EXHIBIT 2.1
PLAN OF TAX-FREE REORGANIZATION UNDER
SECTION 355
OF THE INTERNAL REVENUE CODE
AND
AGREEMENT
This Plan of Tax-Free Reorganization under Section 355 of the Internal
Revenue Code and Agreement (hereinafter referred to as the "Agreement") made and
entered into as of the 24th day of November, 2004, by and among those persons
listed on Schedule A attached hereto (each an "Acquiror" and, collectively, the
"Acquirors"), each a resident of the State of Tennessee, and Civitas BankGroup,
Inc., a Tennessee corporation (hereinafter referred to as "Civitas").
W I T N E S S E T H:
WHEREAS, Civitas owns all of the issued and outstanding shares of capital
stock of BankTennessee, a Tennessee banking corporation (hereinafter referred to
as "BT"); and
WHEREAS, the Acquirors desire to acquire from Civitas, and Civitas desires
to transfer to the Acquirors, all of the issued and outstanding shares of
capital stock of BT in exchange for two million (2,000,000) shares (with an
aggregate value of $17,000,000 based on a per share price of $8.50 per share) of
Civitas' $0.50 par value voting common stock (hereinafter referred to as
"Civitas Common Stock") owned by the Acquirors in the respective amounts set
forth on Schedule A to be delivered on the Closing Date, all upon the terms and
conditions hereinafter set forth; and
WHEREAS, a special committee of the Board of Directors of Civitas deems it
desirable, and in the best interest of Civitas and its shareholders, that the
transaction contemplated by this Agreement be consummated and qualify as a
"reorganization" under Section 355 of the Internal Revenue Code of 1986, as
amended;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements, provisions, covenants and grants herein contained, the parties
hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
For purposes of this Agreement, in addition to the terms defined elsewhere
herein, unless the context otherwise requires, the following terms shall have
the meanings indicated:
"Acquiror" and "Acquirors" shall have the meaning set forth in the
introductory paragraph of this Agreement.
"Affiliate" means, when used with respect to a specific Person, another
Person that directly, or indirectly through one or more intermediaries, controls
or is controlled by or is under common control with the Person specified.
"Acquisition Proposal" shall have the meaning set forth in Section 7.1(a).
"Bank Regulatory Approval" and "Bank Regulatory Approvals" shall have the
meanings set forth in Section 5.3(c).
"BT" shall have the meaning set forth in the introductory paragraph of
this Agreement.
"BT Common Stock" means BT's $3.00 par value voting common stock.
"BT Counsel" means ▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, PLLC.
"Civitas" shall have the meaning set forth in the introductory paragraph
of this Agreement.
"Civitas Common Stock" shall have the meaning set forth in the second
recital of this Agreement.
"Civitas Counsel" means Baker, Donelson, Bearman, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇,
P.C.
"Civitas Disclosure Letter" means the Disclosure Letter delivered to
Acquirors by Civitas on or before the date hereof.
"Civitas Financial Advisor" means ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.
"Closing" means the consummation of the transfer of the BT Common Stock in
exchange for the Exchange Shares as provided in this Agreement.
"Closing Date" means the second business day after the last of the
conditions set forth in Article IX hereof shall have been fulfilled or waived,
or any other date that may be mutually agreed upon by the parties hereto.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and any regulations or published rulings promulgated or issued thereunder.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Shares" shall have the meaning set forth in Section 3.1.
"GAAP" means generally accepted accounting principles, consistently
applied.
"Knowledge" means, with respect to any Person, to that Person's actual
knowledge as of the date of this Agreement and, if the Person is a corporation,
to the actual knowledge of the directors and executive officers of that Person
as of the date of this Agreement.
"Material Adverse Change" or "Material Adverse Effect" means, subject to
the qualifications or limitations set forth in this definition, when used with
respect to a Person, any change or effect that is or would reasonably be
expected (so far as can be foreseen at the time) to be materially adverse to the
assets, condition (financial or otherwise) or results of operations of that
Person and its Subsidiaries taken as a whole. With respect to Civitas, a
Material Adverse Change or Material Adverse Effect shall not be deemed to have
occurred unless a change, effect, condition or occurrence is or would reasonably
be expected to materially adversely affect the ability of Civitas to perform its
obligations hereunder. For the purposes of this Agreement, a Material Adverse
Change
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shall not be deemed to have occurred or a Material Adverse Effect shall not be
deemed to exist with respect to BT unless a change or effect causes or results
in a liability or expense in excess of $500,000.00.
"Person" means an individual, partnership, corporation, trust or other
entity, or a government or agency or instrumentality thereof.
"Securities Act" means the Securities Act of 1933, as amended.
"SEC" means the United States Securities and Exchange Commission.
"Service Agreement" means an agreement between Civitas and BT, in form and
substance satisfactory to Civitas and BT, providing for Civitas, for a period of
six months following the Closing Date, to provide to BT substantially equivalent
services as are currently provided BT as a subsidiary of Civitas, including
certain accounting, human resources, information technology, "back office"
functions, internal audit and customer compliance functions, at fees comparable
to those currently charged to BT by Civitas but as may be amended by agreement
of the parties or as required by Regulatory Authorities upon acceptance of
Civitas.
"Subsidiary" means any corporation, partnership, joint venture or other
legal entity of which a Person (either alone or through or together with any
other Subsidiary), owns, directly or indirectly, 50% or more of the stock or
other equity interests the holders of which are generally entitled to vote for
the election of the board of directors or other governing body of such
corporation or other legal entity.
"Termination Date" means March 30, 2005, or if the Bank Regulatory
Approvals have not been obtained by that date, then June 30, 2005.
All references herein to "Sections," "Schedules" and "Exhibits" shall,
unless otherwise indicated, refer to the sections, schedules and exhibits which
(through attachment, whether to this Agreement, the Civitas Disclosure Letter or
incorporation by reference) are a part of this Agreement.
ARTICLE II
TRANSFERS BY CIVITAS
Section 2.1 Transfer of BT Common Stock. On the Closing Date, Civitas
shall transfer and deliver to the Acquirors, subject to the terms and conditions
set forth in this Agreement, free and clear of all liens, encumbrances, claims,
pledges, or security interests, all of the issued and outstanding shares of BT
Common Stock.
ARTICLE III
TRANSFERS BY ACQUIRORS
Section 3.1 Transfer of Civitas Shares. On the Closing Date, the Acquirors
shall deliver to Civitas, subject to the terms and conditions set forth in this
Agreement, a stock
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certificate or stock certificates representing, in the aggregate, Two Million
shares of Civitas Common Stock (the "Exchange Shares").
Section 3.2 Adjustments. In the event of any reclassification, stock split
or stock dividend with respect to Civitas Common Stock, any change of the
Civitas Common Stock into other securities or any other dividend or distribution
with respect to the Civitas Common Stock, or if a record date with respect to
any of the foregoing should occur, prior to the Closing, appropriate and
proportionate adjustments, if necessary, shall be made to the number of Exchange
Shares to be issued pursuant to this Agreement, and all references to such terms
in this Agreement shall be deemed to be to such terms as so adjusted.
ARTICLE IV
CLOSING
The Closing shall occur at the offices of Civitas Counsel, Suite 1000
Commerce Plaza, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ at 10:00 a.m.,
Nashville time, on the Closing Date.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF CIVITAS
Section 5.1 Corporate Organization. Civitas represents and warrants to the
Acquirors that:
(a) Civitas is a corporation duly organized, validly existing and in
good standing under the laws of the State of Tennessee and has the requisite
corporate power and authority to carry on its business as now being conducted.
