bank, existing share ownership and anticipated subscriptions
of the Organizers. The Organizers may elect to purchase more than the shares
indicated below.
<TABLE>
<CAPTION>
Total Share Percentage Percentage
Ownership of of
Position With Existing Share Anticipated Post- Outstanding Outstanding
Name(Age) Company/ Bank Ownership(1) Subscription(2) Offering Minimum(3) Maximum (4)
--------- ------------- -------------- --------------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Hugh C. Aldredge(69) Director 10,000 90,000 100,000 6.0% 4.1%
Marvin Cosgray (48) Director, -- 50,000 50,000 3.0% 2.0%
President and
Chief Executive
Officer
J. Rex Fuqua(48) Director 10,000 90,000 100,000 6.0% 4.1%
Julian LeCraw Sr.(67) Director 10,000 90,000 100,000 6.0% 4.1%
R. Charles Loudermilk, Sr.(70) Director 10,000 190,000 200,000 12.0% 8.1%
Larry P. Martindale(51) Director 10,000 90,000 100,000 6.0% 4.1%
William T. Towles(69) Director 10,000 90,000 100,000 6.0% 4.1%
------ ------ -------
TOTAL 60,000 690,000 750,000 45.2% 30.5%
</TABLE>
_____________________
(1) All shares presently owned by the Organizers were purchased at a price
of $5.00 per share, the same price at which shares are being offered
to the public.
(2) All of such purchases will be at a price of $5.00 per share, the same
price at which shares are being offered to the public. Organizers may
purchase up to 100% of the shares in the offering if necessary for the
Company to achieve the minimum capital requirement and also may decide
to purchase additional shares in the offering even if the minimum
offering is fully subscribed. Any shares purchased by the Organizers
in excess of their original commitment will be purchased for
investment and not with a view to the resale of such shares. Although
each Organizer has agreed with the other Organizers that he will
subscribe for the number of shares indicated above, neither the
Organizers nor any other subscriber will be obligated to purchase
shares except pursuant to a valid subscription agreement executed
after receipt of this Prospectus. This table includes shares which are
expected to be beneficially owned by the Organizers upon completion of
the offering .
(3) Assumes that the minimum number of 1,600,000 shares are sold in this
offering
(4) Assumes that the maximum number of 2,400,000 shares are sold in this
offering.
All of the Organizers will serve as directors of the Company and the Bank.
Biographical information concerning the Organizers is set forth below.
Hugh C. Aldredge has over 45 years of experience in real estate
development, management and finance. Since 1950, he has been the owner of
Aldredge Properties, a real estate investment concern, and since 1967 he has
been President of Squire Inn, Inc., a hotel investment and management
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<PAGE>
corporation. He received his BBA degree in Marketing in 1949 from The
University of Georgia University. He is a member and serves on the
Administrative Board of Northside United Methodist Church. He is a member of the
Board of Directors and past President of the Atlanta Country Club, and a member
of the Atlanta Classic Foundation, a charitable organization which raises money
through celebrity golf tournaments. He is a past member of the Sandy Springs
Revitalization Committee.
Marvin Cosgray is the President and Chief Executive Officer of the Company
and the proposed President and Chief Executive Officer of the Bank. He graduated
from the University of West Florida with a Bachelors degree and received a law
degree in 1979 from Woodrow Wilson College of Law in Atlanta, Georgia. He served
as President and Chief Executive Officer of Gwinnett National Bank from its
organization in 1988 until April 1997. He served as President and Chief
Executive Officer of First Colony Bank, Alpharetta, Georgia, and its parent bank
holding company, First Colony Bancshares, Inc., from February of 1986 until his
resignation on July 31, 1988. Immediately prior to his service with First Colony
Bank, Mr. Cosgray was President and Chief Executive Officer of Heritage Trust
Savings Bank, Conyers, Georgia. From 1972 until coming to Heritage Trust, Mr.
Cosgray served in various managerial and executive capacities with Gwinnett Bank
and Trust Company, Norcross, Georgia. Mr. Cosgray has chaired and been a member
of various committees of the Community Bankers Association of Georgia and the
Georgia Bankers Association since 1971. He has also been active in civic, social
and church activities throughout his career. He is currently a charter member of
the Norcross Rotary Club where he has served as President and a director. He has
been a director of the Alpharetta/North Fulton Rotary Club, a co-founder and a
director of the Alpharetta Business Alliance, and a two term Chairman of the
North Fulton District of the Boy Scouts of America. He has been a member of the
North Fulton and Gwinnett County Chambers of Commerce. He is an Elder of the
Alpharetta Presbyterian Church.
J. Rex Fuqua is President and Chief Executive Officer of Fuqua Capital
Corporation, a private investment and money management firm, a position he has
held since 1988. From 1982 to 1988 he was President of Signet Capital, Inc., and
from 1979 to 1982 he was President of Signet Communications Company. Prior to
that, he was President of Fuqua National, Inc. for five years. He received his
BBA degree in Finance in 1972 from The University of Georgia and his Masters
Degree in Clinical Psychology from the California School of Professional
Psychology. He is a director of Fuqua Enterprises, Inc., Aaron Rents, Inc., and
FNB Bancshares, Inc., Lakeland, Georgia, which is the holding company for
Farmers & Merchant's Bank, Lakeland, Georgia and The United Banking Company,
Nashville, Georgia. From 1974 to 1976 he was Director of First Georgia Bank,
Atlanta, Georgia.
He is a member of the Board of Trustees of Duke University, the Board of
Trustees of Duke University Graduate Business School, a former Trustee of The
Westminster School in Atlanta, Georgia, and is a Trustee of the Heritage School
in Newnan, Georgia. He is a member of the Board of Counselors of The Carter
Center, a Director of Camp Sunshine, and a member of the Board of Trustees, and
former Chairman, of the Atlanta Botanical Garden.
Julian LeCraw, Sr. has been the owner and principal of Julian LeCraw &
Company, a real estate development and management firm, since 1955. He received
his B.S. degree in Industrial Management in 1952 from the Georgia Institute of
Technology and a L.L.B. degree in 1958 from the Woodrow Wilson School of Law.
From 1983 to 1994, he served as a director of First National Bank of Cobb County
and, following its acquisition by Barnett Bank, of Barnett Bank in Atlanta,
where he also served as a member of the Problem Loan Committee. He is a former
Chairman of the Buckhead
33
<PAGE>
Coalition, Vice President of Georgia Tech Foundation, Inc., a member of the
Board of Trustees of The Westminster School in Atlanta, Georgia, and an Elder of
North Avenue Presbyterian Church.
R. Charles Loudermilk, Sr. is the founder, Chairman and Chief Executive
Officer of Aaron Rents, Inc., one of the leading furniture rental and sales
companies in the United States. He received his B.S. degree in Commerce in 1950
from The University of North Carolina. From 1985 to 1994 he served as director
and a member of the Executive Committee of The Buckhead Bank and The
Chattahoochee Bank.
He is Founder and past Chairman of the Buckhead Coalition, a member of the
Board of Directors of the Corporation for Olympic Development in Atlanta (CODA),
a member of the Board of Visitors of the University of North Carolina and a
member of the Rotary Club of Atlanta, the Atlanta Action Forum and the Executive
Committee of the Atlanta Convention and Visitors Bureau's Board of Directors.
He has served on the Piedmont Hospital Foundation Board, the Shepherd's Spinal
Center Steering Committee and the Archbold Hospital Foundation in Thomasville,
Georgia. He is former President of the National Rental Service Association,
former Chairman of the Board of Directors of the Metropolitan Atlanta Rapid
Transit Authority (MARTA), former Co-Chairman of Andrew Young's Atlanta mayoral
campaigns in 1981 and 1985, and is Treasurer of Guy Milner's United States
Senate campaign. He is Chairman of the Buckhead Club, and a member of the
Commerce Club, the Capital City Club and the Piedmont Driving Club.
Larry P. Martindale has been Vice Chairman of Ritz-Carlton Hotel Company
for over 20 years. He received his B.S. degree in Business Administration in
1969 from the University of Mississippi. He is a member of the Foundation Board
of the University of Mississippi, the Board of Directors of the Atlanta Country
Club and the Board of Directors of Junior Achievement. He is a member of Holy
Innocence's Episcopal Church.
William T. Towles is a builder, developer, manager and investor in
apartments, shopping centers and other real estate projects. He received his
B.S. degree in Architecture in 1950 from the Georgia Institute of Technology. He
is a former member of the Advisory Board of Shepherd's Spinal Center, a former
Trustee of the Georgia Tech Alumni Association, a former Chairman of the Board
of Trustees of St. James United Methodist Church, and a member of the Randolph
Macon Parents Council. He is a member of the Georgia Tech Athletic Hall of Fame
and a former Director of the Peachtree Golf Club.
EMPLOYMENT AGREEMENT
Marvin Cosgray and the Company have entered into an Employment Agreement
pursuant to which Mr. Cosgray is the President and Chief Executive Officer of
the Company and will serve as the President and Chief Executive Officer of the
Bank. The Employment Agreement provides for a starting salary of $115,000 per
annum. In addition, Mr. Cosgray will be eligible to receive annual performance
bonuses, payable in cash or, at the election of Mr. Cosgray, in stock, based on
the return on average assets of the Bank. The maximum performance bonus payable
is 25% of Mr. Cosgray's base salary. Mr. Cosgray will be eligible to
participate in all retirement, welfare and other benefit plans or programs of
the Company applicable generally to employees of the Company or to a class of
employees that includes senior executives of the Company. The Employment
Agreement requires that the Company provide Mr. Cosgray with a term life
insurance policy providing for death benefits totaling $250,000. In addition,
the Company will provide Mr. Cosgray with an automobile allowance of $500 per
month and reimburse Mr. Cosgray for reasonable travel and other expenses related
to his
34
<PAGE>
position with the Company and the Bank, including membership fees for business,
civic and social organizations.
The Employment Agreement is terminable by the Company or the Bank
immediately for cause (as defined in the Employment Agreement) or upon the death
or complete disability of Mr. Cosgray. In addition, the Company may terminate
the Employment Agreement for any reason provided that it pays Mr. Cosgray his
base salary for a period of six months after the date of termination. Mr.
Cosgray may terminate his employment under the Employment Agreement upon sixty
days written notice to the Company and the Bank. For a period of one year
following termination of Mr. Cosgray's employment, Mr. Cosgray may not serve as
a director, officer at the Vice President level or higher, or organizer or
promoter of, or provide executive management services to, any entity engaged in
banking activities which are competitive with those which the Bank has engaged
in within the twelve months immediately preceding such termination at any
location within 15 miles of the boundary of the Bank's primary service area. In
addition, Mr. Cosgray may not use or divulge any confidential information of the
Company or the Bank, solicit any customers of the Company or the Bank for
competitive banking services, solicit for employment any employee of the Company
or the Bank, or pursue any business opportunity which came to his attention in
connection with his employment by the Company or the Bank (other than
opportunities which the Company and the Bank have declined to pursue).
DIRECTOR COMPENSATION
The Organizers do not intend for the Company or the Bank to pay directors'
fees in the initial years of operation.
INTERESTS OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS
For approximately four months, the Company leased temporary furniture from
Aaron Rents, Inc., a public company affiliated with Mr. Loudermilk, for use
during its effort to organize the Bank. The rental rate, which is approximately
$670 per month, and other terms of the lease are no less favorable to the
Company than those available from other sources. The Organizers have entered
into an agreement with Malcolm Garland & Company to assist it in the
organization of the Company and the Bank in return for a fee of $32,500. Malcolm
C. Garland, the principal of Malcolm Garland & Company, served as an unpaid
officer of the Company during its organization but has no ongoing position with
or equity interest in the Company.
The Company and the Bank may have banking and other transactions in the
ordinary course of business with Organizers, directors, and officers of the
Company and the Bank and their affiliates, including members of their families
or corporations, partnerships, or other organizations in which such Organizers,
officers, or directors have a controlling interest, on substantially the same
terms (including price, or interest rates and collateral) as those prevailing at
the time for comparable transactions with unrelated parties. Such transactions
are not expected to involve more than the normal risk of collectability nor
present other unfavorable features to the Company and the Bank. The Bank is
subject to a limit on the aggregate amount it could lend to its and the
Company's directors and officers as a group equal to its unimpaired capital and
surplus (or, under a regulatory exemption available to banks with less than $100
million in deposits, twice that amount), loans to individual directors and
officers must also comply with the Bank's lending policies and statutory lending
limits, and directors with a personal interest in any loan application will be
excluded from the consideration of such loan application.
35
<PAGE>
EXCULPATION AND INDEMNIFICATION
The Articles of Incorporation of the Company contain a conditional
provision which, subject to certain exceptions described below, eliminates the
liability of a director to the Company or its shareholders for monetary damages
for any breach of duty as a director. This provision does not eliminate such
liability to the extent the director (i) appropriated, in violation of his
duties, any business opportunity of the Company, (ii) engaged in willful
misconduct or a knowing violation of law, (iii) permitted any unlawful
distribution, or (iv) derived an improper personal benefit.
The Bylaws of the Company require the Company to indemnify any person who
was, is, or is threatened to be made defendant or respondent in any threatened,
pending, or completed action, suit, or proceeding, whether civil, criminal,
administrative, or investigative, by reason of service by such person as a
director of the Company or the Bank or any other corporation which he served as
such at the request of the Company. Except as noted in the next paragraph,
directors are entitled to be indemnified against judgments, penalties, fines,
settlements, and reasonable expenses actually incurred by the director in
connection with the proceeding. Directors are also entitled to have the Company
advance any such expenses prior to final disposition of the proceeding, upon
delivery of a written affirmation by the director of his good faith belief that
the standard of conduct necessary for indemnification has been met and a written
undertaking to repay the amounts advanced if it is ultimately determined that
the standard of conduct has not been met.
Under the Bylaws, indemnification will be disallowed if it is established
that the director (i) appropriated, in violation of his duties, any business
opportunity of the Company, (ii) engaged in willful misconduct or a knowing
violation of law, (iii) permitted any unlawful distribution, or (iv) derived an
improper personal benefit. In addition to the Bylaws of the Company, Section
18-2-852 of the Georgia Business Corporation Act (the "Corporate Code") requires
that a corporation indemnify a director "who was wholly successful, on the
merits or otherwise, in the defense of any proceeding to which he or she
was a party because he or she was a director of the corporation against
reasonable expenses incurred by the director in connection with the proceeding."
The Corporate Code also provides that upon application of a director a court may
order indemnification if it determines that the director is entitled to such
indemnification under the applicable standard of the Corporate Code.
The Board of Directors also has the authority to extend to officers,
employees, and agents the same indemnification rights held by directors, subject
to all of the accompanying conditions and obligations. The Board of Directors
has extended or intends to extend indemnification rights to all of its executive
officers. The Company intends to enter into indemnity agreements with its
directors and officers.
DESCRIPTION OF CAPITAL STOCK OF THE COMPANY
GENERAL
The authorized capital stock of the Company consists of 10,000,000 shares
of Common Stock, par value $.01 per share, and 1,000,000 shares of Special
Stock, no par value per share (the "Special Stock"). The following summary
describes the Company's capital stock. Reference is made to the Articles of
Incorporation of the Company, which are filed as an exhibit to the Registration
Statement of which this Prospectus forms a part, for a detailed description of
the provisions thereof summarized below.
36
<PAGE>
COMMON STOCK
Holders of shares of the Common Stock are entitled to receive such
dividends as may from time to time be declared by the Board of Directors out of
funds legally available therefor. The Company does not plan to declare any
dividends in the immediate future. See "Dividend Policy." Holders of Common
Stock are entitled to one vote per share on all matters on which the holders of
Common Stock are entitled to vote and do not have any cumulative voting rights.
Holders of Common Stock have no preemptive, conversion, redemption or sinking
fund rights. In the event of a liquidation, dissolution or winding-up of the
Company, holders of Common Stock are entitled to share equally and ratably in
the assets of the Company, if any, remaining after the payment of all debts and
liabilities of the Company and the liquidation preference of any outstanding
Special Stock. The outstanding shares of Common Stock are, and the shares of
Common Stock offered by the Company hereby when issued will be, fully paid and
nonassessable. The rights, preferences and privileges of holders of Common
Stock are subject to any classes or series of Special Stock that the Company may
issue in the future.
There currently is no market for the shares, and, although the Company has
filed a registration statement with the SEC to register the issuance of the
Common Stock in the offering under the Securities Act of 1933, it is not likely
that any trading market will develop for the shares in the future. There are no
present plans for the Common Stock to be traded on any stock exchange or in the
over-the-counter market.
SPECIAL STOCK
The Articles provide that the Board of Directors is authorized, without
further action by the holders of the Common Stock, to provide for the issuance
of shares of the Special Stock in one or more classes or series and to fix the
preferences, limitations, and relative rights thereof, and to fix the number of
shares to be included in any such classes or series. Any Special Stock so
issued may rank senior to the Common Stock with respect to the payment of
dividends or amounts upon liquidation, dissolution or winding-up, or both. In
addition, any such shares of Special Stock may have class or series voting
rights. Upon completion of this offering, the Company will not have any shares
of Special Stock outstanding. Issuances of Special Stock, while providing the
Company with flexibility in connection with general corporate purposes, may,
among other things, have an adverse effect on the rights of holders of Common
Stock, and in certain circumstances such issuances could have the effect of
decreasing the market price of the Common Stock. The Company has no present
plan to issue any shares of Special Stock.
CERTAIN ANTITAKEOVER EFFECTS
The provisions of the Articles, the Bylaws and the Corporation Act
summarized in the following paragraphs may be deemed to have antitakeover
effects and may delay, defer or prevent a tender offer or takeover attempt that
a shareholder might consider to be in such shareholder's best interest,
including those attempts that might result in a premium over the market price
for the shares held by shareholders, and may make removal of management more
difficult.
Authorized but Unissued Stock. The authorized but unissued shares of
Common Stock and Preferred Stock will be available for future issuance without
shareholder approval. These additional shares may be used for a variety of
corporate purposes, including future public offerings to raise additional
capital, corporate acquisitions, and employee benefit plans. The existence of
authorized but
37
<PAGE>
unissued and unreserved shares of Common Stock and Preferred Stock may enable
the Board of Directors to issue shares to persons friendly to current
management, which could render more difficult or discourage any attempt to
obtain control of the Company by means of a proxy contest, tender offer, merger
or otherwise, and thereby protect the continuity of the Company's management.
Advance Notice Requirements for Shareholder Proposals. The Bylaws
establish advance notice procedures with regard to proposals raised, other than
by or at the direction of the Board of Directors, at any meeting of the
shareholders of the Company. These procedures provide that the notice of
shareholder proposals must be in writing and be received by the Secretary of the
Company on or before the later to occur of (i) 14 days prior to the meeting or
(ii) 5 days after notice of the meeting is provided to the shareholders. The
Company may reject a shareholder proposal that is not made in accordance with
such procedures.
Certain Nomination Requirements. Pursuant to the Bylaws, the Company has
established certain nomination requirements for an individual to be elected as a
director of the Company at any annual or special meeting of the shareholders,
including that the nominating party provide the Company within a specified time
prior to the meeting (i) notice that such party intends to nominate the proposed
director; (ii) the name and certain biographical information on the nominee; and
(iii) a statement that the nominee has consented to the nomination. The chairman
of any Shareholders' meeting may, for good cause shown, waive the operation of
these provisions. These provisions could reduce the likelihood that a third
party would nominate and elect individuals to serve on the Board of Directors.
Consideration of Other Constituencies in Mergers. The Corporation Act
grants the Board of Directors the discretion, when considering whether a
proposed merger or similar transaction is in the best interests of the Company
and its shareholders, to take into account the effect of the transaction on the
employees, customers, and suppliers of the Company and upon the communities in
which the offices of the Company are located.
SHARES ELIGIBLE FOR FUTURE SALE
Upon completion of this offering, the Company will have a minimum of
1,660,000 and a maximum of 2,460,000 shares of Common Stock outstanding. The
shares sold in this offering will be freely tradable, without restriction or
registration under the Securities Act, except for shares purchased by
"affiliates" of the Company, which will be subject to resale restrictions under
the Securities Act. An affiliate of the issuer is defined in Rule 144 under the
Securities Act as a person that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with the
issuer. Rule 405 under the Securities Act defines the term "control" to mean
the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of the person whether through the
ownership of voting securities, by contract or otherwise. Directors of the
Company and the Bank will likely be deemed to be affiliates. These securities
held by affiliates may be sold without registration in accordance with the
provisions of Rule 144 or another exemption from registration.
In general, under Rule 144, an affiliate of the Company or a person holding
restricted shares may sell, within any three-month period, a number of shares no
greater than 1% of the then outstanding shares of the Common Stock or the
average weekly trading volume of the Common Stock during the four calendar weeks
preceding the sale, whichever is greater. Rule 144 also requires that the
securities must be sold in "brokers' transactions," as defined in the Securities
Act, and the
38
<PAGE>
person selling the securities may not solicit orders or make any payment in
connection with the offer or sale of securities to any person other than the
broker who executes the order to sell the securities. This requirement may make
the sale of the Common Stock by affiliates of the Company pursuant to Rule 144
difficult if no trading market develops in the Common Stock. Rule 144 also
requires persons holding restricted securities to hold the shares for at least
one year prior to sale.
LEGAL MATTERS
The validity of the issuance of the shares of the Common Stock offered
hereby will be passed upon for the Company by Morris, Manning & Martin, L.L.P.,
Atlanta, Georgia.
EXPERTS
The financial statements of the Company at June 30, 1997, and for the
period from October 15, 1996 (inception) until June 30, 1997, have been audited
by Mauldin & Jenkins, LLC, Atlanta, Georgia (the "Accountant"), independent
certified public accountants, as stated in the Accountant's report appearing
elsewhere herein, and have been so included in reliance on the report of such
firm given upon the Accountant's authority as an expert in accounting and
auditing.
39
<PAGE>
BUCKHEAD COMMUNITY BANCORP, INC.
(A DEVELOPMENT STAGE COMPANY)
INDEX TO FINANCIAL STATEMENTS
JUNE 30, 1997
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
PAGE
-----------
<S> <C>
INDEPENDENT AUDITOR'S REPORT............................................... F-2 AND F-3
Balance Sheet, JUNE 30, 1997............................................... F-4
Statement of Loss, Period from October 15, 1996, Date of Inception,
to JUNE 30, 1997......................................................... F-5
Statement of Stockholders' Equity, Period from October 15, 1996,
Date of Inception, to JUNE 30, 1997...................................... F-6
Statement of Cash Flows, Period from October 15, 1996, Date of Inception,
to JUNE 30, 1997......................................................... F-7
Notes to Financial Statements.............................................. F-8
</TABLE>
<PAGE>
INDEPENDENT AUDITOR'S REPORT
- -------------------------------------------------------------------------
TO THE BOARD OF DIRECTORS
BUCKHEAD COMMUNITY BANCORP, INC.
ATLANTA, GEORGIA
We have audited the accompanying balance sheet of BUCKHEAD COMMUNITY
BANCORP, INC., a development stage company, as of June 30, 1997, and the related
statements of loss, stockholders' equity and cash flows for the period from
October 15, 1996, date of inception, to June 30, 1997. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Buckhead Community Bancorp,
Inc. as of June 30, 1997, and the results of its operations and its cash flows
for the period from October 15, 1996, date of inception, to June 30, 1997, in
conformity with generally accepted accounting principles.
F-2
<PAGE>
- --------------------------------------------------------------------------------
The accompanying financial statements have been prepared assuming that
Buckhead Community Bancorp, Inc., will continue as a going concern. As
discussed in Note 1 to the financial statements, the Company is in the
organization stage and has not commenced operations. Also, as discussed in Note
2, the Company's future operations are dependent on obtaining capital through an
initial stock offering and obtaining the necessary final regulatory approvals to
operate under a commercial bank charter. These factors and the expense
associated with development of a new banking institution raise substantial doubt
about the Company's ability to continue as a going concern. Management's plans
in regard to these matters are described in Note 2. The financial statements do
not include any adjustments relating to the recoverability of reported asset
amounts or the amount of liabilities that might result from the outcome of this
uncertainty.
/s/ Mauldin & Jenkins, LLC
Atlanta, Georgia
September 26, 1997
F-3
<PAGE>
BUCKHEAD COMMUNITY BANCORP, INC.
(A Development Stage Company)
BALANCE SHEET
JUNE 30, 1997
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
ASSETS
<S> <C>
Cash $ 21,161
Interest-bearing deposits in banks 175,000
Accrued interest receivable and other assets 4,580
Deferred organization and stock offering costs 159,608
--------
$360,349
========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES, ACCOUNTS PAYABLE $ 4,048
--------
COMMITMENTS
STOCKHOLDERS' EQUITY
Special stock, no par value; 1,000,000 shares authorized; none issued 0
Common stock, $.01 par value; 10,000,000 shares authorized;
80,000 shares issued and outstanding 800
Capital surplus 399,200
Deficit accumulated during the development stage (43,699)
--------
356,301
--------
$360,349
========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
F-4
<PAGE>
BUCKHEAD COMMUNITY BANCORP, INC.
(A Development Stage Company)
STATEMENT OF LOSS
PERIOD FROM OCTOBER 15, 1996, DATE OF INCEPTION,
TO JUNE 30, 1997
- --------------------------------------------------------------------------------
Income, interest $ 5,188
----------
Expenses
Salaries and employee benefits 30,213
Other expenses 18,674
----------
48,887
----------
Net loss $ (43,699)
==========
Losses per share $ (0.57)
==========
SEE NOTES TO FINANCIAL STATEMENTS.
F-5
<PAGE>
BUCKHEAD COMMUNITY BANCORP, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
PERIOD FROM OCTOBER 15, 1996, DATE OF INCEPTION,
TO JUNE 30, 1997
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
Deficit
Accumulated
Common Stock During the Total
--------------------- Capital Development Stockholders'
Shares Par Value Surplus Stage Equity
------ --------- -------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Balance, October 15, 1996
(date of inception) 0 $ 0 $ 0 $ 0 $ 0
Issuance of common stock 80,200 802 400,198 0 401,000
Redemption of common stock (200) (2) (998) 0 (1,000)
Net loss 0 0 0 (43,699) (43,699)
------ ------ ---------- ---------- ----------
Balance, June 30, 1997 80,000 $ 800 $ 399,200 $ (43,699) $ 356,301
====== ====== ========== ========== ==========
</TABLE>
See Notes to Financial Statements.
