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EXHIBIT 1
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
FIRST BANKING COMPANY OF SOUTHEAST GEORGIA
AND
▇▇▇▇▇ BANCORP, INC.
Dated as of November 30, 1998
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TABLE OF CONTENTS
LIST OF EXHIBITS..................................................................................................v
AGREEMENT AND PLAN OF MERGER......................................................................................1
ARTICLE 1. TRANSACTIONS AND TERMS OF THE MERGER............................................................1
1.1 MERGER...................................................................................................1
1.2 TIME AND PLACE OF CLOSING................................................................................2
1.3 EFFECTIVE TIME...........................................................................................2
ARTICLE 2. TERMS OF MERGER.................................................................................2
2.1 ARTICLES OF INCORPORATION................................................................................2
2.2 BYLAWS...................................................................................................2
2.3 DIRECTORS AND OFFICERS...................................................................................2
ARTICLE 3. MANNER OF CONVERTING SHARES.....................................................................3
3.1 CONVERSION OF SHARES.....................................................................................3
3.2 ANTI-DILUTION PROVISIONS.................................................................................3
3.3 SHARES HELD BY ▇▇▇▇▇ OR FIRST BANKING....................................................................3
3.4 DISSENTING SHAREHOLDERS..................................................................................3
3.5 FRACTIONAL SHARES........................................................................................4
ARTICLE 4. EXCHANGE OF SHARES..............................................................................4
4.1 EXCHANGE PROCEDURES......................................................................................4
4.2 RIGHTS OF FORMER SHAREHOLDERS OF ▇▇▇▇▇...................................................................5
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF ▇▇▇▇▇.........................................................6
5.1 ORGANIZATION, STANDING, AND POWER........................................................................6
5.2 AUTHORITY OF ▇▇▇▇▇; NO BREACH BY AGREEMENT...............................................................6
5.3 CAPITAL STOCK............................................................................................7
5.4 ▇▇▇▇▇ SUBSIDIARIES.......................................................................................7
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5.5 SEC FILINGS; FINANCIAL STATEMENTS........................................................................8
5.6 ABSENCE OF UNDISCLOSED LIABILITIES.......................................................................9
5.7 ABSENCE OF CERTAIN CHANGES OR EVENTS.....................................................................9
5.8 TAX MATTERS..............................................................................................9
5.9 ALLOWANCE FOR POSSIBLE LOAN LOSSES......................................................................10
5.10 ASSETS...............................................................................................11
5.11 INTELLECTUAL PROPERTY................................................................................11
5.12 ENVIRONMENTAL MATTERS................................................................................12
5.13 COMPLIANCE WITH LAWS.................................................................................12
5.14 LABOR RELATIONS......................................................................................13
5.15 EMPLOYEE BENEFIT PLANS...............................................................................13
5.16 MATERIAL CONTRACTS...................................................................................15
5.17 LEGAL PROCEEDINGS....................................................................................16
5.18 REPORTS..............................................................................................16
5.19 STATEMENTS TRUE AND CORRECT..........................................................................17
5.20 ACCOUNTING, TAX AND REGULATORY MATTERS...............................................................17
5.21 CHARTER PROVISIONS...................................................................................17
5.22 BOARD RECOMMENDATION.................................................................................17
5.23 Y-2K.................................................................................................17
ARTICLE 6. REPRESENTATIONS AND WARRANTIES OF FIRST BANKING................................................18
6.1 ORGANIZATION, STANDING, AND POWER.......................................................................18
6.2 AUTHORITY OF FIRST BANKING; NO BREACH BY AGREEMENT......................................................18
6.3 CAPITAL STOCK...........................................................................................19
6.4 FIRST BANKING SUBSIDIARIES..............................................................................19
6.5 SEC FILINGS, FINANCIAL STATEMENTS.......................................................................20
6.6 ABSENCE OF UNDISCLOSED LIABILITIES......................................................................21
6.7 ABSENCE OF CERTAIN CHANGES OR EVENTS....................................................................21
6.8 TAX MATTERS.............................................................................................21
6.9 ALLOWANCE FOR POSSIBLE LOAN LOSSES......................................................................23
6.10 ASSETS...............................................................................................23
6.11 INTELLECTUAL PROPERTY................................................................................24
6.12 ENVIRONMENTAL MATTERS................................................................................24
6.13 COMPLIANCE WITH LAWS.................................................................................25
6.14 LABOR RELATIONS......................................................................................25