Civitas has no Subsidiaries other than those listed in Exhibit 21 to its latest
Annual Report on Form 10-K filed with the SEC. Civitas is duly qualified to do
business and is in good standing in each jurisdiction where the character of its
properties owned or held under lease or the nature of its activities makes such
qualification necessary, except where the failure to be so qualified would not,
individually or in the aggregate, have a Material Adverse Effect on Civitas.
(b) BT is a commercial bank duly organized, validly existing and in good
standing under the laws of the State of Tennessee and has the requisite
corporate power and authority to carry on its business as now being conducted.
BT has no Subsidiaries. BT does not own any interest in any partnership or other
entity. There are no outstanding contractual obligations of BT to acquire any
shares of capital stock or other ownership interest of any corporation,
partnership or other entity. Except as made in the ordinary course of its
banking business, BT does not have any investment (either debt or equity), or
commitments to make such an investment, in any corporation, joint venture,
general or limited partnership, business enterprise or other person or entity.
BT is duly licensed or qualified to do business and is in good standing in each
jurisdiction where it owns or leases property, conducts business or where the
character of its properties owned or held under lease or the nature of its
activities makes such licensure or qualification necessary. The deposit accounts
of BT are insured by the Federal Deposit
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Insurance Corporation to the fullest extent permitted by law, and all premiums
and assessments required to be paid in connection therewith have been paid when
due.
Section 5.2 Capital Structure.
(a) BT has authorized capital stock consisting of one million
(1,000,000) shares of BT common stock, of which Thirty-Three Thousand Three
Hundred Thirty-Three and 33/100s (33,333.33) shares are issued and outstanding.
BT has no other issued or authorized securities. There are no shares of BT
Common Stock held in the treasury of BT. The issued and outstanding shares of BT
Common Stock are validly issued, fully paid and nonassessable. There are no
existing subscriptions, options, warrants, calls, commitments, agreements or
rights of any kind obligating BT to issue any shares of stock or options or
rights with respect thereto, and there are no existing or outstanding securities
of any kind convertible into or exchangeable for shares of BT Common Stock. No
former shareholder of BT or any corporation heretofore merged with or into BT
has any claim or cause of action whatsoever against BT arising out of or in any
way connected with any occurrence or state of facts in existence prior to the
date hereof that would have a Material Adverse Effect on BT. To Civitas'
Knowledge, no former shareholder of BT or any corporation heretofore merged with
or into BT has any claim or cause of action whatsoever against BT not barred by
the applicable statute of limitations arising out of or in any way connected
with any occurrence or state of facts in existence prior to the date hereof. To
Civitas' Knowledge, no former shareholder of BT or any corporation heretofore
merged with or into BT shall come to have any claim or cause of action
whatsoever against BT or any of the Acquirors by virtue of, or in any way
connected with, the transactions contemplated by this Agreement. All of the
issued and outstanding BT Common Stock has been issued and sold in compliance
with all federal and state securities laws. There are no preemptive rights in
respect of BT Common Stock.
(b) Except as set forth on the Civitas Disclosure Letter, Civitas owns
of record and beneficially all of the issued and outstanding BT Common Stock and
has the right and power to transfer and assign the BT Common Stock, free and
clear of all liens, encumbrances, restrictions, claims, pledges or security
interests or charges or interests of any kind, whether voluntarily incurred or
arising by operation of law or otherwise. Civitas has the exclusive right, power
and authority to vote the BT Common Stock. Civitas is the sole shareholder of
BT. Upon and effective with the Closing, subject to the Acquirors' satisfaction
of the condition set forth in Section 9.3.3, the Acquirors will have good, valid
and marketable title to all of the issued and outstanding capital stock of BT
free and clear of all liens, encumbrances, restrictions, claims, pledges,
security interests, charges or interests of any kind, whether voluntarily
incurred or arising by operation of law or otherwise, with the exception of
liens or encumbrances that may have been created or granted by the Acquirors.
(c) Since December 31, 2003, BT has not declared, set aside, made or
paid to Civitas dividends or other distributions on the outstanding shares of BT
Common Stock, and BT has no obligation to declare, set aside, make or pay to
Civitas dividends or other distributions on the outstanding shares of BT Common
Stock. There are no amounts owed to Civitas by BT as a result of any previous
declaration of any dividend or other distribution on any outstanding securities
of BT.
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Section 5.3 Authority; Non-Contravention.
(a) Civitas has all requisite corporate power and authority to enter
into this Agreement and to consummate the transactions contemplated hereby.
Civitas' execution and delivery of this Agreement and its consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action. This Agreement has been duly executed and delivered by Civitas
and, subject to the satisfaction of the conditions applicable to Civitas as
forth herein, constitutes a valid and binding obligation of Civitas, enforceable
in accordance with its terms.
(b) The execution and delivery of this Agreement by Civitas does not and
will not, and the consummation of the transactions contemplated hereby and
compliance with the provisions hereof will not conflict with, or result in any
violation of, or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation or acceleration of
any obligation or to the loss of a benefit under, or result in the creation of
any lien, security interest, charge or encumbrance upon any of the properties or
assets of Civitas or any of its Subsidiaries (including BT) under:
(1) any provision of the Charter or By-laws of either Civitas or
BT;
(2) any loan or credit agreement, note, bond, mortgage, indenture,
lease or other agreement, instrument, permit, concession, franchise or license
applicable to Civitas or any of its Subsidiaries, except as set forth on the
Civitas Disclosure Letter;
(3) any judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to Civitas, any of its Subsidiaries, or any of their
respective properties or assets;
other than, in the case of clauses (2) or (3), any such conflicts, violations,
defaults, rights, loss of benefits, liens, security interests, charges or
encumbrances that, individually or in the aggregate, would not have a Material
Adverse Effect on Civitas or a Material Adverse Effect on BT.
(c) No filing or registration with, or authorization, consent or
approval of, any domestic (federal or state), foreign or supranational court,
commission, governmental body, regulatory agency, authority or tribunal (a
"Governmental Entity") is required by or with respect to Civitas or any of its
Subsidiaries (including BT) in connection with the execution and delivery of
this Agreement by Civitas or is necessary for the consummation of the
transactions contemplated by this Agreement, except:
(1) those required by the Department of Financial Institutions of
the State of Tennessee, the United States Federal Reserve Board and/or the
United States Federal Deposit Insurance Corporation (each a "Bank Regulatory
Approval" and, collectively, the "Bank Regulatory Approvals"); and
(2) in connection, or in compliance, with the provisions of the
Securities Act, the Exchange Act and applicable state securities or blue sky
laws (the Securities Act, Exchange Act and such applicable state securities laws
being hereinafter referred to collectively as "Securities Laws").
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Section 5.4 BT Financial Statements. Civitas has delivered to Acquirors
(or will deliver when available, with respect to periods ended after the date of
this Agreement but prior to the Closing Date) true, correct and complete copies
of:
(a) All Call Reports, including any amendments thereto, filed with any
Regulatory Authority by BT for the years ended December 31, 2001, 2002, 2003,
and thereafter, together with any correspondence with any federal or state
regulatory agency having jurisdiction over BT (collectively, "Regulatory
Authorities") concerning any of the aforesaid financial statements and Reports
(the "BT Regulatory Financial Statements"). To Civitas' Knowledge, such BT
Regulatory Financial Statements (i) were (or will be) prepared from the records
of BT; (ii) were (or will be) prepared in accordance with regulatory accounting
principles consistently applied; (iii) present (or, when prepared, will present)
BT's financial condition and the results of its operations, changes in
stockholders' equity and cash flows at the relevant dates thereof and for the
periods covered thereby; and (iv) contain or reflect (or, when prepared, will
contain and reflects) all necessary adjustments and accruals for an accurate
presentation of BT's financial condition and the results of BT's operations and
cash flows for the periods covered by such financial statements.