F-6
<PAGE>
BUCKHEAD COMMUNITY BANCORP, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
PERIOD FROM OCTOBER 15, 1996, DATE OF INCEPTION,
TO JUNE 30, 1997
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
OPERATING ACTIVITIES
Net loss $ (43,699)
Adjustment to reconcile net loss to net cash used in
operating activities:
Increase in accrued interest receivable and other assets (4,580)
Increase in accounts payable 4,048
-----------
Net cash used in operating activities (44,231)
-----------
INVESTING ACTIVITIES
Increase in deferred organization and stock offering costs (159,608)
Increase in interest-bearing deposits in banks (175,000)
-----------
Net cash used in investing activities (334,608)
-----------
FINANCING ACTIVITIES
Proceeds from issuance of common stock 401,000
Redemption of common stock (1,000)
-----------
Net cash provided by financing activities 400,000
-----------
Net increase in cash 21,161
Cash at beginning of period -
-----------
Cash at end of period $ 21,161
===========
</TABLE>
See Notes to Financial Statements.
F-7
<PAGE>
BUCKHEAD COMMUNITY BANCORP, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
NOTE 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
Buckhead Community Bancorp, Inc. (the "Company") was incorporated to
operate as a bank holding company pursuant to the Federal Bank
Holding Company Act of 1956, as amended, and the Georgia Bank
Holding Company Act, and to purchase 100% of the issued and
outstanding capital stock of The Bank of Buckhead, N.A. (the
"Bank"), an association to be organized under the laws of the United
States, which will conduct a general banking business in Atlanta,
Georgia. The Organizers have filed a joint application with the
Office of the Comptroller of the Currency (the "OCC") and the
Federal Deposit Insurance Corporation (the "FDIC") to charter the
proposed Bank and for FDIC insurance of the Bank's deposits. Upon
receipt of preliminary approval from the OCC, the Company will file
an application to become a bank holding company with the Federal
Reserve Board (the "FRB") and the Georgia Department of Banking and
Finance (the "DBF"). Upon obtaining regulatory approval, the
Company will be a registered bank holding company subject to
regulation by the FRB and the DBF.
Activities since inception have consisted of the Company's and the
Bank's organizers engaging in organizational and preopening
activities necessary to obtain regulatory approvals and to prepare
to commence business as a financial institution.
SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The financial statements have been prepared on the accrual basis in
accordance with generally accepted accounting principles.
F-8
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
NOTE 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
DEFERRED ORGANIZATION AND STOCK OFFERING COSTS
Deferred organization costs will be amortized in accordance with
applicable regulations and accounting policies over a period not to
exceed five years from the commencement of operations. Stock
offering costs will be charged to capital surplus upon completion
of the stock offering. Additional costs are expected to be
incurred for organization costs and stock offering costs.
Following is a summary of deferred organization and stock offering
costs:
<TABLE>
<S> <C> <C>
Consulting $ 52,275
Legal 75,495
Filing fees 18,438
Other 13,400
-------------
$ 159,608
=============
</TABLE>
INCOME TAXES
The Company will be subject to Federal and state income taxes when
taxable income is generated. No income taxes have been accrued
because of operating losses incurred during the preopening period.
LOSSES PER SHARE
Losses per share are computed by dividing net loss by the weighted
average number of common shares outstanding.
FISCAL YEAR
The Company will adopt a calendar year for both financial reporting
and tax reporting purposes.
F-9
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
NOTE 2. LIQUIDITY AND GOING CONCERN CONSIDERATIONS
The Company incurred a net loss of $43,699 for the period from
inception (October 15, 1996) to June 30, 1997.
At June 30, 1997, the Company is totally funded by stock sales from
the organizers. Management believes that the current level of
expenditures is well within the financial capabilities of the
organizers and adequate to meet existing obligations and fund current
operations, but obtaining final regulatory approvals and commencing
banking operations is dependent on successfully completing the stock
offering and obtaining regulatory approval.
To provide permanent funding for its operation, the Company is
currently anticipating offering a minimum of 1,600,000 and a maximum
of 2,400,00 shares of its common stock, $.01 par value, at $5 per
share in an initial public offering. Costs related to the
organization and registration of the Company's common stock will be
paid from the gross proceeds of the offering. Should subscriptions
for the minimum offering not be obtained, amounts paid by subscribers
with their subscriptions will be returned and the offer withdrawn.
NOTE 3. COMMITMENTS AND SUBSEQUENT EVENTS
The Company has entered into an employment agreement with its
President and Chief Executive Officer with an effective date of
October 1, 1997. The agreement continues to December 31, 2000 and
provides for an initial annual base salary of $115,000, increasing
$5,000 per year through 2000.
The Company has entered into a ten-year lease agreement for facilities
to house the Bank's office. The lease term is expected to commence on
November 1, 1997. Annual rent for the first year of the lease is
approximately $160,000 with increases of 3% per year during the lease
term.
Subsequent to June 30, 1997, two former organizers of the Company
redeemed 20,000 shares of common stock for the initial purchase price
of $5 per share.
F-10
<PAGE>
EXHIBIT A
BUCKHEAD COMMUNITY BANCORP, INC.
SUBSCRIPTION AGREEMENT
Buckhead Community Bancorp, Inc.
P.O. Box 53299
Atlanta, Georgia 30355
(404) 812-0440
Ladies and Gentlemen:
You have informed me that Buckhead Community Bancorp, Inc., a Georgia
corporation (the "Company"), is offering up to 2,400,000 shares of its Common
Stock, par value $.01 per share (the "Common Stock"), at a price of $5.00 per
share payable as provided herein and as described in and offered pursuant to the
Prospectus furnished with this Subscription Agreement to the undersigned (the
"Prospectus").
1. SUBSCRIPTION. Subject to the terms and conditions hereof, the
undersigned hereby tenders this subscription, together with payment in United
States currency by check, bank draft, or money order payable to "SunTrust Bank,
Atlanta, Escrow Account for Buckhead Community Bancorp, Inc." the amount
indicated below (the "Funds"), representing the payment of $5.00 per share for
the number of shares of Common Stock indicated below. The total subscription
price must be paid at the time the Subscription Agreement is executed.
2. ACCEPTANCE OF SUBSCRIPTION. It is understood and agreed that the
Company shall have the right to accept or reject this subscription in whole or
in part, for any reason whatsoever. The Company may reduce the number of shares
for which the undersigned has subscribed, indicating acceptance of less than all
of the shares subscribed on its written form of acceptance.
3. ACKNOWLEDGMENTS. The undersigned hereby acknowledges that he or she
has received a copy of the Prospectus. This Subscription Agreement creates a
legally binding obligation and the undersigned agrees to be bound by the terms
of this Agreement.
4. REVOCATION. The undersigned agrees that once this Subscription
Agreement is tendered to the Company, it may not be withdrawn and that this
Agreement shall survive the death or disability of the undersigned.
THE SHARES OF COMMON STOCK OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS OR
DEPOSITS ACCOUNTS AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.
<PAGE>
Please indicate in the space provided below the exact name or names and
address in which the stock certificate representing shares subscribed for
hereunder should be registered.
<TABLE>
<S> <C>
_____________________________________ _____________________________________________
Number of Shares Subscribed for Name or Names of Subscribers (Please Print)
(minimum 2,000 shares)
$____________________________________ _____________________________________________
Total Subscription Price at $5.00 Please indicate form of ownership desired
per share (funds must be enclosed) (individual, joint tenants with right of
survivorship, tenants in common, trust,
corporation, partnership, custodian, etc.)
Date: _______________________________ _____________________________________________
Signature of Subscriber(s)*
_____________________________________ _____________________________________________
Social Security Number or Federal Signature of Subscriber(s)*
Taxpayer Identification Number
Street (Residence) Address:
_____________________________________________
_____________________________________________
_____________________________________________
City, State and Zip Code
</TABLE>
*When signing as attorney, trustee, administrator, or guardian, please give
your full title as such. If a corporation, please sign in full corporate name
by president or other authorized officer. In the case of joint tenants or
tenants in common, each owner must sign.
FEDERAL INCOME TAX BACKUP WITHHOLDING
In order to prevent the application of federal income tax backup
withholding, each subscriber must provide the Escrow Agent with a correct
Taxpayer Identification Number ("TIN"). An individual's social security number
is his or her TIN. The TIN should be provided in the space provided in the
Substitute Form W-9, which is set forth below.
Under federal income tax law, any person who is required to furnish his or
her correct TIN to another person, and who fails to comply with such
requirements, may be subject to a $50 penalty imposed by the IRS.
Backup withholding is not an additional tax. Rather, the tax liability of
persons subject to backup withholding will be reduced by the amount of tax
withheld. If backup withholding results in an overpayment of taxes, a refund
may be obtained from the IRS. Certain taxpayers, including all corporations,
are not subject to these backup withholding and reporting requirements.
A-2
<PAGE>
If the shareholder has not been issued a TIN and has applied for a TIN or
intends to apply for a TIN in the near future, "Applied For" should be written
in the space provided for the TIN on the Substitute Form W-9.
SUBSTITUTE FORM W-9
Under penalties of perjury, I certify that: (i) The number shown on this
form is my correct Taxpayer Identification Number (or I am waiting for a
Taxpayer Identification Number to be issued to me), and (ii) I am not subject to
backup withholding because: (a) I am exempt from backup withholding; or (b) I
have not been notified by the Internal Revenue Service ("IRS") that I am subject
to backup withholding as a result of a failure to report all interest or
dividends; or (c) the IRS has notified me that I am no longer subject to backup
withholding.
You must cross out item (ii) above if you have been notified by the IRS
that you are subject to backup withholding because of underreporting interest or
dividends on your tax return. However, if after being notified by the IRS that
you were subject to backup withholding you received another notification from
the IRS that you are not longer subject to backup withholding, do not cross out
item (ii).
Each subscriber should complete this section.
_____________________________________ _____________________________________
Signature of Subscriber Signature of Subscriber
_____________________________________ _____________________________________
Printed Name Printed Name
_____________________________________ _____________________________________
Social Security or Employer Social Security or Employer
Identification No. Identification No.
TO BE COMPLETED BY THE COMPANY:
Accepted as of ___________, 199__, as to _________ shares.
BUCKHEAD COMMUNITY BANCORP, INC.
By:____________________________________
Marvin Cosgray
President and Chief Executive Officer
A-3
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFOR-
MATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PRO-
SPECTUS IN CONNECTION WITH THE OFFER MADE HEREBY. IF GIVEN OR MADE, SUCH IN-
FORMATION AND REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHO-
RIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR
SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY
JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH
JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HERE-
UNDER AT ANY TIME SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT
THE INFORMATION HEREIN IS CORRECT AT ANY TIME AFTER THE DATE HEREOF.
---------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Reports to Shareholders.................................................. 2
Additional Information................................................... 2
Prospectus Summary....................................................... 3
Risk Factors............................................................. 7
The Company and The Bank................................................. 11
The Offering............................................................. 12
Use of Proceeds.......................................................... 15
Capitalization........................................................... 17
Selected Financial Data.................................................. 18
Dividend Policy.......................................................... 18
Proposed Business........................................................ 18
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 23
Supervision and Regulation............................................... 24
Management............................................................... 32
Description of Capital Stock of the Company.............................. 36
Legal Matters............................................................ 39
Experts.................................................................. 39
Financial Statements..................................................... F-1
Subscription Agreement................................................... A-1
</TABLE>
---------------
UNTIL , 1998, ALL DEALERS EFFECTING TRANSACTIONS IN THE REGISTERED
SECURITIES, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED
TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO
DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR
UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
2,400,000 SHARES
BUCKHEAD COMMUNITY BANCORP., INC.
A PROPOSED HOLDING COMPANY FOR
[BUCKHEAD NATIONAL BANK LOGO]
NATIONAL ASSOCIATION
(PROPOSED)
COMMON STOCK
---------------
PROSPECTUS
---------------
, 1997
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II
INDEMNIFICATION OF DIRECTORS AND OFFICERS
ITEM 13. Other Expenses of Issuance and Distribution.
Estimated expenses (other than underwriting commissions) of the sale of the
shares of Common Stock are as follows:
<TABLE>
<S> <C>
Registration Fee................................. $ 3,540.00
Blue Sky Fees and Expenses....................... 1,000.00
Printing and Engraving........................... 10,000.00
Legal Fees and Expenses.......................... 20,000.00
Accounting Fees and Expenses..................... 3,500.00
Miscellaneous Disbursements...................... 1,960.00
----------
TOTAL $40,000.00
==========
</TABLE>
ITEM 14. Indemnification of Directors and Officers.
The bylaws of the Company require the Company to indemnify any person who
was, is, or is threatened to be made a named defendant or respondent in any
threatened, pending, or completed action, suit, or proceeding, whether civil,
criminal, administrative, or investigative, by reason of service by such person
as a director of the Company or the Bank or any other corporation which he
served as such at the request of the Company. Except as noted in the next
paragraph, directors are entitled to be indemnified against judgments,
penalties, fines, settlements, and reasonable expenses actually incurred by the
director in connection with the proceeding. Directors are also entitled to have
the Company advance any such expenses prior to final disposition of the
proceeding, upon delivery of a written affirmation by the director of his good
faith belief that the standard of conduct necessary for indemnification has been
met and a written undertaking to repay the amounts advanced if it is ultimately
determined that the standard of conduct has not been met.
Under the Bylaws, indemnification will be disallowed if it is established
that the director (i) appropriated, in violation of his duties, any business
opportunity of the Company, (ii) engaged in willful misconduct or a knowing
violation of law, (iii) permitted any unlawful distribution, or (iv) derived an
improper personal benefit. In addition to the Bylaws of the Company, Section
18-2-852 of the Georgia Business Corporation Code (the "Corporate Code")
requires that a corporation indemnify a director who is wholly successful, on
the merits or otherwise, in the defense of any proceeding to which he or she was
a party because he or she is or was a director of the corporation against
reasonable expenses incurred by the director in connection with the proceeding.
The Corporate Code also provides that upon application of a director a court may
order indemnification if it determines that the director is entitled to such
indemnification under the applicable standard of the Corporation Act.
The Board of Directors also has the authority to extend to officers,
employees and agents the same indemnification rights held by directors, subject
to all of the accompanying conditions and obligations. The Board of Directors
has extended or intends to extend indemnification rights to all of its executive
officers.
The Company has the power to purchase and maintain insurance on behalf of
any person who is or was a director, officer, employee or agent of the Company
against any liability asserted
II-1
<PAGE>
against him or incurred by him in any such capacity, whether or not the Company
would have the power to indemnify him against such liability under the bylaws.
ITEM 15. Recent Sales of Unregistered Securities.
On October 15, 1996, the Company sold 200 shares to R. Charles Loudermilk,
Sr. in a limited offering exempt under Section 4(2) of the Securities Act for an
aggregate consideration of $1,000. No underwriters were involved in the sale
and no underwriting discounts or commissions were paid. These shares were
redeemed by the Company, on October 28, 1996, for $1,000.
On October 28, 1996, the Company sold 80,000 shares to the Organizers in a
limited offering exempt under Rule 506 of Regulation D and Section 4(2) of the
Securities Act for an aggregate consideration of $400,000. Each organizer
purchase 10,000 of such shares. No underwriters were involved and no
underwriting commissions or discounts were paid.
ITEM 16. Exhibits and Financial Statement Schedules.
(a) Exhibits.
--------
3.1. Articles of Incorporation.
3.2. Bylaws.
4.1. Provisions in the Company's Articles of Incorporation and Bylaws
defining the rights of holders of the Common Stock.
5.1. Opinion Regarding Legality.
10.1. Form of Employment Agreement between Marvin Cosgray and the
Company.
10.2. Form of Escrow Agreement between SunTrust Bank, Atlanta and the
Company.
10.3. Office Lease between Longpoint Investors, Ltd. and the Company
dated August 7, 1997.
23.1. Consent of Mauldin & Jenkins, LLC.
23.2. Consent of Morris, Manning & Martin, L.L.P. (appears in its opinion
filed as Exhibit 5.1).
24.1. Power of Attorney.
(appears on page II-4)
(b) Financial Statement Schedules.
-----------------------------
None.
ITEM 17. Undertakings.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the Company pursuant to the provisions described in Item 14 above or
otherwise, the Company has been advised that in the opinion of the Securities
and Exchange Commission (the "SEC") such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Company of expenses incurred or paid by a director, officer or
controlling person of the Company in the successful defense of any action, suit
or proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the questions whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-2
<PAGE>
The undersigned Company hereby undertakes as follows:
(1) To file, during any period in which offers or sales are being made, a post-
effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the Act;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the Registration Statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high and of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the SEC pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than 20
percent change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective
Registration Statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement.
(2) That, for the purpose of determining any liability under the Act, each such
post-effective amendment shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of
the offering.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this amendment to Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Atlanta,
State of Georgia, on October 8, 1997.
BUCKHEAD COMMUNITY BANCORP, INC.
By: /s/ Marvin Cosgray
---------------------------------------------
Marvin Cosgray, President and Chief Executive
Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints R. Charles Loudermilk, Sr. and Marvin Cosgray,
and each of them, his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement and to file the same
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and cash of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or do in person
hereby ratifying and confirming all that each of said attorney-in-fact or his
substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ R. Charles Loudermilk, Sr. Chairman of the Board October 8, 1997
- --------------------------------
R. Charles Loudermilk, Sr.
/s/ Marvin Cosgray President, Chief Executive Officer, Principal Financial October 8, 1997
- -------------------------------- Officer, Principal Accounting Officer and Director
Marvin Cosgray
/s/ Hugh C. Aldredge Director October 8, 1997
- --------------------------------
Hugh C. Aldredge
/s/ J. Rex Fuqua Director October 8, 1997
- --------------------------------
J. Rex Fuqua
/s/ Julian LeCraw, Sr. Director October 8, 1997
- --------------------------------
Julian LeCraw, Sr.
/s/ Larry P. Martindale Director October 8, 1997
- --------------------------------
Larry P. Martindale
/s/ William T. Towles Director October 8, 1997
- --------------------------------
William T. Towles
</TABLE>
II-4
<PAGE>
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
3.1. Articles of Incorporation......................................................
3.2. Bylaws.........................................................................
4.1. Provisions in the Company's Articles of Incorporation and Bylaws
defining the rights of holders of the Common Stock.............................
5.1. Opinion Regarding Legality.....................................................
10.1. Form of Employment Agreement between Marvin Cosgray and the
Company........................................................................
10.2. Form of Escrow Agreement between SunTrust Bank, Atlanta and the
Company........................................................................
10.3 Office Lease between Longpoint Investors, Ltd. and the Company
dated August 7, 1997..........................................................
23.1. Consent of Mauldin & Jenkins, LLC..............................................
23.2. Consent of Morris, Manning & Martin, L.L.P. (appears in its opinion
filed as Exhibit 5.1)..........................................................
24.1. Power of Attorney (appears on page II-4).......................................
</TABLE>
<PAGE>
Exhibit 3.1
-----------
ARTICLES OF INCORPORATION
OF
BUCKHEAD COMMUNITY BANCORP, INC.
I.
The name of the Corporation is:
Buckhead Community Bancorp, Inc.
II.
The Corporation shall have authority to issue 10,000,000 shares of common
stock, $0.01 par value per share, and 1,000,000 shares of special stock, no par
value per share, any part or all of which shares of special stock may be
established and designated from time to time by the Board of Directors in such
series and with such preferences, limitations, and relative rights as may be
determined by the Board of Directors.
III.
The initial registered office of the Corporation shall be at 1600 Atlanta
Financial Center, 3343 Peachtree Road, N. E., Atlanta, Fulton County, Georgia
30326-1044. The initial registered agent of the Corporation shall be Larry W.
Shackelford.
IV.
The name and address of the incorporator is:
Larry W. Shackelford
Morris, Manning & Martin, L.L.P.
1600 Atlanta Financial Center
3343 Peachtree Road, N.E.
Atlanta, Georgia 30326
V.
The mailing address of the initial principal office of the Corporation is:
Buckhead Community Bancorp, Inc.
c/o Malcolm C. Garland
103 Chestnut Street
Greensboro, Georgia 30642-1064
VI.
No director of the Corporation shall have personal liability to the
Corporation or to its shareholders for monetary damages for breach of fiduciary
duty of care or other duty as a director, except that this Article VI shall not
eliminate or limit the liability of a director: (i) for any appropriation, in
violation of his duties, of any business opportunity of the Corporation;
(ii) for acts or omissions which involve intentional misconduct or a knowing
violation of law; (iii) for the types of liability set forth in Section 14-2-832
of the Georgia Business Corporation Code;
<PAGE>
or (iv) for any transaction from which the director received an improper
personal benefit. Neither the amendment nor repeal of this Article VI, nor the
adoption of any provision of the Articles of Incorporation of the Corporation
inconsistent with this Article VI, shall eliminate or reduce the effect of this
Article VI in respect of any act or failure to act, or any cause of action, suit
or claim that, but for this Article VI, would accrue or arise prior to any
amendment, repeal or adoption of such an inconsistent provision. If the Georgia
Business Corporation Code is subsequently amended to provide for further
limitations on the personal liability of directors of corporations for breach of
duty of care or other duty as a director, then the personal liability of the
directors of the Corporation shall be so further limited to the greatest extent
permitted by the Georgia Business Corporation Code.
VII.
Any action required or permitted to be taken at a shareholders' meeting may
be taken without a meeting if the action is taken by all of the shareholders
entitled to vote on the action, or by persons who would be entitled to vote at a
meeting those shares having voting power to cast not less than the minimum
number (or numbers, in the case of voting by groups) of votes that would be
necessary to authorize or take such actions at a meeting at which all shares
entitled to vote were present and voted. The action must be evidenced by one or
more written consents describing the action taken, signed by shareholders
entitled to take action without a meeting and delivered to the Corporation for
inclusion in the minutes or filing with the corporate records. All voting
shareholders of record who did not participate in taking the action shall be
given written notice of the action not more than ten (10) days after the taking
of action without a meeting. An action by less than unanimous consent may not
be taken with respect to any election of directors as to which shareholders
would be entitled to cumulative voting.
VIII.
The Board of Directors, any committee of the Board of Directors and any
individual Director, in discharging the duties of their respective positions and
in determining what is believed to be in the best interest of the Corporation,
may in their sole discretion consider the interests of the employees, customers,
suppliers and creditors of the Corporation and its subsidiaries, the communities
in which offices or other establishments of the Corporation and its subsidiaries
are located, and all other factors such Directors consider pertinent, in
addition to considering the effects of any action on the Corporation and its
shareholders. Notwithstanding the foregoing, this Article VIII shall not be
deemed to provide any of the foregoing constituencies any right to be considered
in any such discharging of duties or determination.
IN WITNESS WHEREOF, the undersigned has executed these Articles of
Incorporation.
/s/ Larry W. Shackelford
----------------------------------
Larry W. Shackelford
Incorporator
<PAGE>
Exhibit 3.2
-----------
BYLAWS
OF
BUCKHEAD COMMUNITY BANCORP, INC.
BYLAWS
OF
BUCKHEAD COMMUNITY BANCORP, INC.
- --------------------------------------------------------------------------------
References in these Bylaws to "Articles of Incorporation" are to the
Articles of Incorporation of Buckhead Community Bancorp, Inc., a Georgia
corporation (the "Corporation"), as amended and restated from time to time.
All of these Bylaws are subject to contrary provisions, if any, of the
Articles of Incorporation (including provisions designating the preferences,
limitations, and relative rights of any class or series of shares), the Georgia
Business Corporation Code (the "Code"), and other applicable law, as in effect
on and after the effective date of these Bylaws. References in these Bylaws to
"Sections" shall refer to sections of the Bylaws, unless otherwise indicated.
- --------------------------------------------------------------------------------
ARTICLE ONE
Office
<PAGE>
1.1 Registered Office and Agent. The Corporation shall maintain a
---------------------------
registered office and shall have a registered agent whose business office is the
same as the registered office.
1.2 Principal Office. The principal office of the Corporation shall
----------------
be at the place designated in the Corporation's annual registration with the
Georgia Secretary of State.
1.3 Other Offices. In addition to its registered office and
-------------
principal office, the Corporation may have offices at other locations either in
or outside the State of Georgia.
ARTICLE TWO
Shareholders' Meetings
2.1 Place of Meetings. Meetings of the Corporation's shareholders
-----------------
may be held at any location inside or outside the State of Georgia designated by
the Board of Directors or any other person or persons who properly call the
meeting, or if the Board of Directors or such other person or persons do not
specify a location, at the Corporation's principal office.
2.2 Annual Meetings. The Corporation shall hold an annual meeting
---------------
of shareholders, at a time determined by the Board of Directors, to elect
directors and to transact any business that properly may come before the
meeting. The annual meeting may be combined with any other meeting of
shareholders, whether annual or special.
2.3 Special Meetings. Special meetings of shareholders of one or
----------------
more classes or series of the Corporation's shares may be called at any time by
the Board of Directors, the Chairman of the Board, or the Chief Executive
Officer, and shall be called by the Corporation upon the written request (in
compliance with applicable requirements of the Code) of the holders of shares
representing 25% or more of the votes entitled to be cast on each issue proposed
to be considered at the special meeting. The business that may be transacted at
any special meeting of shareholders shall be limited to that proposed in the
notice of the special meeting given in accordance with Section 2.4 (including
related or incidental matters that may be necessary or appropriate to effectuate
the proposed business).
2.4 Notice of Meetings. In accordance with Section 9.5 and subject
------------------
to waiver by a shareholder pursuant to Section 2.5, the Corporation shall give
written notice of the date, time, and place of each annual and special
shareholders' meeting no fewer than 10 days nor more than 60 days before the
meeting date to each shareholder of record entitled to vote at the meeting. The
notice of an annual meeting need not state the purpose of the meeting unless
these Bylaws require otherwise. The notice of a special meeting shall state the
purpose for which the meeting is called. If an annual or special shareholders'
meeting is adjourned to a different date, time, or location, the Corporation
shall give shareholders notice of the new date, time, or location of the
adjourned meeting, unless a quorum of shareholders was present at the meeting
and information regarding the adjournment was announced before the meeting was
adjourned; provided, however, that if a new record date is or must be fixed in
-------- -------
accordance with Section 7.6, the Corporation must
-2-
<PAGE>
give notice of the adjourned meeting to all shareholders of record as of the new
record date who are entitled to vote at the adjourned meeting.
