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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 1, 1995
----------------
CITI-BANCSHARES, INC.
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(Exact name of registrant as specified in its charter)
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Florida 0-18507 59-2298309
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
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1211 N. Boulevard West
Leesburg, Florida 34748
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(Addresses, including zip codes, of principal executive offices)
(904) 787-5111
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(Registrant's telephone numbers, including area code)
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ITEM 5. OTHER EVENTS.
On November 1, 1995, Citi-Bancshares, Inc. ("CBI") executed an Agreement
and Plan of Merger (the "Agreement"), dated as of October 20, 1995, with
Citizens First Bancshares, Inc. ("CFB") pursuant to which CFB will be acquired
by CBI. The Boards of Directors of CBI and CFB approved the Agreement and the
transactions contemplated thereby meetings held on October 19, 1995.
In accordance with the terms of the Agreement, CBI will acquire CFB
pursuant to a merger (the "Merger") of CFB with and into CBI as the surviving
entity. Also as a result of the Merger, each share of the $.10 par value
common stock of CFB ("CFB Common Stock") outstanding immediately prior to the
effective time of the Merger (as described in the Agreement, the "Effective
Time") will be converted into the right to receive that number of shares of the
$.01 par value common stock of CBI ("CBI Common Stock") equal to 425,000
divided by the number of shares of CFB Common Stock issued and outstanding at
the Effective Time, subject to possible adjustment upon the occurrence of
certain events.
The Agreement also prohibits CFB from paying any cash dividends with
respect to the CFB Common Stock.
The Merger is intended to constitute a tax-free reorganization under the
Internal Revenue Code of 1986, as amended, and to be accounted for as a pooling
of interests.
Consummation of the Merger is subject to various conditions, including
among others: (i) receipt of the approval by the shareholders of CFB of the
Agreement and the Merger as required under Florida law; (ii) receipt of certain
regulatory approvals, including that of the Board of Governors of the Federal
Reserve System; (iii) receipt of an opinion of counsel as to the tax-free
nature of certain aspects of the Merger; (iv) receipt of a satisfactory opinion
from an independent auditor to the effect that the Merger qualifies to be
accounted for as a pooling of interests; and (v) satisfaction of certain usual
conditions.
The Agreement and the Merger will be submitted for approval of CFB's
shareholders at a special meeting of CFB's shareholders. Prior to this
meeting, CBI will file a registration statement with the Securities and
Exchange Commission registering under the Securities Act of 1933, as amended,
the CBI Common Stock to be issued in exchange for the outstanding shares of
CFB. Such shares of CBI Common Stock will be offered to the CFB shareholders
pursuant to a prospectus that will also serve as a proxy statement for the CFB
shareholders' meeting.
For additional information regarding the Agreement, please refer to the
copy of the Agreement which is included as an Exhibit to this Current Report on
Form 8-K. The foregoing discussion is qualified in its entirety by reference
to such document.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
The exhibits listed in the Exhibit Index are filed as part of this Current
Report on Form 8-K.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CITI-BANCSHARES, INC.
(Registrant)
By: /s/ Ken W. Mullis
---------------------------
Name: Ken W. Mullis
Title: President and Chief Executive Officer
Date: November 7, 1995
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INDEX TO EXHIBITS
Sequential
Exhibit Page No.
- ------- ----------
A. Press Release dated November 2, 1995, announcing the execution
of the definitive Agreement and Plan of Merger ..................
B. Agreement and Plan of Merger dated as of October 20, 1995 .......
<PAGE> 6
EXHIBIT A
PRESS RELEASE
PRESS RELEASE
FOR IMMEDIATE RELEASE
9:00 A.M.
November 2, 1995
Contacts: Kenneth W. Mullis H. Reid Sides, Jr.
Citi-Bancshares, Inc. Citizens First Bancshares, Inc.
(904) 787-5111 (904) 732-2223
CITI-BANCSHARES, INC.
AND
CITIZENS FIRST BANCSHARES, INC.
TO MERGE
Citi-Bancshares, Inc. ("Citi-Bancshares"), Leesburg, Florida (Nasdaq NMS:
CNB), and Citizens First Bancshares, Inc. ("Citizens First"), Ocala, Florida,
announced the signing of a definitive Agreement and Plan of Merger whereby
Citizens First will merge with and into Citi-Bancshares in exchange for
Citi-Bancshares common stock. Citizens First's banking subsidiary, Citizens
First Bank of Ocala, will be merged with and into Citi-Bancshares' subsidiary,
Citizens National Bank of Leesburg.
The transaction is expected to be completed in the first quarter of 1996,
subject to applicable shareholder and regulatory approvals.
Mr. H. Reid Sides, Jr., President and Chief Executive Officer of Citizens
First, stated "We are pleased to announce our definitive agreement with
Citi-Bancshares and believe that this transaction is an outstanding opportunity
for our shareholders, customers and employees. We look forward to the merger
with Citi-Bancshares, which is a strong, local independent community banking
organization. Associating with Citi-Bancshares will
<PAGE> 7
allow us to keep decision making at the local level thereby retaining our
community bank philosophy and commitment to personalized banking."
Mr. Kenneth W. Mullis, President of Citi-Bancshares, stated "This is a
very attractive acquisition for Citi-Bancshares. The resulting organization
will be strongly capitalized and will retain its focus on personal service to
its customers and communities."
Citi-Bancshares is a $455 million asset bank holding company which,
through its subsidiary Citizens National Bank of Leesburg, provides a broad
range of banking, trust and financial services to commercial and individual
customers located in Lake, Marion and Sumter Counties in Central Florida.
Citi-Bancshares' headquarters are located at 1211 North Boulevard West,
Leesburg, Florida; telephone (904) 787-5111.
Citizens First is a $41 million asset bank holding company whose
subsidiary is Citizens First Bank of Ocala, Ocala, Florida.
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EXHIBIT B
AGREEMENT AND PLAN OF MERGER
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AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
CITIZENS FIRST BANCSHARES, INC.
AND
CITI-BANCSHARES, INC.
DATED AS OF OCTOBER 19, 1995
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TABLE OF CONTENTS
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Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Preamble . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 1 - TRANSACTIONS AND TERMS OF MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Time and Place of Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Effective Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.4 Bank Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 2 - TERMS OF MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.1 Charter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.2 Bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.3 Directors and Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 3 - MANNER OF CONVERTING SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3.1 Conversion of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3.2 Anti-Dilution Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.3 Shares Held by CFB or CBI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.4 Dissenting Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.5 Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE 4 - EXCHANGE OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4.1 Exchange Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4.2 Rights of Former CFB Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES OF CFB . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
5.1 Organization, Standing, and Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
5.2 Authority; No Breach By Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
5.3 Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
5.4 CFB Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
5.5 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
5.6 Absence of Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
5.7 Absence of Certain Changes or Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
5.8 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
5.9 Allowance for Possible Loan Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.10 Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.11 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.12 Compliance With Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.13 Labor Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.14 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.15 Material Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.16 Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.17 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.18 Statements True and Correct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.19 Accounting, Tax and Regulatory Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.20 State Takeover Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.21 Charter Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.22 Directors' Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.23 Shareholders' Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.24 Federal Home Loan Bank of Atlanta . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.25 Real Estate/Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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ARTICLE 6 - REPRESENTATIONS AND WARRANTIES OF CBI . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.1 Organization, Standing, and Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.2 Authority; No Breach By Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.3 Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.4 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.5 Absence of Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.6 Absence of Certain Changes or Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.7 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.8 Compliance With Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.9 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.10 Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.11 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.12 Statements True and Correct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.13 Accounting, Tax and Regulatory Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.14 Labor Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.15 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
6.16 Allowance for Possible Loan Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
6.17 Material Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE 7 - CONDUCT OF BUSINESS PENDING CONSUMMATION . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.1 Affirmative Covenants of CFB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.2 Negative Covenants of CFB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
7.3 Covenants of CBI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
7.4 Adverse Changes in Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
7.5 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE 8 - ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8.1 Registration Statement; Proxy Statement; Shareholder Approval . . . . . . . . . . . . . . . . . 20
8.2 Exchange Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8.3 Applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8.4 Filings with State Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8.5 Agreement as to Efforts to Consummate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8.6 Investigation and Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8.7 Press Releases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8.8 Certain Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8.9 Accounting and Tax Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.10 State Takeover Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.11 Charter Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.12 Agreements of Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.13 Employee Benefits and Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.14 Certain Policies of CFB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.15 Real Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.16 Director and Officer Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE 9 - CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE . . . . . . . . . . . . . . . . . . . . . . 23
9.1 Conditions to Obligations of Each Party . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
9.2 Conditions to Obligations of CBI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
9.3 Conditions to Obligations of CFB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE 10 - TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
10.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
10.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
10.3 Non-Survival of Representations and Covenants . . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE 11 - MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
11.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
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11.2 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.3 Brokers and Finders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.4 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.5 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.6 Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
11.7 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
11.8 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
11.9 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
11.10 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
11.11 Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
11.12 Interpretations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
11.13 Enforcement of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
11.14 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
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<PAGE> 13
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and
entered into as of October 19, 1995, by and between CITIZENS FIRST BANCSHARES,
INC. ("CFB"), a Florida corporation having its principal office located in
Ocala, Florida; and CITI-BANCSHARES, INC. ("CBI"), a Florida corporation having
its principal office located in Leesburg, Florida.
PREAMBLE
The Boards of Directors of CFB and CBI are of the opinion that the
transactions described herein are in the best interests of the parties and
their respective shareholders. This Agreement provides for the acquisition of
CFB by CBI pursuant to the Merger (as defined below) of CFB with and into CBI.
At the effective time of such Merger, the outstanding shares of the capital
stock of CFB shall be converted into the right to receive shares of the common
stock of CBI (except as provided herein). As a result, shareholders of CFB
shall become shareholders of CBI and CBI shall continue to conduct the business
and operations of CFB. The transactions described in this Agreement are
subject to the approvals of the shareholders of CFB, the Board of Governors of
the Federal Reserve System, the Office of the Comptroller of the Currency, the
Florida State Banking Department and other necessary authorities, and the
satisfaction of certain other conditions described in this Agreement. It is
the intention of the parties to this Agreement that the Merger for federal
income tax purposes shall qualify as a "reorganization" within the meaning of
Section 368(a) of the Internal Revenue Code, and for accounting purposes shall
qualify for treatment as a pooling of interests.
Following the Closing of the Merger, Citizens First Bank of Ocala ("CFBO"),
a wholly-owned Florida state bank subsidiary of CFB, will be merged (the "Bank
Merger") with Citizens National Bank of Leesburg ("CNBL"), a wholly-owned
subsidiary of CBI.
Certain terms used in this Agreement are defined in Section 11.1 of this
Agreement.
NOW, THEREFORE, in consideration of the above and the mutual
warranties, representations, covenants and agreements set forth herein, the
parties agree as follows:
ARTICLE 1
TRANSACTIONS AND TERMS OF MERGER
1.1 Merger. Subject to the terms and conditions of this Agreement, at
the Effective Time, CFB shall be merged with and into CBI in accordance with
the provisions of Section 607.1101 of the FBCA and with the effect provided in
Section 607.1106 of the FBCA (the "Merger"). CBI shall be the Surviving
Corporation resulting from the Merger and shall continue to be governed by the
Laws of the State of Florida. The Merger shall be consummated pursuant to the
terms of this Agreement, which has been approved and adopted by the respective
Boards of Directors of CFB and CBI.
1.2 TIME AND PLACE OF CLOSING. The Closing will take place at 9:00
A.M. on the date that the Effective Time occurs (or the immediately preceding
day if the Effective Time is earlier than 9:00 A.M.), or at such other time as
the Parties, acting through their chief executive officers or chief financial
officers, may mutually agree. The place of Closing shall be at the offices of
Alston & Bird, Atlanta, Georgia, or such other place as may be mutually agreed
upon by the Parties.
1.3 EFFECTIVE TIME. The Merger and other transactions contemplated by
this Agreement shall become effective on the date and at the time the Articles
of Merger reflecting the Merger shall become effective with the Secretary of
State of the State of Florida (the "Effective Time"). Subject to the terms and
conditions hereof, unless
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otherwise mutually agreed upon in writing by the chief executive officers or
chief financial officers of each Party, the Parties shall use their reasonable
efforts to cause the Effective Time to occur on (a) the last business day of
the month in which occurs the last to occur of (i) the effective date
(including expiration of any applicable waiting period) of the last required
Consent of any Regulatory Authority having authority over and approving or
exempting the Merger, and (ii) the date on which the shareholders of CFB
approve this Agreement to the extent such approval is required by applicable
Law or (b) such later date within 30 days thereof as may be specified by CBI.
1.4 BANK MERGER. Following the Merger, CFBO shall (at CBI's
discretion) be merged with CNBL (the "Bank Merger") under the Charter and
Articles of Association of CNBL in accordance with the provisions of and with
the effect provided in Title 12, United States Code, Section 215a on terms and
subject to the provisions of the Bank Plan of Merger ("Bank Plan"), attached
hereto as Exhibit 1. The Bank Plan shall be executed and the transactions
contemplated therein shall be consummated at such date and time as CBI directs
(the "Bank Merger Effective Time"). CFB shall vote all the shares of CFBO
capital stock in favor of the Bank Plan and the Bank Merger provided therein.
ARTICLE 2
TERMS OF MERGER
2.1 CHARTER. The Articles of Incorporation of CBI in effect
immediately prior to the Effective Time shall be the Articles of Incorporation
of the Surviving Corporation until otherwise amended or repealed.
2.2 BYLAWS. The Bylaws of CBI in effect immediately prior to the
Effective Time shall be the Bylaws of the Surviving Corporation until otherwise
amended or repealed.
2.3 DIRECTORS AND OFFICERS. The directors of CBI in office
immediately prior to the Effective Time, together with such additional persons
as may thereafter be elected, shall serve as the directors of the Surviving
Corporation from and after the Effective Time in accordance with the Bylaws of
the Surviving Corporation. The officers of CBI in office immediately prior to
the Effective Time, together with such additional persons as may thereafter be
elected, shall serve as the officers of the Surviving Corporation from and
after the Effective Time in accordance with the Bylaws of the Surviving
Corporation.
ARTICLE 3
MANNER OF CONVERTING SHARES
3.1 Conversion of Shares. Subject to the provisions of this
Article 3, at the Effective Time, by virtue of the Merger and without any
action on the part of CBI, CFB, or the shareholders of any of the
foregoing, the shares of the constituent corporations shall be converted as
follows:
(a) Each share of CBI Capital Stock issued and outstanding
immediately prior to the Effective Time shall remain issued and
outstanding from and after the Effective Time.
(b) Each share of CFB Common Stock (excluding shares held by any
CFB Company or any CBI Company, in each case other than in a
fiduciary capacity or as a result of debts previously contracted, and
excluding shares held by shareholders who perfect their statutory
dissenters' rights as provided in Section 3.4 of this Agreement)
issued and outstanding at the Effective Time shall cease to be
outstanding and shall be converted into and exchanged solely for the
right to receive that number of shares of CBI Common Stock equal to
425,000 divided by the number of shares of CFB Common Stock issued and
outstanding at the Effective Time (the "Exchange Ratio").
3.2 Anti-Dilution Provisions. In the event CFB or CBI changes the
number of shares of CFB Common Stock or CBI Common Stock, respectively, issued
and outstanding prior to the Effective Time as a result of a stock
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split, stock dividend, or similar recapitalization with respect to such
stock and the record date therefor (in the case of a stock dividend) or the
effective date thereof (in the case of a stock split or similar
recapitalization for which a record date is not established) shall be
prior to the Effective Time, the Exchange Ratio shall be proportionately
adjusted.
3.3 Shares Held by CFB or CBI. Each of the shares of CFB Common
Stock held by any CFB Company or by any CBI Company, in each case other
than in a fiduciary capacity or as a result of debts previously
contracted, shall be canceled and retired at the Effective Time and no
consideration shall be issued in exchange therefor.