(b) BT's unaudited balance sheets as of December 31, 2001, 2002, and
2003, and September 30, 2004, and unaudited statements of income and changes in
stockholders' equity and statements of cash flows for the years ended December
31, 2001, 2002, and 2003, and the period ended September 30, 2004, and the
unaudited balance sheets, statements of income, changes in stockholders' equity
and statements of cash flow for any quarter or fiscal year ended thereafter
(collectively, the "BT Financial Statements"). To Civitas' Knowledge, each of
the BT Financial Statements (including the related notes) fairly presents the
results of operations of BT for the respective periods covered thereby and the
financial condition of BT as of the respective dates thereof, in each case in
accordance with generally accepted accounting principles consistently applied
during the periods involved, except as may be noted therein.
Section 5.5 Opinion of Financial Advisor. Civitas has received the opinion
of ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc. (the "Civitas Financial Advisor") to the effect
that, as of the date hereof, the consideration to be received by Civitas in
exchange for the BT Common Stock being transferred to the Acquirors, pursuant to
the terms and conditions of this Agreement, is fair to Civitas' shareholders
from a financial point of view.
Section 5.6 Corporate Documents. The copies of the Charter and By-laws of
Civitas and BT, which have been delivered to the Acquirors, are true, correct
and complete copies of each of such Charter and By-laws as in effect on the date
hereof. The minute books of BT contain true and correct records of all meetings
and other corporate actions held or taken by the BT shareholders and Board of
Directors.
Section 5.7 Certain Agreements. Except as set forth on the Civitas
Disclosure Letter, BT is not a party to any written, or to Civitas' Knowledge,
any oral, agreement or plan, including any employment, consulting, or severance
agreement, any stock option plan, stock appreciation rights plan, restricted
stock plan or stock purchase plan, any of the benefits of which will be
increased, or the vesting of the benefits of which will be accelerated, by the
occurrence of any of
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the transactions contemplated by this Agreement or the value of any of the
benefits of which will be calculated on the basis of any of the transactions
contemplated by this Agreement.
Section 5.8 Absence of Certain Changes or Events. To Civitas' Knowledge,
since December 31, 2003, there has not been:
(a) any declaration or payment of dividends on any capital stock of BT or any
distribution with respect to, or in redemption of, any of the shares of
capital stock of BT;
(b) any sale or transfer of any assets or properties of BT except in the
ordinary course of business consistent with past practice;
(c) any damage, destruction or loss (whether or not covered by insurance) that
could reasonably be expected to have a Material Adverse Effect on BT;
(d) any Material Adverse Change in the condition (financial or otherwise) of
properties, assets, liabilities, business or prospects of BT except as
reflected in the BT Regulatory Financial Statements and BT Financial
Statements;
(e) any transaction other than in the ordinary course of business of BT
consistent with past practice;
(f) any lease of personal or real property to or from any person, firm or
entity with respect to which BT is a party;
(g) any amendment of the Charter or By-laws of BT;
(h) the granting or filing of any lien, encumbrance or security interest
against any of the shares of capital stock of BT or any of its properties
or assets, real, personal or mixed, tangible or intangible;
(i) any payment, loan or advance of any amount to, or sale, transfer or lease
of any properties or assets (real, personal or mixed, tangible or
intangible) to, or execution of any agreement with, officers or directors
of Civitas, except as approved by the BT Board of Directors;
(j) any increase in the compensation payable to or to become payable by BT to
any officer, employee or agent of BT (including, without limitation, any
increase in the discretionary matching under any 401(k) plan), except for
normal compensation adjustments to salaries or wages made in the ordinary
course of business consistent with past practice;
(k) any payment, other than in the ordinary course of business of BT
consistent with past practice, under any insurance, pension or other
benefit plan, program or arrangement made to, for or with any officer,
employee or agent of Civitas or BT;
(l) any change in the method of accounting or accounting practice by BT,
except as required by generally accepted accounting principles; or
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(m) any agreement, whether in writing or otherwise, to take any action
described in this Section 5.8.
Section 5.9 Compliance with Laws. To Civitas' Knowledge, other than as
listed on the Civitas Disclosure Letter,, BT is not in violation of any
applicable federal, state, local or foreign statute, law, regulation, ordinance,
rule, judgment, order or decree applicable to it or employees conducting its
business. Other than as referenced in examination reports from Regulatory
Authorities and as listed on the Civitas Disclosure Letter, Civitas has not
received any notification or communication from any agency or department of
federal, state or local government or any Regulatory Authority or the staff
thereof asserting that BT is not in compliance with any statutes, regulations or
ordinances, (ii) threatening to revoke any permit, license, franchise,
certificate or authority or other governmental authorization, or (iii) requiring
BT to enter into or consent to the issuance of a cease and desist order, formal
agreement, directive, 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 dividend.
Section 5.10 Contracts. To Civitas' Knowledge, all contracts to which BT
or any of its assets, business or operations, is a party to, or is bound or
affected by, or receives benefits under either (i) have been approved by the
Board of Directors of BT, or (ii) entered into in the ordinary course of
business of BT.
Section 5.11 Assets. To Civitas' Knowledge, BT has good and marketable
title to, leasehold interest in, or right to use all properties and assets of
any nature used in its business, free and clear of all liens, charges, claims
and encumbrances of any nature whatsoever, except any property taxes and
assessments not delinquent and other encumbrances which do not adversely affect
the value or utility of the asset. To Civitas' Knowledge, all leased assets of
BT are held under valid leases enforceable in accordance with their respective
terms and each such lease is in full force and effect. Civitas has not received
notice from any insurance carrier that (i) any insurance covering BT or its
assets would 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 any
such policies of insurance and no notices have been given by Civitas under such
policies.
Section 5.12 No Brokers. Neither Civitas or BT is a party to or bound by
any contract, arrangement or understanding with any person or firm which may
result in the obligation of BT to pay any finder's fees, brokerage or agent's
commissions or other like payments in connection with the negotiations leading
to this Agreement or the consummation of the transactions contemplated hereby,
and there will be no claim for payment of any finder's fees, brokerage or
agent's commissions or other like payments in connection with the negotiations
leading to this Agreement or the consummation of the transactions contemplated
hereby.
Section 5.13 Absence of Undisclosed Liabilities. To Civitas' Knowledge,
except as and to the extent reflected or reserved against in the most recent
financial statements of BT furnished to the Acquirors, BT has not incurred any
liabilities of any kind whatsoever, whether accrued, absolute, contingent,
determined, determinable or otherwise other than: (a) liabilities incurred in
the ordinary course of business in accordance with past practice since the date
of such financial
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statements; (b) liabilities that have been repaid, discharged or otherwise
extinguished; or (c) liabilities under or contemplated by this Agreement.
Section 5.14 Tax Matters. (a) Except as set forth on the Civitas
Disclosure Letter, all tax returns required to be filed by or on behalf of BT
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, 2003,
and all tax returns filed are complete and accurate. All taxes shown on filed
tax returns have been paid. There is no audit examination, deficiency, or refund
litigation with respect to any taxes. All taxes and other liabilities due with
respect to completed and settled examinations or concluded litigation have been
paid. There are no liens with respect to taxes upon any of the assets of BT.