6.15 EMPLOYEE BENEFIT PLANS...............................................................................26
6.16 MATERIAL CONTRACTS...................................................................................28
6.17 LEGAL PROCEEDINGS....................................................................................28
6.18 REPORTS..............................................................................................29
6.19 STATEMENTS TRUE AND CORRECT..........................................................................29
6.20 ACCOUNTING, TAX AND REGULATORY MATTERS...............................................................29
6.21 CHARTER PROVISIONS...................................................................................29
6.22 BOARD RECOMMENDATION.................................................................................30
6.23 Y2K..................................................................................................30
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ARTICLE 7. CONDUCT OF BUSINESS PENDING CONSUMMATION.......................................................30
7.1 AFFIRMATIVE COVENANTS OF ▇▇▇▇▇..........................................................................30
7.2 NEGATIVE COVENANTS OF ▇▇▇▇▇.............................................................................30
7.3 AFFIRMATIVE COVENANTS OF FIRST BANKING..................................................................32
7.4 NEGATIVE COVENANTS OF FIRST BANKING.....................................................................32
7.5 ADVERSE CHANGES IN CONDITION............................................................................33
7.6 REPORTS.................................................................................................33
ARTICLE 8. ADDITIONAL AGREEMENTS..........................................................................33
8.1 REGISTRATION STATEMENT..................................................................................33
8.2 NASDAQ LISTING..........................................................................................33
8.3 SHAREHOLDER APPROVAL....................................................................................34
8.4 APPLICATIONS............................................................................................34
8.5 FILINGS WITH STATE OFFICES..............................................................................34
8.6 AGREEMENT AS TO EFFORTS TO CONSUMMATE...................................................................34
8.7 INVESTIGATION AND CONFIDENTIALITY.......................................................................35
8.8 PRESS RELEASES..........................................................................................35
8.9 CERTAIN ACTIONS.........................................................................................35
8.10 ACCOUNTING AND TAX TREATMENT.........................................................................36
8.11 CHARTER PROVISIONS...................................................................................36
8.12 AGREEMENTS OF AFFILIATES.............................................................................36
8.13 EMPLOYEE BENEFITS AND CONTRACTS......................................................................37
8.14 INDEMNIFICATION......................................................................................37
ARTICLE 9. CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE..............................................38
9.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY.................................................................38
9.2 CONDITIONS TO OBLIGATIONS OF FIRST BANKING..............................................................40
9.3 CONDITIONS TO OBLIGATIONS OF ▇▇▇▇▇......................................................................41
ARTICLE 10. TERMINATION....................................................................................42
10.1 TERMINATION..........................................................................................42
10.2 EFFECT OF TERMINATION................................................................................43
10.3 NON-SURVIVAL OF REPRESENTATIONS AND COVENANTS........................................................43
ARTICLE 11. MISCELLANEOUS..................................................................................43
11.1 DEFINITIONS..........................................................................................43
11.2 EXPENSES.............................................................................................50
11.3 BROKERS AND FINDERS..................................................................................51
11.4 ENTIRE AGREEMENT.....................................................................................51
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11.5 AMENDMENTS...........................................................................................51
11.6 WAIVERS..............................................................................................52
11.7 ASSIGNMENT...........................................................................................52
11.8 NOTICES..............................................................................................52
11.9 GOVERNING LAW........................................................................................53
11.10 COUNTERPARTS.........................................................................................53
11.11 CAPTIONS, ARTICLES AND SECTIONS......................................................................53
11.12 INTERPRETATIONS......................................................................................53
11.13 ENFORCEMENT OF AGREEMENT.............................................................................53
11.14 SEVERABILITY.........................................................................................54
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LIST OF EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
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1. Form of Agreement of Affiliates of ▇▇▇▇▇ Bancorp, Inc. (ss.
8.12, ss. 9.2(f)).
2. Form of Claims Letter (ss. 9.2(g)).
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the "Agreement") is made and entered
into as of November 30, 1998, by and between FIRST BANKING COMPANY OF SOUTHEAST
GEORGIA ("FIRST BANKING"), a Georgia corporation located in Statesboro, Georgia,
and ▇▇▇▇▇ BANCORP, INC.("▇▇▇▇▇"), a Georgia corporation located in Jesup,
Georgia.