2.5 Waiver of Notice. A shareholder may waive any notice required
----------------
by the Code, the Articles of Incorporation, or these Bylaws, before or after the
date and time of the matter to which the notice relates, by delivering to the
Corporation a written waiver of notice signed by the shareholder entitled to the
notice. In addition, a shareholder's attendance at a meeting shall be (a) a
waiver of objection to lack of notice or defective notice of the meeting unless
the shareholder at the beginning of the meeting objects to holding the meeting
or transacting business at the meeting, and (b) a waiver of objection to
consideration of a particular matter at the meeting that is not within the
purpose stated in the meeting notice, unless the shareholder objects to
considering the matter when it is presented. Except as otherwise required by the
Code, neither the purpose of nor the business transacted at the meeting need be
specified in any waiver.
2.6 Voting Group; Quorum; Vote Required to Act. (a) Unless
------------------------------------------
otherwise required by the Code or the Articles of Incorporation, all classes or
series of the Corporation's shares entitled to vote generally on a matter shall
for that purpose be considered a single voting group (a "Voting Group"). If
either the Articles of Incorporation or the Code requires separate voting by two
or more Voting Groups on a matter, action on that matter is taken only when
voted upon by each such Voting Group separately. At all meetings of
shareholders, any Voting Group entitled to vote on a matter may take action on
the matter only if a quorum of that Voting Group exists at the meeting, and if a
quorum exists, the Voting Group may take action on the matter notwithstanding
the absence of a quorum of any other Voting Group that may be entitled to vote
separately on the matter. Unless the Articles of Incorporation, these Bylaws, or
the Code provides otherwise, the presence (in person or by proxy) of shares
representing a majority of votes entitled to be cast on a matter by a Voting
Group shall constitute a quorum of that Voting Group with regard to that matter.
Once a share is present at any meeting other than solely to object to holding
the meeting or transacting business at the meeting, the share shall be deemed
present for quorum purposes for the remainder of the meeting and for any
adjournments of that meeting, unless a new record date for the adjourned meeting
is or must be set pursuant to Section 7.6 of these Bylaws.
(b) Except as provided in Section 3.4, if a quorum exists, action
on a matter by a Voting Group is approved by that Voting Group if the votes cast
within the Voting Group favoring the action exceed the votes cast opposing the
action, unless the Articles of Incorporation, a provision of these Bylaws that
has been adopted pursuant to Section 14-2-1021 of the Code (or any successor
provision), or the Code requires a greater number of affirmative votes.
2.7 Voting of Shares. Unless otherwise required by the Code or the
----------------
Articles of Incorporation, each outstanding share of any class or series having
voting rights shall be entitled to one vote on each matter that is submitted to
a vote of shareholders.
2.8 Proxies. A shareholder entitled to vote on a matter may vote in
-------
person or by proxy pursuant to an appointment executed in writing by the
shareholder or by his or her
-3-
<PAGE>
attorney-in-fact. An appointment of a proxy shall be valid for 11 months from
the date of its execution, unless a longer or shorter period is expressly stated
in the proxy.
2.9 Presiding Officer. Except as otherwise provided in this Section
-----------------
2.9, the Chairman of the Board, and in his or her absence or disability the
Chief Executive Officer, shall preside at every shareholders' meeting (and any
adjournment thereof) as its chairman, if either of them is present and willing
to serve. If neither the Chairman of the Board nor the Chief Executive Officer
is present and willing to serve as chairman of the meeting, and if the Chairman
of the Board has not designated another person who is present and willing to
serve, then a majority of the Corporation's directors present at the meeting
shall be entitled to designate a person to serve as chairman. If no director of
the Corporation is present at the meeting or if a majority of the directors who
are present cannot be established, then a chairman of the meeting shall be
selected by a majority vote of (a) the shares present at the meeting that would
be entitled to vote in an election of directors, or (b) if no such shares are
present at the meeting, then the shares present at the meeting comprising the
Voting Group with the largest number of shares present at the meeting and
entitled to vote on a matter properly proposed to be considered at the meeting.
The chairman of the meeting may designate other persons to assist with the
meeting.
2.10 Adjournments. At any meeting of shareholders (including an
------------
adjourned meeting), a majority of shares of any Voting Group present and
entitled to vote at the meeting (whether or not those shares constitute a
quorum) may adjourn the meeting, but only with respect to that Voting Group, to
reconvene at a specific time and place. If more than one Voting Group is present
and entitled to vote on a matter at the meeting, then the meeting may be
continued with respect to any such Voting Group that does not vote to adjourn as
provided above, and such Voting Group may proceed to vote on any matter to which
it is otherwise entitled to do so; provided, however, that if (a) more than one
-------- -------
Voting Group is required to take action on a matter at the meeting and (b) any
one of those Voting Groups votes to adjourn the meeting (in accordance with the
preceding sentence), then the action shall not be deemed to have been taken
until the requisite vote of any adjourned Voting Group is obtained at its
reconvened meeting. The only business that may be transacted at any reconvened
meeting is business that could have been transacted at the meeting that was
adjourned, unless further notice of the adjourned meeting has been given in
compliance with the requirements for a special meeting that specifies the
additional purpose or purposes for which the meeting is called. Nothing
contained in this Section 2.10 shall be deemed or otherwise construed to limit
any lawful authority of the chairman of a meeting to adjourn the meeting.
2.11 Conduct of the Meeting. At any meeting of shareholders, the
----------------------
chairman of the meeting shall be entitled to establish the rules of order
governing the conduct of business at the meeting.
2.12 Action of Shareholders Without a Meeting. Action required or
----------------------------------------
permitted to be taken at a meeting of shareholders may be taken without a
meeting if the action is taken by all shareholders entitled to vote on the
action or, if permitted by the Articles of Incorporation, by persons who would
be entitled to vote at a meeting shares having voting power to cast the
requisite number of votes (or numbers, in the case of voting by groups) that
would be necessary
-4-
<PAGE>
to authorize or take the action at a meeting at which all shareholders entitled
to vote were present and voted. The action must be evidenced by one or more
written consents describing the action taken, signed by shareholders entitled to
take action without a meeting, and delivered to the Corporation for inclusion in
the minutes or filing with the corporate records. Where required by Section
14-2-704 or other applicable provision of the Code, the Corporation shall
provide shareholders with written notice of actions taken without a meeting.
2.13 Matters Considered at Annual Meetings. Notwithstanding anything
-------------------------------------
to the contrary in these Bylaws, the only business that may be conducted at an
annual meeting of shareholders shall be business brought before the meeting (a)
by or at the direction of the Board of Directors prior to the meeting, (b) by or
at the direction of the Chairman of the Board or the Chief Executive Officer, or
(c) by a shareholder of the Corporation who is entitled to vote with respect to
the business and who complies with the notice procedures set forth in this
Section 2.13. For business to be brought properly before an annual meeting by a
shareholder, the shareholder must have given timely notice of the business in
writing to the Secretary of the Corporation. To be timely, a shareholder's
notice must be delivered or mailed to and received at the principal offices of
the Corporation on or before the later to occur of (i) 14 days prior to the
annual meeting or (ii) 5 days after notice of the meeting is provided to the
shareholders pursuant to Section 2.4 hereof. A shareholder's notice to the
Secretary shall set forth a brief description of each matter of business the
shareholder proposes to bring before the meeting and the reasons for conducting
that business at the meeting; the name, as it appears on the Corporation's
books, and address of the shareholder proposing the business; the series or
class and number of shares of the Corporation's capital stock that are
beneficially owned by the shareholder; and any material interest of the
shareholder in the proposed business. The chairman of the meeting shall have
the discretion to declare to the meeting that any business proposed by a
shareholder to be considered at the meeting is out of order and that such
business shall not be transacted at the meeting if (i) the chairman concludes
--
that the matter has been proposed in a manner inconsistent with this Section
2.13 or (ii) the chairman concludes that the subject matter of the proposed
business is inappropriate for consideration by the shareholders at the meeting.
ARTICLE THREE
Board of Directors
3.1 General Powers. All corporate powers shall be exercised by or
--------------
under the authority of, and the business and affairs of the Corporation shall be
managed by, the Board of Directors, subject to any limitation set forth in the
Articles of Incorporation, in bylaws approved by the shareholders, or in
agreements among all the shareholders that are otherwise lawful.
3.2 Number, Election and Term of Office. The number of directors of
-----------------------------------
the Corporation shall be fixed by resolution of the Board of Directors or of the
shareholders from time to time and, until otherwise determined, shall be eight
(8); provided, however, that no decrease in the number of directors shall have
-------- -------
the effect of shortening the term of an incumbent director. The Board of
Directors shall be divided into three classes to be known as Class I, Class
-5-
<PAGE>
II, and Class III, which shall be as nearly equal in number as possible. Except
in case of death, resignation, disqualification, or removal, each director shall
serve for a term ending on the date of the third annual meeting of shareholders
following the annual meeting at which the director was elected; provided,
--------
however, that each initial director in Class I shall hold office until the 1997
- -------
annual meeting of shareholders; each initial director in Class II shall hold
office until the 1998 annual meeting of shareholders; and each initial director
in Class III shall hold office until the 1999 annual meeting of shareholders.
Despite the expiration of a director's term, he or she shall continue to serve
until his or her successor, if there is to be any, has been elected and has
qualified. In the event of any increase or decrease in the authorized number of
directors, the newly created or eliminated directorships resulting from such an
increase or decrease shall be apportioned among the three classes of directors
so that the three classes remain as nearly equal in size as possible; provided,
--------
however, that there shall be no classification of additional directors elected
- -------
by the Board of Directors until the next meeting of shareholders called for the
purposes of electing directors, at which meeting the terms of all such
additional directors shall expire, and such additional directors positions, if
they are to be continued, shall be apportioned among the classes of directors
and nominees therefor shall be submitted to the shareholders for their vote.
Except as provided elsewhere in this Section 3.2 and in Section 3.4, the
directors shall be elected at each annual meeting of shareholders, or at a
special meeting of shareholders called for purposes that include the election of
directors, by a plurality of the votes cast by the shares entitled to vote and
present at the meeting.
3.3 Removal of Directors. The entire Board of Directors or any
--------------------
individual director may be removed, with or without cause, by the shareholders,
provided that directors elected by a particular Voting Group may be removed only
by the shareholders in that Voting Group. Removal action may be taken only at a
shareholders' meeting for which notice of the removal action has been given. A
removed director's successor, if any, may be elected at the same meeting to
serve the unexpired term.
3.4 Vacancies. A vacancy occurring in the Board of Directors may be
---------
filled for the unexpired term, unless the shareholders have elected a successor,
by the affirmative vote of a majority of the remaining directors, whether or not
the remaining directors constitute a quorum; provided, however, that if the
-------- -------
vacant office was held by a director elected by a particular Voting Group, only
the holders of shares of that Voting Group or the remaining directors elected by
that Voting Group shall be entitled to fill the vacancy; provided further,
-------- -------
however, that if the vacant office was held by a director elected by a
- -------
particular Voting Group and there is no remaining director elected by that
---
Voting Group, the other remaining directors or director (elected by another
Voting Group or Groups) may fill the vacancy during an interim period before the
shareholders of the vacated director's Voting Group act to fill the vacancy. A
vacancy or vacancies in the Board of Directors may result from the death,
resignation, disqualification, or removal of any director, or from an increase
in the number of directors.
3.5 Compensation. Directors may receive such compensation for their
------------
services as directors as may be fixed by the Board of Directors from time to
time. A director may also serve the Corporation in one or more capacities other
than that of director and receive compensation for services rendered in those
other capacities.
-6-
<PAGE>
3.6 Committees of the Board of Directors. The Board of Directors
------------------------------------
may designate from among its members an executive committee or one or more other
standing or ad hoc committees, each consisting of one or more directors, who
serve at the pleasure of the Board of Directors. Subject to the limitations
imposed by the Code, each committee shall have the authority set forth in the
resolution establishing the committee or in any other resolution of the Board of
Directors specifying, enlarging, or limiting the authority of the committee.
3.7 Qualification of Directors. No person elected to serve as a
--------------------------
director of the Corporation shall assume office and begin serving unless and
until duly qualified to serve, as determined by reference to the Code, the
Articles of Incorporation, and any further eligibility requirements established
in these Bylaws.
3.8 Certain Nomination Requirements. No person may be nominated for
-------------------------------
election as a director at any annual or special meeting of shareholders unless
(a) the nomination has been or is being made pursuant to a recommendation or
approval of the Board of Directors of the Corporation or a properly constituted
committee of the Board of Directors previously delegated authority to recommend
or approve nominees for director; (b) the person is nominated by a shareholder
of the Corporation who is entitled to vote for the election of the nominee at
the subject meeting, and the nominating shareholder has furnished written notice
to the Secretary of the Corporation, at the Corporation's principal office, not
later than 14 days before the date of the meeting or 5 days after notice is
given pursuant to Section 2.4, whichever is later, and the notice (i) sets forth
with respect to the person to be nominated his or her name, age, business and
residence addresses, principal business or occupation during the past five
years, any affiliation with or material interest in the Corporation or any
transaction involving the Corporation, and any affiliation with or material
interest in any person or entity having an interest materially adverse to the
Corporation, and (ii) is accompanied by the sworn or certified statement of the
shareholder that the nominee has consented to being nominated and that the
shareholder believes the nominee will stand for election and will serve if
elected; or (c) (i) the person is nominated to replace a person previously
identified as a proposed nominee (in accordance with the provisions of subpart
(b) of this Section 3.8) who has since become unable or unwilling to be
nominated or to serve if elected, (ii) the shareholder who furnished such
previous identification makes the replacement nomination and delivers to the
Secretary of the Corporation (at the time of or prior to making the replacement
nomination) an affidavit or other sworn statement affirming that the shareholder
had no reason to believe the original nominee would be so unable or unwilling,
and (iii) such shareholder also furnishes in writing to the Secretary of the
Corporation (at the time of or prior to making the replacement nomination) the
same type of information about the replacement nominee as required by subpart
(b) of this Section 3.8 to have been furnished about the original nominee. The
chairman of any meeting of shareholders at which one or more directors are to be
elected, for good cause shown and with proper regard for the orderly conduct of
business at the meeting, may waive in whole or in part the operation of this
Section 3.8.
ARTICLE FOUR
-7-
<PAGE>
Meetings of the Board of Directors
4.1 Regular Meetings. A regular meeting of the Board of Directors
----------------
shall be held in conjunction with each annual meeting of shareholders. In
addition, the Board of Directors may, by prior resolution, hold regular meetings
at other times.
4.2 Special Meetings. Special meetings of the Board of Directors
----------------
may be called by or at the request of the Chairman of the Board, the Chief
Executive Officer, or any director in office at that time.
4.3 Place of Meetings. Directors may hold their meetings at any
-----------------
place in or outside the State of Georgia that the Board of Directors may
establish from time to time.
4.4 Notice of Meetings. Directors need not be provided with notice
------------------
of any regular meeting of the Board of Directors. Unless waived in accordance
with Section 4.10, the Corporation shall give at least two days' notice to each
director of the date, time, and place of each special meeting. Notice of a
meeting shall be deemed to have been given to any director in attendance at any
prior meeting at which the date, time, and place of the subsequent meeting was
announced.
4.5 Quorum. At meetings of the Board of Directors, the greater of
------
(a) a majority of the directors then in office, or (b) one-third of the number
of directors fixed in accordance with these Bylaws shall constitute a quorum for
the transaction of business.
4.6 Vote Required for Action. If a quorum is present when a vote is
------------------------
taken, the vote of a majority of the directors present at the time of the vote
will be the act of the Board of Directors, unless the vote of a greater number
is required by the Code, the Articles of Incorporation, or these Bylaws. A
director who is present at a meeting of the Board of Directors when corporate
action is taken is deemed to have assented to the action taken unless (a) he or
she objects at the beginning of the meeting (or promptly upon his or her
arrival) to holding the meeting or transacting business at it; (b) his or her
dissent or abstention from the action taken is entered in the minutes of the
meeting; or (c) he or she delivers written notice of dissent or abstention to
the presiding officer of the meeting before its adjournment or to the
Corporation immediately after adjournment of the meeting. The right of dissent
or abstention is not available to a director who votes in favor of the action
taken.
4.7 Participation by Conference Telephone. Members of the Board of
-------------------------------------
Directors may participate in a meeting of the Board by means of conference
telephone or similar communications equipment through which all persons
participating may hear and speak to each other. Participation in a meeting
pursuant to this Section 4.7 shall constitute presence in person at the meeting.
4.8 Action by Directors Without a Meeting. Any action required or
-------------------------------------
permitted to be taken at any meeting of the Board of Directors may be taken
without a meeting if a written consent, describing the action taken, is signed
by each director and delivered to the Corporation
-8-
<PAGE>
for inclusion in the minutes or filing with the corporate records. The consent
may be executed in counterpart, and shall have the same force and effect as a
unanimous vote of the Board of Directors at a duly convened meeting.
4.9 Adjournments. A meeting of the Board of Directors, whether or
------------
not a quorum is present, may be adjourned by a majority of the directors present
to reconvene at a specific time and place. It shall not be necessary to give
notice to the directors of the reconvened meeting or of the business to be
transacted, other than by announcement at the meeting that was adjourned, unless
a quorum was not present at the meeting that was adjourned, in which case notice
shall be given to directors in the same manner as for a special meeting. At any
such reconvened meeting at which a quorum is present, any business may be
transacted that could have been transacted at the meeting that was adjourned.
4.10 Waiver of Notice. A director may waive any notice required by
----------------
the Code, the Articles of Incorporation, or these Bylaws before or after the
date and time of the matter to which the notice relates, by a written waiver
signed by the director and delivered to the Corporation for inclusion in the
minutes or filing with the corporate records. Attendance by a director at a
meeting shall constitute waiver of notice of the meeting, except where a
director at the beginning of the meeting (or promptly upon his or her arrival)
objects to holding the meeting or to transacting business at the meeting and
does not thereafter vote for or assent to action taken at the meeting.
ARTICLE FIVE
Officers
5.1 Offices. The officers of the Corporation shall consist of a
-------
President, a Secretary, and a Treasurer, and may include a Chief Executive
Officer separate from the President, each of whom shall be elected or appointed
by the Board of Directors. The Board of Directors may also elect a Chairman of
the Board from among its members. The Board of Directors from time to time may,
or may authorize the Chief Executive Officer to, create and establish the duties
of other offices and may, or may authorize the Chief Executive Officer to, elect
or appoint, or authorize specific senior officers to appoint, the persons who
shall hold such other offices, including one or more Vice Presidents (including
Executive Vice Presidents, Senior Vice Presidents, Assistant Vice Presidents,
and the like), one or more Assistant Secretaries, and one or more Assistant
Treasurers. Whether or not so provided by the Board of Directors, the Chairman
of the Board or the Chief Executive Officer may appoint one or more Assistant
Secretaries, and one or more Assistant Treasurers. Any two or more offices may
be held by the same person.
5.2 Term. Each officer shall serve at the pleasure of the Board of
----
Directors (or, if appointed by the Chief Executive Officer or a senior officer
pursuant to this Article Five, at the pleasure of the Board of Directors, the
Chief Executive Officer, or the senior officer authorized to have appointed the
officer) until his or her death, resignation, or removal, or until his or her
replacement is elected or appointed in accordance with this Article Five.
-9-
<PAGE>
5.3 Compensation. The compensation of all officers of the
------------
Corporation shall be fixed by the Board of Directors or by a committee or
officer appointed by the Board of Directors. Officers may serve without
compensation.
5.4 Removal. All officers (regardless of how elected or appointed)
-------
may be removed, with or without cause, by the Board of Directors, and any
officer appointed by the Chief Executive Officer or another senior officer may
also be removed, with or without cause, by the Chief Executive Officer or by any
senior officer authorized to have appointed the officer to be removed. Removal
will be without prejudice to the contract rights, if any, of the person removed,
but shall be effective notwithstanding any damage claim that may result from
infringement of such contract rights.
5.5 Chairman of the Board. The Chairman of the Board (if there be
---------------------
one) shall preside at and serve as chairman of meetings of the shareholders and
of the Board of Directors (unless another person is selected under Section 2.9
to act as chairman). The Chairman of the Board shall perform other duties and
have other authority as may from time to time be delegated by the Board of
Directors.
5.6 Chief Executive Officer. The Chief Executive Officer shall be
-----------------------
charged with the general and active management of the Corporation, shall see
that all orders and resolutions of the Board of Directors are carried into
effect, shall have the authority to select and appoint employees and agents of
the Corporation, and shall, in the absence or disability of the Chairman of the
Board, perform the duties and exercise the powers of the Chairman of the Board.
The Chief Executive Officer shall perform any other duties and have any other
authority as may be delegated from time to time by the Board of Directors, and
shall be subject to the limitations fixed from time to time by the Board of
Directors.
5.7 President. If there shall be no separate Chief Executive
---------
Officer of the Corporation, then the President shall be the chief executive
officer of the Corporation and shall have all the duties and authority given
under these Bylaws to the Chief Executive Officer. The President shall otherwise
be the chief operating officer of the Corporation and shall, subject to the
authority of the Chief Executive Officer, have responsibility for the conduct
and general supervision of the business operations of the Corporation. The
President shall perform such other duties and have such other authority as may
from time to time be delegated by the Board of Directors or the Chief Executive
Officer. In the absence or disability of the Chief Executive Officer, the
President shall perform the duties and exercise the powers of the Chief
Executive Officer.
5.8 Vice Presidents. The Vice President (if there be one) shall, in
---------------
the absence or disability of the President, perform the duties and exercise the
powers of the President, whether the duties and powers are specified in these
Bylaws or otherwise. If the Corporation has more than one Vice President, the
one designated by the Board of Directors or the Chief Executive Officer (in that
order of precedence) shall act in the event of the absence or disability of the
President. Vice Presidents shall perform any other duties and have any other
authority as from
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<PAGE>
time to time may be delegated by the Board of Directors, the Chief Executive
Officer, or the President.
5.9 Secretary. The Secretary shall be responsible for preparing
---------
minutes of the meetings of shareholders, directors, and committees of directors
and for authenticating records of the Corporation. The Secretary or any
Assistant Secretary shall have authority to give all notices required by law or
these Bylaws. The Secretary shall be responsible for the custody of the
corporate books, records, contracts, and other documents. The Secretary or any
Assistant Secretary may affix the corporate seal to any lawfully executed
documents requiring it, may attest to the signature of any officer of the
Corporation, and shall sign any instrument that requires the Secretary's
signature. The Secretary or any Assistant Secretary shall perform any other
duties and have any other authority as from time to time may be delegated by the
Board of Directors, the Chief Executive Officer, or the President.
5.10 Treasurer. Unless otherwise provided by the Board of Directors,
---------
the Treasurer shall be responsible for the custody of all funds and securities
belonging to the Corporation and for the receipt, deposit, or disbursement of
these funds and securities under the direction of the Board of Directors. The
Treasurer shall cause full and true accounts of all receipts and disbursements
to be maintained and shall make reports of these receipts and disbursements to
the Board of Directors, the Chief Executive Officer and President upon request.
The Treasurer or Assistant Treasurer shall perform any other duties and have any
other authority as from time to time may be delegated by the Board of Directors,
the Chief Executive Officer, or the President.
ARTICLE SIX
Distributions and Dividends
Unless the Articles of Incorporation provide otherwise, the Board of
Directors, from time to time in its discretion, may authorize or declare
distributions or share dividends in accordance with the Code.
ARTICLE SEVEN
Shares
7.1 Share Certificates. The interest of each shareholder in the
------------------
Corporation shall be evidenced by a certificate or certificates representing
shares of the Corporation, which shall be in such form as the Board of Directors
from time to time may adopt in accordance with the Code. Share certificates
shall be in registered form and shall indicate the date of issue, the name of
the Corporation, that the Corporation is organized under the laws of the State
of Georgia, the name of the shareholder, and the number and class of shares and
designation of the series, if any, represented by the certificate. Each
certificate shall be signed by the President or a Vice President (or in lieu
thereof, by the Chairman of the Board or Chief Executive Officer, if there be
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<PAGE>
one) and may be signed by the Secretary or an Assistant Secretary; provided,
--------
however, that where the certificate is signed (either manually or by facsimile)
- -------
by a transfer agent, or registered by a registrar, the signatures of those
officers may be facsimiles.
7.2 Rights of Corporation with Respect to Registered Owners. Prior
-------------------------------------------------------
to due presentation for transfer of registration of its shares, the Corporation
may treat the registered owner of the shares (or the beneficial owner of the
shares to the extent of any rights granted by a nominee certificate on file with
the Corporation pursuant to any procedure that may be established by the
Corporation in accordance with the Code) as the person exclusively entitled to
vote the shares, to receive any dividend or other distribution with respect to
the shares, and for all other purposes; and the Corporation shall not be bound
to recognize any equitable or other claim to or interest in the shares on the
part of any other person, whether or not it has express or other notice of such
a claim or interest, except as otherwise provided by law.
7.3 Transfers of Shares. Transfers of shares shall be made upon the
-------------------
books of the Corporation kept by the Corporation or by the transfer agent
designated to transfer the shares, only upon direction of the person named in
the certificate or by an attorney lawfully constituted in writing. Before a new
certificate is issued, the old certificate shall be surrendered for cancellation
or, in the case of a certificate alleged to have been lost, stolen, or
destroyed, the provisions of Section 7.5 of these Bylaws shall have been
complied with.
7.4 Duty of Corporation to Register Transfer. Notwithstanding any
----------------------------------------
of the provisions of Section 7.3 of these Bylaws, the Corporation is under a
duty to register the transfer of its shares only if: (a) the share certificate
is endorsed by the appropriate person or persons; (b) reasonable assurance is
given that each required endorsement is genuine and effective; (c) the
Corporation has no duty to inquire into adverse claims or has discharged any
such duty; (d) any applicable law relating to the collection of taxes has been
complied with; (e) the transfer is in fact rightful or is to a bona fide
purchaser; and (f) the transfer is in compliance with applicable provisions of
any transfer restrictions of which the Corporation shall have notice.
7.5 Lost, Stolen, or Destroyed Certificates. Any person claiming a
---------------------------------------
share certificate to be lost, stolen, or destroyed shall make an affidavit or
affirmation of this claim in such a manner as the Corporation may require and
shall, if the Corporation requires, give the Corporation a bond of indemnity in
form and amount, and with one or more sureties satisfactory to the Corporation,
as the Corporation may require, whereupon an appropriate new certificate may be
issued in lieu of the one alleged to have been lost, stolen or destroyed.