(b) Civitas shall timely file all tax returns of BT required to be
filed for the fiscal year ended December 31, 2004, and all tax returns which are
required to be filed for any other periods preceding the Closing Date. All such
tax returns filed shall be complete and accurate. Civitas shall pay all taxes
and other liabilities due by BT with respect to all such periods preceding the
Closing Date.
(c) BT 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 Code.
(d) Except as set forth on the Civitas Disclosure Letter, BT is
not a party to any tax allocation or sharing agreement and BT has not been a
member of an affiliated group filing a consolidated federal income tax return
(other than a group the common parent of which was Civitas) and does not have
any liability for taxes of any Person (other than BT) under Treasury Regulation
Section 1.1502-6 (or any similar provision of state, local or foreign law) as a
transferee or successor or by contract or otherwise.
Section 5.15 Legal Proceedings. There is no litigation instituted or, to
Civitas' Knowledge, threatened or pending against BT.
Section 5.16 Representations Complete. None of the representations or
warranties made by Civitas herein contains, to Civitas' Knowledge, any untrue
statement of a material fact or omits, to Civitas' Knowledge, to state any
material fact necessary to make the statements therein, in light of the
circumstances under which made, not misleading.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF ACQUIRORS
Each Acquiror, individually represents and warrants to Civitas that:
Section 6.1 Investor Status of Acquirors.
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Section 6.1.1 Such Acquiror acknowledges that he/she knows and
understands the following: (1) that BT is a wholly-owned subsidiary of Civitas;
and (2) that he/she has had and continues to have complete access to and
familiarity with the business operations and financial and other matters
relative to BT.
Section 6.1.2 Such Acquiror is an "accredited investor" as that term
is defined in Rule 501 of Regulation D, 15 C.F.R. ▇▇.▇▇. 230.501 et seq.,
promulgated under the Securities Act, and has such Knowledge and experience in
financial and business matters so as to be capable of evaluating the merits and
risks of an investment in BT.
Section 6.1.3 Such Acquiror is acquiring BT Common Stock for his/her
own account for investment and not with a view to, or for resale in connection
with, any distribution of the BT Common Stock within the meaning of the
Securities Act. Such Acquiror agrees that such BT Common Stock may not be sold,
transferred, offered for sale, pledged, hypothecated or otherwise disposed of
without registration under the Securities Act, as amended, except pursuant to an
exemption from registration available under such Securities Act. Such Acquiror
agrees that he/she will not sell, offer for sale or solicit offers to buy any of
the BT Common Stock in violation of the Securities Act or the securities laws of
any state. Such Acquiror understands that the shares of BT Common Stock acquired
hereunder have not been registered under federal or any state securities laws.
Section 6.1.4
(a) Such Acquiror understands and hereby acknowledges that the BT
Common Stock (a) is not being registered under the Federal Securities Act
of 1933, as amended, and is not being registered or otherwise qualified
for sale under the "Blue Sky" laws and regulations of any state, (b) may
not be sold or offered for sale unless subsequently so registered or
qualified, or an exemption from such registration or qualification is
available, (c) will not be listed on any stock or other securities
exchange, (d) will carry no rating from any rating service, and (e) may
not be readily marketable, even if subsequently registered or qualified.
(b) Such Acquiror is a resident of the State of Tennessee.
(c) Neither Civitas nor any person acting on its behalf has
offered or sold the BT Common Stock to such Acquiror by means of any form
of general solicitation or general advertising or publicly disseminated
advertisements or sales literature.
(d) Such Acquiror has sufficient knowledge and experience in
financial and business matters, including the purchase and ownership of
corporate securities similar to the BT Common Stock, to be capable of
evaluating the risks and merits of the investment represented by the BT
Common Stock. Such Acquiror is able to bear the economic risks of such
investment. Such Acquiror has adequate means of providing for his current
needs and possible personal contingencies, and he has no need for
liquidity of his investment in the BT Common Stock.
(e) Such Acquiror has made, with due diligence, his own inquiry,
investigation, and analysis with respect to Civitas and the BT Common
Stock.
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(f) Such Acquiror acknowledges that he has had the opportunity to
ask questions and receive answers from knowledgeable individuals
concerning, among other things, BT and the BT Common Stock, so that, as a
reasonable investor, such Acquiror has been able to make a fully informed
decision to purchase the BT Common Stock.
(g) Such Acquiror is aware of and understands that the BT Common
Stock is a speculative investment which involves a risk of loss of such
Acquiror's entire investment. Such Acquiror understands BT's future
operations are subject to many significant risks.
(h) Such Acquiror understands and intends that Civitas will rely
upon the representations made by him in this Agreement and related
documents and that Civitas is fully entitled to rely upon each and all of
the same without further inquiry. Such Acquiror agrees to indemnify and
save and hold Civitas, its officers, directors, employees, and assigns
harmless from and against any claim, loss or expense (including reasonable
attorney fees) incurred by any of them by reason of their reliance
hereupon.
Section 6.2 Authority; Non-Contravention.
(a) Such Acquiror has all requisite power, authority and legal capacity
to enter into this Agreement and to consummate the transactions contemplated
hereby. This Agreement has been duly executed and delivered by such Acquiror
and, subject to the satisfaction of the conditions applicable to them as set
forth herein, constitutes a valid and binding obligation of such Acquiror,
enforceable in accordance with its terms.
(b) The execution and delivery of this Agreement by such Acquiror does
not and will not, and the consummation by him/her of the transactions
contemplated hereby and compliance with the provisions hereof will not, conflict
with, or result in any violation of, or default (with or without notice or lapse
of time, or both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or to the loss of a benefit under, or result in
the creation of any lien, security interest, charge or encumbrance upon any of
the properties or assets of such Acquiror under:
(1) any loan or credit agreement, note, bond, mortgage, indenture,
lease or other agreement, instrument, permit, concession, franchise or license
applicable to such Acquiror; or
(2) any judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to such Acquiror;
other than any such conflicts, violations, defaults, rights, liens, security
interests, charges or encumbrances that, individually or in the aggregate, would
not materially impair the ability of such Acquiror to perform his/her respective
obligations hereunder or prevent the consummation of any of the transactions
contemplated hereby.
(c) To such Acquiror's Knowledge, no filing or registration with, or
authorization, consent or approval of, any Governmental Entity is required by or
with respect to such Acquiror in connection with the execution and delivery of
this Agreement by such Acquiror or is
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necessary for the consummation of the transactions contemplated by this
Agreement with respect to such Acquiror, except for:
(1) the Bank Regulatory Approvals; and
(2) in connection, or in compliance, with the Securities Laws.
Section 6.3 Ownership of Exchange Shares. Such Acquiror holds of record
and owns beneficially the number of Exchange Shares set forth next to his or her
name in Schedule 1, and such Acquiror has the right and power to transfer and
assign his or her Exchange Shares, free and clear of any restrictions on
transfer, claims, taxes, liens, options or other demands or liabilities. Such
Acquiror is not a party to any option, warrant, right, contract, call, put or
other agreement or commitment providing for the disposition or acquisition of
any Exchange Shares (other than this Agreement). Such Acquiror has the exclusive
right, power and authority to vote the Exchange Shares owned by that Acquiror
and such Acquiror is not a party to any voting trust, proxy, or other agreement
or understanding with respect to voting of the Exchange Shares. Such Acquiror
will not sell, pledge or otherwise transfer or assign any of the Exchange Shares
prior to the Closing Date.