3.4 Dissenting Shareholders. Any holder of shares of CFB Common
Stock who perfects his dissenters' rights in accordance with and as
contemplated by Section 607.1301 et seq. of the FBCA shall be entitled to
receive the value of such shares in cash as determined pursuant to such
provision of Law; provided, that no such payment shall be made to any
dissenting shareholder unless and until such dissenting shareholder has
complied with the applicable provisions of the FBCA and surrendered to CFB
the certificate or certificates representing the shares for which payment is
being made. In the event that after the Effective Time a dissenting
shareholder of CFB fails to perfect, or effectively withdraws or loses, his
right to appraisal and of payment for his shares, CBI shall issue and
deliver the consideration to which such holder of shares of CFB Common Stock
is entitled under this Article 3 (without interest) upon surrender by such
holder of the certificate or certificates representing shares of CFB Common
Stock held by him.
3.5 Fractional Shares. Notwithstanding any other provision of this
Agreement, each holder of shares of CFB Common Stock exchanged pursuant to
the Merger who would otherwise have been entitled to receive a fraction of
a share of CBI Common Stock (after taking into account all certificates
delivered by such holder) shall receive, in lieu thereof, cash (without
interest) in an amount equal to such fractional part of a share of CBI Common
Stock multiplied by the market value of one share of CBI Common Stock at
the Effective Time. The market value of one share of CBI Common Stock at the
Effective Time shall be the last sale price of such common stock on the
Nasdaq National Market (as reported by The Wall Street Journal or, if
not reported thereby, any other authoritative source) on the last trading
day preceding the Effective Time. No such holder will be entitled to
dividends, voting rights, or any other rights as a shareholder in respect of
any fractional shares.
ARTICLE 4
EXCHANGE OF SHARES
4.1 Exchange Procedures. Promptly after the Effective Time, CBI
and CFB shall cause the exchange agent selected by CBI (the "Exchange
Agent") to mail to the former shareholders of CFB appropriate
transmittal materials (which shall specify that delivery shall be effected,
and risk of loss and title to the certificates theretofore representing shares
of CFB Common Stock shall pass, only upon proper delivery of such
certificates to the Exchange Agent). After the Effective Time, each
holder of shares of CFB Common Stock (other than shares to be canceled
pursuant to Section 3.3 of this Agreement or as to which statutory
dissenters' rights have been perfected as provided in Section 3.4 of this
Agreement) issued and outstanding at the Effective Time shall surrender the
certificate or certificates representing such shares to the Exchange Agent
and shall promptly upon surrender thereof receive in exchange therefor the
consideration provided in Section 3.1 of this Agreement, together with
all undelivered dividends or distributions in respect of such shares
(without interest thereon) pursuant to Section 4.2 of this Agreement. To
the extent required by Section 3.5 of this Agreement, each holder of shares
of CFB Common Stock issued and outstanding at the Effective Time also shall
receive, upon surrender of the certificate or certificates representing such
shares, cash in lieu of any fractional share of CBI Common Stock to which
such holder may be otherwise entitled (without interest). CBI shall not be
obligated to deliver the consideration to which any former holder of CFB
Common Stock is entitled as a result of the Merger until such holder
surrenders his certificate or certificates representing the shares of CFB
Common Stock for exchange as provided in this Section 4.1. The certificate
or certificates of CFB Common Stock so surrendered shall be duly endorsed
and/or accompanied by such transmittal materials as the Exchange Agent may
require. Any other provision of this
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Agreement notwithstanding, neither CBI, the Surviving Corporation nor the
Exchange Agent shall be liable to a holder of CFB Common Stock for any
amounts paid or property delivered in good faith to a public official
pursuant to any applicable abandoned property Law.
4.2 Rights of Former CFB Shareholders. At the Effective Time, the
stock transfer books of CFB shall be closed as to holders of CFB Common Stock
immediately prior to the Effective Time, and no transfer of CFB Common Stock
by any such holder shall thereafter be made or recognized. Until
surrendered for exchange in accordance with the provisions of Section 4.1 of
this Agreement, each certificate theretofore representing shares of CFB
Common Stock (other than shares to be canceled pursuant to Sections 3.3
and 3.4 of this Agreement) shall from and after the Effective Time represent
for all purposes only the right to receive the consideration provided in
Sections 3.1 and 3.5 of this Agreement in exchange therefor, subject,
however, to the Surviving Corporation's obligation to pay any dividends or
make any other distributions with a record date prior to the Effective Time
which have been declared or made by CFB in respect of such shares of CFB
Common Stock in accordance with the terms of this Agreement and which remain
unpaid at the Effective Time. Whenever a dividend or other distribution is
declared by CBI on the CBI Common Stock, the record date for which is at or
after the Effective Time, the declaration shall include dividends or other
distributions on all shares issuable pursuant to this Agreement, but
after the Effective Time no dividend or other distribution payable to
the holders of record of CBI Common Stock as of any time subsequent to the
Effective Time shall be delivered to the holder of any certificate
representing shares of CFB Common Stock issued and outstanding at the
Effective Time until such holder surrenders such certificate for exchange as
provided in Section 4.1 of this Agreement. However, upon surrender of such
CFB Common Stock certificate, both the CBI Common Stock certificate (together
with all such undelivered dividends or other distributions, all without
interest) and any undelivered cash payments to be paid for fractional
share interests (without interest) shall be delivered and paid with respect
to each share represented by such certificate.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF CFB
CFB hereby represents and warrants to CBI as follows:
5.1 Organization, Standing, and Power. CFB is a corporation duly
organized, validly existing, and in good standing under the Laws of the State
of Florida, and has the corporate power and authority to carry on its
business as now conducted and to own, lease and operate its Assets. CFB is
duly qualified or licensed to transact business as a foreign corporation in
good standing in the States of the United States and foreign jurisdictions
where the character of its Assets or the nature or conduct of its business
requires it to be so qualified or licensed, except for such jurisdictions in
which the failure to be so qualified or licensed is not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on CFB.
5.2 Authority; No Breach By Agreement.
(a) CFB has the corporate power and authority necessary to
execute, deliver, and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby. The execution, delivery, and
performance of this Agreement and the consummation of the transactions
contemplated herein, including the Mergers, have been duly and validly
authorized by all necessary corporate action in respect thereof on the part of
CFB, subject to the approval of this Agreement by the holders of a majority of
the outstanding CFB Common Stock, which is the only shareholder vote required
for approval of this Agreement and consummation of the Merger by CFB. Subject
to such requisite shareholder approval, this Agreement represents a legal,
valid, and binding obligation of CFB, enforceable against CFB in accordance
with its terms (except in all cases as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, or similar Laws
affecting the enforcement of creditors' rights generally and except that the
availability of the equitable remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any proceeding
may be brought).
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(b) Neither the execution and delivery of this Agreement by CFB,
nor the consummation by CFB and of the transactions contemplated hereby, nor
compliance by CFB with any of the provisions hereof, will (i) conflict
with or result in a breach of any provision of CFB's Articles of Incorporation
or Bylaws or, or (ii) constitute or result in a Default under, or require
any Consent pursuant to, or result in the creation of any Lien on any
Asset of any CFB Company under, any Contract or Permit of any CFB
Company, or (iii) subject to receipt of the requisite approvals referred to
in Section 9.1(b) of this Agreement, violate any Law or Order applicable to
any CFB Company or any of their respective material Assets.
(c) Other than in connection or compliance with the
provisions of the Securities Laws, applicable state corporate and
securities Laws, and other than Consents required from Regulatory
Authorities, and other than notices to or filings with the Internal
Revenue Service or the Pension Benefit Guaranty Corporation with respect
to any employee benefit plans, or under, and other than Consents,
filings, or notifications which, if not obtained or made, are not
reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on CFB, no notice to, filing with, or Consent of, any public
body or authority is necessary for the consummation by CFB of the Merger and
the other transactions contemplated in this Agreement.
5.3 Capital Stock.
(a) The authorized capital stock of CFB consists of 750,000
shares of CFB Common Stock, of which 304,480 shares are issued and outstanding
as of the date of this Agreement and not more than 322,480 shares will be
issued and outstanding at the Effective Time. All of the issued and
outstanding shares of capital stock of CFB are duly and validly issued and
outstanding and are fully paid and nonassessable. None of the outstanding
shares of capital stock of CFB has been issued in violation of any
preemptive rights of the current or past shareholders of CFB. CFB has
reserved 50,000 shares of CFB Common Stock for issuance under the CFB Stock
Plan, pursuant to which options to purchase not more than 18,000 shares of
CFB Common Stock are outstanding.
(b) Except as set forth in Section 5.3(a) of this Agreement or
as disclosed in Section 5.3 of the CFB Disclosure Memorandum, there are no
shares of capital stock or other equity securities of CFB outstanding and
no outstanding Rights relating to the capital stock of CFB.
5.4 CFB Subsidiaries. CFB has disclosed in Section 5.4 of the CFB
Disclosure Memorandum all of the CFB Subsidiaries as of the date of this
Agreement. Except as disclosed in Section 5.4 of the CFB Disclosure
Memorandum, CFB or one of its Subsidiaries owns all of the issued and
outstanding shares of capital stock of each CFB Subsidiary. No equity
securities of any CFB Subsidiary are or may become required to be issued by
reason of any Rights, and there are no Contracts by which any CFB Subsidiary
is bound to issue (other than to another CFB Company) additional shares of
its capital stock or Rights or by which any CFB Company is or may be bound
to transfer any shares of the capital stock of any CFB Subsidiary (other
than to another CFB Company). There are no Contracts relating to the
rights of any CFB Company to vote or to dispose of any shares of the
capital stock of any CFB Subsidiary. All of the shares of capital stock of
each CFB Subsidiary are held by a CFB Company, and are fully paid and
(except pursuant to 12 USC Section 55 in the case of national banks and
comparable, applicable state Law, if any, in the case of state depository
institutions) nonassessable and are owned by the CFB Company free and clear
of any Lien. Each CFB Subsidiary is either a bank, a savings association,
or a corporation, and is duly organized, validly existing, and (as to
corporations) in good standing under the Laws of the jurisdiction in which
it is incorporated or organized, and has the corporate power and authority
necessary for it to own, lease, and operate its Assets and to carry on its
business as now conducted. Each CFB Subsidiary is duly qualified or licensed
to transact business as a foreign corporation in good standing in the
States of the United States and such foreign jurisdictions where the
character of its Assets or the nature or conduct of its business requires it
to be so qualified or licensed, except for such jurisdictions in which the
failure to be so qualified or licensed is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on CFB. Each CFB
Subsidiary that is a depository institution is an "insured institution" as
defined in the Federal Deposit Insurance Act and applicable regulations
thereunder, and the deposits in which are insured by the Bank Insurance Fund.
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5.5 Financial Statements. CFB has included in Section 5.5 of the
CFB Disclosure Memorandum, copies of all CFB Financial Statements for periods
ended prior to the date hereof and will deliver to CBI copies of all CFB
Financial Statements prepared subsequent to the date hereof. The CFB
Financial Statements (as of the dates thereof and for the periods covered
thereby) (i) are or, if dated after the date of this Agreement, will be in
accordance with the books and records of the CFB Companies, which are or will
be, as the case may be, complete, correct maintained in accordance with
good business practices, and (ii) present or will present, as the case may
be, fairly the consolidated financial position of the CFB Companies as of the
dates indicated and the consolidated results of operations, changes in
shareholders' equity and cash flows of the CFB Companies for the periods
indicated, in accordance with GAAP (subject to any exceptions as to
consistency specified therein or as may be indicated in the notes
thereto or, in the case of interim financial statements, to normal
recurring year-end adjustments that are not material in amount or effect).
5.6 Absence of Undisclosed Liabilities. No CFB Company has any
Liabilities that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on CFB, except Liabilities which are
accrued or reserved against in the consolidated balance sheets of CFB as of
December 31, 1994 and June 30, 1995, included in the CFB Financial Statements
delivered prior to the date of this Agreement or reflected in the notes
thereto. No CFB Company has incurred or paid any Liability since June 30,
1995, except for such Liabilities incurred or paid in the ordinary course of
business consistent with past business practice and which are not reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
CFB.
5.7 Absence of Certain Changes or Events. Since December 31, 1994,
except as disclosed in the CFB Financial Statements delivered prior to the date
of this Agreement or as disclosed in Section 5.7 of the CFB Disclosure
Memorandum, (i) there have been no events, changes, or occurrences which have
had, or are reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on CFB, and (ii) the CFB Companies have not taken any
action, or failed to take any action, prior to the date of this Agreement,
which action or failure, if taken after the date of this Agreement, would
represent or result in a material breach or violation of any of the covenants
and agreements of CFB provided in Article 7 of this Agreement.
5.8 Tax Matters.
(a) All Tax returns required to be filed by or on behalf of any
of the CFB Companies have been timely filed or requests for extensions have
been timely filed, granted, and have not expired for periods ended on or
before December 31, 1994, and on or before the date of the most recent
fiscal year end immediately preceding the Effective Time, and all returns
filed are complete and accurate to the Knowledge of CFB. All Taxes shown on
filed returns have been paid. As of the date of this Agreement, there is no
audit examination, deficiency, or refund Litigation with respect to any
Taxes, except as reserved against in the CFB Financial Statements or as
disclosed in Section 5.8 of the CFB Disclosure Memorandum. All Taxes and
other Liabilities due with respect to completed and settled examinations or
concluded Litigation have been paid.
(b) None of the CFB Companies has executed an extension or
waiver of any statute of limitations on the assessment or collection of any Tax
due (excluding such statutes that relate to years currently under examination
by the Internal Revenue Service or other applicable taxing authorities)
that is currently in effect.
(c) Adequate provision for any Taxes due or to become due for
any of the CFB Companies for the period or periods through and including the
date of the respective CFB Financial Statements has been made and is reflected
on such CFB Financial Statements.
(d) Deferred Taxes of the CFB Companies have been provided for in
accordance with GAAP.
(e) Each of the CFB Companies is in compliance with, and its
records contain all information and documents (including properly completed
IRS Forms W-9) necessary to comply with, all applicable information reporting
and Tax withholding requirements under federal, state, and local Tax
Laws, and such records identify with specificity all accounts subject to
backup withholding under Section 3406 of the Internal Revenue Code.
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(f) CFB has not made any payments, is not obligated to make any
payments, and is not a party to any contract, agreement or other arrangement
that obligate it to make any payments that would be deemed not deductible
under Section 280G of the Internal Revenue Code.
(g) There are no Liens with respect to Taxes previously due and
payable upon any of the assets of CFB or any of its Subsidiaries.
(h) There has not been an ownership change, as defined in
Internal Revenue Code Section 382(g), of CFB or any of its Subsidiaries that
occurred during or after any Taxable Period in which CFB or any of its
Subsidiaries incurred a net operating loss that carries over to any Taxable
Period ending after December 31, 1994.
(i) Neither CFB nor any of its Subsidiaries has filed any
consent under Section 341(f) of the Internal Revenue Code concerning
collapsible corporations.
5.9 Allowance for Possible Loan Losses. The allowance for
possible loan or credit losses (the "Allowance") shown on the
consolidated balance sheets of CFB included in the most recent CFB
Financial Statements dated prior to the date of this Agreement was, and the
Allowance shown on the consolidated balance sheets of CFB included in the
CFB Financial Statements as of dates subsequent to the execution of this
Agreement will be, as of the dates thereof, adequate (within the meaning of
GAAP and applicable regulatory requirements or guidelines) to provide for
losses relating to or inherent in the loan and lease portfolios (including
accrued interest receivables) of the CFB Companies and other extensions of
credit (including letters of credit and commitments to make loans or extend
credit) by the CFB Companies as of the dates thereof.