7.6 Fixing of Record Date. For the purpose of determining
---------------------
shareholders (a) entitled to notice of or to vote at any meeting of shareholders
or, if necessary, any adjournment thereof, (b) entitled to receive payment of
any distribution or dividend, or (c) for any other proper purpose, the Board of
Directors may fix in advance a date as the record date. The record date may not
be more than 70 days (and, in the case of a notice to shareholders of a
shareholders' meeting, not less than 10 days) prior to the date on which the
particular action, requiring the determination of shareholders, is to be taken.
A separate record date may be established for each Voting Group entitled to vote
separately on a matter at a meeting. A determination of shareholders of record
entitled to notice of or to vote at a meeting of shareholders shall apply to any
adjournment of the meeting, unless the Board of Directors shall fix a new record
date for the
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reconvened meeting, which it must do if the meeting is adjourned to a date more
than 120 days after the date fixed for the original meeting.
7.7 Record Date if None Fixed. If no record date is fixed as
-------------------------
provided in Section 7.6, then the record date for any determination of
shareholders that may be proper or required by law shall be, as appropriate, the
date on which notice of a shareholders' meeting is mailed, the date on which the
Board of Directors adopts a resolution declaring a dividend or authorizing a
distribution, or the date on which any other action is taken that requires a
determination of shareholders.
ARTICLE EIGHT
Indemnification
8.1 Indemnification of Directors. The Corporation shall indemnify
----------------------------
and hold harmless any director of the Corporation (an "Indemnified Person") who
was or is a party, or is threatened to be made a party, to any threatened,
pending or completed action, suit, or proceeding, whether civil, criminal,
administrative, or investigative, whether formal or informal, including any
action or suit by or in the right of the Corporation (for purposes of this
Article Eight, collectively, a "Proceeding") because he or she is or was a
director, officer, employee, or agent of the Corporation, against any judgment,
settlement, penalty, fine, or reasonable expenses (including, but not limited
to, attorneys' fees and disbursements, court costs, and expert witness fees)
incurred with respect to the Proceeding (for purposes of this Article Eight, a
"Liability"), provided, however, that no indemnification shall be made for: (a)
any appropriation by a director, in violation of the director's duties, of any
business opportunity of the corporation; (b) any acts or omissions of a director
that involve intentional misconduct or a knowing violation of law; (c) the types
of liability set forth in Code Section 14-2-832; or (d) any transaction from
which the director received an improper personal benefit.
8.2 Indemnification of Others. The Board of Directors shall have
-------------------------
the power to cause the Corporation to provide to officers, employees, and agents
of the Corporation all or any part of the right to indemnification permitted for
such persons by appropriate provisions of the Code. Persons to be indemnified
may be identified by position or name, and the right of indemnification may be
different for each of the persons identified. Each officer, employee, or agent
of the Corporation so identified shall be an "Indemnified Person" for purposes
of the provisions of this Article Eight.
8.3 Other Organizations. The Corporation shall provide to each
-------------------
director, and the Board of Directors shall have the power to cause the
Corporation to provide to any officer, employee, or agent, of the Corporation
who is or was serving at the Corporation's request as a director, officer,
partner, trustee, employee, or agent of another corporation, partnership, joint
venture, trust, employee benefit plan, or other enterprise all or any part of
the right to indemnification and other rights of the type provided under
Sections 8.1, 8.2, 8.4, and 8.10 of this Article Eight (subject to the
conditions, limitations, and obligations specified in those Sections) permitted
for such
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<PAGE>
persons by appropriate provisions of the Code. Persons to be indemnified may be
identified by position or name, and the right of indemnification may be
different for each of the persons identified. Each person so identified shall be
an "Indemnified Person" for purposes of the provisions of this Article Eight.
8.4 Advances. Expenses (including, but not limited to, attorneys'
------------------
fees and disbursements, court costs, and expert witness fees) incurred by an
Indemnified Person in defending any Proceeding of the kind described in Sections
8.1 or 8.3, as to an Indemnified Person who is a director of the Corporation, or
in Sections 8.2 or 8.3, as to other Indemnified Persons, if the Board of
Directors has specified that advancement of expenses be made available to any
such Indemnified Person, shall be paid by the Corporation in advance of the
final disposition of such Proceeding as set forth herein. The Corporation shall
promptly pay the amount of such expenses to the Indemnified Person, but in no
event later than 10 days following the Indemnified Person's delivery to the
Corporation of a written request for an advance pursuant to this Section 8.4,
together with a reasonable accounting of such expenses; provided, however, that
-------- -------
the Indemnified Person shall furnish the Corporation a written affirmation of
his or her good faith belief that he or she has met the applicable standard of
conduct and a written undertaking and agreement to repay to the Corporation any
advances made pursuant to this Section 8.4 if it shall be determined that the
Indemnified Person is not entitled to be indemnified by the Corporation for such
amounts. The Corporation may make the advances contemplated by this Section 8.4
regardless of the Indemnified Person's financial ability to make repayment. Any
advances and undertakings to repay pursuant to this Section 8.4 may be unsecured
and interest-free.
8.5 Non-Exclusivity. Subject to any applicable limitation imposed
---------------
by the Code or the Articles of Incorporation, the indemnification and
advancement of expenses provided by or granted pursuant to this Article Eight
shall not be exclusive of any other rights to which a person seeking
indemnification or advancement of expenses may be entitled under any provision
of the Articles of Incorporation, or any Bylaw, resolution, or agreement
specifically or in general terms approved or ratified by the affirmative vote of
holders of a majority of the shares entitled to be voted thereon.
8.6 Insurance. The Corporation shall have the power to purchase and
---------
maintain insurance on behalf of any person who is or was a director, officer,
employee, or agent of the Corporation, or who, while serving in such a capacity,
is also or was also serving at the request of the Corporation as a director,
officer, trustee, partner, employee, or agent of any corporation, partnership,
joint venture, trust, employee benefit plan, or other enterprise, against any
Liability that may be asserted against or incurred by him or her in any such
capacity, or arising out of his or her status as such, whether or not the
Corporation would have the power to indemnify him or her against such liability
under the provisions of this Article Eight.
8.7 Notice. If the Corporation indemnifies or advances expenses to
a director under any of Sections 14-2-851 through 14-2-854 of the Code in
connection with a Proceeding by or in the right of the Corporation, the
Corporation shall, to the extent required by Section 14-2-1621 or
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<PAGE>
any other applicable provision of the Code, report the indemnification or
advance in writing to the shareholders with or before the notice of the next
shareholders' meeting.
8.8 Security. The Corporation may designate certain of its assets
--------
as collateral, provide self-insurance, establish one or more indemnification
trusts, or otherwise secure or facilitate its ability to meet its obligations
under this Article Eight, or under any indemnification agreement or plan of
indemnification adopted and entered into in accordance with the provisions of
this Article Eight, as the Board of Directors deems appropriate.
8.9 Amendment. Any amendment to this Article Eight that limits or
---------
otherwise adversely affects the right of indemnification, advancement of
expenses, or other rights of any Indemnified Person hereunder shall, as to such
Indemnified Person, apply only to Proceedings based on actions, events, or
omissions (collectively, "Post Amendment Events") occurring after such amendment
and after delivery of notice of such amendment to the Indemnified Person so
affected. Any Indemnified Person shall, as to any Proceeding based on actions,
events, or omissions occurring prior to the date of receipt of such notice, be
entitled to the right of indemnification, advancement of expenses, and other
rights under this Article Eight to the same extent as if such provisions had
continued as part of the Bylaws of the Corporation without such amendment. This
Section 8.9 cannot be altered, amended, or repealed in a manner effective as to
any Indemnified Person (except as to Post Amendment Events) without the prior
written consent of such Indemnified Person.
8.10 Agreements. The provisions of this Article Eight shall be
----------
deemed to constitute an agreement between the Corporation and each Indemnified
Person hereunder. In addition to the rights provided in this Article Eight, the
Corporation shall have the power, upon authorization by the Board of Directors,
to enter into an agreement or agreements providing to any Indemnified Person
indemnification rights substantially similar to those provided in this Article
Eight.
8.11 Continuing Benefits. The rights of indemnification and
-------------------
advancement of expenses permitted or authorized by this Article Eight shall,
unless otherwise provided when such rights are granted or conferred, continue as
to a person who has ceased to be a director, officer, employee, or agent and
shall inure to the benefit of the heirs, executors, and administrators of such
person.
8.12 Successors. For purposes of this Article Eight, the term
----------
"Corporation" shall include any corporation, joint venture, trust, partnership,
or unincorporated business association that is the successor to all or
substantially all of the business or assets of this Corporation, as a result of
merger, consolidation, sale, liquidation, or otherwise, and any such successor
shall be liable to the persons indemnified under this Article Eight on the same
terms and conditions and to the same extent as this Corporation.
8.13 Severability. Each of the Sections of this Article Eight, and
------------
each of the clauses set forth herein, shall be deemed separate and independent,
and should any part of any such Section or clause be declared invalid or
unenforceable by any court of competent jurisdiction, such invalidity or
unenforceability shall in no way render invalid or unenforceable any other part
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<PAGE>
thereof or any separate Section or clause of this Article Eight that is not
declared invalid or unenforceable.
8.14 Additional Indemnification. In addition to the specific
--------------------------
indemnification rights set forth herein, the Corporation shall indemnify each of
its directors and such of its officers as have been designated by the Board of
Directors to the full extent permitted by action of the Board of Directors
without shareholder approval under the Code or other laws of the State of
Georgia as in effect from time to time.
ARTICLE NINE
Miscellaneous
9.1 Inspection of Books and Records. The Board of Directors shall
-------------------------------
have the power to determine which accounts, books, and records of the
Corporation shall be available for shareholders to inspect or copy, except for
those books and records required by the Code to be made available upon
compliance by a shareholder with applicable requirements, and shall have the
power to fix reasonable rules and regulations (including confidentiality
restrictions and procedures) not in conflict with applicable law for the
inspection and copying of accounts, books, and records that by law or by
determination of the Board of Directors are made available. Unless required by
the Code or otherwise provided by the Board of Directors, a shareholder of the
Corporation holding less than two percent of the total shares of the Corporation
then outstanding shall have no right to inspect the books and records of the
Corporation.
9.2 Fiscal Year. The Board of Directors is authorized to fix the
-----------
fiscal year of the Corporation and to change the fiscal year from time to time
as it deems appropriate.
9.3 Corporate Seal. The corporate seal will be in such form as the
--------------
Board of Directors may from time to time determine. The Board of Directors may
authorize the use of one or more facsimile forms of the corporate seal. The
corporate seal need not be used unless its use is required by law, by these
Bylaws, or by the Articles of Incorporation.
9.4 Annual Statements. Not later than four months after the close
-----------------
of each fiscal year, and in any case prior to the next annual meeting of
shareholders, the Corporation shall prepare (a) a balance sheet showing in
reasonable detail the financial condition of the Corporation as of the close of
its fiscal year, and (b) a profit and loss statement showing the results of its
operations during its fiscal year. Upon receipt of written request, the
Corporation promptly shall mail to any shareholder of record a copy of the most
recent such balance sheet and profit and loss statement, in such form and with
such information as the Code may require.
9.5 Notice. (a) Whenever these Bylaws require notice to be given to
------
any shareholder or to any director, the notice may be given by mail, in person,
by courier delivery, by telephone, or by telecopier, telegraph, or similar
electronic means. Whenever notice is given to a shareholder or director by mail,
the notice shall be sent by depositing the notice in a post office
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<PAGE>
or letter box in a postage-prepaid, sealed envelope addressed to the shareholder
or director at his or her address as it appears on the books of the Corporation.
Any such written notice given by mail shall be effective: (i) if given to
shareholders, at the time the same is deposited in the United States mail; and
(ii) in all other cases, at the earliest of (x) when received or when delivered,
properly addressed, to the addressee's last known principal place of business or
residence, (y) five days after its deposit in the mail, as evidenced by the
postmark, if mailed with first-class postage prepaid and correctly addressed, or
(z) on the date shown on the return receipt, if sent by registered or certified
mail, return receipt requested, and the receipt is signed by or on behalf of the
addressee. Whenever notice is given to a shareholder or director by any means
other than mail, the notice shall be deemed given when received.
(b) In calculating time periods for notice, when a period of time
measured in days, weeks, months, years, or other measurement of time is
prescribed for the exercise of any privilege or the discharge of any duty, the
first day shall not be counted but the last day shall be counted.
ARTICLE TEN
Amendments
Except as otherwise provided under the Code, the Board of Directors
shall have the power to alter, amend, or repeal these Bylaws or adopt new
Bylaws. Any Bylaws adopted by the Board of Directors may be altered, amended,
or repealed, and new Bylaws adopted, by the shareholders. The shareholders may
prescribe in adopting any Bylaw or Bylaws that the Bylaw or Bylaws so adopted
shall not be altered, amended, or repealed by the Board of Directors.
Dated: October 15, 1996.
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<PAGE>
Exhibit 4.1
-----------
ARTICLES OF INCORPORATION
OF
BUCKHEAD COMMUNITY BANCORP, INC.
II.
The Corporation shall have authority to issue 10,000,000 shares of common
stock, $0.01 par value per share, and 1,000,000 shares of special stock, no par
value per share, any part or all of which shares of special stock may be
established and designated from time to time by the Board of Directors in such
series and with such preferences, limitations, and relative rights as may be
determined by the Board of Directors.
VI.
No director of the Corporation shall have personal liability to the
Corporation or to its shareholders for monetary damages for breach of fiduciary
duty of care or other duty as a director, except that this Article VI shall not
eliminate or limit the liability of a director: (i) for any appropriation, in
violation of his duties, of any business opportunity of the Corporation; (ii)
for acts or omissions which involve intentional misconduct or a knowing
violation of law; (iii) for the types of liability set forth in Section 14-2-832
of the Georgia Business Corporation Code; or (iv) for any transaction from which
the director received an improper personal benefit. Neither the amendment nor
repeal of this Article VI, nor the adoption of any provision of the Articles of
Incorporation of the Corporation inconsistent with this Article VI, shall
eliminate or reduce the effect of this Article VI in respect of any act or
failure to act, or any cause of action, suit or claim that, but for this Article
VI, would accrue or arise prior to any amendment, repeal or adoption of such an
inconsistent provision. If the Georgia Business Corporation Code is
subsequently amended to provide for further limitations on the personal
liability of directors of corporations for breach of duty of care or other duty
as a director, then the personal liability of the directors of the Corporation
shall be so further limited to the greatest extent permitted by the Georgia
Business Corporation Code.
VII.
Any action required or permitted to be taken at a shareholders' meeting may
be taken without a meeting if the action is taken by all of the shareholders
entitled to vote on the action, or by persons who would be entitled to vote at a
meeting those shares having voting power to cast
-1-
<PAGE>
not less than the minimum number (or numbers, in the case of voting by groups)
of votes that would be necessary to authorize or take such actions at a meeting
at which all shares entitled to vote were present and voted. The action must be
evidenced by one or more written consents describing the action taken, signed by
shareholders entitled to take action without a meeting and delivered to the
Corporation for inclusion in the minutes or filing with the corporate records.
All voting shareholders of record who did not participate in taking the action
shall be given written notice of the action not more than ten (10) days after
the taking of action without a meeting. An action by less than unanimous consent
may not be taken with respect to any election of directors as to which
shareholders would be entitled to cumulative voting.
VIII.
The Board of Directors, any committee of the Board of Directors and any
individual Director, in discharging the duties of their respective positions and
in determining what is believed to be in the best interest of the Corporation,
may in their sole discretion consider the interests of the employees, customers,
suppliers and creditors of the Corporation and its subsidiaries, the communities
in which offices or other establishments of the Corporation and its subsidiaries
are located, and all other factors such Directors consider pertinent, in
addition to considering the effects of any action on the Corporation and its
shareholders. Notwithstanding the foregoing, this Article VIII shall not be
deemed to provide any of the foregoing constituencies any right to be considered
in any such discharging of duties or determination.
BYLAWS
OF
BUCKHEAD COMMUNITY BANCORP, INC.
2.13 Matters Considered at Annual Meetings. Notwithstanding anything
-------------------------------------
to the contrary in these Bylaws, the only business that may be conducted at an
annual meeting of shareholders shall be business brought before the meeting (a)
by or at the direction of the Board of Directors prior to the meeting, (b) by or
at the direction of the Chairman of the Board or the Chief Executive Officer, or
(c) by a shareholder of the Corporation who is entitled to vote with respect to
the business and who complies with the notice procedures set forth in this
Section 2.13. For business to be brought properly before an annual meeting by a
shareholder, the shareholder must have given timely notice of the business in
writing to the Secretary of the Corporation. To be timely, a shareholder's
notice must be delivered or mailed to and received at the principal offices of
the Corporation on or before the later to occur of (i) 14 days prior to the
annual meeting or (ii) 5 days after notice of the meeting is provided to the
shareholders pursuant to Section 2.4 hereof. A shareholder's notice to the
Secretary shall set forth a brief description of each matter of business the
shareholder proposes to bring before the meeting and the reasons for
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<PAGE>
conducting that business at the meeting; the name, as it appears on the
Corporation's books, and address of the shareholder proposing the business; the
series or class and number of shares of the Corporation's capital stock that are
beneficially owned by the shareholder; and any material interest of the
shareholder in the proposed business. The chairman of the meeting shall have the
discretion to declare to the meeting that any business proposed by a shareholder
to be considered at the meeting is out of order and that such business shall not
be transacted at the meeting if (i) the chairman concludes that the matter has
--
been proposed in a manner inconsistent with this Section 2.13 or (ii) the
chairman concludes that the subject matter of the proposed business is
inappropriate for consideration by the shareholders at the meeting.
3.8 Certain Nomination Requirements. No person may be nominated for
-------------------------------
election as a director at any annual or special meeting of shareholders unless
(a) the nomination has been or is being made pursuant to a recommendation or
approval of the Board of Directors of the Corporation or a properly constituted
committee of the Board of Directors previously delegated authority to recommend
or approve nominees for director; (b) the person is nominated by a shareholder
of the Corporation who is entitled to vote for the election of the nominee at
the subject meeting, and the nominating shareholder has furnished written notice
to the Secretary of the Corporation, at the Corporation's principal office, not
later than 14 days before the date of the meeting or 5 days after notice is
given pursuant to Section 2.4, whichever is later, and the notice (i) sets forth
with respect to the person to be nominated his or her name, age, business and
residence addresses, principal business or occupation during the past five
years, any affiliation with or material interest in the Corporation or any
transaction involving the Corporation, and any affiliation with or material
interest in any person or entity having an interest materially adverse to the
Corporation, and (ii) is accompanied by the sworn or certified statement of the
shareholder that the nominee has consented to being nominated and that the
shareholder believes the nominee will stand for election and will serve if
elected; or (c) (i) the person is nominated to replace a person previously
identified as a proposed nominee (in accordance with the provisions of subpart
(b) of this Section 3.8) who has since become unable or unwilling to be
nominated or to serve if elected, (ii) the shareholder who furnished such
previous identification makes the replacement nomination and delivers to the
Secretary of the Corporation (at the time of or prior to making the replacement
nomination) an affidavit or other sworn statement affirming that the shareholder
had no reason to believe the original nominee would be so unable or unwilling,
and (iii) such shareholder also furnishes in writing to the Secretary of the
Corporation (at the time of or prior to making the replacement nomination) the
same type of information about the replacement nominee as required by subpart
(b) of this Section 3.8 to have been furnished about the original nominee. The
chairman of any meeting of shareholders at which one or more directors are to be
elected, for good cause shown and with proper regard for the orderly conduct of
business at the meeting, may waive in whole or in part the operation of this
Section 3.8.
ARTICLE SIX
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<PAGE>
Distributions and Dividends
Unless the Articles of Incorporation provide otherwise, the Board of
Directors, from time to time in its discretion, may authorize or declare
distributions or share dividends in accordance with the Code.
ARTICLE SEVEN
Shares
7.1 Share Certificates. The interest of each shareholder in the
------------------
Corporation shall be evidenced by a certificate or certificates representing
shares of the Corporation, which shall be in such form as the Board of Directors
from time to time may adopt in accordance with the Code. Share certificates
shall be in registered form and shall indicate the date of issue, the name of
the Corporation, that the Corporation is organized under the laws of the State
of Georgia, the name of the shareholder, and the number and class of shares and
designation of the series, if any, represented by the certificate. Each
certificate shall be signed by the President or a Vice President (or in lieu
thereof, by the Chairman of the Board or Chief Executive Officer, if there be
one) and may be signed by the Secretary or an Assistant Secretary; provided,
--------
however, that where the certificate is signed (either manually or by facsimile)
- -------
by a transfer agent, or registered by a registrar, the signatures of those
officers may be facsimiles.
7.2 Rights of Corporation with Respect to Registered Owners. Prior
-------------------------------------------------------
to due presentation for transfer of registration of its shares, the Corporation
may treat the registered owner of the shares (or the beneficial owner of the
shares to the extent of any rights granted by a nominee certificate on file with
the Corporation pursuant to any procedure that may be established by the
Corporation in accordance with the Code) as the person exclusively entitled to
vote the shares, to receive any dividend or other distribution with respect to
the shares, and for all other purposes; and the Corporation shall not be bound
to recognize any equitable or other claim to or interest in the shares on the
part of any other person, whether or not it has express or other notice of such
a claim or interest, except as otherwise provided by law.
7.3 Transfers of Shares. Transfers of shares shall be made upon the
-------------------
books of the Corporation kept by the Corporation or by the transfer agent
designated to transfer the shares, only upon direction of the person named in
the certificate or by an attorney lawfully constituted in writing. Before a new
certificate is issued, the old certificate shall be surrendered for cancellation
or, in the case of a certificate alleged to have been lost, stolen, or
destroyed, the provisions of Section 7.5 of these Bylaws shall have been
complied with.
7.4 Duty of Corporation to Register Transfer. Notwithstanding any of
----------------------------------------
the provisions of Section 7.3 of these Bylaws, the Corporation is under a duty
to register the transfer of its shares only if: (a) the share certificate is
endorsed by the appropriate person or persons; (b) reasonable assurance is given
that each required endorsement is genuine and effective; (c) the Corporation has
no duty to inquire into adverse claims or has discharged any such duty; (d) any
applicable law relating to the collection of taxes has been complied with; (e)
the transfer is in fact rightful or is to a bona fide purchaser; and (f) the
transfer is in compliance with applicable provisions of any transfer
restrictions of which the Corporation shall have notice.
-4-
<PAGE>
7.5 Lost, Stolen, or Destroyed Certificates. Any person claiming a
---------------------------------------
share certificate to be lost, stolen, or destroyed shall make an affidavit or
affirmation of this claim in such a manner as the Corporation may require and
shall, if the Corporation requires, give the Corporation a bond of indemnity in
form and amount, and with one or more sureties satisfactory to the Corporation,
as the Corporation may require, whereupon an appropriate new certificate may be
issued in lieu of the one alleged to have been lost, stolen or destroyed.
7.6 Fixing of Record Date. For the purpose of determining
---------------------
shareholders (a) entitled to notice of or to vote at any meeting of shareholders
or, if necessary, any adjournment thereof, (b) entitled to receive payment of
any distribution or dividend, or (c) for any other proper purpose, the Board of
Directors may fix in advance a date as the record date. The record date may not
be more than 70 days (and, in the case of a notice to shareholders of a
shareholders' meeting, not less than 10 days) prior to the date on which the
particular action, requiring the determination of shareholders, is to be taken.
A separate record date may be established for each Voting Group entitled to vote
separately on a matter at a meeting. A determination of shareholders of record
entitled to notice of or to vote at a meeting of shareholders shall apply to any
adjournment of the meeting, unless the Board of Directors shall fix a new record
date for the reconvened meeting, which it must do if the meeting is adjourned to
a date more than 120 days after the date fixed for the original meeting.
7.7 Record Date if None Fixed. If no record date is fixed as
-------------------------
provided in Section 7.6, then the record date for any determination of
shareholders that may be proper or required by law shall be, as appropriate, the
date on which notice of a shareholders' meeting is mailed, the date on which the
Board of Directors adopts a resolution declaring a dividend or authorizing a
distribution, or the date on which any other action is taken that requires a
determination of shareholders.
ARTICLE EIGHT
Indemnification
8.1 Indemnification of Directors. The Corporation shall indemnify
----------------------------
and hold harmless any director of the Corporation (an "Indemnified Person") who
was or is a party, or is threatened to be made a party, to any threatened,
pending or completed action, suit, or proceeding, whether civil, criminal,
administrative, or investigative, whether formal or informal, including any
action or suit by or in the right of the Corporation (for purposes of this
Article Eight, collectively, a "Proceeding") because he or she is or was a
director, officer, employee, or agent of the Corporation, against any judgment,
settlement, penalty, fine, or reasonable expenses (including, but not limited
to, attorneys' fees and disbursements, court costs, and expert witness fees)
incurred with respect to the Proceeding (for purposes of this Article Eight, a
"Liability"), provided, however, that no indemnification shall be made for: (a)
any appropriation by a director, in violation of the director's duties, of any
business opportunity of the corporation; (b) any acts or omissions of a director
that involve intentional misconduct or a knowing violation of
-5-
<PAGE>
law; (c) the types of liability set forth in Code Section 14-2-832; or (d) any
transaction from which the director received an improper personal benefit.
8.2 Indemnification of Others. The Board of Directors shall have the
-------------------------
power to cause the Corporation to provide to officers, employees, and agents of
the Corporation all or any part of the right to indemnification permitted for
such persons by appropriate provisions of the Code. Persons to be indemnified
may be identified by position or name, and the right of indemnification may be
different for each of the persons identified. Each officer, employee, or agent
of the Corporation so identified shall be an "Indemnified Person" for purposes
of the provisions of this Article Eight.