Section 6.4 No Brokers. None of the Acquirors is a party to or bound by
any contract, arrangement or understanding with any person or firm which may
result in the obligation of Civitas to pay any finder's fees, brokerage or
agent's commissions or other like payments in connection with the negotiations
leading to this Agreement or the consummation of the transactions contemplated
hereby, and there will be no claim for payment of any finder's fees, brokerage
or agent's commissions or other like payments in connection with the
negotiations leading to this Agreement or the consummation of the transactions
contemplated hereby.
Section 6.5 Representations Complete. None of the representations or
warranties made by such Acquiror herein contains, to such Acquiror's Knowledge,
any untrue statement of a material fact or omits, to such Acquiror's Knowledge,
to state any material fact necessary to make the statements therein, in light of
the circumstances under which made, not misleading.
ARTICLE VII
COVENANTS RELATING TO CONDUCT OF BUSINESS
Section 7.1 Acquisition Proposals. Prior to the Closing Date, Civitas
agrees:
(a) that neither it nor any of its Subsidiaries or Affiliates shall, and
each of them shall direct and use its best efforts to cause its respective
officers, directors, employees, agents and representatives (including, without
limitation, any investment banker, attorney or accountant retained by it or any
of its Subsidiaries or Affiliates) not to, initiate, solicit or encourage,
directly or indirectly, any inquiries or the making or implementation of any
proposal or offer (including, without limitation, any proposal or offer to its
shareholders) with respect to a merger, acquisition, tender offer, exchange
offer, consolidation or similar transaction involving, or any purchase of all or
any significant portion of the assets or the equity securities of BT, other than
the transactions contemplated by this Agreement (any such proposal or offer
being hereinafter referred to as an "Acquisition Proposal") or engage in any
negotiations concerning, or provide
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any confidential information or data to, or have any discussions with, any
person relating to an Acquisition Proposal or otherwise facilitate any effort or
attempt to make or implement an Acquisition Proposal;
(b) that it will immediately cease and cause to be terminated any
existing activities, discussions or negotiations with any parties conducted
heretofore with respect to any of the foregoing and each will take the necessary
steps to inform the individuals or entities referred to above of the obligations
undertaken in this Section 7.1; and
(c) that it will notify the Acquirors immediately if any such inquiries
or proposals are received by, any such information is requested from, or any
such negotiations or discussions are sought to be initiated or continued with,
it;
provided, however, that nothing contained in this Section 7.1 shall prohibit the
Board of Directors (or any special committee of such Board) of Civitas from
furnishing information to or entering into discussions or negotiations with, any
person or entity that makes an unsolicited bona fide Acquisition Proposal, if,
and only to the extent that:
(1) the Board of Directors (or committee) of Civitas determines in
good faith, based on the advice of Civitas Counsel that such action is advisable
in order for the Board of Directors (or committee) to comply with its fiduciary
duties to shareholders imposed by law; and
(2) subject to the exercise of fiduciary duties of Civitas' Board
of Directors (or committee), the requirements of the federal securities laws and
any confidentiality agreement with such person or entity (which such party
determined in good faith was required to be executed in order for Civitas' Board
of Directors (or committee) to comply with its fiduciary duties to shareholders
imposed by law), such party keeps the other party to this Agreement informed of
the status (not the terms) of any such discussions or negotiations; and
Nothing in this Section 7.1 shall: (x) permit Civitas to terminate this
Agreement (except as specifically provided in Article X hereof) or (y) permit
Civitas to enter into any agreement with respect to an Acquisition Proposal
during the term of this Agreement (it being agreed that during the term of this
Agreement, Civitas shall not enter into any agreement with any person that
provides for, or in any way facilitates, an Acquisition Proposal (other than a
confidentiality agreement in customary form)).
Section 7.2 Conduct of Businesses.
(a) Prior to the Closing Date, unless the Acquirors have been notified
at least 5 business days in advance thereof and have not objected in writing
thereto, Civitas shall and shall cause BT to:
(1) use their reasonable efforts to preserve intact their business
organizations, except for completion of transactions contemplated before the
date of this Agreement, and goodwill and keep available the services of their
respective officers and employees;
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(2) confer on a regular basis with one or more representatives of
the Acquirors to report operational matters of materiality and, subject to
Section 7.1, any proposals to engage in material transactions;
(3) promptly notify the Acquirors of any emergency or other
Material Adverse Change in the condition (financial or otherwise), business,
properties, assets, liabilities, prospects or the normal course of their
businesses or in the operation of their properties, any material governmental
complaints, investigations, or hearings (or communications indicating that the
same may be contemplated), or the breach of any representation or warranty
contained herein;
(4) conduct operations according to their usual, regular and
ordinary course in substantially the same manner as heretofore conducted;
(5) maintain in the ordinary course of business, their respective
properties in their current condition of repair, ordinary wear and tear
excepted;
(6) maintain their books of account and records relating to their
respective operations in the usual, regular and ordinary manner on a basis
consistent with past practices and not to make any changes in their accounting
methods, principles or practices, except as may be required by generally
accepted accounting principles;
(7) not amend their respective Charter or Bylaws;
(8) not declare, set aside or pay any dividend or make any other
distribution or payment with respect to any shares of the capital stock of BT;
(9) not sell, lease or otherwise dispose of, except in the
ordinary course of business, any assets of BT with a value greater than
$10,000.00;
(10) not enter into any commitment (or series of related
commitments) to purchase goods or services extending beyond the Closing Date
which may result in total payments by or liability to BT in excess of
$50,000.00;
(11) not enter into any commitment with any officer, director or
consultant of BT; and
(12) not do any act, omit to do any act or permit any act within
the control of Civitas or BT which will cause a breach of any representation,
warranty, covenant or agreement contained in this Agreement.
Section 7.3 Filings; Other Action. Subject to the terms and conditions
herein provided, Civitas and the Acquirors shall, (a) to the extent required,
promptly make their respective filings and thereafter make any other required
submissions in order to obtain all Regulatory Approvals with respect to this
Agreement and the transactions contemplated by this Agreement; (b) use all
reasonable efforts to cooperate with one another in: (1) determining which
filings are required to be made prior to the Closing Date with, and which
consents, approvals, permits or authorizations are required to be obtained prior
to the Closing Date from any
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Governmental Entities in connection with the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby; and (2)
timely making all such filings and timely seeking all such consents, approvals,
permits or authorizations ((a) and (b) together, collectively, "Regulatory
Filings"); (c) use their best efforts to obtain in writing any consents and
financing commitments required from third parties in form reasonably
satisfactory to Civitas and the Acquirors necessary to effectuate the
transactions contemplated by this Agreement, including, without limitations, the
consent or approval of their respective lenders; and (d) use all reasonable
efforts to take, or cause to be taken, all other action and do, or cause to be
done, all other things necessary, proper or appropriate to consummate and make
effective the transactions contemplated by this Agreement, including, without
limitation, satisfaction of the conditions set forth in Article IX below. If, at
any time after the Closing Date, any further action is necessary or desirable to
carry out the purpose of this Agreement, the Acquirors or the proper officers
and directors of Civitas shall take all such necessary action.