5.10 Assets. Except as disclosed in Section 5.10 of the
CFB Disclosure Memorandum or as disclosed or reserved against in the CFB
Financial Statements delivered prior to the date of this Agreement, the CFB
Companies have good and marketable title, free and clear of all Liens, to
all of their respective Assets. All tangible properties used in the
businesses of the CFB Companies are in good condition, reasonable wear
and tear excepted, and are usable in the ordinary course of business
consistent with CFB's past practices. All Assets which are material to CFB's
business on a consolidated basis, held under leases or subleases by any of the
CFB Companies, are held under valid Contracts enforceable in accordance with
their respective terms (except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, or other Laws
affecting the enforcement of creditors' rights generally and except that the
availability of the equitable remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any proceedings
may be brought), and each such Contract is in full force and effect. The CFB
Companies currently maintain insurance similar in amounts, scope, and
coverage to that maintained by other peer banking organizations. None of
the CFB Companies has received notice from any insurance carrier that (i)
such insurance will be canceled or that coverage thereunder will be reduced
or eliminated, or (ii) premium costs with respect to such policies of
insurance will be substantially increased. There are presently no claims
pending under such policies of insurance and no notices have been given by
any CFB Company under such policies. The Assets of the CFB Companies include
all assets required to operate the business of the CFB Companies as presently
conducted.
5.11 Environmental Matters.
(a) To the Knowledge of CFB, each CFB Company, its
Participation Facilities, and its Loan Properties are, and have been, in
compliance with all Environmental Laws.
(b) To the Knowledge of CFB, there is no Litigation pending
or threatened before any court, governmental agency, or authority or other
forum in which any CFB Company or any of its Participation Facilities
has been or, with respect to threatened Litigation, may be named as a
defendant (i) for alleged noncompliance (including by any predecessor) with
any Environmental Law or (ii) relating to the release into the environment of
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any Hazardous Substance, whether or not occurring at, on, under, or
involving a site owned, leased, or operated by any CFB Company or any of its
Participation Facilities.
(c) To the Knowledge of CFB, there is no Litigation pending
or threatened before any court, governmental agency, or board or other forum
in which any of its Loan Properties (or CFB in respect of such Loan
Property) has been or, with respect to threatened Litigation, may be named as
a defendant or potentially responsible party (i) for alleged noncompliance
(including by any predecessor) with any Environmental Law or (ii) relating to
the release into the environment of any Hazardous Substance, whether or not
occurring at, on, under, or involving a Loan Property.
(d) To the Knowledge of CFB, there is no reasonable basis for any
Litigation of a type described in subsections (b) or (c).
(e) During the period of (i) any CFB Company's ownership or
operation of any of their respective current properties, (ii) any CFB
Company's participation in the management of any Participation Facility or
(iii) any CFB Company's holding of a security interest in a Loan Property,
there have been no releases of Hazardous Substances in, on, under, or
affecting such properties, except such as are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on CFB. Prior to
the period of (i) any CFB Company's ownership or operation of any of their
respective current properties, (ii) any CFB Company's participation in the
management of any Participation Facility or (iii) any CFB Company's
holding of a security interest in a Loan Property, to the Knowledge of CFB,
there were no releases of Hazardous Substances in, on, under, or affecting any
such property, Participation Facility or Loan Property.
5.12 Compliance with Laws. CFB is duly registered as a bank
holding company under the BHC Act and Florida Law. Each CFB Company has in
effect all Permits necessary for it to own, lease, or operate its material
Assets and to carry on its business as now conducted, except for those Permits
the absence of which are not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on CFB, and there has occurred no
Default under any such Permit. Except as disclosed in Section 5.12 of
the CFB Disclosure Memorandum, none of the CFB Companies:
(a) is in violation of any Laws, Orders or Permits
applicable to its business or employees conducting its business; and
(b) has received any notification or communication from any
agency or department of federal, state, or local government or any
Regulatory Authority or the staff thereof (i) asserting that any CFB
Company is not in compliance with any of the Laws or Orders which
such governmental authority or Regulatory Authority enforces, (ii)
threatening to revoke any Permits or (iii) requiring any CFB
Company to enter into or consent to the issuance of a cease and
desist order, formal agreement, directive, commitment, or memorandum
of understanding, or to adopt any Board resolution or similar
undertaking, which restricts materially the conduct of its business,
or in any manner relates to its capital adequacy, its credit or reserve
policies, its management, or the payment of dividends.
5.13 Labor Relations. No CFB Company is the subject of any
Litigation asserting that it or any other CFB Company has committed an unfair
labor practice (within the meaning of the National Labor Relations Act or
comparable state law) or seeking to compel it or any other CFB Company to
bargain with any labor organization as to wages or conditions of
employment, nor is there any strike or other labor dispute involving any
CFB Company, pending or threatened, or to the Knowledge of CFB, is there any
activity involving any CFB Company's employees seeking to certify a
collective bargaining unit or engaging in any other organization activity.
5.14 Employee Benefit Plans.
(a) CFB has disclosed in Section 5.14 of the CFB Disclosure
Memorandum, and has delivered or made available to CBI prior to the
execution of this Agreement copies in each case of, all pension,
retirement,
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profit-sharing, deferred compensation, stock option, employee stock
ownership, severance pay, vacation, bonus, or other incentive plan, all
other written employee programs, arrangements, or agreements, all medical,
vision, dental, or other health plans, all life insurance plans, and all
other employee benefit plans or fringe benefit plans, including "employee
benefit plans" as that term is defined in Section 3(3) of ERISA, currently
adopted, maintained by, sponsored in whole or in part by, or contributed
to by any CFB Company or Affiliate thereof for the benefit of
employees, retirees, dependents, spouses, directors, independent
contractors, or other beneficiaries and under which employees, retirees,
dependents, spouses, directors, independent contractors, or other
beneficiaries are eligible to participate (collectively, the "CFB Benefit
Plans"). Any of the CFB Benefit Plans which is an "employee pension benefit
plan," as that term is defined in Section 3(2) of ERISA, is referred to
herein as a "CFB ERISA Plan." Each CFB ERISA Plan which is also a "defined
benefit plan" (as defined in Section 414(j) of the Internal Revenue Code) is
referred to herein as a "CFB Pension Plan." Except as disclosed in Section
5.14 of the CFB Disclosure Memorandum, no CFB Pension Plan is or has been a
multiemployer plan within the meaning of Section 3(37) of ERISA.
(b) Except as disclosed in Section 5.14 of the CFB Disclosure
Memorandum, all CFB Benefit Plans are in compliance with the applicable
terms of ERISA, the Internal Revenue Code, including the 1986 amendments
thereto, and any other applicable Laws the breach or violation of which are
reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on CFB. Except as disclosed in Section 5.14 of the CFB
Disclosure Memorandum, each CFB ERISA Plan which is intended to be
qualified under Section 401(a) of the Internal Revenue Code has received a
favorable determination letter from the Internal Revenue Service, and CFB is
not aware of any circumstances likely to result in revocation of any such
favorable determination letter. To the Knowledge of CFB, no CFB Company has
engaged in a transaction with respect to any CFB Benefit Plan that, assuming
the taxable period of such transaction expired as of the date hereof, would
subject any CFB Company to a Tax imposed by either Section 4975 of the
Internal Revenue Code or Section 502(i) of ERISA in amounts which are
reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on CFB.
(c) No CFB Pension Plan has any "unfunded current liability," as
that term is defined in Section 302(d)(8)(A) of ERISA, and the fair market
value of the assets of any such plan exceeds the plan's "benefit liabilities,"
as that term is defined in Section 4001(a)(16) of ERISA, when determined under
actuarial factors that would apply if the plan terminated in accordance with
all applicable legal requirements and assuming the adoption of interest rates
and mortality tables described in Section 417(e)(3)(A)(i) and the use of such
interest rates published in June 1995, and assuming that all participants take
a lump sum distribution of their vested accrued benefits on June 30, 1995.
Since the date of the most recent actuarial valuation, there has been (i) no
material change in the financial position of any CFB Pension Plan, (ii) no
change in the actuarial assumptions with respect to any CFB Pension Plan, and
(iii) no increase in benefits under any CFB Pension Plan as a result of plan
amendments or changes in applicable Law which is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on CFB or
materially adversely affect the funding status of any such plan. Neither any
CFB Pension Plan nor any "single-employer plan," within the meaning of Section
4001(a)(15) of ERISA, currently or formerly maintained by any CFB Company, or
the single-employer plan of any entity which is considered one employer with
CFB under Section 4001 of ERISA or Section 414 of the Internal Revenue Code or
Section 302 of ERISA (whether or not waived) (an "ERISA Affiliate") has an
"accumulated funding deficiency" within the meaning of Section 412 of the
Internal Revenue Code or Section 302 of ERISA. No CFB Company has provided, or
is required to provide, security to a CFB Pension Plan or to any
single-employer plan of an ERISA Affiliate pursuant to Section 401(a)(29) of
the Code.
(d) Within the six-year period preceding the Effective Time, no
Liability under Subtitle C or D of Title IV of ERISA has been or is expected
to be incurred by any CFB Company with respect to any ongoing, frozen, or
terminated single-employer plan or the single-employer plan of any ERISA
Affiliate. No CFB Company has incurred any withdrawal Liability with
respect to a multiemployer plan under Subtitle B of Title IV of ERISA
(regardless of whether based on contributions of an ERISA Affiliate). No
notice of a "reportable event," within the meaning of Section 4043 of ERISA
for which the 30-day reporting requirement has not been waived, has been
required to be filed for any CFB Pension Plan or by any ERISA Affiliate
within the 12-month period ending on the date hereof.
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(e) Except as disclosed in Section 5.14 of the CFB Disclosure
Memorandum, no CFB Company has any Liability for retiree health and life
benefits under any of the CFB Benefit Plans and there are no
restrictions on the rights of such CFB Company to amend or terminate any
such Plan without incurring any Liability thereunder.
(f) Except as disclosed in Section 5.14 of the CFB Disclosure
Memorandum, neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) result in any
payment (including severance, unemployment compensation, golden parachute, or
otherwise) becoming due to any director, officer or employee of any CFB
Company from any CFB Company under any CFB Benefit Plan or otherwise, (ii)
increase any benefits otherwise payable under any CFB Benefit Plan, or
(iii) result in any acceleration of the time of payment or vesting of any such
benefit.
(g) All liabilities under any CFB benefit plan, other than
benefits accrued pursuant to funded retirement plans subject to the
provisions of Section 412 of the Internal Revenue Code or Section 302 of
ERISA, have been fully reflected on the CFB Financial Statements to the extent
required by and in accordance with GAAP.
5.15 Material Contracts. Except as disclosed in Section 5.15 of
the CFB Disclosure Memorandum or otherwise reflected in the CFB Financial
Statements, none of the CFB Companies, nor any of their respective Assets,
businesses, or operations, is a party to, or is bound or affected by, or
receives benefits under, (i) any employment, severance, termination,
consulting, or retirement Contract providing for aggregate payments to any
Person in any calendar year in excess of $50,000, (ii) any Contract relating
to the borrowing of money by any CFB Company or the guarantee by any CFB
Company of any such obligation (other than Contracts evidencing deposit
liabilities, purchases of federal funds, fully-secured repurchase
agreements, trade payables and Contracts relating to borrowings or
guarantees made in the ordinary course of business), (iii) any Contracts
between or among CFB Companies, and (iv) any other Contract or amendment
thereto that would be required to be filed as an exhibit to a Form 10-K
filed by CFB with the SEC (assuming for purposes hereof that CFB was required
to file such reports) (together with all Contracts referred to in Sections
5.10 and 5.14(a) of this Agreement, the "CFB Contracts"). With respect
to each CFB Contract and except as disclosed in Section 5.15 of the CFB
Disclosure Memorandum: (i) the Contract is in full force and effect; (ii) no
CFB Company is in Default thereunder; (iii) no CFB Company has repudiated
or waived any material provision of any such Contract; and (iv) no other
party to any such Contract is, to the Knowledge of CFB, in Default in any
respect or has repudiated or waived any material provision thereunder.
All of the indebtedness of any CFB Company for money borrowed is
prepayable at any time by such CFB Company without penalty or premium.
5.16 Legal Proceedings. There is no Litigation instituted or
pending, or, to the Knowledge of CFB, threatened (or unasserted but
considered probable of assertion and which if asserted would have at least a
reasonable probability of an unfavorable outcome) against any CFB Company, or
against any Asset, interest, or right of any of them, that is reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect
on CFB, nor are there any Orders of any Regulatory Authorities,
other governmental authorities, or arbitrators outstanding against any
CFB Company. Section 5.16 of the CFB Disclosure Memorandum includes a
summary report of all Litigation as of the date of this Agreement to which
any CFB Company is a party and which names a CFB Company as a defendant or
cross-defendant. No CFB Company nor any of their Affiliates or legal counsel
thereto are aware of any facts or circumstances that would (i) result in a
loss to any CFB Company relating to the First Union National Bank of Florida
vs. Henry Lee Wood litigation described in Section 5.16 of the CFB Disclosure
Memorandum, (ii) result in the failure of the Attorneys Title Insurance Fund,
Inc. to indemnify and make whole CFBO or any of its Affiliates pursuant to
that certain title policy ("Policy") provided by Attorney's Title
Insurance Fund, Inc. relating to the property (the "Property") that is
subject to the above-referenced litigation in the event that the above
referenced litigation is not resolved in favor of CFBO or its Affiliates,
(iii) otherwise give rise to a denial of coverage under the exclusion
provisions of the Policy, (iv) constitute any failure by CFBO or its
Affiliates to comply with the Conditions and Stipulations or other terms of
the Policy or (v) give rise to a claim that any CFB Company had either actual,
implied or constructive knowledge of the claim of title by First Union
National Bank of Florida to the property that is the subject of the above
referenced litigation prior to (a) December 1, 1991 and (b) the date of the
Policy. Absent any such defense to coverage, the Attorney's Title Insurance
Fund will be obligated to reimburse (up to $240,000, i.e., the maximum amount
of insurance coverage under the Policy)
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CFBO to its Affiliates for losses that CFBO or its Affiliates incur as a
result of the above referenced litigation, together with attorneys fees and
other costs as provided by the terms of the Policy.
5.17 Reports. Since January 1, 1990, or the date of organization
if later, each CFB Company has timely filed all reports and statements,
together with any amendments required to be made with respect thereto,
that it was required to file with (i) any Regulatory Authorities and (ii)
any applicable state securities or banking authorities (except, in the case
of state securities authorities, failures to file which are not reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect
on CFB). As of their respective dates, each of such reports and
documents, including the financial statements, exhibits, and schedules
thereto, complied in all material respects with all applicable Laws. As
of its respective date, each such report and document did not, in all
material respects, contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements made therein, in light of the circumstances under which they
were made, not misleading.
5.18 Statements True and Correct. No statement, certificate,
instrument, or other writing furnished or to be furnished by any CFB
Company or any Affiliate thereof to CBI pursuant to this Agreement or any other
document, agreement, or instrument referred to herein contains or will
contain any untrue statement of material fact or will omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. None of the
information supplied or to be supplied by any CFB Company or any Affiliate
thereof for inclusion in the Registration Statement to be filed by CBI with
the SEC will, when the Registration Statement becomes effective, be false
or misleading with respect to any material fact, or omit to state any
material fact necessary to make the statements therein not misleading. None
of the information supplied or to be supplied by any CFB Company or any
Affiliate thereof for inclusion in the Proxy Statement to be mailed to CFB's
shareholders in connection with the Shareholders' Meeting, and any other
documents to be filed or provided by a CFB Company or any Affiliate thereof
with or to the SEC or any other Regulatory Authority in connection with the
transactions contemplated hereby, will, at the respective time such documents
are filed, and with respect to the Proxy Statement, when first mailed to the
shareholders of CFB, be false or misleading with respect to any material
fact, or omit to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, or, in the case of the Proxy Statement or any amendment thereof
or supplement thereto, at the time of the Shareholders' Meeting, be false or
misleading with respect to any material fact, or omit to state any material
fact necessary to correct any statement in any earlier communication with
respect to the solicitation of any proxy for the Shareholders' Meeting.