8.3 Other Organizations. The Corporation shall provide to each director,
-------------------
and the Board of Directors shall have the power to cause the Corporation to
provide to any officer, employee, or agent, of the Corporation who is or was
serving at the Corporation's request as a director, officer, partner, trustee,
employee, or agent of another corporation, partnership, joint venture, trust,
employee benefit plan, or other enterprise all or any part of the right to
indemnification and other rights of the type provided under Sections 8.1, 8.2,
8.4, and 8.10 of this Article Eight (subject to the conditions, limitations, and
obligations specified in those Sections) permitted for such persons by
appropriate provisions of the Code. Persons to be indemnified may be identified
by position or name, and the right of indemnification may be different for each
of the persons identified. Each person so identified shall be an "Indemnified
Person" for purposes of the provisions of this Article Eight.
8.4 Advances. Expenses (including, but not limited to, attorneys' fees
--------
and disbursements, court costs, and expert witness fees) incurred by an
Indemnified Person in defending any Proceeding of the kind described in Sections
8.1 or 8.3, as to an Indemnified Person who is a director of the Corporation, or
in Sections 8.2 or 8.3, as to other Indemnified Persons, if the Board of
Directors has specified that advancement of expenses be made available to any
such Indemnified Person, shall be paid by the Corporation in advance of the
final disposition of such Proceeding as set forth herein. The Corporation shall
promptly pay the amount of such expenses to the Indemnified Person, but in no
event later than 10 days following the Indemnified Person's delivery to the
Corporation of a written request for an advance pursuant to this Section 8.4,
together with a reasonable accounting of such expenses; provided, however, that
-------- -------
the Indemnified Person shall furnish the Corporation a written affirmation of
his or her good faith belief that he or she has met the applicable standard of
conduct and a written undertaking and agreement to repay to the Corporation any
advances made pursuant to this Section 8.4 if it shall be determined that the
Indemnified Person is not entitled to be indemnified by the Corporation for such
amounts. The Corporation may make the advances contemplated by this Section 8.4
regardless of the Indemnified Person's financial ability to make repayment. Any
advances and undertakings to repay pursuant to this Section 8.4 may be unsecured
and interest-free.
8.5 Non-Exclusivity. Subject to any applicable limitation imposed by the
---------------
Code or the Articles of Incorporation, the indemnification and advancement of
expenses provided by or granted pursuant to this Article Eight shall not be
exclusive of any other rights to which a person
-6-
<PAGE>
seeking indemnification or advancement of expenses may be entitled under any
provision of the Articles of Incorporation, or any Bylaw, resolution, or
agreement specifically or in general terms approved or ratified by the
affirmative vote of holders of a majority of the shares entitled to be voted
thereon.
8.6 Insurance. The Corporation shall have the power to purchase and
---------
maintain insurance on behalf of any person who is or was a director, officer,
employee, or agent of the Corporation, or who, while serving in such a capacity,
is also or was also serving at the request of the Corporation as a director,
officer, trustee, partner, employee, or agent of any corporation, partnership,
joint venture, trust, employee benefit plan, or other enterprise, against any
Liability that may be asserted against or incurred by him or her in any such
capacity, or arising out of his or her status as such, whether or not the
Corporation would have the power to indemnify him or her against such liability
under the provisions of this Article Eight.
8.7 Notice. If the Corporation indemnifies or advances expenses to a
------
director under any of Sections 14-2-851 through 14-2-854 of the Code in
connection with a Proceeding by or in the right of the Corporation, the
Corporation shall, to the extent required by Section 14-2-1621 or any other
applicable provision of the Code, report the indemnification or advance in
writing to the shareholders with or before the notice of the next shareholders'
meeting.
8.8 Security. The Corporation may designate certain of its assets as
--------
collateral, provide self-insurance, establish one or more indemnification
trusts, or otherwise secure or facilitate its ability to meet its obligations
under this Article Eight, or under any indemnification agreement or plan of
indemnification adopted and entered into in accordance with the provisions of
this Article Eight, as the Board of Directors deems appropriate.
8.9 Amendment. Any amendment to this Article Eight that limits or
---------
otherwise adversely affects the right of indemnification, advancement of
expenses, or other rights of any Indemnified Person hereunder shall, as to such
Indemnified Person, apply only to Proceedings based on actions, events, or
omissions (collectively, "Post Amendment Events") occurring after such amendment
and after delivery of notice of such amendment to the Indemnified Person so
affected. Any Indemnified Person shall, as to any Proceeding based on actions,
events, or omissions occurring prior to the date of receipt of such notice, be
entitled to the right of indemnification, advancement of expenses, and other
rights under this Article Eight to the same extent as if such provisions had
continued as part of the Bylaws of the Corporation without such amendment. This
Section 8.9 cannot be altered, amended, or repealed in a manner effective as to
any Indemnified Person (except as to Post Amendment Events) without the prior
written consent of such Indemnified Person.
8.10 Agreements. The provisions of this Article Eight shall be deemed to
----------
constitute an agreement between the Corporation and each Indemnified Person
hereunder. In addition to the rights provided in this Article Eight, the
Corporation shall have the power, upon authorization by the Board of Directors,
to enter into an agreement or agreements providing to any Indemnified Person
indemnification rights substantially similar to those provided in this Article
Eight.
-7-
<PAGE>
8.11 Continuing Benefits. The rights of indemnification and advancement
-------------------
of expenses permitted or authorized by this Article Eight shall, unless
otherwise provided when such rights are granted or conferred, continue as to a
person who has ceased to be a director, officer, employee, or agent and shall
inure to the benefit of the heirs, executors, and administrators of such person.
8.12 Successors. For purposes of this Article Eight, the term
----------
"Corporation" shall include any corporation, joint venture, trust, partnership,
or unincorporated business association that is the successor to all or
substantially all of the business or assets of this Corporation, as a result of
merger, consolidation, sale, liquidation, or otherwise, and any such successor
shall be liable to the persons indemnified under this Article Eight on the same
terms and conditions and to the same extent as this Corporation.
8.13 Severability. Each of the Sections of this Article Eight, and each
------------
of the clauses set forth herein, shall be deemed separate and independent, and
should any part of any such Section or clause be declared invalid or
unenforceable by any court of competent jurisdiction, such invalidity or
unenforceability shall in no way render invalid or unenforceable any other part
thereof or any separate Section or clause of this Article Eight that is not
declared invalid or unenforceable.
8.14 Additional Indemnification. In addition to the specific
--------------------------
indemnification rights set forth herein, the Corporation shall indemnify each of
its directors and such of its officers as have been designated by the Board of
Directors to the full extent permitted by action of the Board of Directors
without shareholder approval under the Code or other laws of the State of
Georgia as in effect from time to time.
-8-
<PAGE>
EXHIBIT 5.1
-----------
[LETTERHEAD OF MORRIS, MANNING & MARTIN, L.L.P.]
October 8, 1997
Buckhead Community Bancorp, Inc.
P.O. Box 53299
Atlanta, Georgia 30355
Re: Registration Statement on Form S-1
Gentlemen:
We have acted as counsel for Buckhead Community Bancorp, Inc., a Georgia
corporation (the "Company"), in connection with the registration under the
Securities Act of 1933, as amended, pursuant to a Registration Statement on Form
S-1, of a proposed offering of up to 2,400,000 shares of the Company's common
stock, $.01 par value per share ("Shares").
We have examined such documents, corporate records, and other instruments
as we have considered necessary and advisable for purposes of rendering this
opinion. Based upon and subject to the foregoing, we are of the opinion that the
Shares have been duly authorized and validly issued, and are fully paid and
nonassessable.
We hereby consent to the filing of this Opinion as an exhibit to the
Company's registration statement on Form S-1 and to the reference to our firm
under the caption "Legal Matters" in the Prospectus contained in the
Registration Statement.
Very truly yours,
MORRIS, MANNING & MARTIN, L.L.P.
/s/ Larry W. Shackelford
Larry W. Shackelford
<PAGE>
10.1
EMPLOYMENT AGREEMENT
THIS AGREEMENT made and entered into effective on the 1st day of October,
1997, between BUCKHEAD COMMUNITY BANCORP, INC., a Georgia corporation, and THE
BANK OF BUCKHEAD, N.A. (Proposed) (the "Bank"), a banking institution to be
chartered by the Office of the Comptroller of the Currency (collectively
referred to hereinafter as "Employer") and Marvin Cosgray (hereinafter referred
to as "Employee");
W I T N E S S E T H:
-------------------
WHEREAS, Employee and Employer have agreed for Employee to serve as
President and Chief Executive Officer of Employer; and
WHEREAS, the parties wish to establish the terms and conditions of
Employee's continued employment;
NOW, THEREFORE, in consideration of the premises, the mutual covenants and
agreements set forth herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties agree as
follows:
1.
RELATIONSHIP AND DUTIES
-----------------------
(a) Employer hereby employs Employee on the effective date hereof as
President and Chief Executive Officer of Employer to perform such services and
duties as the Employer's Board of Directors (the "Board") may from time to time
designate during the term hereof. Subject to the terms and conditions hereof and
to the direction of the Board, Employee will perform such duties and exercise
such authority as are customarily performed and exercised by persons holding
such office.
(b) Employee shall serve on the Board and as a member of its Executive
Committee, and such other committees as the Board designates, subject to the
terms hereof.
(c) Employee accepts such employment and shall devote his full time,
attention, and best efforts to the diligent performance of his duties herein
specified and as an officer and director of the Bank and will not accept
employment with any other individual, corporation, partnership, governmental
authority or other entity, or engage in any other venture for profit which
employer or the Board may consider to be in conflict with the Bank's best
interests or to be in competition with the Bank, or which may interfere in any
way with the Employee's performance of his duties hereunder.
(d) Whenever the term "Employer" is used herein, that term shall be
deemed synonymous with the term of "the Bank", whenever the context so requires.
<PAGE>
2.
TERMS OF EMPLOYMENT
-------------------
Employee's employment hereunder shall commence upon the effective date
hereof and shall continue until December 31, 2000 unless extended by written
agreement of the parties or unless terminated earlier pursuant to the terms
hereof. Employee's employment pursuant to this agreement shall be terminated by
the first to occur of any of the following:
(a) the death of Employee;
(b) the complete disability of Employee. "Complete disability" as used
herein shall mean the inability of Employee, due to illness, accident, or any
other physical or mental incapacity, to completely fulfill his obligations
hereunder for an aggregate of sixty (60) days within any period of one hundred
and twenty (120) consecutive days during the term hereof;
(c) the discharge of Employee by Employer for cause. "Cause" as used
herein shall include, without limitation: dishonesty; theft; conviction of a
crime; unethical business conduct; activity which is contrary to the Bank's
interests; gross or repeated negligence in carrying out Employee's duties; or
violation of Employee's obligations hereunder. Discharge for "Cause" will
require a two-thirds majority vote of the Board.
(d) sixty (60) days after Employee has given written notice to Employer of
his intent to terminate his employment hereunder;
Termination of Employee's employment shall constitute both a tender by
Employee of his resignation as an employee, officer and director of Employer,
and acceptance by Employer of that tender.
If the Employee's employment is terminated for reasons other than stated in
subparagraphs (a) - (d) of this paragraph 2, Employer shall pay Employee his
base salary for a period of six (6) months after the date of termination. In the
event of termination of Employee's employment pursuant to the immediately
preceding sentence, the payment to Employee of his base salary for a period of
six (6) months after the date of such termination shall be made on a monthly
basis and shall be conditioned upon Employee providing his best efforts, in good
faith, in assisting Employer in locating a replacement for Employee, in
assisting his replacement with the transition caused by the termination of
Employee's employment, and such other reasonable assistance as Employer may
request during such six (6) months' period.
3.
COMPENSATION
------------
For all services which Employee may render to Employer during the term
hereof, Employer shall pay to Employee, less such deductions as may be required
by law or agreed to by Employee, according to the schedule set out below:
-2-
<PAGE>
(a) Base Salary. From commencement of employment and for calendar
-----------
year 1998, an annual salary of $115,000 payable in equal monthly installments.
For calendar year 1999, Employee's gross annual base salary will be adjusted
upward to $120,000, and in 2000 to $125,000.
(b) Performance Bonuses. In addition to the foregoing base salary,
-------------------
Employee shall be paid a performance bonus in cash or stock of Employer (if
Employee prefers a stock bonus, such bonus can be paid only with the consent of
Employer's Board of Directors, which consent shall not be withheld except in the
case of a legal prohibition against such payment) in three (3) equal monthly
increments beginning within ninety (90) days following the end of each calendar
year, in accordance with the following formulae:
For Calendar Years 1998, 1999 and 2000:
--------------------------------------
Employee will earn a performance bonus in the amount reflected
below upon achievement by the Bank of an average return on assets ('ROA")
pursuant to the following Schedule:
<TABLE>
<CAPTION>
Bonus as a Percentage
Bank's Average of Base Salary for
ROA Each Calendar Year
-------------- ---------------------
<S> <C>
0% to .50% None
.51% to .80% 5%
.81% to 1.10% 10%
1.11% to 1.40% 15%
over 1.40% 20%
</TABLE>
4.
OTHER BENEFITS
--------------
During the term of Employee's employment hereunder, Employer shall furnish
to Employee: (i) automobile allowance of $500 per month; (ii) a term life
insurance policy providing for death benefits of $250,000; (iii) group health,
accident and hospital insurance covering Employee and his dependents; and (iv)
long-term disability insurance with benefits of sixty percent (60%) of
Employee's annual salary, provided that the Employee, on the effective date
hereof, is insurable at ordinary rates for such insurance.
5.
EXPENSES
--------
Upon Employee's presentment to Employer of expense reports acceptable to
Employer and which are in sufficiently detailed form to comply with standards
for deduction of business expenses established from time to time by the Internal
Revenue Service, Employer will reimburse Employee for such expenses approved by
Employer and incurred by Employee in
-3-
<PAGE>
connection with performance of his duties hereunder, including reasonable annual
dues and membership fees for civic, business and social organizations.
6.
POST-TERMINATION COVENANTS
--------------------------
At such time as Employee's employment by Employer terminates, whether
during the initial term hereof or thereafter, Employee agrees that for one (1)
year following such termination he will not serve as a director, officer at the
Vice President level or higher, or organizer or promoter of, or provide
executive management services to, any entity engaged in banking activities which
are competitive with those in which the Bank has engaged within the twelve (12)
months immediately preceding such termination within fifteen (15) miles of the
outside boundary of the Bank's Primary Service Area, as identified in the
national bank charter application filed by Employer with the O.C.C., as that
Primary Service Area has been or may be amended from time to time with the
O.C.C.'s approval. Furthermore, following such termination Employee agrees that
he will not, without the prior written consent of Employer: (i) furnish anyone
with the name of, or any list or lists which identify, any customers or
stockholders of the Employer or utilize such list or information himself; (ii)
furnish, use or divulge to anyone any confidential information of Employer
acquired by him from Employer and relating to Employer's business activities;
(iii) contact directly or indirectly any customer of Employer for the purpose of
soliciting such person's business for another bank or similar financial
institution; (iv) hire for any other employer (including himself) any employee
of Employer or directly or indirectly cause such employee to leave his or her
employment to work for another; (v) pursue an actual or potential business
opportunity of interest to and which could be pursued by Employer which came to
the attention of Employee in connection with his employment with Employer and
which Employee had not previously offered in writing to Employer with sufficient
advance notice to allow Employer to examine and pursue or reject such
opportunity. Excepted from the requirements of subparagraphs (i) and (ii) in
this paragraph is any information which is or becomes publicly available
information through no fault or act of Employee.
It is understood and agreed by the parties hereto that the provisions of
this paragraph are independent of each other, and to the extent any provision or
portion thereof shall be determined by a court of competent jurisdiction to be
unenforceable, such determination shall not affect the validity or
enforceability of any other provision of this paragraph or the remainder of this
Agreement.
7.
WAIVER OF PROVISIONS
--------------------
Failure by any of the parties hereto to insist, in one or more instances,
on performance by the other in strict accordance with the terms and conditions
of this Agreement shall not be deemed a waiver or relinquishment of any right
granted hereunder, or of the obligation of future performance of any such term
or condition, or of any other term or condition of this Agreement, unless such
waiver is contained in a writing signed by or on behalf of all the parties.
-4-
<PAGE>
8.
GOVERNING LAW
-------------
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Georgia. If for any reason any
provision of this Agreement shall be held by a court of competent jurisdiction
to be void or unenforceable, the same shall not affect the remaining provisions
hereof.
9.
MODIFICATION AND AMENDMENT
--------------------------
This Agreement contains the sole and entire agreement among the parties
hereto as to the subject matter hereof and supersedes all prior discussions and
agreements among the parties, and any such prior agreements shall, from and
after the date hereof, be null and void. This Agreement shall not be modified or
amended except by an instrument in writing signed by or on behalf of all parties
hereto.
10.
COUNTERPARTS AND HEADINGS
-------------------------
This Agreement may be executed simultaneously in any number of
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument. The headings set out herein are for
convenience of reference and shall not be deemed a part of this Agreement.
11.
INJUNCTIVE RELIEF
-----------------
In the event of a breach or threatened breach by Employee of any of the
provisions of paragraph 2 or 6, and notwithstanding any other provision in this
Agreement, Employer, in addition to any other available rights or remedies,
shall be entitled to a temporary restraining order and a permanent injunction to
restrain such breach by Employee and/or any persons directly or indirectly
acting for or with him. Employee's obligations under paragraph 6 hereof shall
remain binding and enforceable according to its terms notwithstanding expiration
or termination of the other terms of this Agreement or the termination of
Employee's employment relationship with the Bank.
12.
ARBITRATION
-----------
Except as set forth in paragraph 11 above, in the event of any unresolved
dispute between Employee and Employer, Employee and Employer shall submit such
dispute to a mutually agreeable third party for arbitration in accordance with
the Commercial Arbitration Rules of the American Arbitration Association then in
effect (the "AAA Rules"). The decision of the third
-5-
<PAGE>
party shall be binding on Employee and Employer and may be made a judgment of
any court having jurisdiction of the party against whom enforcement is sought.
In the event the parties cannot agree upon an arbitrator within ten (10) days of
one party's request for arbitration, the parties shall select the arbitrator in
accordance with the AAA Rules.
/s/ MC /s/ RCL
--------------------- ---------------------
(Employee's Initials) (Employer's Initials)
13.
SUCCESSORS
----------
This Agreement shall inure to the benefit of and be binding upon the
Employer, its successors and assigns and upon the Employee, and his heirs and
personal representatives. Neither this Agreement nor performance hereunder may
be assigned by Employee.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal effective as of the date first written above.
EMPLOYER:
BUCKHEAD COMMUNITY BANCORP, INC.
By: /s/ R. Charles Loudermilk, Sr.
-------------------------------------------
R. Charles Loudermilk, Sr., Chairman of the
Board and Authorized Representative
(Corporate Seal)
EMPLOYEE:
/s/ Marvin Cosgray (SEAL)
--------------------------------------
Marvin Cosgray
-6-
<PAGE>
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement") is entered into and effective
as of the ___ day of ______________, 1997, by and between Buckhead Community
Bancorp, Inc., a Georgia corporation (the "Company"), and SunTrust Bank,
Atlanta, a Georgia banking corporation (the "Escrow Agent").
W I T N E S S E T H:
- - - - - - --- - -
WHEREAS, the Company proposes to offer and sell (the "Offering") up to
2,400,000 shares of common stock, $.01 par value per share (the "Shares"), to
investors (the "Investors") at $5.00 per Share pursuant to a registered public
offering; and
WHEREAS, the Company desires to establish an escrow for funds forwarded by
subscribers for Shares, and the Escrow Agent is willing to serve as Escrow Agent
upon the terms and conditions herein set forth.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. DEPOSIT WITH ESCROW AGENT.
-------------------------
(a) The Escrow Agent agrees that it will from time to time accept, in
its capacity as escrow agent, subscription funds for the Shares (the "Escrowed
Funds") received by it from subscribers through or by the Company. All checks
shall be made payable to the Escrow Agent for Buckhead Community Bancorp, Inc.
Any check which does not clear normal banking channels and is returned by the
drawer's bank to Escrow Agent will be promptly turned over to the Company along
with all other subscription documents relating to such check. Any check received
that is made payable to a party other than the Escrow Agent shall be returned to
the Company for return to the proper party. The Company in its sole and absolute
discretion may reject any subscription for Shares for any reason and upon such
rejection it shall notify and instruct the Escrow Agent in writing to return the
Escrowed Funds by check made payable to the subscriber. If the Company rejects
or cancels any subscription for any reason the Company will retain any interest
earned on the Escrowed Funds to help defray organizational costs.
(b) Subscription agreements for the Shares shall be reviewed for
accuracy by the Company and, immediately thereafter, the Company shall deliver
to the Escrow Agent the following information in a typed format: (i) the name
and address of the subscriber; (ii) the number of Shares subscribed for by such
subscriber; (iii) the subscription price paid by such subscriber; (iv) the
subscriber's tax identification number certified by such subscriber; and (v) a
copy of the subscription agreement.
(c) Subscribers may pay a deposit on their subscription price after
receipt of the Preliminary Prospectus used by the Company in the offering, but
prior to the delivery of a final Prospectus and confirmation of subscription to
the subscribers. Such deposit will be at least 10%
<PAGE>
of the total subscription price for the number of shares subscribed for, and
will be refundable if the subscription is not confirmed by the subscriber when
the final Prospectus becomes available.
2. INVESTMENT OF ESCROWED FUNDS. Upon collection of each check by
----------------------------
the Escrow Agent, the Escrow Agent shall invest the funds in the Escrow Agent's
STI Classic Government Money Market Fund or such other investments as the
Company shall direct in writing. The Escrow Agent warrants that its STI Classic
Government Money Market Fund is invested only in short-term securities issued or
fully guaranteed by the United States government. The Company shall provide the
Escrow Agent with instructions from time to time concerning in which of the
specific investment instruments described above the Escrowed Funds shall be
invested, and the Escrow Agent shall adhere to such instructions. Interest and
other earnings shall start accruing on such funds as soon as such funds would be
deemed to be available for access under applicable banking laws and pursuant to
the Escrow Agent's own banking policies.
3. DISTRIBUTION OF ESCROWED FUNDS. The Escrow Agent shall distribute
------------------------------
the Escrowed Funds in the amounts, at the times, and upon the conditions
hereinafter set forth in this Agreement.
(a) If at any time on or prior to September 30, 1998, or such
subsequent extension date not later than March 31, 1999 (the "Closing Date"),
(i) the Escrow Agent has certified to the Company in writing that the Escrow
Agent has received at least $8,000,000 in Escrowed Funds which are collected
funds, and (ii) the Escrow Agent has received a certificate from the President
or the Chairman of the Board of the Company that all other conditions to the
release of funds as described in the Company's Registration Statement filed with
the Securities and Exchange Commission pertaining to the public offering have
been met, then the Escrow Agent shall deliver the Escrowed Funds to the Company
to the extent such Escrowed Funds are collected funds. If any portion of the
Escrowed Funds are not collected funds, then the Escrow Agent shall notify the
Company of such facts and shall distribute such funds to the Company only after
such funds become collected funds. For purposes of this Agreement, "collected
funds" shall mean all funds received by the Escrow Agent which have cleared
normal banking channels. In all events, the Escrow Agent shall deliver not less
than $8,000,000 in collected funds to the Company, except as provided in
Paragraph 3(b) hereof.
(b) If the Escrowed Funds do not, on or prior to the Closing Date,
become deliverable to the Company based on failure to meet the conditions
described in Paragraph 3(a), or if the Company terminates the offering at any
time prior to the Closing Date and delivers written notice to the Escrow Agent
of such termination (the "Termination Notice"), the Escrow Agent shall return
the Escrowed Funds which are collected funds as directed in writing by the
Company to the respective subscribers in amounts equal to the subscription
amount theretofore paid by each of them. All uncleared checks representing
Escrowed Funds which are not collected funds as of the Initial Closing Date
shall be collected by the Escrow Agent, and together with all related
subscription documents thereof shall be delivered to the Company by the Escrow
Agent, unless the Escrow Agent is otherwise specifically directed in writing by
the Company.
4. DISTRIBUTION OF INTEREST. Any interest earned on the Escrowed
------------------------
Funds shall be distributed to subscribers simultaneous with any release of
Escrowed Funds to such subscribers based on the proportion which the amount of
collected funds held in escrow for the benefit of each
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subscriber and the number of days such collected funds have been held bears to
the total of the daily collected balances of Escrowed Funds during the term of
this Agreement. Any interest earned on Escrowed Funds released to the Company
pursuant to Section 3(a) shall also be released to the Company, and no
subscriber shall have any right to receive such interest.
5. FEES OF ESCROW AGENT. The Company shall pay the Escrow Agent an
--------------------
annual fee of $1,500.00 for its services hereunder. In addition, the Company
will pay a service charge of $5.00 per subscriber. All of these fees are
payable upon the release of the Escrowed Funds, and the Escrow Agent is hereby
authorized to deduct such fees from the Escrowed Funds prior to any release
thereof pursuant to Section 3 hereof.
6. LIABILITY OF ESCROW AGENT.
-------------------------
(a) Escrow Agent undertakes to perform only such duties as are
expressly set forth herein, and no additional duties or obligations shall be
implied hereunder. In performing its duties under this Agreement, or upon the
claimed failure to perform any of its duties hereunder, Escrow Agent shall not
be liable to anyone for any damages, losses or expenses which may be incurred as
a result of Escrow Agent so acting or failing to so act; provided, however,
Escrow Agent shall not be relieved from liability for damages arising out of its
proven gross negligence or willful misconduct under this Agreement. Escrow Agent
shall in no event incur any liability with respect to (i) any action taken or
omitted to be taken in good faith upon advice of legal counsel, which may be
counsel to any party hereto, given with respect to any question relating to the
duties and responsibilities of Escrow Agent hereunder or (ii) any action taken
or omitted to be taken in reliance upon any instrument delivered to Escrow Agent
and believed by it to be genuine and to have been signed or presented by the
proper party or parties. Escrow Agent shall not be bound in any way by any other
agreement or contract between the Company and the Investors, whether or not
Escrow Agent has knowledge of any such agreement or contract.
(b) The Company warrants to and agrees with Escrow Agent that, unless
otherwise expressly set forth in this Agreement, there is no security interest
in the Escrowed Funds or any part of the Escrowed Funds; no financing statement
under the Uniform Commercial Code of any jurisdiction is on file in any
jurisdiction claiming a security interest in or describing, whether specifically
or generally, the Escrowed Funds or any part of the Escrowed Funds; and the
Escrow Agent shall have no responsibility at any time to ascertain whether or
not any security interest exists in the Escrowed Funds or any part of the
Escrowed Funds or to file any financing statement under the uniform Commercial
Code of any jurisdiction with respect to the Escrowed Funds or any part thereof.