PREAMBLE
The respective Boards of Directors of ▇▇▇▇▇ and FIRST BANKING are of
the opinion that the transactions described herein are in the best interests of
the Parties to this Agreement and their respective shareholders. This Agreement
provides for the acquisition of ▇▇▇▇▇ by FIRST BANKING, pursuant to the merger
of ▇▇▇▇▇ with and into FIRST BANKING. At the effective time of such merger, the
outstanding shares of the capital stock of ▇▇▇▇▇ shall be converted into the
right to receive shares of the common stock of FIRST BANKING (except as provided
herein). As a result, shareholders of ▇▇▇▇▇ shall become shareholders of FIRST
BANKING, and FIRST BANKING shall conduct the business and operations of ▇▇▇▇▇.
The transactions described in this Agreement are subject to (a) approval of the
shareholders of ▇▇▇▇▇, (b) approval of the Georgia Department of Banking and
Finance, (c) approval of the Board of Governors of the Federal Reserve, and (d)
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.
Certain terms used in this Agreement are defined in Section 11.1
hereof.
NOW, THEREFORE, in consideration of the above and the mutual
warranties, representations, covenants, and agreements set forth herein, the
Parties agree as follows:
ARTICLE 1.
TRANSACTIONS AND TERMS OF THE MERGER
1.1 MERGER. Subject to the terms and conditions of this Agreement, at
the Effective Time, ▇▇▇▇▇ will merge with and into FIRST BANKING in accordance
with the provisions of Section 14-2-1101 of the GBCC and with the effect
provided in Section 14-2-1106 of the GBCC (the "Merger"). FIRST BANKING shall be
the Surviving Corporation resulting from the Merger and shall continue to be
governed by the Laws of the State of Georgia. 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 ▇▇▇▇▇ and FIRST BANKING, as set forth
herein.
1.2 TIME AND PLACE OF CLOSING. The closing of the transactions
contemplated hereby (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
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as the Parties, acting through their authorized officers, may mutually agree.
The Closing shall be held at such location as may be mutually agreed upon by the
Parties.
1.3 EFFECTIVE TIME. The Merger and other transactions contemplated by
this Agreement shall become effective on the date and at the time the
Certificate of Merger reflecting the Merger shall become effective with the
Secretary of State of the State of Georgia (the "Effective Time"). Subject to
the terms and conditions hereof, unless otherwise mutually agreed upon in
writing by the authorized officers of each Party, the Parties shall use their
reasonable efforts to cause the Effective Time to occur on the fifth business
day following the last to occur of (i) the effective date (including expiration
of any applicable waiting period) of the last required Consent of any Regulatory
Authority having authority over and approving or exempting the Merger, and (ii)
the earliest date on which the shareholders of ▇▇▇▇▇ have approved this
Agreement to the extent such approval is required by applicable Law; provided,
however, that the date of the Effective Time shall not extend past the
termination date set forth in ss. 10.1(e) hereof.
ARTICLE 2.
TERMS OF MERGER
2.1 ARTICLES OF INCORPORATION. The Articles of Incorporation of FIRST
BANKING in effect immediately prior to the Effective Time shall be the Articles
of Incorporation of the Surviving Corporation until duly amended or repealed.
2.2 BYLAWS. The Bylaws of FIRST BANKING in effect immediately prior to
the Effective Time shall be the Bylaws of the Surviving Corporation until duly
amended or repealed.
2.3 DIRECTORS AND OFFICERS.
(a) The directors of the Surviving Corporation shall be (i) the
directors of FIRST BANKING immediately prior to the Effective Time and (ii) J.
▇▇▇▇▇▇ ▇▇▇▇▇, together with such additional persons as may thereafter be
elected. Such persons shall serve as the directors of the Surviving Corporation
from and after the Effective Time in accordance with the Bylaws of the Surviving
Corporation.
(b) The executive officers of the Surviving Corporation shall be
(i) the executive officers of the Surviving Corporation immediately prior to the
Effective Time and (ii) such additional persons as may thereafter be elected.
Such persons shall serve as the executive officers of the Surviving Corporation
from and after the Effective Time in accordance with the Bylaws of the Surviving
Corporation.
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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 ▇▇▇▇▇, or the shareholders of the foregoing, the shares of ▇▇▇▇▇ shall
be converted as follows:
(a) Each share of capital stock of FIRST BANKING issued and
outstanding immediately prior to the Effective Time shall remain issued and
outstanding from and after the Effective Time.
(b) Each share of ▇▇▇▇▇ Common Stock (excluding shares held by any
▇▇▇▇▇ Entity or any FIRST BANKING Entity, 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) issued and outstanding immediately prior to the Effective Time
shall cease to be outstanding and shall be converted into and exchanged for the
right to receive 1.57024 shares of FIRST BANKING Common Stock (the "Exchange
Ratio").