Section 7.4 Due Diligence; Inspection of Records and Properties. From the
date hereof to the Closing Date, Civitas shall allow all designated officers,
employees, attorneys, accountants and other representatives of the Acquirors
access at all reasonable times to all its properties, records, files,
correspondence, audits (including, without limitation, workpapers of independent
auditors), as well as to all information relating to commitments, contracts,
titles and financial position, or otherwise pertaining to the business and
affairs, of BT as the Acquirors may reasonably request. Each party will hold all
information about the other party obtained by them in connection with the
transactions contemplated hereby which is non-public in confidence. Acquirors
shall, and shall use their best efforts to cause their accountants, counsel, and
other representatives to maintain the confidentiality of all information
furnished to them by Civitas or BT hereto concerning their business, operations,
and financial condition, and shall not use such information for any purpose
except as necessary to effect the transactions contemplated by this Agreement.
If this Agreement should be terminated, Acquirors shall, upon request, promptly
return all documents, work papers and other materials (including copies made
thereof) received from Civitas and BT or their representatives in connection
with this Agreement or the transactions contemplated herein, and will return or
destroy any such materials containing any confidential information supplied in
connection therewith, and Acquirors will maintain the confidentiality of all
information delivered in connection with such transactions except for any such
information that is readily ascertainable from public or published information
or trade sources.
Section 7.5 Legal Conditions to Exchange. Subject to the terms and
conditions herein provided, each of the Acquirors and Civitas shall use all
reasonable efforts: (a) to take, or cause to be taken, all actions necessary to
comply promptly with all legal requirements which may be imposed on such party
with respect to this Agreement and to consummate the transactions contemplated
hereby; and (b) to obtain (and to cooperate with the other party to obtain) any
consent, authorization, order or approval of, or any exemption by, any
Governmental Entity and/or any other public or private third party which is
required to be obtained or made by such party in connection with this Agreement
and the transactions contemplated by this Agreement. Each of the Acquirors and
Civitas will promptly cooperate with and furnish information to the other in
connection with any such burden suffered by, or requirement imposed upon, any of
them in connection with the foregoing.
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Section 7.6 Further Action. Each party hereto shall, subject to the
fulfillment at or before the Closing Date of each of the conditions of
performance set forth herein or the waiver thereof, perform such further acts
and execute such documents as may reasonably be required to effect the
transactions contemplated by this Agreement.
ARTICLE VIII
ADDITIONAL AGREEMENTS
Section 8.1 Expenses. If the transactions contemplated by this Agreement
are not consummated or this Agreement is terminated by either Civitas or
Acquirors pursuant to Section 10.1, all costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such expense, subject to the provisions of Section
10.1(f).
Section 8.2 Indemnification of BT Directors and Officers.
(a) The Acquirors and BT agree that, until six years from the Closing
Date, the Charter and By-laws of BT shall not be amended to reduce or limit the
rights of indemnity afforded to the present and former directors and officers of
BT thereunder or as to the ability of BT to indemnify such persons, or to
hinder, delay or make more difficult the exercise of such rights of indemnity or
the ability to indemnify, or to reduce any limitations therein on the liability
of directors. The Acquirors agree that they shall cause BT to at all times
exercise the powers granted to it by its Charters, By-laws, and by applicable
law to indemnify to the fullest extent possible present or former directors,
officers, employees and agents BT, as the case may be, against claims made
against them arising from their service in such capacities.
(b) Should any claim or claims be made against any present or former
director, officer, employee or agent of BT arising from his services as such,
within six years of the Closing Date, the provisions of this Section 8.2(b)
respecting the Charter and the By-laws of BT shall continue in effect with until
the final disposition of all such claims.
(c) The provisions of Section 8.2(b) are intended to be for the benefit
of, and shall be enforceable by, each party entitled to indemnification
hereunder, his heirs and his representatives.
Section 8.3 Indemnification of Civitas Directors and Officers.
(a) Civitas agrees that, until six years from the Closing Date, the
Charter and By-laws of Civitas shall not be amended to reduce or limit the
rights of indemnity afforded to such of the Acquirors who are present and former
directors and officers of Civitas thereunder or as to the ability of Civitas to
indemnify such persons, or to hinder, delay or make more difficult the exercise
of such rights of indemnity or the ability to indemnify, or to reduce any
limitations therein on the liability of directors. Civitas agrees that it shall
at all times exercise the powers granted to it by its Charters, By-laws, and by
applicable law to indemnify to the fullest extent possible such of the Acquirors
who are present or former directors, officers, employees and agents of Civitas,
as the case may be, against claims made against them arising from their service
in such capacities.
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(b) Should any claim or claims be made against an Acquiror who is a
present or former director, officer, employee or agent of Civitas arising from
his services as such, within six years of the Closing Date, the provisions of
this Section 8.3(b) respecting the Charter and the By-laws of Civitas shall
continue in effect until the final disposition of all such claims.
(c) The provisions of Section 8.3(b) are intended to be for the benefit
of, and shall be enforceable by, each party entitled to indemnification
hereunder, his heirs and his representatives.
Section 8.4 Indemnification - General.
(a) By Civitas. Civitas will indemnify, defend and hold each Acquiror
harmless after the Closing Date from and against any claims or costs (including,
without limitation, reasonable attorneys' fees and court costs and costs of
investigation), losses, damages, liabilities or expenses (collectively "Costs")
incurred by any Acquiror (whether as a result of a third-party claim, or
otherwise) as a result of:
(1) the nonfulfillment of any covenant, agreement or obligation to
be performed by Civitas under or pursuant to this Agreement or any of the other
agreements contemplated by this Agreement;
(2) any claim for brokerage, finders' fees or other commissions
relative to this Agreement or any of the other agreements contemplated by this
Agreement asserted by or on behalf of any broker or finder claiming to have been
retained by Civitas or to have rendered services on Civitas' behalf; or
(3) any claim or demand made against BT by any third party arising
out of, or related to, the conduct of its business or the ownership and use of
any of its assets prior to the Closing Date, other than claims or demands made
by loan or deposit customers of BT arising in the ordinary course of BT's
banking business.
(b) By Acquirors. Each Acquiror shall indemnify, defend and hold Civitas
harmless on and after the Closing Date from and against all Costs incurred by
Civitas (whether as a result of a third-party claim, or otherwise) as a result
of:
(4) the nonfulfillment of any covenant, agreement or obligation to
be performed by such Acquiror under or pursuant to this Agreement or any of the
other agreements contemplated by this Agreement; or
(5) any claim for brokerage, finders' fees or other commissions
relative to this Agreement or any of the other agreements contemplated by this
Agreement asserted by or on behalf of any broker or finder claiming to have been
retained by such Acquiror or to have rendered services on such Acquiror's
behalf.
(c) Participation in Third Party Claims. Should any claim be made by a
person not a party to this Agreement with respect to any matter to which the
foregoing indemnity relates, the indemnified party shall promptly notify the
indemnifying party thereof. If the indemnified party fails to promptly notify
the indemnifying party, the obligation of the indemnifying party shall be
18
reduced by the amount of damages actually suffered as a result of such late
notice. The indemnified party may make settlement of a claim and such settlement
shall be binding on both parties hereto for the purposes of this Section 8.4 if,
not less than thirty (30) days prior to such settlement, the indemnified party
delivers to the indemnifying party written notice of its intent to settle such
claim, which notice shall set forth the terms of the proposed settlement;
provided, however, that if within such thirty (30) day period the indemnifying
party shall have requested the indemnified party to contest any such claim at
the expense of the indemnifying party, the indemnified party shall promptly
comply, and the indemnifying party shall have the right to direct the defense of
such claim or any litigation based thereon at its own expense through counsel
reasonably acceptable to the indemnified party. The indemnified party shall also
have the right to participate in the settlement of any such claim or in any such
litigation so long as its participation is at its own expense and with the
understanding that the indemnifying party may settle in its own discretion. Any
payment or settlement made by the indemnifying party in such contest, together
with the total expense thereof, shall be binding on the indemnified party and
the indemnifying party for the purposes only of this Section 8.4.