All documents that any CFB Company or any Affiliate thereof is responsible
for filing with any Regulatory Authority in connection with the transactions
contemplated hereby will comply as to form in all material respects with the
provisions of applicable Law.
5.19 Accounting, Tax and Regulatory Matters. No CFB Company or
any Affiliate thereof has taken any action or has any Knowledge of any fact
or circumstance that is reasonably likely to (i) prevent the transactions
contemplated hereby, including the Merger, from qualifying for
pooling-of-interests accounting treatment or as a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code, or (ii) materially
impede or delay receipt of any Consents of Regulatory Authorities referred
to in Section 9.1(b) of this Agreement or result in the imposition of a
condition or restriction of the type referred to in the last sentence of such
Section.
5.20 State Takeover Laws. Each CFB Company has taken all
necessary action to exempt the transactions contemplated by this
Agreement from any applicable state takeover Law, including Sections
607.0901 and 607.0902 of the FBCA.
5.21 Charter Provisions. Each CFB Company has taken all action so
that the entering into of this Agreement and the consummation of the Merger
and the other transactions contemplated by this Agreement do not and will not
result in the grant of any rights to any Person under the Articles of
Incorporation, Bylaws or other governing instruments of any CFB Company or
restrict or impair the ability of CBI or any of its Subsidiaries to vote,
or otherwise to exercise the rights of a shareholder with respect to, shares
of any CFB Company that may be directly or indirectly acquired or controlled by
it.
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5.22 Directors' Agreements. Each of the directors of CFB has
executed and delivered to CBI an agreement in substantially the form of
Exhibit 2.
5.23 Shareholders' Agreements. Each of the directors of CFB and
each of the holders of 5% or more of the outstanding shares of CFB
Common Stock has executed and delivered to CBI an agreement in
substantially the form of Exhibit 3.
5.24 Federal Home Loan Bank of Atlanta. CFBO is a member on good
standing with the Federal Home Loan Bank of Atlanta.
5.25 Real Estate/Construction. Costs to CFB and its
Affiliates relating to the full and complete construction of the banking
office described in Section 5.7 of the CFB Disclosure Memorandum (the
"Construction Project") will not exceed, in the aggregate, $1,300,000.
The real property (the "Parcel") described in Section 5.7 of the CFB
Disclosure Memorandum is the subject of a valid and enforceable land sale
contract which provides for (i) a purchase price of $300,000 and (ii) a
closing date, at the discretion of CFB, not later than January 15, 1996.
There are no facts or circumstances that would result in the sale of the
Parcel for an amount (on a net basis) less than $290,000. Neither the
sale of the Parcel nor the Construction Project will be closed and
completed (i) prior to January 1, 1996, and (ii) without the prior written
consent of CBI which such consent shall not be unreasonably withheld. The
work performed and/or completed to date with respect to the Construction
Project has been performed and/or completed in accordance with the plan
specifications set forth in that certain Program Services Agreement
between Design Build Concepts, Inc. ("DBC") and CFBO. All monies currently
due from CFBO and its Affiliates to DBC have been paid in full. To the
Knowledge of CFBO, DBC has, in turn, properly paid all persons or
companies furnishing labor, materials or services to the Construction
Project and none of which have asserted any unresolved claims or placed
any liens on the Construction Project or the underlying real property. The
foundations of all structural improvements relating to the Construction
Project are located within the boundaries of the property owned in fee
simple by CFB or its Affiliates and within the buildable areas permitted by
applicable zoning and private covenants affecting such property.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF CBI
CBI hereby represents and warrants to CFB as follows:
6.1 Organization, Standing, and Power. CBI is a corporation duly
organized, validly existing, and in good standing under the Laws of the State
of Florida, and has the corporate power and authority to carry on its business
as now conducted and to own, lease and operate its material Assets. CBI is
duly qualified or licensed to transact business as a foreign corporation in
good standing in the States of the United States and foreign jurisdictions
where the character of its Assets or the nature or conduct of its business
requires it to be so qualified or licensed, except for such jurisdictions in
which the failure to be so qualified or licensed is not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on CBI.
6.2 Authority; No Breach By Agreement.
(a) CBI has the corporate power and authority necessary to
execute, deliver and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated herein, including the Merger, have been duly and validly
authorized by all necessary corporate action in respect thereof on the part of
CBI. This Agreement represents a legal, valid, and binding obligation of CBI,
enforceable against CBI in accordance with its terms (except in all cases as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or similar Laws affecting the enforcement of
creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the
discretion of the court before which any proceeding may be brought).
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(b) Neither the execution and delivery of this Agreement by CBI,
nor the consummation by CBI of the transactions contemplated hereby, nor
compliance by CBI with any of the provisions hereof, will (i) conflict
with or result in a breach of any provision of CBI's Articles of
Incorporation or Bylaws, or (ii) constitute or result in a Default under, or
require any Consent pursuant to, or result in the creation of any Lien on
any Asset of any CBI Company under, any Contract or Permit of any CBI
Company or, (iii) subject to receipt of the requisite approvals referred to
in Section 9.1(b) of this Agreement, violate any Law or Order applicable to
any CBI Company or any of their respective material Assets.
(c) Other than in connection or compliance with the
provisions of the Securities Laws, applicable state corporate and
securities Laws, and rules of the NASD, and other than Consents required from
Regulatory Authorities, and other than notices to or filings with the Internal
Revenue Service or the Pension Benefit Guaranty Corporation with respect to
any employee benefit plans, and other than Consents, filings, or notifications
which, if not obtained or made, are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on CBI, no
notice to, filing with, or Consent of, any public body or authority is
necessary for the consummation by CBI of the Merger and the other
transactions contemplated in this Agreement.
6.3 Capital Stock.
(a) The authorized capital stock of CBI consists of 10,000,000
shares of CBI Common Stock, of which 4,047,643 shares are issued and
outstanding as of the date of this Agreement. All of the issued and
outstanding shares of CBI Capital Stock are, and all of the shares of CBI
Common Stock to be issued in exchange for shares of CFB Common Stock upon
consummation of the Merger, when issued in accordance with the terms of this
Agreement, will be, duly and validly issued and outstanding and fully paid
and nonassessable. None of the outstanding shares of CBI Capital Stock has
been, and none of the shares of CBI Common Stock to be issued in exchange
for shares of CFB Common Stock upon consummation of the Merger will be,
issued in violation of any preemptive rights of the current or past
shareholders of CBI. CBI has reserved 111,025 shares of CBI Common Stock
for issuance under the CBI Stock Plan and other option awards, pursuant to
which options to purchase no more than 67,275 shares of CBI Common Stock are
outstanding as of the date hereof.
(b) Except as set forth in Section 6.3(a) of this Agreement, or
as disclosed in Section 6.3 of the CBI Disclosure Memorandum, there are no
shares of capital stock or other equity securities of CBI outstanding and
no outstanding Rights relating to the capital stock of CBI.
6.4 Financial Statements. CBI has disclosed in Section 6.4 of the
CBI Disclosure Memorandum all CBI Financial Statements for periods ended
prior to the date hereof and will deliver to CFB copies of all CBI Financial
Statements prepared subsequent to the date hereof. The CBI Financial
Statements (as of the dates thereof and for the periods covered thereby) (i)
are or, if dated after the date of this Agreement, will be in accordance with
the books and records of the CBI Companies, which are or will be, as the
case may be, complete and correct and which have been or will have been, as
the case may be, maintained in accordance with good business practices, and
(ii) present or will present, as the case may be, fairly the consolidated
financial position of the CBI Companies as of the dates indicated and the
consolidated results of operations, changes in shareholders' equity and cash
flows of the CBI Companies for the periods indicated, in accordance with GAAP
(subject to exceptions as to consistency specified therein or as may be
indicated in the notes thereto or, in the case of interim financial
statements, to normal recurring year-end adjustments that are not material in
amount or effect).
6.5 Absence of Undisclosed Liabilities. No CBI Company has any
Liabilities that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on CBI, except Liabilities which are
accrued or reserved against in the consolidated balance sheets of CBI as of
December 31, 1994 and June 30, 1995, included in the CBI Financial
Statements or reflected in the notes thereto. No CBI Company has incurred
or paid any Liability since June 30, 1995, except for such Liabilities
incurred or paid in the ordinary course of business consistent with past
business practice and which would prevent, or materially delay or impair the
ability of CBI to timely consummate the transactions contemplated by this
Agreement.
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6.6 Absence of Certain Changes or Events. Since December 31, 1994,
except as disclosed in the CBI Financial Statements delivered prior to the
date of this Agreement or as disclosed in Section 6.6 of the CBI Disclosure
Memorandum, (i) there have been no events, changes or occurrences which
have had, or are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on CBI, and (ii) the CBI Companies have
not taken any action, or failed to take any action, prior to the date of this
Agreement, which action or failure, if taken after the date of this
Agreement, would represent or result in a material breach or violation of any
of the covenants and agreements of CBI provided in Article 7 of this Agreement.
6.7 Environmental Matters.
(a) To the Knowledge of CBI, each CBI Company, its
Participation Facilities, and its Loan Properties are, and have been, in
compliance with all Environmental Laws, except for violations which are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on CBI.
(b) To the Knowledge of CBI, there is no Litigation pending
or threatened before any court, governmental agency or board or other forum
in which any of its Loan Properties (or CBI in respect of such Loan
Property) has been or, with respect to threatened Litigation, may be named as
a defendant or potentially responsible party (i) for alleged noncompliance
(including by any predecessor) with any Environmental Law or (ii) relating to
the release, discharge, spillage or disposal into the environment of
any Hazardous Substance, whether or not occurring at, on, under or
involving a Loan Property, except for such Litigation pending or threatened
that is not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on CBI.
(c) To the Knowledge of CBI, there is no Litigation pending
or threatened before any court, governmental agency or authority or other
forum in which any CBI Company or any of its Participation Facilities
has been or, with respect to threatened Litigation, may be named as a
defendant (i) for alleged noncompliance (including by any predecessor) with
any Environmental Law or (ii) relating to the release, discharge, spillage
or disposal into the environment of any Hazardous Substance, whether or not
occurring at, on, under or involving a site owned, leased or operated by
any CBI Company or any of its Participation Facilities, except for such
Litigation pending or threatened that is not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on CBI.
(d) To the Knowledge of CBI, there is no reasonable basis for any
Litigation of a type described in subsections (b) or (c), except such as is
not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on CBI.
(e) During the period of (i) any CBI Company's ownership or
operation of any of their respective current properties, (ii) any CBI
Company's participation in the management of any Participation Facility, or
(iii) any CBI Company's holding of a security interest in a Loan Property, no
release, discharge, spillage or disposal of Hazardous Substances has occurred
in, on, under, or affecting such properties, except such as are not reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect
on CBI. Prior to the period of (i) any CBI Company's ownership or operation
of any of their respective current properties, (ii) any CBI Company's
participation in the management of any Participation Facility, or (iii)
any CBI Company's holding of a security interest in a Loan Property, to the
Knowledge of CBI, no release, discharge, spillage or disposal of Hazardous
Substances has occurred in, on, under or affecting any such property,
Participation Facility or Loan Property, except such as are not reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
CBI.
6.8 Compliance with Laws. CBI is duly registered as a bank holding
company under the BHC Act and Florida Law. Each CBI Company has in effect
all Permits necessary for it to own, lease or operate its material Assets
and to carry on its business as now conducted, except for those Permits the
absence of which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on CBI, and there has
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occurred no Default under any such Permit. Except as disclosed in
Section 6.8 of the CBI Disclosure Memorandum, no CBI Company:
(a) is in violation of any Laws, Orders or Permits
applicable to its business or employees conducting its business,
except for violations which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on CBI; and
(b) has received any notification or communication from any
agency or department of federal, state, or local government or any
Regulatory Authority or the staff thereof (i) asserting that any CBI
Company is not in compliance with any of the Laws or Orders which
such governmental authority or Regulatory Authority enforces, where
such noncompliance is reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on CBI, (ii) threatening
to revoke any Permits, the revocation of which is reasonably likely
to have, individually or in the aggregate, a Material Adverse Effect on
CBI, or (iii) requiring any CBI Company to enter into or consent to
the issuance of a cease and desist order, formal agreement, directive,
commitment or memorandum of understanding, or to adopt any Board
resolution or similar undertaking, which restricts materially the
conduct of its business, or in any manner relates to its capital
adequacy, its credit or reserve policies, its management, or the
payment of dividends.
6.9 Employee Benefit Plans. CBI has delivered or made available to
CFB prior to the execution of this Agreement copies in each case of all
pension, retirement, profit-sharing, deferred compensation, stock option,
employee stock ownership, severance pay, vacation, bonus, or other incentive
plan, all other written employee programs, arrangements, or agreements, all
medical, vision, dental, or other health plans, all life insurance plans,
and all other employee benefit plans or fringe benefit plans, including
"employee benefit plans" as that term is defined in Section 3(3) of ERISA,
currently adopted, maintained by, sponsored in whole or in part by, or
contributed to by any CBI Company or Affiliate thereof for the benefit of
employees, retirees, dependents, spouses, directors, independent
contractors, or other beneficiaries and under which employees, retirees,
dependents, spouses, directors, independent contractors, or other
beneficiaries are eligible to participate (collectively, the "CBI Benefit
Plans"). Any of the CBI Benefit Plans which is an "employee pension benefit
plan," as that term is defined in Section 3(2) of ERISA, is referred to
herein as a "CBI ERISA Plan." Each CBI ERISA Plan which is also a "defined
benefit plan" (as defined in Section 414(j) of the Internal Revenue Code) is
referred to herein as a "CBI Pension Plan." No CBI Pension Plan is or has
been a multiemployer plan within the meaning of Section 3(37) of ERISA.
6.10 Legal Proceedings. There is no Litigation instituted or
pending, or, to the Knowledge of CBI, threatened (or unasserted but
considered probable of assertion and which if asserted would have at least a
reasonable probability of an unfavorable outcome) against any CBI Company, or
against any Asset, interest, or right of any of them, that would prevent, or
materially delay or impair the ability of CBI to timely consummate the
transactions contemplated by this Agreement, nor are there any Orders of
any Regulatory Authorities, other governmental authorities, or arbitrators
outstanding against any CBI Company, that would prevent, or materially delay
or impair the ability of CBI to timely consummate the transactions
contemplated by this Agreement.
6.11 Reports. Since January 1, 1990, or the date of organization
if later, each CBI Company has filed all reports and statements, together with
any amendments required to be made with respect thereto, that it was required
to file with (i) the SEC, including, but not limited to, Forms 10-K, Forms
10-Q, Forms 8-K, and proxy statements, (ii) other Regulatory Authorities, and
(iii) any applicable state securities or banking authorities (except, in the
case of state securities authorities, failures to file which are not
reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on CBI). As of their respective dates, each of such reports
and documents, including the financial statements, exhibits, and schedules
thereto, complied in all material respects with all applicable Laws. As of
its respective date, each such report and document did not, in all material
respects, contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they were
made, not misleading.