(c) As an additional consideration for and as an inducement for
Escrow Agent to act hereunder, it is understood and agreed that, in the event of
any disagreement between the parties to this Agreement or among them or any
other person(s) resulting in adverse claims and demands being made in connection
with or for any money or other property involved in or affected by this
Agreement, Escrow Agent shall be entitled, at the option of Escrow Agent, to
refuse to comply with the demands of such parties, or any of such parties, so
long as such disagreement shall continue. In such event, Escrow Agent shall make
no delivery or other disposition of the Escrowed Funds or any part of such
Escrowed Funds. Anything herein to the contrary notwithstanding, Escrow Agent
shall not be or become liable to such parties or any of them for the
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<PAGE>
failure of Escrow Agent to comply with the conflicting or adverse demands of
such parties or any of such parties.
Escrow Agent shall be entitled to continue to refrain and refuse to
deliver or otherwise dispose of the Escrowed Funds or any part thereof or to
otherwise act hereunder, as stated above, unless and until:
1. the rights of such parties have been finally settled by binding
arbitration or duly adjudicated in a court having jurisdiction of
the parties and the Escrowed Funds; or
2. the parties have reached an agreement resolving their differences
and have notified Escrow Agent in writing of such agreement and
have provided Escrow Agent with indemnity satisfactory to Escrow
Agent against any liability, claims or damages resulting from
compliance by Escrow Agent with such agreement.
In the event of a disagreement between such parties as described
above, Escrow Agent shall have the right, in addition to the rights described
above and at the option of Escrow Agent, to tender into the registry or custody
of any court having jurisdiction, all money and property comprising the Escrowed
Funds and may take such other legal action as may be appropriate or necessary,
in the opinion of Escrow Agent. Upon such tender, the parties hereto agree that
Escrow Agent shall be discharged from all further duties under this Agreement;
provided, however, that the filing of any such legal proceedings shall not
deprive Escrow Agent of its compensation hereunder earned prior to such filing
and discharge of Escrow Agent of its duties hereunder.
(d) The Company agrees to pay Escrow Agent for its ordinary services
hereunder the fees determined in accordance with and payable as specified in
Section 5 hereof. In addition, the Company agrees to pay to Escrow Agent its
expenses incurred in connection with this Agreement, including but not limited
to the actual cost of legal services in the event Escrow Agent deems it
necessary to retain counsel. Such expenses shall be paid to Escrow Agent within
60 days following receipt by the Company of a written statement setting forth
such expenses.
The Company hereto agrees that, in the event any controversy arises
under or in connection with this Agreement or the Escrowed Funds or Escrow Agent
is made a party to or intervenes in any litigation pertaining to this Agreement
or the Escrowed Funds, to pay to Escrow Agent reasonable compensation for its
extraordinary services and to reimburse Escrow Agent for all costs and expenses
associated with such controversy or litigation.
As security for all fees and expenses of Escrow Agent hereunder and
any and all losses, claims, damages, liabilities and expenses incurred by Escrow
Agent in connection with its acceptance of appointment hereunder or with the
performance of its obligations under this Agreement and to secure the obligation
of the parties hereto to indemnify Escrow Agent as set forth in paragraph 6(f)
hereof, Escrow Agent is hereby granted a security interest in and a lien upon
the Escrowed Funds, which security interest and lien shall be prior to all other
security interests, liens or claims against the Escrowed Funds or any part
thereof.
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(e) Escrow Agent may resign at any time from its obligations under
this Agreement by providing written notice to the parties hereto. Such
resignation shall be effective on the date set forth in such written notice
which shall be no earlier than 30 days after such written notice has been given.
In the event no successor escrow agent has been appointed on or prior to the
date such resignation is to become effective, Escrow Agent shall be entitled to
tender into the custody of a court of competent jurisdiction all assets then
held by it hereunder and shall thereupon be relieved of all further duties and
obligations under this Agreement. Escrow Agent shall have no responsibility for
the appointment of a successor escrow agent hereunder.
(f) Escrow Agent shall have no obligation to take any legal action in
connection with this Agreement or towards its enforcement, or to appear in,
prosecute or defend any action or legal proceeding which would or might involve
it in any cost, expense, loss or liability unless security and indemnity, as
provided in this paragraph, shall be furnished.
The Company agrees to indemnify Escrow Agent and it officers,
directors, employees and agents and save Escrow Agent and its officers,
directors, employees and agents harmless from and against any and all Claims (as
hereinafter defined) and Losses (as hereinafter defined) which may be incurred
by Escrow Agent or any of such officers, directors, employees or agents as a
result of Claims asserted against Escrow Agent or any of such officers,
directors, employees or agents as a result of or in connection with Escrow
Agent's capacity as such under this Agreement by any person or entity. For the
purposes hereof, the term "Claims" shall mean all claims, lawsuits, causes of
action or other legal actions and proceedings of whatever nature brought against
(whether by way of direct action, counterclaim, cross action or impleader)
Escrow Agent or any such officer, director, employee or agent, even if
groundless, false or fraudulent, so long as the claim, lawsuit, cause of action
or other legal action or proceeding is alleged or determined, directly or
indirectly, to arise out of, result from, relate to or be based upon, in whole
or in part: (a) the acts or omissions of the Company, (b) the appointment of
Escrow Agent as escrow agent under this Agreement, or (c) the performance by
Escrow Agent of its powers and duties under this Agreement; and the term
"Losses" shall mean losses, costs, damages, expenses, judgments and liabilities
of whatever nature (including but not limited to attorneys', accountants' and
other professionals' fees, litigation and court costs and expenses and amounts
paid in settlement), directly or indirectly resulting from, arising out of or
relating to one or more Claims. Upon the written request of Escrow Agent or any
such officer, director, employee or agent (each referred to hereinafter as an
"Indemnified Party"), the Company agrees to assume the investigation and defense
of any Claim, including the employment of counsel acceptable to the applicable
Indemnified Party and the payment of all expenses related thereto and,
notwithstanding any such assumption, the Indemnified Party shall have the right,
and the Company agrees to pay the cost and expense thereof, to employ separate
counsel with respect to any such Claim and participate in the investigation and
defense thereof in the event that such Indemnified Party shall have been advised
by counsel that there may be one or more legal defenses available to such
Indemnified Party which are different from or additional to those available to
the Company. The Company hereby agrees that the indemnifications and protections
afforded Escrow Agent in this section shall survive the termination of the
Agreement.
7. APPOINTMENT OF SUCCESSOR. The Company may, upon the delivery of
------------------------
thirty (30) days written notice appointing a successor escrow agent to the
Escrow Agent, terminate the services of the Escrow Agent hereunder. In the
event of such termination, the Escrow Agent shall
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immediately deliver to the successor escrow agent selected by the Company, all
documentation and Escrowed Funds including interest earnings thereon in its
possession, less any fees and expenses due to the Escrow Agent or required to be
paid by the Escrow Agent to a third party pursuant to this Agreement.
8. NOTICE. All notices, requests, demands and other communications
------
or deliveries required or permitted to be given hereunder shall be in writing
and shall be deemed to have been duly given (a) upon personal delivery, if
delivered by hand, (b) three days after the date of deposit in the mails,
postage prepaid, if mailed by registered mail, certified mail return receipt
requested, or first class mail, or (c) the next business day if sent by a
prepaid overnight courier service, and in each case at the respective addresses
set forth below or such other address as such party may have fixed by notice:
IF TO THE SUBSCRIBERS To their respective addresses as specified in their
FOR SHARES: Subscription Agreements.
THE COMPANY: Buckhead Community Bancorp, Inc.
P.O. Box 53299
Atlanta, Georgia 30355
Attention: Mr. Marvin Cosgray, President
Phone:
Fax:
WITH A COPY TO: Morris, Manning & Martin, L.L.P.
1600 Atlanta Financial Center
3343 Peachtree Road, N.E.
Atlanta, Georgia 30326
Attention: Larry W. Shackelford, Esq.
Phone: 404-233-7000
Fax: 404-365-9532
THE ESCROW AGENT: SunTrust Bank, Atlanta
Room 400 - Annex
58 Edgewood Avenue
Atlanta, Georgia 30303
Attention: Mr. Ronald C. Painter
Corporate Trust Department
Phone: 404-588-7191
Fax: 404-332-3966
9. REPRESENTATIONS OF THE COMPANY.
------------------------------
(a) In order to induce and as partial consideration for Escrow
Agent's acceptance of this Agreement, the Company acknowledges that Escrow Agent
is serving as escrow agent for the limited purposes set forth herein and each
represent, covenant and warrant to Escrow Agent that no statement or
representation, whether oral or in writing, has been or will be made to any
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prospective subscribers for any of the Shares to the effect that Escrow Agent
has investigated the desirability or advisability of investment in the Shares or
approved, endorsed or passed upon the merits of such investment or is otherwise
involved in any manner with the transactions or events contemplated in any sale
documents, disclosure statements subscription agreements or related document,
other than as Escrow Agent under this Agreement. It is further agreed that no
party shall in any way use the name "SunTrust Bank, Atlanta" or "SunTrust Banks,
Inc." in any sales presentation or literature except in the context of the
duties of the Escrow Agent as escrow agent of the offering of the Shares in the
strictest sense. Any breach or violation of the paragraph shall be grounds for
immediate termination of the Agreement by Escrow Agent in accordance with the
terms and provisions set forth herein.
(b) Without limitation to any release, indemnification or hold
harmless provision in favor of Escrow Agent as elsewhere provided in this
Agreement, the Company covenants and agrees to indemnify Escrow Agent and its
officers, directors, employees and agents and to hold Escrow Agent and such
officers, directors, employees and agents harmless from and against all
liability, cost, losses and expenses, including but not limited to attorneys'
fees and expenses which are suffered or incurred by Escrow Agent or any such
officer, director, employee or agent as a direct or indirect result of the
threat or the commencement of any claim or proceeding against Escrow Agent or
any such officer, director, employee or agent based in whole or in part upon the
allegation of a misrepresentation or an omission of a material or significant
fact in connection with the sale or subscription of any of the Shares. Escrow
Agent shall have no responsibility for approving or accepting on behalf of the
Company any proceeds delivered to it hereunder, nor shall Escrow Agent be
responsible for authorizing issuance of the Shares or for determining the
qualification of any purchaser or the accuracy of the information contained in
the sale documents, disclosure statements, subscription agreements or any
related document.
10. GENERAL.
-------
(a) This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Georgia.
(b) The section headings contained herein are for reference purposes
only and shall not in any way affect the meaning or interpretation of this
Agreement.
(c) This Agreement sets forth the entire agreement and understanding
of the parties with regard to this escrow transaction and supersedes all prior
agreements, arrangements and understandings relating to the subject matter
hereof.
(d) This Agreement may be amended, modified, superseded or canceled,
and any of the terms or conditions hereof may be waived, only by a written
instrument executed by each party hereto or, in the case of a waiver, by the
party waiving compliance. The failure of any part at any time or times to
require performance of any provision hereof shall in no manner affect the right
at a later time to enforce the same. No waiver in any one or more instances by
any part of any condition, or of the breach of any term contained in this
Agreement, whether by conduct or otherwise, shall be deemed to be, or construed
as, a further or continuing waiver of any such condition or breach, or a waiver
of any other condition or of the breach of any other terms of this Agreement.
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(e) This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(f) This Agreement shall inure to the benefit of the parties hereto
and their respective administrators, successors and assigns. The Escrow Agent
shall be bound only by the terms of this Escrow Agreement and shall not be bound
by or incur any liability with respect to any other agreement or understanding
between the parties except as herein expressly provided. The Escrow Agent shall
not have any duties hereunder except those specifically set forth herein.
(g) No interest in any part to this Agreement shall be assignable in
the absence of a written agreement by and between all the parties to this
Agreement, executed with the same formalities as this original Agreement.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
the date first written above.
COMPANY: ESCROW AGENT:
BUCKHEAD COMMUNITY BANCORP, INC. SUNTRUST BANK, ATLANTA
By:_____________________ By:_____________________________
Marvin Cosgray Name:___________________________
President Title:__________________________
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415 EAST PACES FERRY ROAD
OFFICE LEASE
THIS LEASE is made this 7th day of August, 1997, by and among Longpoint
Investors, Ltd. (hereinafter called "Landlord") and Buckhead Community Bancorp,
Inc. (hereinafter called "Tenant"), Colliers Cauble & Co. (hereinafter called
"Broker"), and N/A, (hereinafter called "Co-Broker").
1. PREMISES. Landlord, for an in consideration of the rents, covenants,
agreements, and stipulations hereinafter mentioned, provided for and
contained hereinafter to be paid, kept and performed by Tenant, leases
and rents unto Tenant and Tenant hereby rents and leases from Landlord
the following described space in 415 East Paces Ferry Building
(hereinafter called the "Building") being approximately ____ rentable
square feet (____ usable square feet) located at ________, ______
County, Georgia, (hereinafter called the "Premises"). The Premises
are more particularly described and shown on Exhibit "A" (The Premises
is defined as the entire first floor of the Building, exclusive of the
Lobby. The legal description of the property of which the Premises is
a part ("Land") is attached as Exhibit "B".) as attached hereto and
made a part hereof. No easement for light or air is granted
hereunder. See Special Stipulation 1 for final calculation of square
footage.
2. TERM. The Tenant shall have and hold the Premises for a term of ten
years beginning on the Commencement Date and ending ten years
thereafter at midnight, unless sooner terminated as hereinafter
provided, or unless adjusted pursuant to Special Stipulation 44 called
"Term").
3. RENTAL AND COVENANTS TO PAY RENT.
a. Tenant shall pay to Landlord at Suite 415, 3109 Maple Drive,
Atlanta, Georgia 30305, or at such other place as Landlord may
designate in writing without demand, deduction or set-off, an
annual rental of per RSF (herein called "Base Rental"), payable
in equal monthly installments in advance on the first day of each
calendar month during the Term which is for less than one month
shall be a prorated portion of the monthly rental due. (See
Special Stipulation 44)
b. Base Rental shall escalate as follows: 3% per annum, on the
anniversary date of the lease.
c. All payments, other than those specified above, as required in
this Lease to be made by Tenant to Landlord shall be deemed to be
and shall become additional rent hereunder, whether or not the
same shall be designated as such and shall be due and payable
along with usual rental payments subject to the same conditions
and remedies as exist for said rental payments. (See Special
Stipulation 44)
<PAGE>
4. LATE CHARGES. Other remedies for nonpayment of rental notwithstanding,
time is of the essence of this Lease and if Landlord elects to accept
rent on or after the tenth day after written notice is given to Tenant
of any failure to pay Base Rental, a late charge equal to the greater
of five percent (5%) of the monthly installment of Base Rental or One
Hundred Dollars ($100.00) will be due as additional rent. In the event
Tenant's rent check is dishonored by the Bank, Tenant agrees to pay
Landlord $25.00 as a handling charge and, if applicable, the late
charge, and Tenant shall deliver said monies to Landlord as specified
in Paragraph 3. Dishonored checks must be replaced by cashier's check,
certified check or money order. Any other amounts payable to Landlord
under this Lease with the exception of Base Rental shall be considered
past due 30 days from Landlord's billing date and Tenant shall pay a
monthly service charge of fifteen percent per annum of the amount past
due for that and each subsequent month that the amount remains past
due. The parties agree that such charges represent a fair and
reasonable estimate of the costs the Landlord will incur by reason of
such late payment and/or returned check.
5. Deleted.
6. Deleted.
7. ACCEPTANCE OF PREMISES. Landlord and Landlord's broker have made no
representations or promises with respect to the Building, the
Premises, or this Lease except as herein expressly set forth. The
taking of possession of the Premises after fulfillment of the Delivery
Requirements set out in Special Stipulation 45 by Tenant shall be
conclusive evidence that Tenant accepts the Premises "as is" and that
the Premises and the Building are suitable for the use intended by
Tenant and were in good and satisfactory condition at the time such
possession was so taken, excluding any punch list items. See Special
Stipulations attached, and in particular Special Stipulations 44 and
45.
8. REPAIR BY TENANT AND REMOVAL OF IMPROVEMENTS AND ALTERNATIONS UPON
TERMINATION.
a. Tenant will, at Tenant's expense, take good care of the Premises
and the fixtures and appurtenances therein, and, exclusive of all
portions of the Premises, improvements, equipment, and building
systems that hereinafter are expressly provided to be the
responsibility of Landlord to maintain and repair, will suffer no
active or permissive waste or injury thereof; and Tenant shall,
at Tenant's expense, but under the direction of Landlord,
promptly repair any damage to the Premises or the Building caused
by the misuse or neglect thereof, or by persons permitted on the
Premises by Tenant, or Tenant moving in or out of the Premises.
b. Tenant will not, without Landlord's written consent, make any
alterations, additions or improvements in or about the Premises
and will not do anything to or on the Premises which will
increase the rate of fire insurance on the Building. All
alterations, additions or improvements (including but
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not limited to carpets, window treatments, and window treatment
hardware) made or installed by Tenant to the Premises shall
become the property of Landlord at the expiration of the Term of
this Lease, or any extensions or renewals thereof. Landlord
reserves the right to require Tenant to remove any improvements
or additions made to the Premises by Tenant; Tenant further
agrees to do so prior to the expiration of the Term or within
thirty (30) days after notice from Landlord, whichever shall be
later, provided that Landlord give such notice no later than
thirty (30) days after expiration of the Term of this Lease, or
any extensions or renewals thereof.
c. No later than the last day of the Term, Tenant will remove all of
Tenant's personal property and trade fixtures and repair all
damage done by or in connection with the installation or removal
of said property and will surrender the Premises (together with
all keys to the Premises) in as good a condition as existed at
the beginning of the Term, reasonable wear and tear, damage by
fire, the elements or casualty excepted. All property of tenant
remaining on the Premises after expiration of the Term shall be
deemed conclusively abandoned and may be removed by Landlord, and
Tenant shall reimburse Landlord for the cost of such removal,
subject, however, to Landlord's right to require Tenant to remove
any improvements or additions made to the Premises by Tenant
pursuant to sub-paragraph (b) of this paragraph.
d. In doing any work of any nature in, to or about the Premises,
Tenant will use only contractors or workmen approved by Landlord.
Tenant shall promptly cause the removal of any lien for material
or labor claimed to be furnished to Premises at Tenants request.
See Special Stipulation 8(b), (c) and (d).
9. Deleted and see Special Stipulation 9.
10. USE. Tenant shall use the Premises for retail bank and/or office and
for all lawful activities normally incidental thereto and related to
the conduct of Tenant's business, and for any other purposes permitted
by law. Tenant shall not use or occupy the Premises, or permit the
Premises to be used or occupied, in violation of any ordinance, law or
regulation of any governmental body, or in any manner which would
vitiate or increase the premium charged for insurance on the Premises
or the Building or that would cause damage to the Building, or that
would constitute a public nuisance, or that would disturb the quiet
enjoyment of the other tenants of the Building.
11. SERVICES - WATER, CLEANING, AND ELECTRICITY. Landlord shall furnish
the following services without additional charge.
a. Heat and air conditioning sufficient to reasonably cool or heat
the Premises, at the proper season, during standard building
hours (8:00 a.m. to 6:00 p.m. on Mondays through Fridays,
inclusive and 8:00 A.M. to 1:00 P.M. on
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<PAGE>
Saturdays) on normal business days, except holidays observed by
national banks as legal holidays;
b. Restroom facilities including water, paper towels, and toilet
tissue reasonably used on the Premises;
c. Janitorial services each Monday through Friday, except holidays
observed by national banks as legal holidays;
d. Electric current for lighting and for small business machines
only (e.g. typewriters, personal computers, copiers and other
small office equipment) using 110 volt, 20 AMP circuits. Tenant
will not use any electrical equipment which in Landlord's opinion
will overload the wiring installations or interfere with the
reasonable use thereof by other users in the Building. Tenant
will not, without Landlord's prior written consent in each
instance (which shall not be unreasonably withheld) connect any
additional items (such as electric heaters, data processing
equipment or copy machines) to the Building's electrical
distribution system, or make any alterations or additions to such
system. Should Landlord grant such consent, all additional
circuits or equipment required therefore shall be provided by
Landlord and the reasonable cost thereof shall be paid by Tenant
upon Landlord's demand; See Special Stipulation 11(d) for
amplification.
e. See Special Stipulation 11(e).
f. Landlord shall in no way be liable for cessation of any of the
above services caused by strike, accident or reasonable
breakdown, nor shall Landlord be liable for damages resulting
from any of the fixtures or equipment in the Building being out
of repair, or for injury to person or damage to property, caused
by any defects in the electrical equipment, heating, ventilating
and air conditioning system, water apparatus, or for any damages
arising out of failure to furnish the services enumerated in this
Paragraph 11 beyond the control of Landlord.
12. DESTRUCTION OF OR DAMAGE TO PREMISES. If the Premises are made
untenatable in whole or in part by fire or other casualty, the rent,
until repairs shall be made or this Lease is terminated as hereinafter
provided, shall be apportioned on a per diem basis and prorated
according to the part of the Premises which is usable by the Tenant.
If such damage shall be so extensive that the Premises cannot be
restored by the Landlord within a period of one hundred twenty (120)
days (as evidenced by a written declaration from Landlord to Tenant),
then either party shall have the right to cancel this Lease by notice
to the other given at any time within thirty (30) days after the date
of such damage. If this Lease is not so terminated, the Landlord will
promptly repair the damage at the Landlord's expense, within a
reasonable time thereafter.
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<PAGE>
13. RULES AND REGULATIONS. Tenant will faithfully observe and comply with
the "Rule and Regulations" attached hereto and made a part hereof, and
such further reasonable rules and regulations as Landlord may
prescribe, on written notice to Tenant, for the safety, care and
cleanliness of the Building, and the comfort, quietness and
convenience of other occupants of the Building.
14. See Special Stipulation 14(a) through (g).
15. REMEDIES UPON DEFAULT. Upon the occurrence of an Event of Default,
Landlord shall use reasonable efforts to mitigate its damages,
provided Landlord, in addition to any and all other rights or remedies
it may have at law or in equity, shall have the option of pursuing any
one or more of the following remedies:
a. Landlord may terminate this Lease by giving notice of
termination, in which event this Lease shall expire and terminate
on the date specified in such notice of termination, with the
same force and effect as through the date so specified were the
date herein originally fixed as the termination date of the term
of this Lease, and all rights of Tenant under this Lease and in
and to the Premises shall expire and terminate, and Tenant shall
remain liable for all obligations under this Lease arising up to
the date of such termination and Tenant shall surrender the
Premises to Landlord on the date specified in such notice;
b. Landlord may terminate this Lease as provided in Paragraph 15(a)
hereof and recover from Tenant all damages Landlord may incur by
reason of Tenant's default, including, without limitation, a sum
which, at the date of such termination, represents the then value
of the excess, if any, of (i) the monthly rental and additional
rent for the period commencing with the day following the date of
such termination and ending with the date herein before set for
the expiration of the full term hereby granted, over (ii) the
aggregate reasonable rental value of the Premises (less
reasonable brokerage commissions, attorney's fees and other costs
relating tot he reletting of the Premises) for the same period,
all of which excess sum shall be discounted to present value, and
deemed immediately due and payable;
c. Deleted.
d. Landlord may, from time to time without terminating this Lease,
and without releasing Tenant in whole or in part from Tenant's
obligation to pay monthly rental and additional rent and perform
all of the covenants, conditions and agreements to be performed
by Tenant as provided in this Lease, make such alterations and
repairs as may be reasonably necessary in order to relet the
Premises, and, after making such alterations and repairs,
Landlord may, but shall not be obligated to, relet the Premises
or any part thereof for such term or terms (which may be for a
term extending beyond the Term of this Lease) at such rental or
rentals and upon such other terms and conditions as Landlord in
its sole discretion may deem advisable or acceptable; upon each
reletting, all rentals received by Landlord from such
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<PAGE>
reletting shall be applied first, to the payment of any
indebtedness other than rent due hereunder from Tenant to
Landlord; second, to the payment of any costs and expenses of
such reletting, including brokerage fees and attorneys' fees, and
of costs of such alterations and repairs; third, to the payment
of the monthly rental and additional rent due and unpaid
hereunder, and the residue, if any, shall be held by Landlord and
applied against payment of future monthly rental and additional
rent as the same may become due and payable hereunder; in no
event shall Tenant be entitled to any excess rental received by
Landlord over and above charges that Tenant is obligated to pay
hereunder, including monthly rental and additional rent; if such
rental received from such reletting during any month is less than
those to be paid during the month by Tenant hereunder, including
monthly rental and additional rent, Tenant shall pay any such
deficiency to Landlord, which deficiency shall be calculated and
paid monthly; Tenant shall also pay Landlord as soon as
ascertained and upon demand all costs and expenses reasonably
incurred by Landlord in connection with such reletting and in
making any alterations and repairs which are not covered by the
rentals received from such reletting; notwithstanding any such
reletting without termination, Landlord may at any time
thereafter elect to terminate this Lease for such previous
breach. See Special Stipulation 15(d).
Tenant acknowledges that the Premises are to be used for commercial
purposes, and Tenant expressly waives the protections and rights set
forth in Official Code of Georgia Annotated Section 44-7-52.
16. ASSIGNMENT AND SUBLETTING. Tenant shall not, without the prior
written consent of Landlord, which shall not be unreasonably withheld,
assign this Lease or any interest hereunder, or sublet the Premises or
any part thereof, or permit the use of the Premises by any party other
than the Tenant. Consent to any assignment or sublease shall not
impair this provision and all later assignments or subleases shall be
made likewise only on the prior written consent of Landlord. The
assignee of Tenant, at the option of Landlord, shall become liable to
Landlord for all obligations of Tenant hereunder, but no sublease or
assignment by Tenant shall relieve Tenant of any liability hereunder.
Consent to any assignment or sublease shall nullify any lease options
or first rights of refusal. See Special Stipulation 16.