Notwithstanding anything herein to the contrary, an indemnifying party shall
not, without the prior written consent of the indemnified party, settle any
claim in any manner which adversely affects the indemnified party. In addition
to the foregoing, the indemnifying party shall assume the defense of any claim,
action or proceeding within the scope of the foregoing indemnities upon the
written request of the indemnified party.
(d) Acquirors shall cause BT to indemnify Civitas for any claim or
demand made against Civitas by any third party arising out of, or related to,
the conduct of BT's business or the ownership and use of any of BT's assets
after the Closing Date.
Section 8.5 Resale Payment. Acquirors shall pay, or cause an acquiring
party to pay, to Civitas a resale payment, as defined below, upon demand
following the occurrence of a purchase event that occurs within three years
following the Closing of this Agreement. As used herein, a "purchase event"
means that Acquirors (or their successors by will or devise), BT, or a bank
holding company formed to control BT (the "Sellers") shall have sold directly or
indirectly 50% or more voting control of BT. The resale payment shall be equal
to 10% of the amount, if any, that the acquisition purchase price paid to
Sellers is in excess of $17 million plus any capital contributions made to BT by
the Acquirors or new shareholders. The payment to Civitas shall be made in the
same form as that being paid to the Sellers or may be paid in cash, at the
option of the Sellers.
ARTICLE IX
CONDITIONS PRECEDENT
Section 9.1 Mutual Conditions to Closing. The respective obligations of
each party to effect the transactions contemplated by this Agreement shall be
subject to the satisfaction of the following conditions:
Section 9.1.1 Approvals. All authorizations, consents or approvals
of third parties, the failure of which to obtain would have a Material Adverse
Effect on Civitas or on the Acquirors, as the case may be, shall have been
obtained without either the payment of any fee,
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other than filing fees charged by bank regulators or the SEC, or the amendment
of any agreement.
Section 9.1.2 No Injunctions or Restraints; Illegality. No temporary
restraining order, preliminary or permanent injunction or other order issued by
any court of competent jurisdiction or other legal restraint or prohibition
preventing the consummation of the transactions contemplated by this Agreement
shall be in effect, nor shall any proceeding by any governmental entity seeking
any of the foregoing which has a reasonable likelihood of success be pending.
There shall not be any action taken, or any statute, rule, regulation or order
enacted, entered, enforced or deemed applicable to the transactions contemplated
by this Agreement, which makes their consummation illegal.
Section 9.1.3 Opinions of Financial Advisors. Civitas Financial
Advisor has delivered written opinions, dated the Closing Date and in form and
substance reasonably satisfactory to the parties, that, in the case of Civitas,
the consideration to be received by Civitas in exchange for the BT Common Stock
being transferred to the Acquirors, pursuant to the terms and conditions of this
Agreement, is fair to Civitas' shareholders from a financial point of view.
Section 9.1.4 Service Agreement. The Service Agreement shall have
been duly executed and delivered by each of Civitas and BT.
Section 9.1.5 Opinions. Civitas and the Acquirors shall have
received the opinion of ▇▇▇▇▇, ▇▇▇▇▇▇ & Company dated the Closing Date, to the
effect that the transactions contemplated by this Agreement constitute a
"reorganization" within the meaning of 355 of the Code.
Section 9.2 Conditions to Obligations of the Acquirors. The obligations of
the Acquirors to effect the transactions contemplated by this Agreement are
subject to the satisfaction of the following conditions unless waived by the
Acquirors:
Section 9.2.1 Representations and Warranties. Each of the
representations and warranties of Civitas set forth in Article V shall be true
and correct on the Closing Date.
Section 9.2.2 Performance of Obligations of Civitas. Civitas shall
have performed in all material respects all obligations required to be performed
by it hereunder at or prior to the Closing Date, and the Acquirors shall have
received a certificate signed on behalf of Civitas by the Chief Executive
Officer and the Chief Financial Officer of Civitas to such effect.
Section 9.2.3 Deliveries. The Acquirors shall have received the
following:
(a) A stock certificate or stock certificates representing all of
the issued and outstanding shares of BT, registered in the name of Civitas and
duly endorsed in blank or with executed stock powers or assignments attached, in
proper form for transfer and/or cancellation;
(b) The original minute books and stock transfer records of BT to
the extent not already in the possession of the officers of BT;
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(c) Copies of the charter and bylaws of Civitas and of BT and of
resolutions adopted by the board of directors of Civitas authorizing and
approving the execution and performance of this Agreement and the agreements
contemplated by this Agreement, all as certified by appropriate officers of
Civitas as of the Closing Date;
(d) A certificate as to the incumbency of each person executing
this Agreement and the other agreements contemplated by this Agreement on behalf
of Civitas;
(e) A Certificate of Existence with respect to Civitas dated not
more than seven (7) days prior to the Closing Date issued by the Tennessee
Secretary of State;
(f) A Certificate of Existence with respect to BT dated not more
than seven (7) days prior to the Closing Date issued by the Tennessee Secretary
of State;
(g) A certificate signed on behalf of Civitas by the Chief
Executive Officer of Civitas certifying satisfaction of the conditions set forth
in Section 9.2.1; and
(h) A certificate from an officer of Civitas dated the Closing
Date as to certain factual matters regarding Civitas (the form and substance of
such certificate to be mutually agreeable with Civitas Counsel and Acquirors'
Counsel) that will support, in part, the opinion referred to in Section 9.1.5.
Section 9.2.4 No Material Adverse Change. There shall be no Material
Adverse Change in Civitas or BT.
Section 9.3 Conditions to Obligations of Civitas The obligation of Civitas
to effect the transactions contemplated by this Agreement is subject to the
satisfaction of the following conditions unless waived by Civitas:
Section 9.3.1 Representations and Warranties. Each of the
representations and warranties of the Acquirors set forth in Article VI shall be
true and correct on the Closing Date.
Section 9.3.2 Performance of Obligations of Acquirors. The Acquirors
shall have performed in all material respects all obligations required to be
performed by them hereunder at or prior to the Closing Date, and Civitas shall
have received a certificate signed by the Acquirors to such effect.
Section 9.3.3 Deliveries. Civitas shall have received the following:
(a) A stock certificate or stock certificates representing all of
the Exchange Shares registered in the name of the Acquirors and duly endorsed in
blank or with executed stock powers or assignments attached, in proper form for
transfer and/or cancellation.
(b) A certificate signed by the Acquirors certifying satisfaction
of the conditions set forth in Section 9.3.1; and
(c) A certificate from the Acquirors dated the Closing Date as to
certain factual matters regarding the Acquirors (the form and substance of such
certificate to be mutually
21
agreeable with Civitas Counsel and Acquirors Counsel) that will support, in
part, the opinion referred to in Section 9.1.5.