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6.12 Statements True and Correct. No statement,
certificate, instrument or other writing furnished or to be furnished by
any CBI Company or any Affiliate thereof to CFB pursuant to this Agreement or
any other document, agreement or instrument referred to herein contains or
will contain any untrue statement of material fact or will omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. None of the
information supplied or to be supplied by any CBI Company or any Affiliate
thereof for inclusion in the Registration Statement to be filed by CBI with
the SEC, will, when the Registration Statement becomes effective, be false
or misleading with respect to any material fact, or omit to state any material
fact necessary to make the statements therein not misleading. None of the
information supplied or to be supplied by any CBI Company or any Affiliate
thereof for inclusion in the Proxy Statement to be mailed to CFB's
shareholders in connection with the Shareholders' Meeting, and any other
documents to be filed by any CBI Company or any Affiliate thereof with the SEC
or any other Regulatory Authority in connection with the transactions
contemplated hereby, will, at the respective time such documents are filed,
and with respect to the Proxy Statement, when first mailed to the shareholders
of CFB, be false or misleading with respect to any material fact, or
omit to state any material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading,
or, in the case of the Proxy Statement or any amendment thereof or
supplement thereto, at the time of the Shareholders' Meeting, be false or
misleading with respect to any material fact, or omit to state any material
fact necessary to correct any statement in any earlier communication with
respect to the solicitation of any proxy for the Shareholders' Meeting. All
documents that any CBI Company or any Affiliate thereof is responsible for
filing with any Regulatory Authority in connection with the
transactions contemplated hereby will comply as to form in all material
respects with the provisions of applicable Law.
6.13 Accounting, Tax and Regulatory Matters. No CBI Company or
any Affiliate thereof has taken any action or has any Knowledge of any fact
or circumstance that is reasonably likely to (i) prevent the transactions
contemplated hereby, including the Merger, from qualifying for
pooling-of-interests accounting treatment or as a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code, or (ii) materially
impede or delay receipt of any Consents of Regulatory Authorities referred
to in Section 9.1(b) of this Agreement or result in the imposition of a
condition or restriction of the type referred to in the last sentence of such
Section.
6.14 Labor Relations. No CBI Company is the subject of any
Litigation asserting that it or any other CBI Company has committed an unfair
labor practice (within the meaning of the National Labor Relations Act or
comparable state law) or seeking to compel it or any other CBI Company to
bargain with any labor organization as to wages or conditions of
employment, nor is there any strike or other labor dispute involving any
CBI Company, pending or threatened, or to the Knowledge of CBI, is there any
activity involving any CBI Company's employees seeking to certify a
collective bargaining unit or engaging in any other organization activity.
6.15 Tax Matters.
(a) As of the date hereof, all Tax returns required to be filed
by or on behalf of any of the CBI Companies have been timely filed or
requests for extensions have been timely filed, granted, and have not expired
for periods ended on or before December 31, 1994, and on or before the date
of the most recent fiscal year end immediately preceding the Effective Time,
and all returns filed are complete and accurate to the Knowledge of CBI,
except for any such failure to file or to be complete or accurate which is
not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on CBI. As of the date hereof, all Taxes shown on filed
returns have been paid and as of the date of this Agreement, there is no
audit examination, deficiency, or refund Litigation with respect to any
Taxes, except as reserved against in the CBI Financial Statements or as
disclosed in Section 6.15 of the CBI Disclosure Memorandum or except such as
are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on CBI. As of the date hereof, all Taxes and other
Liabilities due with respect to completed and settled examinations or
concluded Litigation have been paid, except such as are not reasonably likely
to have, individually or in the aggregate, a Material Adverse Effect on CBI.
(b) Adequate provision for any Taxes due or to become due for
any of the CBI Companies for the period or periods through and including the
date of the respective CBI Financial Statements has been made and is
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reflected on such CBI Financial Statements, except such as are not reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
CBI.
(c) Deferred Taxes of the CFB Companies have been provided for
in accordance with GAAP, except such as are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on CBI.
6.16 Allowance for Possible Loan Losses. The allowance for
possible loan or credit losses (the "Allowance") shown on the consolidated
balance sheets of CBI included in the most recent CBI Financial
Statements dated prior to the date of this Agreement was adequate (within the
meaning of GAAP and applicable regulatory requirements or guidelines) to
provide for losses relating to or inherent in the loan and lease portfolios
(including accrued interest receivables) of the CBI Companies and other
extensions of credit (including letters of credit and commitments to make
loans or extend credit) by the CBI Companies as of the date hereof.
6.17 Material Contracts. Except as disclosed in Section 6.17 of
the CBI Disclosure Memorandum or otherwise reflected in the CBI Financial
Statements dated prior to the date hereof, as of the date hereof, none of
the CBI Companies, nor any of their respective Assets, businesses, or
operations, is a party to, or is bound or affected by, or receives benefits
under, (i) any employment, severance, termination, consulting, or retirement
Contract providing for aggregate payments to any Person in any calendar
year in excess of $500,000 and (ii) any other Contract or amendment thereto
that would be required to be filed as an exhibit to a Form 10-K filed by CBI
with the SEC which has not been so filed.
ARTICLE 7
CONDUCT OF BUSINESS PENDING CONSUMMATION
7.1 Affirmative Covenants of CFB. Unless the prior written consent
of the other Party shall have been obtained, and except as otherwise
expressly contemplated herein, CFB shall and shall cause each of its
Subsidiaries to (a) operate its business only in the usual, regular, and
ordinary course, (b) preserve intact its business organization and Assets and
maintain its rights and franchises, and (c) take no action which would (i)
adversely affect the ability of any Party to obtain any Consents required
for the transactions contemplated hereby without imposition of a condition
or restriction of the type referred to in the last sentences of Section
9.1(b) or 9.1(c) of this Agreement, or (ii) adversely affect the ability of
any Party to perform its covenants and agreements under this Agreement.
7.2 Negative Covenants of CFB. From the date of this Agreement
until the earlier of the Effective Time or the termination of this Agreement,
CFB covenants and agrees that it will not do or agree or commit to do, or
permit any of its Subsidiaries to do or agree or commit to do, any of the
following without the prior written consent of the chief executive officer,
president or chief financial officer of CBI, which consent shall not be
unreasonably withheld:
(a) amend the Articles of Incorporation, Bylaws or other
governing instruments of any CFB Company, or
(b) incur any additional debt obligation or other obligation for
borrowed money, except in the ordinary course of the business of
CFB Subsidiaries consistent with past practices (which shall
include, for CFBO, creation of deposit liabilities, purchases of
federal funds, advances from the Federal Reserve Bank or Federal Home
Loan Bank, and entry into repurchase agreements fully secured by U.S.
government or agency securities), or impose, or suffer the
imposition, on any Asset of any CFB Company of any Lien or permit
any such Lien to exist (other than in connection with deposits,
repurchase agreements, bankers acceptances, "treasury tax and loan"
accounts established in the ordinary course of CBFO's business, the
satisfaction of legal requirements in the exercise of trust powers,
and Liens in effect as of the date hereof that are disclosed in the CFB
Disclosure Memorandum); or
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(c) repurchase, redeem, or otherwise acquire or exchange (other
than exchanges in the ordinary course under employee benefit plans),
directly or indirectly, any shares, or any securities convertible into
any shares, of the capital stock of any CFB Company, or declare or pay
any dividend or make any other distribution in respect of CFB's capital
stock; or
(d) except for this Agreement, or pursuant to the exercise of
stock options outstanding as of the date hereof and pursuant to
the terms thereof in existence on the date hereof, or as disclosed in
Section 7.2(d) of the CFB Disclosure Memorandum, issue, sell, pledge,
encumber, authorize the issuance of, enter into any Contract to issue,
sell, pledge, encumber, or authorize the issuance of, or otherwise permit
to become outstanding, any additional shares of CFB Common Stock or any
other capital stock of any CFB Company, or any stock appreciation rights,
or any option, warrant, conversion, or other right to acquire any
such stock, or any security convertible into any such stock; or
(e) adjust, split, combine or reclassify any capital stock of
any CFB Company or issue or authorize the issuance of any other
securities in respect of or in substitution for shares of CFB Common
Stock, or sell, lease, mortgage or otherwise dispose of or otherwise
encumber any shares of capital stock of any CFB Subsidiary (unless any
such shares of stock are sold or otherwise transferred to another CFB
Company) or any Asset other than in the ordinary course of business for
reasonable and adequate consideration; or
(f) except for purchases of U.S. Treasury securities or U.S.
Government agency securities, which in either case have maturities of
three years or less, purchase any securities or make any material
investment, either by purchase of stock of securities, contributions to
capital, Asset transfers, or purchase of any Assets, in any Person other
than a wholly owned CFB Subsidiary, or otherwise acquire direct or
indirect control over any Person, other than in connection with (i)
foreclosures in the ordinary course of business, (ii) acquisitions of
control by a depository institution Subsidiary in its fiduciary capacity,
or (iii) the creation of new wholly owned Subsidiaries organized to
conduct or continue activities otherwise permitted by this Agreement; or
(g) grant any increase in compensation or benefits to the
employees or officers of any CFB Company, except in accordance with
past practice disclosed in Section 7.2(g) of the CFB Disclosure
Memorandum or as required by Law; pay any severance or termination pay or
any bonus other than pursuant to written policies or written Contracts in
effect on the date of this Agreement and disclosed in Section 7.2(g) of
the CFB Disclosure Memorandum; and enter into or amend any severance
agreements with officers of any CFB Company; grant any material increase
in fees or other increases in compensation or other benefits to directors
of any CFB Company except in accordance with past practice disclosed in
Section 7.2(g) of the CFB Disclosure Memorandum; or voluntarily
accelerate the vesting of any stock options or other stock-based
compensation or employee benefits; or
(h) enter into, amend or change any employment, benefit or
severance Contract between any CFB Company and any Person (unless such
amendment or change is required by Law) that the CFB Company does not
have the unconditional right to terminate without Liability (other than
Liability for services already rendered), at any time on or after the
Effective Time;
(i) adopt any new employee benefit plan of any CFB Company or
make any material change in or to any existing employee benefit plans
of any CFB Company other than any such change that is required by Law or
that, in the opinion of counsel, is necessary or advisable to maintain
the tax qualified status of any such plan; or
(j) make any significant change in any Tax or accounting
methods or systems of internal accounting controls, except as may
be appropriate to conform to changes in Tax Laws or regulatory accounting
requirements or GAAP; or
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(k) commence any Litigation other than in accordance with past
practice, or compromise of settle any Litigation involving any Liability
of any CFB Company for material money damages or restrictions upon the
operations of any CFB Company; or
(l) modify, amend or terminate any material Contract (including
any loan Contract or extension of credit with any Person or affiliated or
related persons with an aggregate unpaid balance exceeding $100,000 or
any loan Contract or extension of credit to any director, officer
principal (5% or greater) shareholder of CFB or their affiliated or
related persons) or waive, release, compromise or assign any material
rights or claims; or
(m) obtain any advances or otherwise borrow any monies from, or
become indebted to, the FHLB.
7.3 Covenants of CBI. From the date of this Agreement until the
earlier of the Effective Time or the termination of this Agreement, CBI
covenants and agrees that it shall (x) continue to conduct its business and
the business of its Subsidiaries in a manner designed in its reasonable
judgment, to enhance the long-term value of the CBI Common Stock, and (y)
take no action which would (i) materially adversely affect the ability of
any Party to obtain any Consents required for the transactions
contemplated hereby without imposition of a condition or restriction of the
type referred to in the last sentences of Section 9.1(b) or 9.1(c) of this
Agreement, or (ii) materially adversely affect the ability of any Party
to perform its covenants and agreements under this Agreement; provided, that
the foregoing shall not prevent any CBI Company from discontinuing or
disposing of any of its Assets or business if such action is, in the judgment
of CBI, desirable in the conduct of the business of CBI and its Subsidiaries.
CBI further covenants and agrees that it will not, without the prior written
consent of the chief executive officer, president or chief financial officer
of CFB, which consent shall not be unreasonably withheld, amend the
Articles of Incorporation or Bylaws of CBI, in each case, in any manner
adverse to the holders of CFB Common Stock as compared to the rights of
holders of CBI Common Stock generally.
7.4 Adverse Changes in Condition. Each Party agrees to give
written notice promptly to the other Party upon becoming aware of the
occurrence or impending occurrence of any event or circumstance relating to
it or any of its Subsidiaries which (i) is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on it or (ii)
would cause or constitute a breach of any of its representations,
warranties, or covenants contained herein, and to use its reasonable efforts
to prevent or promptly to remedy the same.
7.5 Reports. Each Party and its Subsidiaries shall timely file
all reports required to be filed by it with Regulatory Authorities between
the date of this Agreement and the Effective Time and shall deliver to the
other Party copies of all such reports promptly after the same are filed. If
financial statements are contained in any such reports filed with the
SEC, such financial statements will fairly present the consolidated
financial position of the entity filing such statements as of the dates
indicated and the consolidated results of operations, changes in
shareholders' equity, and cash flows for the periods then ended in
accordance with GAAP (subject in the case of interim financial statements to
normal recurring year-end adjustments that are not material). As of their
respective dates, such reports filed with the SEC will comply in all material
respects with the Securities Laws and will not contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
Any financial statements contained in any other reports to other Regulatory
Authorities shall be prepared in accordance with the Laws applicable to such
reports, and will not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading.
ARTICLE 8
ADDITIONAL AGREEMENTS
8.1 Registration Statement; Proxy Statement; Shareholder Approval. At
a date determined by CBI in its sole discretion, CBI shall file the
Registration Statement with the SEC, and shall use its reasonable efforts to
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cause the Registration Statement to become effective under the 1933 Act and
take any action required to be taken under the applicable state Blue Sky or
securities Laws in connection with the issuance of the shares of CBI Common
Stock upon consummation of the Merger. CFB shall furnish all information
concerning it and the holders of its capital stock as CBI may reasonably
request in connection with such action. CFB shall call a Shareholders'
Meeting, to be held as soon as reasonably practicable after the Registration
Statement is declared effective by the SEC, for the purpose of voting upon
approval of this Agreement and such other related matters as it deems
appropriate. In connection with the Shareholders' Meeting, (i) CFB shall
prepare and file with the SEC a Proxy Statement and mail such Proxy Statement
to its shareholders, (ii) the Parties shall furnish to each other all
information concerning them that they may reasonably request in connection with
such Proxy Statement, (iii) the Board of Directors of CFB shall recommend
(subject to compliance with their fiduciary duties as advised by counsel) to
its shareholders the approval of this Agreement, and (iv) the Board of
Directors and officers of CFB shall (subject to compliance with their fiduciary
duties as advised by counsel) use their reasonable efforts to obtain such
shareholders' approval.
8.2 Exchange Listing. CBI shall use its reasonable efforts to list,
prior to the Effective Time, on the Nasdaq National Market the shares of CBI
Common Stock to be issued to the holders of CFB Common Stock pursuant to the
Merger.
8.3 Applications. CBI shall promptly prepare and file, and CFB
shall cooperate in the preparation and, where appropriate, filing of,
applications with all Regulatory Authorities having jurisdiction over the
transactions contemplated by this Agreement seeking the requisite Consents
necessary to consummate the transactions contemplated by this Agreement.
8.4 Filings with State Offices. Upon the terms and subject to the
conditions of this Agreement, CBI shall execute and file the Articles of
Merger.
8.5 Agreement as to Efforts to Consummate. Subject to the terms and
conditions of this Agreement, each Party agrees to use, and to cause its
Subsidiaries to use, its reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper, or
advisable under applicable Laws to consummate and make effective, as soon as
practicable after the date of this Agreement, the transactions contemplated by
this Agreement, including using its reasonable efforts to lift or rescind any
Order adversely affecting its ability to consummate the transactions
contemplated herein and to cause to be satisfied the conditions referred to in
Article 9 of this Agreement; provided, that nothing herein shall preclude
either Party from exercising its rights under this Agreement. Each Party shall
use, and shall cause each of its Subsidiaries to use, its reasonable efforts to
obtain all Consents necessary or desirable for the consummation of the
transactions contemplated by this Agreement.