17. EMINENT DOMAIN. If all or any part of Premises or the land on which
Building stands or any estate therein are taken by virtue of eminent
domain or conveyed or leased in lieu of such taking, this Lease shall
expire on the date when title shall vest, or the term of such lease
shall commence, and any rent paid for any period beyond said date
shall be repaid to Tenant. It is expressly agreed that the Tenant
shall not have any right or claim of any award made to or received by
the Landlord for such taking. The widening of streets abutting the
land on which the Building stands shall not effect this Lease,
provided no part of the Building is so taken. Nothing herein
contained, however, shall preclude Tenant from claiming, proving and
receiving from the condemning authority a separate award for the value
of any of Tenant's personal property taken which Tenant could have
rightfully removed
-6-
<PAGE>
from the Premises hereunder and for relocation and moving expenses, so
long as the Landlord's award is not thereby reduced. See Special
Stipulation 17.
18. LANDLORD'S ENTRY OF PREMISES. Landlord may enter the premises with
prior notice, except in case of emergencies, at reasonable hours with
prospective purchasers or tenants, or to inspect the Premises, or to
make repairs required by Landlord under the terms hereof or repairs to
adjoining space within the Building.
19. Deleted.
20. SUBORDINATION. Landlord may, from time to time, grant first lien
deeds of trust, security deeds, mortgages or other first lien security
interests covering its estate in the Building (each a "Mortgage").
Tenant agrees that this Lease shall be subject and subordinate to each
Mortgage, including any modifications, extensions, renewals thereof
and advances July 1996 subordination shall be required to make this
Lease subject and subordinate to any Mortgage. Tenant shall, upon
request, from time to time execute and deliver to Landlord or the
holder of any Mortgage any instrument requested by Landlord or the
holder of such Mortgage. Tenant agrees to recognize and attorn to any
party succeeding to the interest of Landlord as a result of the
enforcement of any Mortgage, and be bound to such party under all the
terms, covenants, and conditions of this Lease, for the balance of the
Term of this Lease, including any extensions or renewals thereof, with
the same force and effect as if such party were the original Landlord
under this Lease. Upon the request of Landlord, Tenant agrees to
execute a subordination and attornment agreement incorporating the
provisions set forth above and otherwise in form reasonably acceptable
to Landlord. See Special Stipulation 20.
21. INDEMNITY AND INSURANCE. Tenant agrees to and hereby does indemnify
and save Landlord harmless against all claims for damages to persons
or property by reason of Tenant's use or occupancy of the Premises,
and all expenses incurred by Landlord because thereof, including
attorney's fees and court costs. Supplementing the foregoing and in
addition thereto, Tenant shall during the term of this Lease and any
extension or renewal thereof, and at Tenant's expense, maintain in
full force and effect comprehensive general liability insurance with
limits of $500,000.00 per person and $1,000,000.00 per incident, and
property damage limits of $100,000.00, which insurance shall contain a
special endorsement recognizing and insuring any liability accruing to
Tenant under the first sentence of this Paragraph 21, and naming
Landlord as additional insured. Tenant shall provide evidence of such
insurance to Landlord prior to the commencement of the term of this
Lease. Landlord and Tenant each hereby release and relieve the other,
and waive its right of recovery, for loss or damage arising out of or
incident to the perils insured against which perils occur in, on or
about the Premises, whether due to the negligence of Landlord or
Tenant or their Brokers, employees, contractors and/or invitees, to
the extent that such loss or damage is within the policy limits of
said comprehensive general liability insurance. Landlord and Tenant
shall, upon obtaining the policies of insurance required, give notice
to the insurance carrier or carriers that the foregoing mutual waiver
of subrogation is contained in this Lease. See Special Stipulation
21.
-7-
<PAGE>
22. RIGHTS CUMULATIVE. All rights, powers and privileges conferred
hereunder upon the parties hereto shall be cumulative and not
restrictive of those given by law.
23. HOLDING OVER. If Tenant remains in possession of the Premises after
expiration of the Term hereof, with Landlord's acquiescence and
without any express agreement of the parties, Tenant shall be a tenant
at will at the rental rate which is in effect at the end of this Lease
and there shall be no renewal of this Lease by operation of law. If
Tenant remains in possession of the Premises after expiration of the
Term hereof without Landlord's acquiescence, Tenant shall be a tenant
at sufferance and commencing on the date following the date of such
expiration, the monthly rental payable under Paragraph 3 above shall
for each month, or fraction thereof during which Tenant so remains in
possession of the Premises, be 125% of the monthly rental otherwise
payable under Paragraph 3 above.
24. WAIVER OF RIGHTS. No failure of Landlord to exercise any power given
Landlord hereunder or to insist upon strict compliance by Tenant of
its obligations hereunder and no custom or practice of the parties at
variance with the terms hereof shall constitute a waiver of Landlord's
right to demand exact compliance with the terms hereof.
25. SECTION TITLES. The section titles in this Lease are included for
convenience only and shall not be taken into consideration in any
construction or interpretation of this Lease or any of its provisions.
26. NOTICE.
a. Any notice by either party to the other required or permitted
under this Lease shall be valid only if in writing and shall be
deemed to be duly given only if delivered personally or sent by
registered or certified mail addressed (-) if to Tenant, at the
Premises, and (2) if to Landlord, at the address set forth
herein, or at such other address for either party as that party
may designate by notice to the other, with copy to the Broker(s)
at the address set forth herein; notice shall be deemed given, if
delivered personally, upon delivery thereof, and if mailed upon
the mailing thereof. See Special Stipulation 26.
b. Deleted.
27. DEFINITIONS. "Landlord" as used in this Lease shall include the
undersigned, its heirs, representatives, assigns and successors in
title to the Premises. "Tenant" shall include the undersigned and its
heirs, representatives, and successors, and if this Lease is validly
assigned or sublet, shall also include Tenant's assigns or subtenants
covered by such assignment or sublease. "Broker" and "Co-Broker"
shall include the undersigned, their successors, assigns, heirs and
representatives. "Landlord", "Tenant", "Broker", and "Co-Broker"
include male and female, singular and plural, corporation, partnership
or individual, as may fit the particular parties.
-8-
<PAGE>
28. ENTIRE AGREEMENT. This Lease contains the entire agreement of the
parties hereto, and no representations, inducements, promises or
agreements, oral or otherwise, between the parties, not embodied
herein, shall be of any force or effect. No subsequent alteration,
amendment, change or addition to this Lease, except as to changes or
additions to the Rules and Regulations described in Paragraph 13,
shall be binding upon Landlord or Tenant unless reduced to writing and
signed by Landlord and Tenant.
29. ATTORNEY'S FEES. In the event that any action or proceeding is
brought to enforce any term, covenant or condition of this Lease on
the part of Landlord or Tenant, the prevailing party in such
litigation shall be entitled to recover reasonable attorney's fees to
be fixed by the court in such action or proceeding, in an amount at
least equal to fifteen percent of any damages due from the non-
prevailing party.
30. LIMITATION ON BROKER'S SERVICES AND DISCLAIMER. Broker and Co-Broker
are parties to this Lease for the purpose of enforcing their rights to
receive a real estate commission. Tenant must look solely to Landlord
as regards all covenants and agreements contained herein, and Broker
and Co-Broker shall never be liable to Tenant in regard to any matter
which may arise by virtue of this Lease. Landlord and Tenant
acknowledge that the Atlanta Commercial Board of REALTORS, Inc. has
furnished this Standard Office Lease form to its members as a service
and that it makes no representation or warranty as to the
enforceability of this Standard Office Lease form or any paragraph
thereof.
31. NO ESTATE IN LAND. This Lease shall create the relationship of
landlord and tenant between the parties hereto. Tenant has only a
usufruct no subject to levy and sale, and not assignable by Tenant
except by Landlord's consent.
32. TIME OF ESSENCE. Time is of the essence of this Lease.
33. REAL ESTATE COMMISSION. Landlord agrees to pay to Broker and Co-
Broker for negotiating this Lease, a commission as agreed to in a
separate agreement. Tenant warrants and represents that it has had no
dealings with any broker or broker(s) in connection with this Lease,
other than Broker and Co-Broker and Tenant covenants to pay, hold
harmless and indemnify Landlord from and against any and all cost,
expense or liability for any compensation, commissions or charges
claimed by any broker or broker(s) on behalf of the Tenant with
respect to this Lease or negotiations thereof, other than Broker and
Co-Broker. See Special Stipulation 33.
34. See Special Stipulation 34.
35. CERTAIN ENVIRONMENTAL MATTERS.
a. Tenant shall not use, store, treat, discard or dispose of any
hazardous substances in or about the Premises. For purposes of
this Lease, "hazardous substances" shall mean and include those
elements or compounds which are contained in the list of
hazardous substances adopted by the Environmental Protection
Agency (EPA) and the list of toxic
-9-
<PAGE>
pollutants designated by Congress or the EPA under any applicable
environmental law or legislation; as such lists may be
supplemented, amended or newly enacted from time to time. To the
extent that any of the applicable environmental laws of the State
of Georgia establish a meaning for "hazardous substances" which
is broader than that specified in any federal legislation or
laws, such broader meaning shall apply. "Applicable environmental
law" shall mean and include the collective aggregate of the
following: any law, statute, ordinance, rule, regulation, order
or determination of any governmental authority or any board of
fire underwriters (or body exercising similar functions) or any
restrictive covenant or deed restriction (recorded or otherwise)
affecting the Premises pertaining to health or the environment.
b. The occupancy, operation and use of the Premises by Tenant shall
not violate any applicable environmental laws, of any federal,
state, local or other governmental authority.
c. Without limiting the generality of the above, Tenant represents
that it is not the subject of any pending or, to the best of
Tenant's knowledge, threatened investigation or inquiry by any
governmental authority, or subject to any remedial obligations
under any applicable environmental laws, including, without
limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended ("CERCLA"),
the Resource Conservation and Recovery Act of 1987, as amended
("RCRA"), and any and all applicable state laws, and this
representation and warranty would continue to be true and correct
following disclosure to any applicable governmental authority of
all relevant facts, conditions and circumstances pertaining to
the Tenant.
d. Tenant represents that it is to obtain any permits, licenses or
authorization to occupy, operate or use any portion of the
Premises by reason of any applicable environmental laws.
e. Tenant represents that it has not received any notice from any
governmental authority with respect to any violation of any
applicable environmental laws.
f. Tenant shall not cause any violation of any applicable
environmental laws, nor permit any sub-tenant of any portion of
the Premises to cause such a violation, nor permit any
environmental liens to be placed on any portion of the Building
or the Premises.
g. Tenant shall give notice to Landlord immediately upon (i)
Tenant's receipt of any notice from any governmental authority of
a violation of any applicable environmental laws or upon
acquiring knowledge of the receipt of any such notice by any sub-
tenant of any portion of the Premises, and (ii) acquiring
knowledge of the presence of any hazardous substances on the
Premises in a condition that is resulting or could reasonably be
expected to
-10-
<PAGE>
result in any adverse environmental impact, with a full
description thereof. Tenant shall promptly comply with all
applicable environmental laws requiring the notice, removal,
treatment, or disposal of such hazardous substances, caused by or
within the control of Tenant and provide the Landlord with
satisfactory evidence of such compliance.
36. See Special Stipulation 36.
37. SEVERABILITY. The terms, conditions, covenants and provisions of this
Lease shall be deemed to be severable. If any clause or provision
herein contained shall be adjudged to be invalid or unenforceable by a
court of competent jurisdiction or by operation of any applicable law,
it shall not affect the validity of any other clause or provision
herein, but such other clauses or provisions shall remain in full
force and effect.
38. QUIET ENJOYMENT. If Tenant shall pay the rent herein and other
amounts to be paid by Tenant to Landlord, and will and faithfully
keep, perform, and observe all of the covenants, agreements and
conditions herein stipulated to be kept, performed and observed by
Tenant, Tenant shall at all times during the term of the Lease have
the peaceable and quiet enjoyment of the Premises against the claims
of all persons whomsoever, and Landlord covenants and agrees that it
shall timely pay real estate taxes on the Land and Building.
39. Deleted.
40. AGENCY DISCLOSURE. Landlord and Tenant hereby acknowledge that Broker
has acted as an agent for Landlord in this transaction and will be
paid a commission by Landlord and that Co-Broker has acted as an agent
for N/A in this transaction and will be paid a real estate
---
commission by N/A.
---
41. NO OPTION. The submission of this Lease for examination does not
constitute a reservation of or option for the Premises, and this Lease
shall become effectively only upon execution and delivery of a fully
executed Lease by Landlord.
42. SPECIAL STIPULATIONS. Special Stipulations shall control if in
conflict with any of the foregoing provisions of this Lease.
IN WITNESS WHEREOF, the parties have hereunto set their hands and seals the
day and year first above written.
TENANT:
Signed, sealed and delivered in Buckhead Community Bancorp, Inc.
the presence of:
R. Charles Loudermilk, Sr. (SEAL)
_________________________________ ----------------------------
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<PAGE>
Witness __________________________________
Address 1100 Aaron Building
309 East Paces Ferry Road
Atlanta, Georgia 30305
__________________________________
Phone
Signed, sealed and delivered in LANDLORD:
the presence of:
Longpoint Investors, Ltd.
John D. Margeson (SEAL)
_________________________________ ----------------------------
Witness
__________________________________
Address 3109 Maple Drive, Suite 415
Atlanta, Georgia 30305
__________________________________
Phone 404-237-5245
Signed, sealed and delivered in
the presence of: BROKER:
Colliers Cauble & Co.
____________________________(SEAL)
_________________________________
Witness
__________________________________
Address
__________________________________
__________________________________
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<PAGE>
Signed, sealed and delivered in the presence of: N/A
________________________(SEAL)
____________________________
Witness ________________________
Address
________________________
________________________
Phone
-13-
<PAGE>
RULES AND REGULATIONS
(which are referred to in the within Lease and made a part thereof)
1. The sidewalks, entry passages, corridors, halls, and stairways shall not be
obstructed by tenants, or used by them for any purpose other than those of
ingress and egress.
2. The water closet and other water apparatus, shall not be used for any other
purpose than those for which they were constructed, and no sweepings,
rubbish, or other obstructing substances shall be thrown therein.
3. No advertisement or other notice shall be inscribed, painted or affixed on
any part of the outside or inside of the Building. Window shades, blinds or
curtains of a uniform color and pattern only, as specified by Landlord, shall
be used throughout the Building to give a uniform color exposure through
exterior windows. No awnings shall be placed on Building.
4. No tenant shall do or permit to be done in the Building, or bring or keep
anything thereon, which shall in any way obstruct or interfere with the
rights of other tenants, or in any way injure or annoy them, or conflict with
the laws relating to fires, or with the regulations of the Fire Department,
or any part thereof, or conflict with any of the rules and ordinances of the
Board of Health. Tenants, their invitees and employees shall maintain order
in the Building, shall not make or permit any improper noise in the Building
or interfere in any way with other tenants or those having business with
them. No rooms shall be occupied or used as sleeping or lodging apartments
at any time without permission of Landlord. No part of the Building shall be
used or in any way appropriated for gambling, immoral or other unlawful
practices. No intoxicating liquor or liquors shall be sold in the Building
by Tenant without Landlord's permission.
5. Tenants shall not employ any persons other than the janitors of Landlord (who
will be provided with pass-keys into the offices) for the purpose of cleaning
or taking care of Premises.
6. No animals, birds, bicycles, or other vehicles shall be allowed into the
offices, halls, corridors, or elsewhere in the Building.
7. All glass, locks and trimmings in or upon the doors and windows of the
Building shall be kept whole, and when any part thereof shall be broken, the
same shall immediately be replaced and put in order under direction and to
the satisfaction of Landlord, or its broker, and shall be left whole and in
good repair. Tenants shall not deface the Building, the woodwork or the
walls of the Premises.
8. No additional locks or latches shall be put upon any door without the written
consent of Landlord. Tenants at the termination of their Lease of the
Premises shall return to Landlord all keys and security cards to doors in
Building.
9. Landlord in all cases retains power to prescribe the weight and position of
iron safes, files having excessing weight, or other heavy articles. Any
damage done to the Building or to
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<PAGE>
tenants or to other persons by taking safe or other heavy article in or out
of Premises, for overloading a floor, or in any other manner shall be paid
for by Tenant causing such damage.
10. Parking facilities supplied by Landlord for Tenants shall be used for
vehicles that may occupy a standard parking area only (i.e. 8'x13').
Moreover, the use of such parking facilities shall be limited to normal
business parking and shall not be used for a continuous parking of any
vehicle or trailer regardless of size.
11. The Landlord shall not be responsible to any Tenant for the non-observance
or violation of any of these Rules and Regulations by any other tenants.
12. Tenant shall not permit in the Premises any cooking or the use of any
apparatus for the preparation of food nor the use of any electrical
apparatus likely to cause an overload of electrical circuits, with the
exception of a microwave oven, coffee machine and refrigerator.
13. Tenant shall maintain no food or drink coin operating vending machines
within the Premises or the Building without the written consent of Landlord;
such consent shall not preclude Landlord from charging Tenant for utility
costs thereof. Tenant agrees that all personal property, including machines
permitted by Landlord under this paragraph, brought into the Premises by
Tenant, its employees, licensees and invitees shall be at the sole risk of
Tenant and Landlord and shall not be liable for theft or of money deposited
therein or for any damages thereto; such theft or damage being the sole
responsibility of Tenant.
14. All Tenants and occupants shall observe strict care not to leave their
windows or doors open when it rains or snows, or while air-conditioning or
heating systems are in operation, and for any fault or carelessness in any
of these respects, shall indemnify other tenants for any injury sustained by
other Tenants, and to Landlord for damage to paint, plastering or other
parts of the Building, resulting from default or carelessness.
15. Deleted.
16. These Rules and Regulations are supplemental to, and shall not be construed
to in any way modify or amend, in whole or in part, the terms, covenants,
agreements and conditions of any lease of any premises in the Building.
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<PAGE>
SPECIAL STIPULATIONS
Landlord: Longpoint Investors, Ltd.
Tenant: Buckhead Community Bancorp, Inc.
Date: August 7, 1997
Re: 415 East Paces Ferry Road Office Lease
The following number references are to the corresponding paragraph number
in the standard lease agreement between the parties (the "Standard Lease").
Where in conflict with the Standard Lease, the following provisions shall
control:
3. The calculation of rentable square feet and usable square feet is an
approximation at this time. The Premises shall consist of all of the
ground floor of the Building, less and except that part of the ground
floor within the present lobby ("Lobby"), plus one-third of the square
footage contained in the Lobby. Promptly upon execution of this Lease.
Landlord will measure the number of square feet contained within the
Premises. This measurement shall be from exterior wall to exterior wall.
Tenant shall be notified in writing as to the calculation and Tenant shall
have a period of ten days after notification within which to notify
Landlord in writing of any disagreement as to the calculation. Unless
Tenant notifies Landlord of Tenant's disagreement, Landlord's calculation
shall become final, and the precise rental under paragraph 3 shall be
determined by multiplying the number of square feet within the Premises by
$17.50 and shall become the base rental ("Base Rental").
If Tenant does notify Landlord of Tenant's disagreement with Landlord's
calculation, then Tenant's notification shall be accompanied by a
certification from a qualified architect selected by Tenant as to the
architect's calculation of the number of square feet contained within the
Premises. Landlord shall have a period of ten days after such notification
within which to notify Tenant in writing of any disagreement as to
Tenant's calculation. Unless Landlord notifies Tenant of Landlord's
disagreement, Tenant's calculation shall become final, and the precise
rental under paragraph 3 shall be determined by multiplying the number of
square feet contained in Tenant's measurement times $17.50 and shall
become the Base Rental. If Landlord does disagree with Tenant's
calculation of the number of square feet contained within the Premises,
the matter shall be submitted to arbitration under the provisions of
Special Stipulation 51 hereof.
Tenant shall also have non-exclusive right to use of the common areas in
the Building. Tenant shall have right of access to the Premises 24 hours
per day, 365 days per year.
8. (b) Landlord's consent shall not be unreasonably withheld. Tenant may
make alterations, additions or improvements to the Premises without
Landlord's written
<PAGE>
consent which do not affect the Building structure, the exterior of
the Building or any of the Building systems.
(c) Tenant's obligation to remove improvements and alterations excludes
initial Improvements made by Landlord and Tenant, including Tenant
Improvements. As to improvements thereafter, Landlord's approval
shall indicate whether or not Tenant will be obligated to remove same
at end of Term.
(d) Landlord's approval shall not be unreasonably withheld.
9. Landlord shall provide for the cleaning, repair and maintenance, consistent
with comparable buildings in the Buckhead area, of the public portions of
the Building (including but not limited to the Lobby of the Building) and
the Land, all Building systems (including the heating, ventilating and air
conditioning systems, electrical, plumbing and mechanical systems in the
Building and the Premises), all exterior walls, corridors, windows, roof
and other structural elements and equipment of the Building and the
Premises and the grounds and parking areas on the Land and such additional
maintenance as may be necessary because of damage by persons other than
Tenant, its brokers, employees, invitees or visitors. Except as provided
in Section 44 and except as provided in the foregoing sentence, Landlord
shall not be required to make any improvements or repairs of any kind or
character on the Premises during the term of this Lease. Tenant shall
reimburse Landlord for the repairs of any damage caused by Tenant or
Tenant's employees, agents, contractors, invitees or licensees or caused by
Tenant's default hereunder. Landlord shall be responsible to comply with
and keep the Building including the Premises in compliance with all
applicable governmental requirements, laws, ordinances and rules for
occupancy of the Building and for tenants generally saving only such laws,
ordinances or requirements pertaining to the specific nature of Tenant's
business and occupancy in the Premises by Tenant for which Tenant shall be
responsible.
11. (d) The requirement for written consent for electric appliance connection
applies only to appliances or machines that require greater electrical
power than a 110 volt, 20 amp circuit.
(e) If Tenant requires greater electrical power than the standard power
provided in Section 11(d) or requires after hours HVAC, then Landlord
reserves the right to charge Tenant as additional rent a reasonable
sum for such excess to reimburse Landlord the actual costs of such
additional services.
(f) The phrase "reasonable breakdown" is deleted and the phrase "breakdown
beyond the control of Landlord" is substituted. Whether breakdown is
beyond the control of Landlord shall be an arbitrable matter.
14. The subparts of Section 14 are modified as follows:
2
<PAGE>
(a) Tenant fails to pay the rental as provided for herein and on or before
the due date thereof, which failure is not cured within ten days after
written notice is provided by Landlord to Tenant;
(b) Tenant fails to comply with or abide by and perform any other
obligation imposed upon Tenant under this Lease and such failure is
not cured within 30 days after written notice is given by Landlord to
Tenant, or if such default or failure is of such a nature that it
cannot be reasonably cured within 30 days, then within such longer
period as is reasonably necessary for Tenant to effect a cure,
provided Tenant is diligently pursuing the cure thereof;
(c) Tenant is adjudicated bankrupt or files for bankruptcy protection;
(d) A permanent receiver is appointed for Tenant's property and such
receiver is not removed within 60 days after written notice from
Landlord to Tenant to obtain such removal;
(e) Tenant either voluntarily or involuntarily takes advantage of any debt
or relief proceeding under the present or future law, whereby the rent
or any part thereof is or is proposed to be reduced or payment thereof
deferred;
(f) Tenant makes an assignment for the benefit of creditors; or
(g) Tenant's effects are levied upon or attached under process against
Tenant, which is not satisfied or dissolved within 30 days after
written notice from Landlord to Tenant to obtain satisfaction thereof.
15. (b) The excess sum referred to in Section 15(b) shall be discounted to
present value.
(d) The authority to make alterations and repairs is limited to those that
are reasonably necessary. The authority to relet the Premises shall
be on such terms and conditions as Landlord is reasonably able to
obtain.
16. Tenant without the consent of Landlord may sublet or assign this Lease
and/or permit the use of the Premises or a portion thereof to any
subsidiary or affiliated company of Tenant or any of its principal
shareholders or directors. In addition, Tenant without obtaining
Landlord's consent may transfer or assign this Lease to any successor by
merger or purchaser of substantially all of the assets of Tenant or stock
in Tenant.
17. Nothing in paragraph 17 is intended to preclude Tenant from claiming,
proving and receiving from the condemning authority a separate award for
damages sustained by Tenant or loss in respect to Tenant's interest from
such condemnation.
18. The notice required prior to entry by Landlord shall be "reasonable."
3
<PAGE>
The Landlord's right to show the Premises to prospective tenants shall be
limited to the last 180 days of the Term.
20. Tenant's obligation to sign a subordination agreement shall be subject to
the proposed mortgage holder executing a non-disturbance and attornment
agreement providing that Tenant's rights under the lease will not be
disturbed absent a default, and that such holder will recognize Tenant as
Tenant in the Premises under the terms of the lease.
21. Landlord agrees to and hereby does indemnify and save Tenant harmless
against all claims for damages to persons or property by reason of claims
against Tenant, its employees and agents or other liability, damages, costs
and expenses or Tenant, its employees and agents occurring or being made
resulting from the negligence or misconduct of Landlord, its agents,
employees or contractors on the Land, in the Building or the Premises.
26. Notices required hereunder shall be sent to Tenant as follows:
Buckhead Community Bancorp, Inc.
c/o of Mr. R. Charles Loudermilk, Sr.
1100 Aaron Building
309 E. Paces Ferry Rd., N.E.
Atlanta, Georgia 30305-2307
A. B. Martin
Morris, Manning & Martin, LLP
3343 Peachtree Road, N.E.
Suite 1600
Atlanta, Georgia 30326
33. Landlord covenants to pay, hold harmless and indemnify Tenant from and
against any and all costs, expense or liability for any compensation,
commissions or charges claimed by Broker or other brokers on behalf of
Landlord with respect to this Lease or negotiations thereof.
34. Except for the obligations of Landlord in Section 44, Landlord's
obligations and liability to Tenant hereunder are limited to those
pertaining to building improvements as specified herein and Landlord's
interest in the Land and the Building, all rents due Landlord in respect to
such interest and all proceeds of insurance payable to Landlord.
36. Force Majeure. Except for the time periods in Section 44 and Section 45
whenever a period of time is herein prescribed for action to be taken by
Landlord or Tenant, Landlord or Tenant shall not be liable or responsible
for, and there shall be excluded from the computation of any such period of
time, any delays due to strikes, riots, acts of God, shortages of labor or
materials, theft, fire, public enemy, injunction, insurrection, court
order, requisition or any other causes or any kind whatsoever which are
beyond the control of Landlord or Tenant.
4
<PAGE>
43. Acceptance of Premises and Representations of Landlord. Landlord agrees to
make certain modifications and improvements to the Building and the Land
pursuant to the "Plans and Specifications" (hereinafter defined in Section
(44) and other requirements set forth in Section (44) ("Landlord's Work").