ARTICLE X
TERMINATION AND AMENDMENT
Section 10.1 Termination. This Agreement may be terminated at any time
prior to the Closing Date:
(a) by mutual consent of Civitas and each of the Acquirors in a written
instrument;
(b) by either Civitas or the Acquirors, if there has been a breach on
the part of the other of one or more representations, warranties, covenants or
agreements set forth in this Agreement, which breach has not been cured within
five (5) business days following receipt by the breaching party of notice of
such breach and that, individually or in the aggregate, causes or is likely to
cause a Material Adverse Effect;
(c) by either Civitas or the Acquirors upon written notice to the other
party if any court or governmental entity of competent jurisdiction shall have
issued a final permanent order enjoining or otherwise prohibiting the
consummation of the transactions contemplated by this Agreement, and in any such
case the time for appeal or petition for reconsideration of such order shall
have expired without such appeal or petition being granted;
(d) by either Civitas or the Acquirors if the transactions contemplated
by this Agreement shall not have been consummated on or before the Termination
Date unless the failure to so consummate by such time is due to the breach of
this Agreement by the party seeking to terminate;
(e) by the Acquirors, if prior to the Closing Date, the Board of
Directors (or Special Committee) of Civitas shall have approved, recommended or
endorsed any Acquisition Proposal other than this Agreement; and
(f) by Civitas if, prior to the Closing Date, its Board of Directors,
after consultation with its legal counsel and financial advisors, determines in
the good faith exercise of its fiduciary duties that a bona fide proposal or
offer by a third party to consummate an Acquisition Proposal is in the best
interests of its shareholders; provided, however, that, in such event, Civitas
shall reimburse Acquirors for their out-of-pocket expenses incurred in
connection with this transaction and, provided, further, that prior to any such
termination by Civitas, Civitas shall have complied with the requirements of
this Section 10.1(f). In the event that, prior to the Closing Date, Civitas
receives a bona fide proposal or offer from a third party to consummate an
Acquisition Proposal that it has determined is in the best interests of its
shareholders as set forth above, the Acquirors shall have a right of first
refusal to acquire the BT Stock on the terms and conditions set forth in such
Acquisition Proposal. Such right of first refusal shall be exercisable for a
period of thirty (30) days following the date on which notice of such
Acquisition Proposal is given to Acquirors. The price at which the Acquirors
shall have the right of first refusal to purchase the BT Stock shall be equal to
the price set forth in the Acquisition Proposal less an allowance giving effect
to the tax-free status to Civitas of the acquisition by the Acquirors of the BT
Stock pursuant to this
22
Agreement. If the Acquirors elect the right of first refusal as provided herein,
all terms and conditions of the transaction, other than an adjustment of the
consideration, shall be as provided in this Agreement.
Section 10.2 Effect of Termination. In the event of termination of this
Agreement by either Civitas or the Acquirors as provided in Section 10.1, this
Agreement shall forthwith become void and there shall be no liability or
obligation on the part of Civitas or the Acquirors or their respective officers
or directors except for the obligations of the parties with respect to the
confidentiality provisions of Section 7.4 and their covenants contained in
Section 10.1(f). No termination of this Agreement shall relieve any person from
liability resulting from a breach by a party of any of its covenants or
agreements set forth herein.
Section 10.3 Amendment. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto.
Section 10.4 Extension; Waiver. At any time prior to the Closing Date, the
parties hereto may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties of the other
contained herein or in any document delivered pursuant hereto and (iii) waive
compliance with any of the agreements or conditions contained herein. Any
agreement on the part of a party hereto to any such extension or waiver shall be
valid only if set forth in a written instrument signed on behalf of such party.
ARTICLE XI
GENERAL PROVISIONS
Section 11.1 Survival of Representations and Warranties. All
representations, warranties, covenants, indemnities and agreements made herein
shall survive the Closing Date for a period of two (2) years. No investigation
by any party hereto shall affect the representations and warranties of the
other.
Section 11.2 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally, telecopied
(with confirmation) or mailed by registered or certified mail (return receipt
requested) upon the date actually delivered to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
(g) if to Civitas, to:
Civitas BankGroup, Inc.
Four Corporate Centre
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, President/CEO
23
with a copy to:
Baker, Donelson, Bearman, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, P.C.
Commerce Center, Suite 1000
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
and
(h) if to Acquirors, to:
▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, PLLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
For all purposes of consent, notice and otherwise, ▇▇▇▇ ▇▇▇▇▇▇ is hereby
designated by the Acquirors as their representative, and Civitas is authorized
to rely on ▇▇. ▇▇▇▇▇▇'▇ authority to act on behalf of the Acquirors.
Section 11.3 Interpretation. When a reference is made in this Agreement to
Sections or Exhibits, such reference shall be to a Section or Exhibit to this
Agreement unless otherwise indicated. The headings contained herein are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include," "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation." The phrase "made available" in this Agreement
shall mean that the information referred to has been made available if requested
by the party to whom such information is to be made available. The phrases "the
date of this Agreement," "the date hereof' and terms of similar import, unless
the context otherwise requires, shall be deemed to refer to the date set forth
on the first page of this Agreement. Headings of articles and sections used
herein are used for convenience of reference only and shall not affect the
interpretation of this Agreement.
Section 11.4 Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become
24
effective when two or more counterparts have been signed by each of the parties
and delivered to the other parties, it being understood that all parties need
not sign the same counterpart.
Section 11.5 Entire Agreement; No Third Party Beneficiaries; Rights of
Ownership. This Agreement (including the documents and the instruments referred
to herein) (i) constitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof, and (ii) except as provided in Sections
8.2 and 8.3, is not intended to confer upon any person other than the parties
hereto any rights or remedies hereunder.
Section 11.6 Governing Law. This Agreement shall be governed and construed
in accordance with the laws of the State of Tennessee, without regard to any
otherwise applicable conflicts of law principles.
Section 11.7 Publicity. It is the intention of the parties to use
reasonable efforts to reach agreement on the wording of any news releases or
other public announcements by Civitas or the Acquirors, or any of their
respective affiliates, pertaining to this Agreement. In the absence of
circumstances requiring otherwise, any such releases or public announcements
shall be submitted to the other party for its comment prior to issuance.
Section 11.8 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of the other parties; provided, however, that Acquirors may assign all
or any portion of their rights and obligations under this Agreement to any other
persons who are currently on the Board of Directors of Civitas or BT and up to
ten (10) other additional "accredited investors." Subject to the preceding
sentence, this Agreement shall be binding upon, inure to the benefit of and be
enforceable by the parties and their respective successors and assigns.
Section 11.9 Exhibits. The Exhibits and Schedules attached to this
Agreement are integral parts of this Agreement and incorporated herein by this
reference and expressly made a part hereof.
Section 11.10 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby are not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the transactions be consummated as originally contemplated to the
fullest extent possible.
Section 11.11 Enforcement of this Agreement. The parties agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to temporary, preliminary and/or permanent injunction or injunctions
25
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.
26
IN WITNESS WHEREOF, Civitas, by its officer thereunto duly authorized, and
each of the Acquirors have caused this Agreement to be signed on this 24th day
of November, 2004.
CIVITAS BANKGROUP, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
----------------------------------
Title: President and Chief Executive
Officer
ACQUIRORS:
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
/s/ ▇▇▇ ▇▇▇▇▇▇
/s/ R. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
/s/ R. ▇▇▇▇▇▇ ▇▇▇▇▇
27
Schedule 1
to
Plan of Tax-Free Reorganization under Section 355 of the Internal Revenue Code
and Agreement made and entered into as of the 24th day of November, 2004, by and
among those persons listed below (each an "Acquiror" and, collectively, the
"Acquirors"), each a resident of the State of Tennessee, and Civitas BankGroup,
Inc., a Tennessee corporation (hereinafter referred to as "Civitas").
Name of Acquiror Address Number of Civitas Shares
28