8.6 Investigation and Confidentiality.
(a) Prior to the Effective Time, each Party shall keep the other
Party advised of all material developments relevant to its business and to
consummation of the Merger and shall permit the other Party to make or cause
to be made such investigation of the business and properties of it and its
Subsidiaries and of their respective financial and legal conditions as the
other Party reasonably requests, provided that such investigation shall be
reasonably related to the transactions contemplated hereby and shall not
interfere unnecessarily with normal operations. No investigation by a
Party shall affect the representations and warranties of the other Party.
(b) In addition to the Parties' respective obligations under
the Confidentiality Agreements, each Party shall, and shall cause its
advisers and agents to, maintain the confidentiality of all
confidential information furnished to it by the other Party concerning its
and its Subsidiaries' businesses, operations, and financial positions and
shall not use such information for any purpose except in furtherance of the
transactions contemplated by this Agreement. If this Agreement is
terminated prior to the Effective Time, each Party shall promptly return or
certify the destruction of all documents and copies thereof, and all work
papers containing confidential information received from the other Party.
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(c) CFB shall use its reasonable efforts to exercise its rights
under confidentiality agreements entered into with Persons which were
considering an Acquisition Transaction with CFB to preserve the confidentiality
of the information relating to CFB provided to such Persons and their
Affiliates and Representatives.
(d) Each Party agrees to give the other Party notice as soon as
practicable after any determination by it of any fact or occurrence relating to
the other Party which it has discovered through the course of its investigation
and which represents, or is reasonably likely to represent, either a breach of
any representation, warranty, covenant or agreement of the other Party or which
has had or is reasonably likely to have a Material Adverse Effect on the other
Party.
8.7 Press Releases. Prior to the Effective Time, CFB and CBI shall
consult with each other as to the form and substance of any press release or
other public disclosure materially related to this Agreement or any other
transaction contemplated hereby; provided, that nothing in this Section 8.7
shall be deemed to prohibit any Party from making any disclosure which its
counsel deems necessary or advisable in order to satisfy such Party's
disclosure obligations imposed by Law.
8.8 Certain Actions. Except with respect to this Agreement and the
transactions contemplated hereby, no CFB Company nor any Affiliate thereof nor
any Representatives thereof retained by any CFB Company shall directly or
indirectly solicit any Acquisition Proposal by any Person. Except to the
extent necessary to comply with the fiduciary duties of CFB's Board of
Directors as advised by counsel, no CFB Company or any Affiliate or
Representative thereof shall furnish any non-public information that it is not
legally obligated to furnish, negotiate with respect to, or enter into any
Contract with respect to, any Acquisition Proposal, but CFB may communicate
information about such an Acquisition Proposal to its shareholders if and to
the extent that it is required to do so in order to comply with its legal
obligations as advised by counsel. CFB shall promptly notify CBI orally and in
writing in the event that it receives any inquiry or proposal relating to any
such transaction. CFB shall (i) immediately cease and cause to be terminated
any existing activities, discussions or negotiations with any Persons conducted
heretofore with respect to any of the foregoing, and (ii) direct and use its
reasonable efforts to cause all of its Representatives not to engage in any of
the foregoing.
8.9 Accounting and Tax Treatment. Each of the Parties undertakes
and agrees to use its reasonable efforts to cause the Merger, and to take no
action which would cause the Merger not, to qualify for pooling-of-interests
accounting treatment and treatment as a "reorganization" within the meaning
of Section 368(a) of the Internal Revenue Code for federal income tax purposes.
8.10 State Takeover Laws. Each CFB Company shall take all
necessary steps to exempt the transactions contemplated by this Agreement
from, or if necessary challenge the validity or applicability of, any
applicable state takeover Law, including Sections 607.0901 and 607.0902 of the
FBCA.
8.11 Charter Provisions. Each CFB Company shall take all
necessary action to ensure that the entering into of this Agreement and the
consummation of the Merger and the other transactions contemplated hereby do
not and will not result in the grant of any rights to any Person
under the Articles of Incorporation, Bylaws or other governing instruments
of any CFB Company or restrict or impair the ability of CBI or any of its
Subsidiaries to vote, or otherwise to exercise the rights of a shareholder
with respect to, shares of any CFB Company that may be directly or indirectly
acquired or controlled by it.
8.12 Agreement of Affiliates. CFB has disclosed in Section 8.12
of the CFB Disclosure Memorandum all Persons whom it reasonably believes is an
"affiliate" of CFB for purposes of Rule 145 under the 1933 Act. CFB shall use
its reasonable efforts to cause each such Person to deliver to CBI not later
than 30 days prior to the Effective Time, a written agreement, substantially
in the form of Exhibit 4, providing that such Person will not sell, pledge,
transfer, or otherwise dispose of the shares of CFB Common Stock held by
such Person except as contemplated by such agreement or by this Agreement and
will not sell, pledge, transfer, or otherwise dispose of the shares of CBI
Common Stock to be received by such Person upon consummation of the Merger
except in
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compliance with applicable provisions of the 1933 Act and the rules and
regulations thereunder and until such time as financial results covering at
least 30 days of combined operations of CBI and CFB have been published within
the meaning of Section 201.01 of the SEC's Codification of Financial
Reporting Policies. To qualify the Merger for pooling-of-interests
accounting treatment, shares of CBI Common Stock issued to such
affiliates of CFB in exchange for shares of CFB Common Stock shall not be
transferable until such time as financial results covering at least 30 days
of combined operations of CBI and CFB have been published within the meaning
of Section 201.01 of the SEC's Codification of Financial Reporting
Policies, regardless of whether each such affiliate has provided the
written agreement referred to in this Section 8.12 (and CBI shall be
entitled to place restrictive legends upon certificates for shares of CBI
Common Stock issued to affiliates of CFB pursuant to this Agreement to
enforce the provisions of this Section 8.12). CBI shall not be required to
maintain the effectiveness of the Registration Statement under the 1933 Act
for the purposes of resale of CBI Common Stock by such affiliates.
8.13 Employee Benefits and Contracts. Following the Effective
Time, CBI shall provide generally to officers and employees of the CFB
Companies employee benefits under employee benefit plans (other than stock
option or other plans involving the potential issuance of CBI Common Stock or
cash bonuses), on terms and conditions which when taken as a whole are
substantially similar to those currently provided by the CBI Companies to their
similarly situated officers and employees. For purposes of participation and
vesting, but otherwise not in calculating any benefits or benefit accrual under
such employee benefit plans, the service of the employees of the CFB Companies
prior to the Effective Time shall be treated as service with a CBI Company
participating in such employee benefit plan. CBI also shall cause the
Surviving Corporation and its Subsidiaries to honor in accordance with their
terms all provisions for vested benefits or other vested amounts earned or
accrued through the Effective Time under the CFB Benefit Plans.
8.14 Certain Policies of CFB. At the request of CBI, CFB shall
use its best efforts to modify and change its loan, litigation and real
estate valuation policies and practices (including loan classifications
and levels of reserves) prior to the Effective Time so as to be consistent
on a mutually satisfactory basis with those of CBI and GAAP. CFB shall
not be required to modify or change any such policies or practices,
however, until such time as (i) satisfaction of the conditions set forth in
Section 9.1(a), 9.1(b) and 9.1(c) of this Agreement, (ii) such time as CFB and
CBI agree that the Effective Time will occur prior to the public disclosure of
such modifications or changes in regular periodic earnings releases or
periodic reports filed with the SEC, and (iii) CBI acknowledges in writing
that all conditions to its obligation to consummate the Merger (and CBI's
rights to terminate this Agreement) have been waived or satisfied;
provided, that in all circumstances CFB shall make such modifications and
changes not later than immediately prior to the Effective Time. CFB's
representations, warranties, covenants and agreements contained in this
Agreement shall not be deemed to be untrue or breached in any respect for any
purpose as a consequence of any modifications or changes undertaken solely on
account of this Section 8.14.
8.15 Real Estate. CFB shall use all reasonable efforts to cause
the real property defined as the Parcel in Section 5.25 hereof to be sold
prior to Closing for an amount (on a net basis) of not less than $290,000.
8.16 Director and Officer Insurance. CFBO, at its option and
expense, may seek to maintain CFBO's existing directors' and officers'
liability insurance policy covering persons who are currently covered by
such insurance carried by CFBO for a period of two years after the Effective
Time on terms no less favorable than those in effect on the date hereof;
provided, that no CBI Company shall be obligated to make annual premium
payments in respect of such policy and further provided that the cost of such
policy extension shall not exceed a total of $18,000 and that all such
amounts shall be expenses of CFBO during the 1995 calendar year, and upon
and following the Effective Time, the CBI Companies shall be entitled to the
rights and benefits of such policy to the same extent as the CFB Companies,
including CFBO, were as of the date hereof.
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ARTICLE 9
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
9.1 Conditions to Obligations of Each Party. The respective
obligations of each Party to perform this Agreement and consummate the
Merger and the other transactions contemplated hereby are subject to the
satisfaction of the following conditions, unless waived by both Parties
pursuant to Section 11.6 of this Agreement:
(a) Shareholder Approval. The shareholders of CFB shall have
adopted, approved, ratified and confirmed this Agreement, and the
consummation of the transactions contemplated hereby, including the
Merger, as and to the extent required by Law, by the provisions of
any governing instruments; the holders of not more than five (5%)
percent of the outstanding shares of CFB Common Stock shall have
given notice of their intent to exercise their statutory rights of
dissent.
(b) Regulatory Approvals. All Consents of, filings and
registrations with, and notifications to, all Regulatory Authorities
required for consummation of the Merger shall have been obtained or
made and shall be in full force and effect and all waiting periods
required by Law shall have expired. No Consent obtained from any
Regulatory Authority which is necessary to consummate the
transactions contemplated hereby shall be conditioned or restricted in
a manner (including requirements relating to the raising of additional
capital or the disposition of Assets) which in the reasonable judgment
of the Board of Directors of CBI would so materially adversely affect
the economic or business benefits of the transactions contemplated by
this Agreement that, had such condition or requirement been known,
such Party would not, in its reasonable judgment, have entered into this
Agreement.
(c) Consents and Approvals. Each Party shall have obtained any
and all Consents required for consummation of the Merger (other than
those referred to in Section 9.1(b) of this Agreement) or for the
preventing of any Default under any Contract or Permit of such Party
which, if not obtained or made, is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on such
Party. No Consent so obtained which is necessary to consummate the
transactions contemplated hereby shall be conditioned or restricted
in a manner which in the reasonable judgment of the Board of
Directors of CBI would so materially adversely affect the
economic or business benefits of the transactions contemplated by
this Agreement that, had such condition or requirement been known,
CBI would not, in its reasonable judgment, have entered into this
Agreement.
(d) Legal Proceedings. No court or governmental or
regulatory authority of competent jurisdiction shall have enacted,
issued, promulgated, enforced or entered any Law or Order (whether
temporary, preliminary or permanent) or taken any other action
which prohibits, restricts in any material respect or makes illegal,
consummation of the transactions contemplated by this Agreement.
(e) Registration Statement. The Registration Statement shall be
effective under the 1933 Act, no stop orders suspending the
effectiveness of the Registration Statement shall have been issued, no
action, suit, cease and desist or other order, proceeding or
investigation by the SEC to suspend the effectiveness thereof shall
have been initiated and be continuing, and all necessary approvals
under state securities Laws or the 1933 Act or 1934 Act relating to the
issuance or trading of the shares of CBI Common Stock issuable pursuant
to the Merger shall have been received and remain in effect.
(f) Listing of CBI Common Stock. The shares of CBI Common Stock
issuable pursuant to the Merger shall have been approved for listing on
the Nasdaq National Market.
(g) Pooling Letters. The Parties shall have received a letter,
dated as of the Effective Time, in form and substance reasonably
acceptable to such Party, from Purvis, Gray and Company, or such other
certified public accountant mutually acceptable to the Parties, to
the effect that the Merger will qualify for pooling-of-interests
accounting treatment and that such firm is not aware of any matters
relating to CFB and
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its Subsidiaries which would preclude the Merger from qualifying for
pooling-of-interests accounting treatment.
(h) Tax Matters. Each Party shall have received a written
opinion of counsel from Alston & Bird, in form reasonably satisfactory
to such Parties (the "Tax Opinion"), to the effect that (i) the Merger
will constitute a reorganization within the meaning of Section 368(a)
of the Internal Revenue Code, (ii) the exchange in the Merger of CFB
Common Stock for CBI Common Stock will not give rise to gain or loss
to the shareholders of CFB with respect to such exchange (except to the
extent of any cash received), and (iii) none of CFB or CBI will
recognize gain or loss as a consequence of the Merger (except for
amounts resulting from any required change in accounting methods
and any income and deferred gain recognized pursuant to Treasury
regulations issued under Section 1502 of the Internal Revenue Code),
and, with respect to the Bank Merger, that (i) the Bank Merger
will constitute a reorganization within the meaning of Section 368(a)
of the Internal Revenue Code, and (ii) none of CFB, CBI, CFBO or CNBL
will recognize gain or loss as a consequence of the Bank Merger. In
rendering such Tax Opinion, such counsel shall be entitled to rely
upon representations of officers of CFB and CBI reasonably
satisfactory in form and substance to such counsel.
9.2 Conditions to Obligations of CBI. The obligations of CBI
to perform this Agreement and consummate the Merger and the other
transactions contemplated hereby are subject to the satisfaction of the
following conditions, unless waived by CBI pursuant to Section 11.6(a) of this
Agreement:
(a) Representations and Warranties. The representations and
warranties of CFB set forth or referred to in this Agreement shall be
true and correct as of the date of this Agreement and as of the
Effective Time with the same effect as though all such representations
and warranties had been made on and as of the Effective Time
(provided that representations and warranties which are confined to a
specified date shall speak only as of such date).
(b) Performance of Agreements and Covenants. Each and all of
the agreements and covenants of CFB to be performed and complied with
pursuant to this Agreement and the other agreements contemplated hereby
prior to the Effective Time shall have been duly performed and complied
with.
(c) Certificates. CFB shall have delivered to CBI (i) a
certificate, dated as of the Effective Time and signed on its behalf
by its chief executive officer and its chief financial officer, to
the effect that the conditions of its obligations set forth in Section
9.2(a) and 9.2(b) of this Agreement have been satisfied, and (ii)
certified copies of resolutions duly adopted by CFB's Board of
Directors and shareholders evidencing the taking of all corporate
action necessary to authorize the execution, delivery and
performance of this Agreement, and the consummation of the
transactions contemplated hereby, all in such reasonable detail as CBI
and its counsel shall request.
(d) Opinion of Counsel. CBI shall have received an opinion of
Hicks & MacQuarrie, counsel to CFB, dated as of the Closing, in form
reasonably satisfactory to CBI, as to the matters set forth in Exhibit
5.
(e) Accountant's Letters. CBI shall have received from Purvis,
Gray & Company letters dated not more than five days prior to (i) the
date of the Joint Proxy Statement and (ii) the Effective Time, with
respect to certain financial information regarding CFB, in form
and substance reasonably satisfactory to CBI, which letters shall be
based upon customary specified procedures undertaken by such firm in
accordance with Statement of Auditing Standard No. 72.
(f) Affiliates' Agreements. CBI shall have received from each
affiliate of CFB the affiliates letter referred to in Section 8.12
of this Agreement, to the extent necessary to assure in the
reasonable judgment of CBI that the transactions contemplated
hereby will qualify for pooling-of-interests accounting treatment.