Subject to completion of Landlord's Work and satisfaction of the Delivery
Requirements and the representations and warranties of Landlord hereinafter
set forth. Tenant agrees to accept the "Premises" for installation of the
Tenant Improvements in accordance with Section 45.
As a material inducement to Tenant to enter into this Lease, Landlord
hereby represents and warrants to Tenant as follows:
(a) Title. Landlord owns the land on which the Building is located in
fee simple subject to those matters of title set forth on Exhibit "C" attached
hereto and by this reference made a part hereof.
(b) Construction and Compliance. The building is structurally sound
and is in a tenantable condition free of material defects in design ,
workmanship and materials and subject to completion of the Tenant Improvements,
fully complies with all governmental requirements (including the obtainment of
all necessary approvals). Landlord agrees that if at any time or times any
public authority, enforcer or beneficiary of any governmental requirements
establishes that the Building has not been constructed in compliance with any
governmental requirements in effect at the time of the Commencement Date and
should request compliance, then upon receipt of notice of such complaint
Landlord shall promptly cause such repairs, alterations or other work to be done
or other action taken so long as to bring about the compliance requested without
unreasonable interference to Tenant's business or rights under this Lease.
(c) Environmental.
(i) Landlord represents that to the best of Landlord's
knowledge, there are not now nor have there ever been any toxic or "Hazardous
Substances" (hereinafter defined) used, generated, stored, treated or disposed
on the Land.
(ii) Landlord hereby indemnifies Tenant from and against any and
all loss, liabilities, claims or reasonable expenses, including without
limitation any investigation or claim of any third party or governmental agency,
remediation costs, reasonable engineering and reasonable attorneys' fees and
expenses that Tenant may incur by reason of the use, generation, including with
limitation, any CERCLA claim, arising from or relating to (i) the generation,
presence or suspected presence, release or disposal of Hazardous Substances,
whether known or unknown, at, on, from or under the Premises at any time whether
prior to or after the delivery of the Premises to Tenant except to the extent
caused by Tenant and (ii) the migration of Hazardous Substances from other
property to the Premises. As a condition of such indemnity, Tenant shall within
ten (10) days deliver 43. Acceptance of Premises and Representations of
Landlord. Landlord agrees to make certain modifications written notice to
Landlord of any claims made on Tenant that are subject to this indemnity and
Tenant shall reasonably cooperate and consult with Landlord on the defense of
such claim so as to mitigate the costs and expenses of this indemnity. This
indemnity shall survive the cancellation, termination or expiration of this
Lease.
5
<PAGE>
(iii) For purposes hereof "Hazardous Substances" means:
(aa) Any toxic or hazardous waste, materials,
pollutants or substances, including petroleum products and by-products,
flammable explosives, radioactive materials, asbestos, polychlorinated
biphenyls, pesticides, herbicides, pesticide or herbicide containers, untreated
sewage, industrial process sludge.
(bb) Any substance defined as "Hazardous Substances"
or "Toxic Substances" or similarly identified in or pursuant to CERCLA.
(cc) "Hazardous Materials" as identified in or
pursuant to the Hazardous Materials Transportation Act, 49 U.S.C. ' 1801 et seq.
-- ----
as now or hereafter amended.
(dd) Any chemical substance or mixture regulated under
The Toxic Substance Control Act of 1976, 15 U.S.C. ' 2601 et seq. as now or
-- ----
hereafter amended.
(ee) Any "Toxic Pollutant" under The Clean Water Act,
33 U.S.C. ' 466 et seq. as now or hereafter amended; any hazardous air pollutant
-- ----
under The Clean Air Act, 42 U.S.C. ' 7401 et seq. as now or hereafter amended.
-- ----
(ff) Any toxic or hazardous wastes, materials,
pollutants or substances regulated under any other applicable law including any
so called "Super Fund" or "Super Lien" legislation, now or hereafter existing,
or
(gg) Any "hazardous substance" as identified in or
pursuant to any Governmental Requirement as now or hereafter amended.
(d) Authority. Landlord hereby represents and warrants that it has
full power and authority to enter into this Lease and perform all of its
obligations hereunder.
(e) Additional Representations and Warranties. Landlord warrants and
represents that:
(i) No person other than Tenant is entitled to possession
of the Premises.
(ii) The Building has unrestricted right of ingress and
egress to and over public rights of way.
(iii) To the best knowledge of Landlord, all necessary
surface work, drainage, sewer and other utility services are available to the
Premises through facilities located in public rights of way or valid and
existing private easements of perpetual duration which have priority over all
existing mortgages or security instruments.
(iv) To the best knowledge of Landlord, the Land has not
been used as a land fill or waste facility or otherwise been used for the
disposal, storage or treatment of any
6
<PAGE>
waste, trash, garbage, industrial by-product, chemical or hazardous substance of
any nature (including any Hazardous Substance).
(v) To the best knowledge of Landlord, the Land contains no
sewers, septic tanks, above ground tanks or "underground storage tanks" (as
defined in 40 C.F.R. Section 280.12).
(vi) Except as provided in Section 42, there exists no
pending or to the best knowledge of Landlord, contemplated condemnation, eminent
domain or rezoning proceeding affecting the Premises, or any pending or
contemplated proceedings or public improvements which could or might result in a
levy of a special tax or assessment against the Premises.
(vii) Upon Substantial Completion of the Building, the
Building and the Premises (except such work for which Tenant is responsible) are
in compliance with all applicable governmental requirements relating to the land
use requirements.
(viii) All Building systems, including HVAC, electrical,
plumbing and mechanical systems and equipment serving the Premises shall be in
good operating condition to the Delivery date.
44. Building Improvements. Landlord will (a) improve the exterior face of the
Building; (b) redesign and construct a new entrance to the east face of the
Building; (c) repair, restore, seal and restripe the parking lot; (d)
remodel the Lobby space; (e) install appropriate landscaping on the Land
and (f) install a monument sign for the Building including Tenant's name as
the top billing sign, all shall be completed at Landlord's cost and
expense. All of the foregoing work is herein called "Landlord's Work".
Landlord shall cause plans and specifications for Landlord's Work to be
completed and Landlord shall obtain a cost estimate from its contractor for
the actual costs of the new entrance on or before August 14, 1997. Tenant
shall have the right to approve such plans and specifications and cost
estimates provided Tenant shall approve or give its reasons for disapproval
on or before three (3) business days after Landlord shall deliver to Tenant
such plans and specifications for approval. If Tenant shall not approve
such plans and specifications or cost estimate Tenant shall give Landlord
the reasons therefore and Landlord shall make such changes to such plans
and specifications as are requested by Tenant. This process shall continue
until Tenant shall approve such plans and specifications and cost estimate.
If Landlord and Tenant do not agree on the Building plans and
specifications or cost estimate by August 19, 1997, then Tenant shall have
the right to terminate this Lease by notice to Landlord. Such final plans
and specifications as are approved by Tenant are herein called the
"Building Plans and Specifications." Within thirty (30) days of the date
Landlord and Tenant shall approve the Building Plans and Specifications and
cost estimates, Tenant shall pay to Landlord the amount of the cost
estimate or reimburse Landlord for the costs of construction of such
improvements in the manner set out below. Provided that in lieu of paying
such costs to Landlord at the option of Landlord or Tenant Landlord shall
credit such amount due Landlord from Tenant against Tenant Allowance due
Tenant from Landlord. Landlord shall cause Landlord's Work to be
constructed in a good and workmanlike manner in accordance with the
7
<PAGE>
Building Plans and Specifications on or before January 1, 1998 (the
"Scheduled Building Completion Date").
If "Substantial Completion" of the Building shall not occur by sixty (60)
days after the Scheduled Building Completion Date then for each day
thereafter until Substantial Completion shall occur, the Commencement Date
shall be delayed and, in addition, Tenant shall be entitled to a credit
against Base Rental that shall begin to accrue and be due after the
Commencement Date equal to one-half (1/2) of the prorated daily amount of
Base Rental due hereunder for each day of such delay. If Substantial
Completion of the Building shall not occur by ninety (90) days after the
Scheduled Building Completion Date, then for each day thereafter until
Substantial Completion shall occur the Commencement Date shall be delayed
and, in addition, Tenant shall be entitled to a credit against Base Rental
that shall begin to accrue and be due after the Commencement Date, one (1)
full day Base Rental hereunder for each day of such delay. If Substantial
Completion of the Building shall not occur by June 15, 1998, then in lieu
of the foregoing rights, Tenant at any time after June 15, 1998 may elect
to terminate the Lease in which event Landlord shall pay to Tenant Fifty
Thousand ($50,000.00) Dollars as liquidated damages; Landlord and Tenant
acknowledge that the exact amount of Tenant's Damages in consequence of
such default are not capable of being exactly ascertained and that such
liquidated damages constitute the reasonable amount of Tenant's damages and
are not a penalty. Tenant is not so required to exercise such termination
option and unless Tenant shall so exercise its termination rights, then the
Commencement Date shall continue to be delayed and Tenant's credit against
Base Rental provided above shall continue to accrue. For purposes of this
Lease "Substantial Completion of the Building" shall mean completion of the
Building and the parking areas and the landscaping on the Land all in
accordance with the Building Plans and Specifications with the exception of
only minor punchlist items (the "Punchlist") that can be completed within
thirty (30) days which do not in the reasonable opinion of Tenant
materially interfere with the occupancy of the Premises by Tenant and the
operation of Tenant's business from the Premises or prevent Tenant from
obtaining a certificate of occupancy for the Tenant Improvements. After
Substantial Completion of the Building shall occur, Landlord shall promptly
and within thirty (30) days complete the Punchlist without any material
interference to the rights of Tenant to operate its business. All the time
periods herein are subject to adjustment, day for day, for delays
occasioned by Tenant's actions or inactions.
Rental shall begin on the Commencement Date. Landlord shall send Tenant a
Commencement Date agreement for signature, confirming the establishment of
the Commencement Date.
The term "Commencement Date" shall mean the date on which Substantial
Completion of the Building shall occur and a certificate of occupancy
(temporary or permanent) is issued to Tenant.
45. Tenant Improvements. Tenant at its cost and expense subject to
reimbursement from Landlord of "Tenant's Allowance" (hereinafter defined)
shall construct the Tenant Improvements in the Premises. The "Tenant
Improvements" shall be all those certain
8
<PAGE>
interior improvements to be constructed and installed in the Premises in
accordance with "Tenant's Plans and Specifications" (hereinafter defined)
generally constituting Tenant's interior build-out requirements which shall
include (a) the necessary equipment systems and improvements for connection
to, and distribution from the main Building systems trunk lines for the
HVAC plumbing, mechanical and electrical systems in the Building and (b)
the ceiling, lighting, floor covering, wall covering and finishes and
window treatments. Tenant Improvements shall include a drive-through
banking window. Prior to the commencement of the installation of the Tenant
Improvements, Tenant shall prepare and obtain Landlord's approval of
Tenant's Plans and Specifications for Tenant Improvements. Landlord shall
approve the Tenant Plans and Specifications or disapprove with the reasons
therefore within three (3) business days of Tenant's delivery of such Plans
and Specifications for approval. This process shall continue until Tenant's
Plans and Specifications are approved by Landlord. If Tenant is unable to
obtain Landlord's approval of Tenant's Plans and Specifications within (15)
days after Tenant first delivers such plans to Landlord then Tenant may
terminate this Lease by notice to Landlord. Tenant may commence
construction of the Tenant Improvements upon Landlord's delivery of the
Premises to Tenant with all of the "Landlord's Delivery Requirements"
satisfied. The date Landlord delivers the Premises to Tenant with all
Delivery Requirements satisfied is the "Delivery Date".
For purposes hereof Landlord's Delivery Requirements are: (a) the Premises
shall be delivered to Tenant in a "broom clean" condition with all exterior
partitions installed and complete; (b) all main Building system including
HVAC electrical plumbing and mechanical shall be in good working order and
ready for connection to and installation of a distribution system to the
Premises and; (c) there shall exist no condition at the Premises or the
Building or other reason except only the necessary approval of Tenant's
Plans and Specifications by the applicable governmental authorities that
shall prevent Tenant obtaining a building permit for construction of
Tenant Improvements.
Landlord shall reimburse Tenant the aggregate amount of $14.00 per square
foot ("Tenant's Allowance") for Tenant's Improvements. Landlord shall
disburse Tenant's Allowance to Tenant upon request by Tenant and
certification by Tenant of the percentage of Tenant's Improvements that are
complete. Tenant's Allowance shall be disbursed in percentage to the
proportion of Tenant's Improvements that shall be completed. Landlord
shall not be required to make disbursements more than monthly and may hold
back 10% (the "Retainage") of the amount requested by Tenant to be
disbursed to Tenant until final completion of Tenant's Improvements.
Landlord shall not be required to disburse the Retainage until Tenant's
Improvements shall be complete and Tenant shall have obtained a certificate
of occupancy for the Premises. Tenant shall cause Tenant's Improvements
to be completed in accordance with Tenant's Plans and Specifications and in
accordance with all governmental laws and other requirements by a
contractor that shall be approved by Landlord (such approval shall not be
unreasonably withheld). Subject to being reimbursed the Tenant Allowance
as provided herein, Tenant shall indemnify and hold harmless Landlord from
and against any liabilities and other obligations resulting from the
construction of Tenant's Improvements in the Premises.
9
<PAGE>
46. Renewal Option. Tenant shall have the option to renew its Lease for two
five (5) year terms. Tenant shall notify Landlord in writing of Tenant's
intent to renew at least six (6) months prior to the expiration date of the
Term in the case of the first renewal term, and at least six months prior
to the expiration of the first renewal term, in the case of the second
renewal term. All terms and conditions of this Lease shall remain the same
during the renewal term except as provided below.
Rental. The Base Rental during the first year of each renewal term shall
be the "Fair Market Rental Rate". For purposes of this Section "Fair
Market Rental" shall mean the Base Rental rate per rentable square foot
then being charged for comparable buildings taking into consideration such
considerations relevant to the determination of Fair Market Rental Rates as
deemed important by the Appraiser.
The Fair Market Rental Rate shall be determined between
Landlord and Tenant as follows:
Within thirty (30) days of the Tenant's notification to Landlord of its
exercise of its renewal option Landlord shall advise Tenant in writing of
its determination of the Fair Market Rental Rate. Within fifteen (15) days
after receipt of Landlord's determination of the Fair Market Rental Rate
Tenant shall advise Landlord in writing whether or not Tenant accepts or
rejects the Fair Market Rental Rate set forth by Landlord. In the event
Tenant rejects such terms as set forth by Landlord, Tenant shall counter by
advising Landlord in writing of Tenant's determination of the Fair Market
Rental Rate. If Landlord and Tenant cannot then agree upon the Fair Market
Rental Rate within sixty (60) days of the Tenant's original notice of
exercise Tenant's Renewal Option, then the parties shall jointly appoint an
"Appraiser" as hereinbelow set forth who within ten (10) days of
appointment will pick either Landlord's or Tenant's determination of Fair
Market Rental Rate. Tenant may elect by written notice to Landlord within
ten (10) business days from the Appraiser's determination any one of the
following: (a) to continue to exercise its option to renew this Lease for
the full expanded term at the Fair Market Rental Rate determined by
Appraiser or (b) to rescind its election to renew this lease in which event
this Lease shall expire on the scheduled expiration date then in effect
without regard to such renewal. The cost of the Appraiser shall be borne by
the party whose determination of Fair Market Rental Rate was not adopted by
the Appraiser.
For purposes of this Section "Appraiser" shall mean a certified commercial
real estate appraiser to be agreed upon by Landlord and Tenant with a
minimum of ten (10) years experience with similar asset types in the
Atlanta, Georgia north metro area provided that should Landlord and Tenant
be unable to agree upon a person to serve in such capacity then Landlord
and Tenant shall each choose a person meeting said qualifications and the
two so chosen shall select a third person meeting said qualifications who
shall thereupon serve as Appraiser Notwithstanding anything to the contrary
contained in this Lease, the dispute resolution provisions set forth in
this Section 46 and not the arbitration procedured set forth in Section 51
shall be utilized in determining the applicable "Fair Market Rental Rate"
in connection with any exercise by Tenant of a renewal option.
10
<PAGE>
47. Signage. Landlord shall provide at its cost (and without deduction from
Tenant's Tenant Improvements Allowance), a monument sign located on East
Paces Ferry Road with the Tenant's name and logo as described in and in
accordance with the specifications to be approved by Tenant. A depiction
of the signage agreed to by the parties is attached as Exhibit D.
48. Parking
(a) At no additional charge Tenant, its employees, customers and others
shall have the exclusive right to park in six (6) parking spaces in
front of the Building in a location approved by Tenant. Landlord shall
install signage in front of each of such parking spaces denoting the
exclusive and reserved status of such parking spaces, which signage
shall include Tenant's identification and logo as designated by
Tenant. Tenant shall have the right to enforce such exclusive rights,
including the right to remove or have towed any cars of vehicles
parking in such spaces in violation of this provision.
(b) at no additional charge Tenant, its employees and customers shall have
the non-exclusive right to park in any other parking spaces on the
Land not marked as exclusive or reserved. Landlord shall maintain a
parking ratio of at least 3 parking spaces per 1,000 square feet of
leased space, thereby entitling Tenant at all times to free parking in
at least 26 spaces on the land (including the reserved parking spaces
described in Section 48 (a) above) in reasonable locations for visitor
parking.
(c) Landlord agrees to cooperate with Tenant in the enforcement of
Tenant's parking rights granted in this Section taking such reasonable
measures as are necessary to enforce such parking rights.
49. Mandatory FDIC Rights. Notwithstanding any other provisions of this Lease,
in the event the Tenant or any financial institution or subsidiary thereof
operating in the Premises becomes insolvent or is placed in conservatorship
or receivership by its primary state or federal bank regulator or other
bank regulatory authority, Landlord may not terminate this Lease without
the prior consent of such regulator or authority. Any such regulator or
authority shall have the option to either (a) affirm this Lease (in which
event Landlord may not terminate this Lease) or (b) terminate this Lease.
If this Lease is terminated as allowed herein, notwithstanding any
provision in this Lease to the contrary, the maximum liability for such
termination shall be the unpaid Rent accrued through the date of
termination, up to the date of reentry of the Landlord or termination
without acceleration, it being acknowledged and agreed that Landlord, in
such event is not entitled to collect any Rent due in respect to any period
after the earlier of termination or reentry by Landlord.
50. Drive-Thru. Landlord agrees to grant Tenant unimpeded access to the drive-
thru banking window to be constructed on the Land as provided in Section
44. Tenant and its customers shall have the exclusive use of the drive-
thru window. Landlord shall install appropriate signage to indicate the
reserved status of such drive. No cars shall be allowed
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<PAGE>
to park in any manner which shall impede reasonable access to and through
the drive. Landlord agrees to cooperate reasonably with Tenant in the
enforcement of Tenant's rights in this Section 50. Tenant at its expense
may replace and/or remove the existing awning now covering a portion of
such drive.
51. Arbitration. Any dispute, controversy or claim arising out of or in
connection with, or relating to this Lease, upon the request of any party
involved, may be submitted to, and settled by, arbitration in the City of
Atlanta, State of Georgia, pursuant to the commercial arbitration rules
then in effect of the American Arbitration Association (or at any time or
at any other place or under any other form of arbitration mutually
acceptable to the parties so involved). Any award rendered shall be final
and conclusive upon the parties and a judgment thereon may be entered in
the highest court of the forum, state or federal, having jurisdiction. The
expenses of the arbitration shall be borne equally by the parties to the
arbitration, provided that each party shall pay for and bear the cost of
its own experts, evidence and counsel's fees, except that in the discretion
of the arbitrator, any award may include the cost of a party's counsel if
the arbitrator expressly determines that the party against whom such award
is entered has caused the dispute controversy or claim to be submitted to
arbitration as a dilatory tactic.
52. Landlord's Default and Tenant's Remedies. In the event Landlord defaults
in any of its obligations under this Lease, including without limitation
Landlord's satisfaction of Landlord's repairs and maintenance obligations,
and such failure continues for a period of thirty (30) days after written
notice of such failure, delivered by Tenant to Landlord, Tenant shall have
the right, but not the obligation, to do whatever Landlord is obligated to
do by the provisions of this Lease. Landlord agrees to reimburse Tenant
immediately upon demand for any reasonable expenses which Tenant may incur,
thus effecting compliance on behalf of Landlord.
53. Zoning Contingency. Landlord and Tenant acknowledge that the current
"zoning" for the Property does not permit a bank to operate from the
Premises. Landlord has filed a zoning application to rezone the Property
to permit a bank. If such rezoning is not accomplished by February 7,
1998, then Tenant shall have the right to terminate this Lease by notice to
Landlord received not later than February 11, 1998. If this Lease is
terminated as provided in this section, then Tenant shall be responsible to
pay to its contractors all costs and expenses of the Tenant Improvements in
place at such time without reimbursement from Landlord for the Tenant
Allowance. The foregoing notwithstanding, if Tenant's actual hard costs
for construction to date of termination equal or exceed $500,000.00,
Landlord shall reimburse Tenant the amount of $100,000.00.
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IN WITNESS WHEREOF, the parties have hereunto set their hands and seals the
day and year first above written.
Signed, sealed and delivered in the presence of:
TENANT
BUCKHEAD COMMUNITY BANCORP, INC.
By: /s/ R. Charles Loudermilk
______________________________ --------------------------------
Witness
____________________________________
Address
____________________________________
Phone
Signed, sealed and delivered LANDLORD
in the presence of: LONGPOINT INVESTORS, LTD.
By: /s/ John D. Margeson
______________________________ --------------------------------
Witness GENERAL PARTNER
____________________________________
Address
____________________________________
Phone
Signed, sealed and delivered BROKER
in the presence of: COLLIERS CAUBLE & COMPANY
______________________________
Witness By: _______________________________
____________________________________
Address
____________________________________
Phone
13
<PAGE>
EXHIBIT "B"
-----------
LAND
----
All that tract or parcel of land lying and being in the City of Atlanta in Land
Lot 61 of the 17th District, Fulton County, Georgia, being more particularly
described as follows:
BEGINNING at the corner formed by the southwesterly side of East Paces Ferry
Road and the northerly side of Buckhead Avenue, and running thence northwesterly
and then westerly, in a direction somewhat north of west, along the
southwesterly and southerly sides of East Paces Ferry Road, as the southwesterly
and southerly sides of East Paces Ferry Road were located prior to the warranty
deed dated July 1, 1964, recorded in Deed Book 4268, page 148, Fulton County
Records, from John M. Taulman and Mrs. Helen T. Waterman to Fulton County,
following the curvature thereof towards the west, 294.6 feet to the easterly
line of a parcel of land that was conveyed by Mrs. S. C. Sims to F. Marion
Thomason by a deed dated July 24, 1925, recorded in Deed Book 929, page 146,
Fulton county records; thence southerly, in a direction slightly east of south,
in a straight line, alone the easterly line of the parcel of land that was
conveyed to F. Marion Thomason as set out above and along the easterly line of a
parcel of land that was conveyed by William E. Arnaud to Mrs. Mabel O. Reeves by
a deed dated May 16, 1944, recorded in Deed Book 1986, page 395, Fulton County
records, forming a southeasterly angle of 59 degrees and 44 minutes with a
straight line running from the point of beginning to the point last run to,
208.5 feet to the northerly side of Buckhead Avenue; thence easterly in a
direction somewhat north of east, along the northerly side of Buckhead Avenue
following the slight curvature thereof towards the north, 258 feet to the corner
formed by the southwesterly side of East Paces Ferry Road and the northerly side
of Buckhead Avenue and the point of beginning;
LESS & EXCEPT property conveyed in Warranty Deed and Temporary Easement from
John M. Taulman and Mrs. Helen T. Waterman to Fulton County, dated July 1, 1964,
filed July 17, 1964, recorded in Deed Book 4268, page 148, Fulton County
Records.
14
<PAGE>
EXHIBIT "C"
-----------
MATTERS OF TITLE
1. Agreement by and between John M. Taulman, Helen Taulman Waterman, and the
City of Atlanta, dated March 12, 1964, filed March 17, 1964, recorded in
Deed Book 4106, Page 470, Fulton County, Georgia Records.
2. Easement in favor of Georgia Power Company, dated April 24, 1964, recorded
in Deed Book 4255, page 157, aforesaid records.
15
<PAGE>
October 3, 1997
Longpoint Investors, Ltd.
c/o John D. Margeson, General Partner
Suite 415
3109 Maple Drive
Atlanta, GA 30305
Re: Proposed lease agreement between Longpoint Investors, Ltd. (Landlord)
and Buckhead Community Bancorp, Inc. (Tenant) for space in building
located at 415 East Paces Ferry Road, Atlanta, Georgia dated July 30,
1997 (the "Lease Agreement")
Gentlemen:
As a principal organizer of Buckhead Community Bancorp, Inc., I have
requested that you, as Landlord, enter into the Lease Agreement with Tenant and
proceed with the work contemplated thereby immediately and in advance of the
completion of the organization of the bank subsidiary ("Bank") being organized
by Tenant and receipt by it of its bank charter.
In return for your agreement to do so, I unconditionally guarantee the
timely, full and faithful completion of the Tenant's Improvements called for
under the Lease Agreement. I also do hereby guarantee payment to you of the
monthly Base Rental required to be paid under the Lease Agreement for the period
from November 1, 1997 through April 1, 1998.
At such time as the organization of the Bank is completed, and it has
received its authorization to commence business, then and only then this
guaranty shall become null and void, and you shall look solely to Buckhead
Community Bancorp, Inc. for performance under the Lease Agreement.
Please signify your concurrence by signing the attached copy of this
letter.
Sincerely,
/s/ R. Charles Loudermilk, Sr.
R. Charles Loudermilk, Sr.
ACCEPTED:
LONGPOINT INVESTORS, LTD.
By: John D. Margeson
General Partner
Date: August 7, 1997
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITOR
We have issued our report dated September 26, 1997, accompanying the
financial statements of Buckhead Community Bancorp, Inc. as of and for the
period ending June 30, 1997, contained in the Registration Statement and
Prospectus. We consent to the use of the aforementioned report in the
Registration Statement and Prospectus, and to the use of our name as it appears
under the caption "Experts".
/s/ Mauldin & Jenkins, LLC
Atlanta, Georgia
October 7, 1997