(c) Each warrant to acquire shares of ▇▇▇▇▇ Common Stock not
exercised prior to the Effective Time shall be forfeited.
3.2 ANTI-DILUTION PROVISIONS. In the event FIRST BANKING changes the
number of shares of FIRST BANKING Common Stock issued and outstanding prior to
the Effective Time as a result of a stock split, stock dividend, or similar
recapitalization with respect to such stock and the record date therefor (in the
case of a stock dividend) or the effective date thereof (in the case of a stock
split or similar recapitalization for which a record date is not established)
and prior to the Effective Time, the Exchange Ratio shall be proportionately
adjusted.
3.3 SHARES HELD BY ▇▇▇▇▇ OR FIRST BANKING. Each of the shares of ▇▇▇▇▇
Common Stock held by any ▇▇▇▇▇ Entity or by any FIRST BANKING Entity, 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 ▇▇▇▇▇ Common Stock
who perfects his dissenters' rights in accordance with and as contemplated by
Article 13, Part 2 of Title 14 of the GBCC, 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 GBCC and surrendered to FIRST BANKING the certificates or
certificates representing the shares for which payment is being made. In the
event that after the Effective Time, a dissenting shareholder of ▇▇▇▇▇ fails to
perfect, or effectively withdraws or loses, his right to appraisal of and
payment for his shares, FIRST BANKING shall issue and deliver the consideration
to which such holder of shares of ▇▇▇▇▇ Common Stock is entitled under this
Article 3 (without interest) upon surrender by such holder of the certificate or
certificates representing shares of ▇▇▇▇▇ Common Stock held by him. If and to
the extent
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required by applicable Law, ▇▇▇▇▇ will establish (or cause to be established) an
escrow account with an amount sufficient to satisfy the maximum aggregate
payment that may be required to be paid to dissenting shareholders. Upon
satisfaction of all claims of dissenting shareholders, the remaining escrowed
amount, reduced by payment of the fees and expenses of the escrow agent, will be
returned to FIRST BANKING.
3.5 FRACTIONAL SHARES. Notwithstanding any other provision of this
Agreement, each holder of shares of ▇▇▇▇▇ Common Stock exchanged pursuant to the
Merger who would otherwise have been entitled to receive a fraction of a share
of FIRST BANKING 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 FIRST BANKING
Common Stock multiplied by the market value of one share of FIRST BANKING Common
Stock at the Effective Time. The market value of one share of FIRST BANKING
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 selected by FIRST
BANKING) 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, FIRST
BANKING shall cause the exchange agent selected by FIRST BANKING (the "Exchange
Agent") to mail to each holder of record of a certificate or certificates which
represented shares of ▇▇▇▇▇ Common Stock immediately prior to the Effective Time
(the "Certificates") appropriate transmittal materials and instructions (which
shall specify that delivery shall be effected, and risk of loss and title to
such Certificates shall pass, only upon proper delivery of such Certificates to
the Exchange Agent). The Certificate or Certificates of ▇▇▇▇▇ Common Stock so
delivered shall be duly endorsed as the Exchange Agent may require. In the event
of a transfer of ownership of shares of ▇▇▇▇▇ Common Stock represented by
Certificates that are not registered in the transfer records of ▇▇▇▇▇, the
consideration provided in Section 3.1 may be issued to a transferee if the
Certificates representing such shares are delivered to the Exchange Agent,
accompanied by all documents required to evidence such transfer and by evidence
satisfactory to the Exchange Agent that any applicable stock transfer taxes have
been paid. If any Certificate shall have been lost, stolen, mislaid or
destroyed, upon receipt of (i) an affidavit of that fact from the holder
claiming such Certificate to be lost, mislaid, stolen or destroyed, (ii) such
bond, security or indemnity as FIRST BANKING and the Exchange Agent may
reasonably require, and (iii) any other documents necessary to evidence and
effect the bona fide exchange thereof, the Exchange Agent shall issue to such
holder the consideration into which the shares represented by such lost, stolen,
mislaid or destroyed Certificate shall have been converted. The Exchange Agent
may establish such other reasonable and customary rules and procedures in
connection with its duties as it may deem appropriate. After the Effective Time,
each holder of shares of ▇▇▇▇▇ Common Stock (other than shares to be canceled
pursuant to Section 3.3 or as to which statutory dissenters' rights have been
perfected as provided in Section 3.4) 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
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receive in exchange therefor the consideration provided in Section 3.1, together
with all undelivered dividends or distributions in respect of such shares
(without interest thereon) pursuant to Section 4.2. FIRST BANKING shall not be
obligated to deliver the consideration to which any former holder of ▇▇▇▇▇
Common Stock is entitled as a result of the Merger until such holder surrenders
such holder's Certificate or Certificates for exchange as provided in this
Section 4.1. Any other provision of this Agreement notwithstanding, neither
FIRST BANKING nor the Exchange Agent shall be liable to a holder of ▇▇▇▇▇ Common
Stock for any amounts paid or property delivered in good faith to a public
official pursuant to any applicable abandoned property, escheat or similar Law.