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(h) Claims Letters. Each of the directors and officers of CFB
and CFBO shall have executed and delivered to CBI letters in
substantially the form of Exhibit 6.
(i) Survey. CFB shall provide to CBI an updated survey for
the Construction Project, of sufficient quality and detail for
title insurance purposes, showing that the foundations of all
structural improvements are located within the boundaries of the
property owned in fee simple by CFB or its Affiliates and within the
buildable areas permitted by applicable zoning and private covenants
affecting such property.
(j) Options. All options to purchase shares of CFB Common Stock
outstanding on the date hereof as provided in Section 5.3 hereof and
in the CFB Disclosure Memorandum, shall have been exercised in full,
and no CFB Company nor any of their Affiliates or successors shall have
paid or be obligated to pay any cash or other consideration (except
shares of CFB Common Stock issuable upon exercise) for, or in
respect of, such options.
9.3 Conditions to Obligations of CFB. The obligations of CFB to
perform this Agreement and consummate the Merger and the other transactions
contemplated hereby are subject to the satisfaction of the following
conditions, unless waived by CFB pursuant to Section 11.6(b) of this Agreement:
(a) Representations and Warranties. The representations and
warranties of CBI set forth or referred to in this Agreement shall
be true and correct as of the date of this Agreement and as of the
Effective Time with the same effect as though all such representations
and warranties had been made on and as of the Effective Time
(provided that representations and warranties which are confined to
a specified date shall speak only as of such date), except as expressly
contemplated by this Agreement.
(b) Performance of Agreements and Covenants. Each and all of
the agreements and covenants of CBI to be performed and complied with
pursuant to this Agreement and the other agreements contemplated hereby
prior to the Effective Time shall have been duly performed and complied
with.
(c) Certificates. CBI shall have delivered to CFB (i) a
certificate, dated as of the Effective Time and signed on its behalf
by its chief executive officer and its chief financial officer, to
the effect that the conditions of its obligations set forth in Section
9.3(a) and 9.3(b) of this Agreement have been satisfied, and (ii)
certified copies of resolutions duly adopted by CBI's Board of
Directors evidencing the taking of all corporate action necessary
to authorize the execution, delivery and performance of this
Agreement, and the consummation of the transactions contemplated
hereby, all in such reasonable detail as CFB and its counsel shall
request.
(d) Opinion of Counsel. CFB shall have received an opinion of
Alston & Bird, special counsel to CBI, dated as of the Effective Time,
in form reasonably acceptable to CFB, as to the matters set forth in
Exhibit 7.
ARTICLE 10
TERMINATION
10.1 Termination. Notwithstanding any other provision of this
Agreement, and notwithstanding the approval of this Agreement by the
shareholders of CFB, this Agreement may be terminated and the Merger abandoned
at any time prior to the Effective Time:
(a) By mutual consent of the Board of Directors of CBI and the
Board of Directors of CFB; or
(b) By the Board of Directors of either Party (provided that the
terminating Party is not then in material breach of any
representation, warranty, covenant, or other agreement contained in
this Agreement) in the event of a material breach by the other
Party of any representation or warranty contained in this
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Agreement which cannot be or has not been cured within 30 days after
the giving of written notice to the breaching Party of such breach; or
(c) By the Board of Directors of either Party (provided that the
terminating Party is not then in material breach of any
representation, warranty, covenant, or other agreement contained in
this Agreement) in the event of a material breach by the other Party
of any covenant or agreement contained in this Agreement which cannot
be or has not been cured within 30 days after the giving of written
notice to the breaching Party of such breach; or
(d) By the Board of Directors of either Party (provided that the
terminating Party is not then in material breach of any
representation, warranty, covenant, or other agreement contained in
this Agreement) in the event (i) any Consent of any Regulatory
Authority required for consummation of the Merger and the other
transactions contemplated hereby shall have been denied by final
nonappealable action of such authority or if any action taken by such
authority is not appealed within the time limit for appeal, or (ii)
the shareholders of CFB fail to vote their approval of this
Agreement and the transactions contemplated hereby as required by the
FBCA and the rules of the NASD at the Shareholders' Meeting where the
transactions were presented to such shareholders for approval and voted
upon; or
(e) By the Board of Directors of either Party in the event that
the Merger shall not have been consummated by April 30, 1996, if the
failure to consummate the transactions contemplated hereby on or before
such date is not caused by any breach of this Agreement by the
Party electing to terminate pursuant to this Section 10.1(e); or
(f) By the Board of Directors of either Party (provided that the
terminating Party is not then in material breach of any
representation, warranty, covenant, or other agreement contained in
this Agreement) in the event that any of the conditions precedent
to the obligations of such Party to consummate the Merger cannot be
satisfied or fulfilled by the date specified in Section 10.1(e) of this
Agreement; or
(g) By CBI, in the event that the Board of Directors of CFB
shall have failed to reaffirm its approval of the Merger and the
transactions contemplated by this Agreement (to the exclusion of any
other Acquisition Proposal), or shall have resolved not to reaffirm the
Merger, or shall have affirmed, recommended or authorized entering into
any other Acquisition Proposal or other transaction involving a merger,
share exchange, consolidation or transfer of substantially all of the
Assets of CFB.
10.2 Effect of Termination. In the event of the termination and
abandonment of this Agreement pursuant to Section 10.1 of this Agreement, this
Agreement shall become void and have no effect, except that (i) the provisions
of this Section 10.2 and Article 11 and Section 8.6(b) of this Agreement shall
survive any such termination and abandonment, and (ii) a termination pursuant
to Sections 10.1(b), 10.1(c) or 10.1(f) of this Agreement shall not relieve the
breaching Party from Liability for an uncured willful breach of a
representation, warranty, covenant, or agreement giving rise to such
termination.
10.3 Non-Survival of Representations and Covenants. The
respective representations, warranties, obligations, covenants, and
agreements of the Parties shall not survive the Effective Time except
this Section 10.3 and Articles 2, 3, 4 and 11 and Sections 8.12 and 8.13 of
this Agreement.
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ARTICLE 11
MISCELLANEOUS
11.1 Definitions.
(a) Except as otherwise provided herein, the capitalized terms
set forth below shall have the following meanings:
"Acquisition Proposal" with respect to a Party shall mean any
tender offer or exchange offer or any proposal for a merger,
acquisition of all of the stock or assets of, or other business
combination involving such Party or any of its Subsidiaries or the
acquisition of a substantial equity interest in, or a substantial
portion of the assets of, such Party or any of its Subsidiaries.
"Affiliate" of a Person shall mean: (i) any other Person
directly, or indirectly through one or more intermediaries,
controlling, controlled by or under common control with such Person;
(ii) any officer, director, partner, employer, or direct or indirect
beneficial owner of any 5% or greater equity or voting interest of
such Person; or (iii) any other Person for which a Person described
in clause (ii) acts in any such capacity.
"Agreement" shall mean this Agreement and Plan of Merger,
including the Exhibits delivered pursuant hereto and incorporated herein
by reference.
"Articles of Merger" shall mean the Articles of Merger to be
executed by CBI and filed with the Secretary of State of the State of
Florida relating to the Merger as contemplated by Section 1.1 of this
Agreement.
"Assets" of a Person shall mean all of the assets, properties,
businesses and rights of such Person of every kind, nature, character and
description, whether real, personal or mixed, tangible or intangible,
accrued or contingent, or otherwise relating to or utilized in such
Person's business, directly or indirectly, in whole or in part, whether or
not carried on the books and records of such Person, and whether or not
owned in the name of such Person or any Affiliate of such Person and
wherever located.
"BHC Act" shall mean the federal Bank Holding Company Act of
1956, as amended.
"CBI Capital Stock" shall mean, collectively, the CBI Common Stock
and any other class or series of capital stock of CBI.
"CBI Common Stock" shall mean the $.01 par value common stock of
CBI.
"CBI Companies" shall mean, collectively, CBI and all CBI
Subsidiaries.
"CBI Disclosure Memorandum" shall mean the written information
entitled "Citi-Bancshares, Inc. Disclosure Memorandum" delivered prior to
the date of this Agreement to CFB describing in reasonable detail the
matters contained therein and, with respect to each disclosure made
therein, specifically referencing each Section of this Agreement under
which such disclosure is being made. Information disclosed with
respect to one Section shall not be deemed to be disclosed for purposes
of any other Section not specifically referenced with respect thereto.
"CBI Financial Statements" shall mean (i) the consolidated
statements of condition (including related notes and schedules, if any) of
CBI as of June 30, 1995, and as of December 31, 1994 and 1993, and the
related statements of income, changes in shareholders' equity, and cash
flows (including related notes and schedules, if any) for the six months
ended June 30, 1995, and for each of the three years ended December 31,
1994, 1993 and 1992, as filed by CBI in SEC Documents, and (ii) the
consolidated statements
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of condition of CBI (including related notes and schedules, if any) and
related statements of income, changes in shareholders' equity, and cash
flows (including related notes and schedules, if any) included in SEC
Documents filed with respect to periods ended subsequent to June 30, 1995.
"CBI Stock Plan" shall mean the existing stock option and other
stock-based compensation plan of CBI designated as follows: 1994 Stock
Option and Stock Appreciation Rights Plan.
"CBI Subsidiaries" shall mean the Subsidiaries of CBI and any
corporation, bank, savings association, or other organization acquired as a
Subsidiary of CBI in the future and owned by CBI at the Effective Time.
"CFB Common Stock" shall mean the $.10 par value common stock of
CFB.
"CFB Companies" shall mean, collectively, CFB and all CFB
Subsidiaries.
"CFB Disclosure Memorandum" shall mean the written information
entitled "Citizens First Bancshares, Inc. Disclosure Memorandum" delivered
prior to the date of this Agreement to CBI describing in reasonable detail
the matters contained therein and, with respect to each disclosure made
therein, specifically referencing each Section of this Agreement under
which such disclosure is being made. Information disclosed with respect to
one Section shall not be deemed to be disclosed for purposes of any other
Section not specifically referenced with respect thereto.
"CFB Financial Statements" shall mean (i) the audited consolidated
balance sheets (including related notes and schedules, if any) of CFB as of
December 31, 1994 and 1993, and the related audited statements of income,
changes in shareholders' equity, and cash flows (including related notes
and schedules, if any) for each of the three fiscal years ended December
31, 1994, 1993 and 1992, and the unaudited balance sheets as of June 30,
1995, and (ii) the consolidated balance sheets of CFB (including related
notes and schedules, if any) and related statements of income, changes in
shareholders' equity, and cash flows (including related notes and
schedules, if any) with respect to periods ended subsequent to June 30,
1995, and such financial statements as of and for the years ended December
31, 1995 shall be audited by an independent certified public accounting
firm, with a nonqualified opinion expressed thereon by such independent
certified public accounting firm, and (iii) the balance sheets, and related
statements of income and changes in shareholders' equity (including related
notes and schedules, if any) filed as "Call Reports" by CFB with the FDIC
as of and for the periods ending June 30, 1995, and as of and for each
period subsequent to June 30, 1995.
"CFB Stock Plan" shall mean the existing stock option and other
stock-based compensation plan of CFB designated as follows: 1993
Nonstatutory Stock Option Plan.
"CFB Subsidiaries" shall mean the Subsidiaries of CFB, which shall
include the CFB Subsidiaries described in Section 5.4 of this Agreement and
any corporation, bank, savings association, or other organization acquired
as a Subsidiary of CFB in the future and owned by CFB at the Effective
Time.
"CFBO" shall mean Citizens First Bank of Ocala, a Florida bank,
wholly-owned by CFB.
"CNBL" shall mean Citizens National Bank of Leesburg, a national
banking association, wholly-owned by CBI.
"Closing Date" shall mean the date on which the Closing occurs.
"Confidentiality Agreement" shall mean those certain
confidentiality provisions contained in that certain Letter of Intent dated
September 14, 1995, between CFB and CBI.
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"Consent" shall mean any consent, approval, authorization,
clearance, exemption, waiver, or similar affirmation by any Person pursuant
to any Contract, Law, Order, or Permit.
"Contract" shall mean any written or oral agreement, arrangement,
authorization, commitment, contract, indenture, instrument, lease,
obligation, plan, practice, restriction, understanding or undertaking of
any kind or character, or other document to which any Person is a party or
that is binding on any Person or its capital stock, Assets or business.
"Default" shall mean (i) any breach or violation of or default
under any Contract, Order or Permit, (ii) any occurrence of any event that
with the passage of time or the giving of notice or both would constitute a
breach or violation of or default under any Contract, Order or Permit, or
(iii) any occurrence of any event that with or without the passage of time
or the giving of notice would give rise to a right to terminate or revoke,
change the current terms of, or renegotiate, or to accelerate, increase, or
impose any Liability under, any Contract, Order or Permit, where, in any
such event, such Default is reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on a Party.
"Environmental Laws" shall mean all Laws relating to pollution or
protection of human health or the environment (including ambient air,
surface water, ground water, land surface or subsurface strata) and which
are administered, interpreted or enforced by the United States
Environmental Protection Agency and state and local agencies with
jurisdiction over, and including common law in respect of, pollution or
protection of the environment, including the Comprehensive Environmental
Response Compensation and Liability Act, as amended, 42 U.S.C. 9601 et seq.
("CERCLA"), the Resource Conservation and Recovery Act, as amended, 42
U.S.C. 6901 et seq. ("RCRA"), and other Laws relating to emissions,
discharges, releases or threatened releases of any Hazardous Material, or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of any Hazardous
Material.
"ERISA Affiliate" shall have the meaning provided in Section 5.14
of this Agreement.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"Exhibits" 1 through 7, inclusive, shall mean the Exhibits so
marked, copies of which are attached to this Agreement. Such Exhibits are
hereby incorporated by reference herein and made a part hereof, and may be
referred to in this Agreement and any other related instrument or document
without being attached hereto.
"FHLB" shall mean the Federal Home Loan Bank of Atlanta.
"FBCA" shall mean the Florida Business Corporation Act.
"GAAP" shall mean generally accepted accounting principles,
consistently applied during the periods involved.
"Hazardous Substance" shall mean (i) any hazardous substance,
hazardous material, hazardous waste, regulated substance or toxic substance
(as those terms are defined by any applicable Environmental Laws) and (ii)
any chemicals, pollutants, contaminants, petroleum, petroleum products, or
oil (and specifically shall include asbestos requiring abatement, removal
or encapsulation pursuant to the requirements of governmental authorities
and any polychlorinated biphenyls).
"Internal Revenue Code" shall mean the Internal Revenue Code of
1986, as amended, and the rules and regulations promulgated thereunder.
"Knowledge" as used with respect to a Person (including references
to such Person being aware of a particular matter) shall mean those facts
that are known or should reasonably have been known after due
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inquiry by the Chairman, President, Chief Financial Officer, Chief
Accounting Officer, Chief Credit Officer, General Counsel, any Assistant or
Deputy General Counsel, or any Senior or Executive Vice President of such
Person and the knowledge of any such persons obtained or which would have
been obtained from a reasonable investigation.
"Law" shall mean any code, law, ordinance, regulation, reporting
or licensing requirement, rule, or statute or written, publicly available
interpretation applicable to a Person or its Assets, Liabilities or
business, including those promulgated, interpreted or enforced by any
Regulatory Authority.
"Liability" shall mean any direct or indirect, primary or
secondary, liability, indebtedness, obligation, penalty, cost or expense
(including costs of investigation, collection and defense), claim,
deficiency, guaranty or endorsement of or by any Person (other than
endorsements of notes, bills, checks, and drafts presented for collection
or deposit in the ordinary course of business) of any type, whether
accrued, absolute or contingent, liquidated or unliquidated, matured or
unmatured, or otherwise.
"Lien" shall mean any conditional sale agreement, default of
title, easement, encroachment, encumbrance, hypothecation, infringement,
lien, mortgage, pledge, reservation, restriction, security interest, title
retention or other security arrangement, or any adverse right or interest,
charge, or claim of any nature whatsoever of, on, or with respect to any
property or property interest, other than (i) Liens for current property
Taxes not yet due and payable, (ii) for depository institution Subsidiaries
of a Party, pledges to secure deposits and other Liens incurred in the
ordinary course of the banking business, and (iii) Liens which are not
reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on a Party.
"Litigation" shall mean any action, arbitration, cause of action,
claim, complaint, criminal prosecution, demand letter, governmental or
other examination or investigation, hearing, inquiry, administrative or
other proceeding, or notice (written or oral) by any Person alleging
potential Liability or requesting information relating to or affecting a
Party, its business, its Assets (including Contracts related to it), or the
transactions contemplated by this Agreement, but shall not include regular,
periodic examinations of depository institutions and their Affiliates by
Regulatory Authorities.
"Loan Property" shall mean any property owned by the Party in
question or by any of its Subsidiaries or in which such Party or Subsidiary
holds a security interest, and, where required by the context, includes the
owner or operator of such property, but only with respect to such property.
"Material Adverse Effect" on a Party shall mean an event, change
or occurrence which, individually or together with any other event, change
or occurrence, has a material adverse impact on (i) the financial position,
business, or results of operations of such Party and its Subsidiaries,
taken as a whole, or (ii) the ability of such Party to perform its
obligations under this Agreement or to consummate the Merger or the other
transactions contemplated by this Agreement, provided that "material
adverse impact" shall not be deemed to include the impact of (x) changes in
banking and similar Laws of general applicability or interpretations
thereof by courts or governmental authorities, (y) changes in generally
accepted accounting principles or regulatory accounting principles
generally applicable to banks and their holding companies, and (z) the
Merger and compliance with the provisions of this Agreement on the
operating performance of the Parties. "Material" for purposes of this
Agreement shall be determined in light of the facts and circumstances of
the matter in question; provided that any specific monetary amount stated
in this Agreement shall determine materiality in that instance.
"Mergers" shall mean the Merger and the Bank Merger, collectively.
"NASD" shall mean the National Association of Securities Dealers,
Inc.
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"Nasdaq National Market" shall mean the National Market System of
the National Association of Securities Dealers Automated Quotations System.
"Order" shall mean any administrative decision or award, decree,
injunction, judgment, order, quasi-judicial decision or award, ruling, or
writ of any federal, state, local or foreign or other court, arbitrator,
mediator, tribunal, administrative agency or Regulatory Authority.
"Participation Facility" shall mean any facility or property in
which the Party in question or any of its Subsidiaries participates in the
management and, where required by the context, said term means the owner or
operator of such facility or property, but only with respect to such
facility or property.
"Party" shall mean either CFB or CBI, and "Parties" shall mean
both CFB and CBI.
"Permit" shall mean any federal, state, local, and foreign
governmental approval, authorization, certificate, order, easement, filing,
franchise, license, notice, permit, or right to which any Person is a party
or that is or may be binding upon or inure to the benefit of any Person or
its securities, Assets or business.
"Person" shall mean a natural person or any legal, commercial or
governmental entity, such as, but not limited to, a corporation, general
partnership, joint venture, limited partnership, limited liability company,
trust, business association, group acting in concert, or any person acting
in a representative capacity.
"Proxy Statement" shall mean the proxy statement used by CFB to
solicit the approval of its shareholders of the transactions contemplated
by this Agreement, which shall include the prospectus of CBI relating to
the issuance of the CBI Common Stock to holders of CFB Common Stock.
"Registration Statement" shall mean the Registration Statement on
Form S-4, or other appropriate form, including any pre-effective or
post-effective amendments or supplements thereto, filed with the SEC by CBI
under the 1933 Act with respect to the shares of CBI Common Stock to be
issued to the shareholders of CFB in connection with the transactions
contemplated by this Agreement.
"Regulatory Authorities" shall mean, collectively, the United
States Department of Justice, the Board of the Governors of the Federal
Reserve System, the Office of the Comptroller of the Currency, the Federal
Deposit Insurance Corporation,, the Florida State Banking Department, all
state regulatory agencies having jurisdiction over the Parties and their
respective Subsidiaries, the NASD, and the SEC.
"Representative" shall mean any investment banker, financial
advisor, attorney, accountant, consultant, or other representative of a
Person.
"Rights" shall mean all arrangements, calls, commitments,
Contracts, options, rights to subscribe to, scrip, understandings,
warrants, or other binding obligations of any character whatsoever relating
to, or securities or rights convertible into or exchangeable for, shares of
the capital stock of a Person or by which a Person is or may be bound to
issue additional shares of its capital stock or other Rights.
"1933 Act" shall mean the Securities Act of 1933, as amended.
"1934 Act" shall mean the Securities Exchange Act of 1934, as
amended.
"SEC Documents" shall mean all forms, proxy statements,
registration statements, reports, schedules, and other documents filed, or
required to be filed, by a Party or any of its Subsidiaries with any
Regulatory Authority pursuant to the Securities Laws.
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"Securities Laws" shall mean the 1933 Act, the 1934 Act, the
Investment Company Act of 1940, as amended, the Investment Advisors Act of
1940, as amended, the Trust Indenture Act of 1939, as amended, and the
rules and regulations of any Regulatory Authority promulgated thereunder.
"Shareholders' Meeting" shall mean the meeting of the shareholders
of CFB to be held pursuant to Section 8.1 of this Agreement, including any
adjournment or adjournments thereof.
"Significant Subsidiary" shall mean any present or future
consolidated Subsidiary of the Party in question, the assets of which
constitute ten percent (10%) or more of the consolidated assets of such
Party as reflected on such Party's consolidated statement of condition
prepared in accordance with GAAP.
"Subsidiaries" shall mean all those corporations, banks,
associations, or other entities of which the entity in question owns or
controls 50% or more of the outstanding equity securities either directly
or through an unbroken chain of entities as to each of which 50% or more of
the outstanding equity securities is owned directly or indirectly by its
parent; provided, there shall not be included any such entity acquired
through foreclosure or any such entity the equity securities of which are
owned or controlled in a fiduciary capacity.
"Surviving Corporation" shall mean CBI as the surviving
corporation resulting from the Merger.
"Tax" or "Taxes" shall mean any federal, state, county, local, or
foreign income, profits, franchise, gross receipts, payroll, sales,
employment, use, property, withholding, excise, occupancy, and other taxes,
assessments, charges, fares, or impositions, including interest, penalties,
and additions imposed thereon or with respect thereto.
(b) The terms set forth below shall have the meanings ascribed
thereto in the referenced sections:
Allowance Section 6.16
Bank Merger Section 1.4
Bank Plan Section 1.4
CBI Benefit Plans Section 6.9
CBI ERISA Plan Section 6.9
CBI Pension Plan Section 6.9
CFB Benefit Plans Section 5.14
CFB Contracts Section 6.17
CFB ERISA Plan Section 5.14
CFB Options Section 5.14
CFB Pension Plan Section 5.14
Closing Section 1.2
Construction Project Section 1.2
Effective Time Section 1.3
ERISA Affiliate Section 5.14
Exchange Agent Section 4.1
Exchange Ratio Section 3.1(c)
Parcel Section 1.2
Merger Section 1.1
Tax Opinion Section 9.1(h)
(c) Any singular term in this Agreement shall be deemed to include
the plural, and any plural term the singular. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed
followed by the words "without limitation."
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11.2 Expenses.
(a) Except as otherwise provided in this Section 11.2, each of the
Parties shall bear and pay all direct costs and expenses incurred by it or on
its behalf in connection with the transactions contemplated hereunder,
including filing, registration and application fees, printing fees, and fees
and expenses of its own financial or other consultants, investment bankers,
accountants, and counsel, except that each of the Parties shall bear and pay
one-half of the filing fees payable in connection with the Registration
Statement and the Joint Proxy Statement and printing costs incurred in
connection with the printing of the Registration Statement and the Joint Proxy
Statement.
(b) Nothing contained in this Section 11.2 shall constitute or
shall be deemed to constitute liquidated damages for the willful breach by a
Party of the terms of this Agreement or otherwise limit the rights of the
nonbreaching Party.
11.3 Brokers and Finders. Except for The Carson Medlin Company as
to CBI, each of the Parties represents and warrants that neither it nor any of
its officers, directors, employees, or Affiliates has employed any broker or
finder or incurred any Liability for any financial advisory fees, investment
bankers' fees, brokerage fees, commissions, or finders' fees in connection with
this Agreement or the transactions contemplated hereby. In the event of a
claim by any broker or finder based upon his or its representing or being
retained by or allegedly representing or being retained by CFB or CBI, each of
CFB and CBI, as the case may be, agrees to indemnify and hold the other Party
harmless from and against any Liability in respect of any such claim.
11.4 Entire Agreement. Except as otherwise expressly provided
herein, this Agreement (including the documents and instruments referred to
herein) constitutes the entire agreement between the Parties with respect to
the transactions contemplated hereunder and supersedes all prior arrangements
or understandings with respect thereto, written or oral (except, as to Section
8.6(b) of this Agreement, for the Confidentiality Agreement). Nothing in this
Agreement expressed or implied, is intended to confer upon any Person, other
than the Parties or their respective successors, whether third party
beneficiaries or otherwise, any rights, remedies, obligations, or liabilities
under or by reason of this Agreement, other than as provided in Sections 8.13
of this Agreement.
11.5 Amendments. To the extent permitted by Law, this Agreement
may be amended by a subsequent writing signed by each of the Parties upon the
approval of the Boards of Directors of each of the Parties, whether before or
after shareholder approval of this Agreement has been obtained; provided, that
after any such approval by the holders of CFB Common Stock, there shall be made
no amendment that pursuant to the FBCA requires further approval by such
shareholders without the further approval of such shareholders; and further
provided, that after any such approval by the holders of CFB Common Stock, the
provisions of this Agreement relating to the manner or basis in which shares of
CFB Common Stock will be exchanged for shares of CBI Common Stock shall not be
amended after the Shareholders' Meetings in a manner adverse to the holders of
CFB Common Stock without any requisite approval of the holders of the issued
and outstanding shares of CFB Common Stock entitled to vote thereon.
11.6 Waivers.
(a) Prior to or at the Effective Time, CBI, acting through its
Board of Directors, chief executive officer or other authorized officer, shall
have the right to waive any Default in the performance of any term of this
Agreement by CFB, to waive or extend the time for the compliance or fulfillment
by CFB of any and all of its obligations under this Agreement, and to waive any
or all of the conditions precedent to the obligations of CBI under this
Agreement, except any condition which, if not satisfied, would result in the
violation of any Law. No such waiver shall be effective unless in writing
signed by a duly authorized officer of CBI.
(b) Prior to or at the Effective Time, CFB, acting through its
Board of Directors, chief executive officer or other authorized officer, shall
have the right to waive any Default in the performance of any term of this
Agreement by CBI, to waive or extend the time for the compliance or fulfillment
by CBI of any and all of its
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obligations under this Agreement, and to waive any or all of the conditions
precedent to the obligations of CFB under this Agreement, except any condition
which, if not satisfied, would result in the violation of any Law. No such
waiver shall be effective unless in writing signed by a duly authorized officer
of CFB.
(c) The failure of any Party at any time or times to require
performance of any provision hereof shall in no manner affect the right of such
Party at a later time to enforce the same or any other provision of this
Agreement. No waiver of any condition or of the breach of any term contained
in this Agreement in one or more instances shall be deemed to be or construed
as a further or continuing waiver of such condition or breach or a waiver of
any other condition or of the breach of any other term of this Agreement.
11.7 Assignment. Except as expressly contemplated hereby, neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by any Party hereto (whether by operation of Law or otherwise)
without the prior written consent of the other Party. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and be
enforceable by the Parties and their respective successors and assigns.
11.8 Notices. All notices or other communications which are
required or permitted hereunder shall be in writing and sufficient if delivered
by hand, by facsimile transmission, by registered or certified mail, postage
pre-paid, or by courier or overnight carrier, to the persons at the addresses
set forth below (or at such other address as may be provided hereunder), and
shall be deemed to have been delivered as of the date so delivered:
<TABLE>
<S> <C>
CFB: Citizens First Bancshares, Inc.
750 S.W. Martin Luther King, Jr. Ave.
Ocala, Florida 34478
Telecopy Number: (904) 732-0540
Attention: H. Reid Sides, Jr.
Copy to Counsel: Hicks & MacQuarrie
2303 S.E. 17th Street
Ocala, Florida 34471
Telecopy Number: (904) 351-2284
Attention: C. Daniel Hicks
CBI: Citi-Bancshares, Inc.
1211 North Boulevard West
Leesburg, Florida 34748-5351
Telecopy Number: (904) 326-4738
Attention: Kenneth W. Mullis
Copy to Counsel: Alston & Bird
One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30309-3424
Telecopy Number: (404) 881-7777
Attention: Ralph F. MacDonald, III
</TABLE>
11.9 Governing Law. This Agreement shall be governed by and
construed in accordance with the Laws of the State of Florida, without regard
to any applicable conflicts of Laws.
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11.10 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original, but all
of which together shall constitute one and the same instrument.
11.11 Captions. The captions contained in this Agreement are for
reference purposes only and are not part of this Agreement.
11.12 Interpretations. Neither this Agreement nor any
uncertainty or ambiguity herein shall be construed or resolved against any
party, whether under any rule of construction or otherwise. No party to
this Agreement shall be considered the draftsman. The parties acknowledge
and agree that this Agreement has been reviewed, negotiated and accepted by
all parties and their attorneys and shall be construed and interpreted
according to the ordinary meaning of the words used so as fairly to
accomplish the purposes and intentions of all parties hereto.
11.13 Enforcement of Agreement. The Parties hereto agree that
irreparable damage would occur in the event that any of the provisions of
this Agreement was not performed in accordance with its specific terms or
was otherwise breached. It is accordingly agreed that the Parties
shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions hereof
in any court of the United States or any state having jurisdiction, this
being in addition to any other remedy to which they are entitled at law or in
equity.
11.14 Severability. Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining
terms and provisions of this Agreement or affecting the validity or
enforceability of any of the terms or provisions of this Agreement in any
other jurisdiction. If any provision of this Agreement is so broad as to be
unenforceable, the provision shall be interpreted to be only so broad as is
enforceable.
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to
be executed on its behalf and its corporate seal to be hereunto affixed and
attested by officers thereunto as of the day and year first above written.
<TABLE>
<S> <C>
ATTEST: CITI-BANCSHARES, INC.
/s/ BOBBY A. SULLIVAN By: /s/ KENNETH W. MULLIS
- --------------------------- ---------------------------
Secretary President
[CORPORATE SEAL]
ATTEST: CITIZENS FIRST BANCSHARES, INC.
/s/ CHERYL R. ROSS By: /s/ H. REID SIDES, JR.
- --------------------------- ---------------------------
Secretary President
</TABLE>
[CORPORATE SEAL]
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LIST OF EXHIBITS
Exhibit Number Description
1. Bank Plan of Merger. (Sec. 1.4).
2. Form of Directors' Agreement. (Sec. 5.22).
3. Form of Shareholders' Agreement. (Sec. 5.25).
4. Form of agreement of affiliates of CFB. (Sec.
8.12, 9.2(g)).
5. Matters as to which Hicks & MacQuarrie will opine.
(Sec. 9.2(d)).
6. Form of Claims Letter (Sec. 9.2(h)).
7. Matters as to which Alston & Bird will opine. (Sec.
9.3(d)).
iv