Approval of this Agreement by the shareholders of ▇▇▇▇▇ shall constitute
ratification of the appointment of the Exchange Agent.
4.2 RIGHTS OF FORMER SHAREHOLDERS OF ▇▇▇▇▇. At the Effective Time, the
stock transfer books of ▇▇▇▇▇ shall be closed as to holders of ▇▇▇▇▇ Common
Stock immediately prior to the Effective Time and no transfer of ▇▇▇▇▇ Common
Stock by any such holder shall thereafter be made or recognized. Until
surrendered for exchange in accordance with the provisions of Section 4.1, each
Certificate theretofore representing shares of ▇▇▇▇▇ Common Stock (other than
shares to be canceled pursuant to Sections 3.3 and 3.4) shall from and after the
Effective Time represent for all purposes only the right to receive the
consideration provided in Section 3.1 in exchange therefor, subject, however, to
FIRST BANKING'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 ▇▇▇▇▇ in respect of such shares of ▇▇▇▇▇ Common Stock in accordance with the
terms of this Agreement and which remain unpaid at the Effective Time. To the
extent permitted by Law, former shareholders of record of ▇▇▇▇▇ shall be
entitled to vote after the Effective Time at any meeting of FIRST BANKING
shareholders the number of whole shares of FIRST BANKING Common Stock into which
their respective shares of ▇▇▇▇▇ Common Stock are converted, regardless of
whether such holders have exchanged their Certificates for certificates
representing FIRST BANKING Common Stock in accordance with the provisions of
this Agreement. Whenever a dividend or other distribution is declared by FIRST
BANKING on the FIRST BANKING Common Stock, the record date for which is at or
after the Effective Time, the declaration shall include dividends or other
distributions on all shares of FIRST BANKING Common Stock issuable pursuant to
this Agreement, but no dividend or other distribution payable to the holders of
record of FIRST BANKING Common Stock as of any time subsequent to the Effective
Time shall be delivered to the holder of any Certificate until such holder
surrenders such Certificate for exchange as provided in Section 4.1. However,
upon surrender of such Certificate, both the FIRST BANKING Common Stock
certificate (together with all such undelivered dividends or other distributions
without interest) and any undelivered dividends and cash payments payable
hereunder (without interest) shall be delivered and paid with respect to each
share represented by such Certificate. No interest shall be payable with respect
to any cash to be paid under Section 3.1 of this Agreement except to the extent
required in connection with the exercise of dissenters' rights.
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES OF ▇▇▇▇▇
▇▇▇▇▇ hereby represents and warrants to FIRST BANKING as follows:
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5.1 ORGANIZATION, STANDING, AND POWER. ▇▇▇▇▇ is a corporation duly
organized, validly existing, and in good standing under the Laws of the State of
Georgia, and has the corporate power and authority to carry on its business as
now conducted and to own, lease and operate its material Assets. ▇▇▇▇▇ is duly
qualified or licensed to transact business as a foreign corporation in good
standing in 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. The minute book and other
organizational documents for ▇▇▇▇▇ have been made available to FIRST BANKING for
its review and, except as disclosed in Section 5.1 of the ▇▇▇▇▇ Disclosure
Memorandum, are true and complete in all material respects as in effect as of
the date of this Agreement and accurately reflect in all material respects all
amendments thereto and all proceedings of the Board of Directors and
shareholders thereof.
5.2 AUTHORITY OF ▇▇▇▇▇; NO BREACH BY AGREEMENT.
(a) ▇▇▇▇▇ 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 ▇▇▇▇▇, subject to the
approval of this Agreement by the holders of a majority of the outstanding
voting stock of ▇▇▇▇▇, which is the only shareholder vote required for approval
of this Agreement, and consummation of the Merger by ▇▇▇▇▇. Subject to such
requisite shareholder approval, this Agreement represents a legal, valid, and
binding obligation of ▇▇▇▇▇, enforceable against ▇▇▇▇▇ in accordance with its
terms (except in all cases as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, receivership, conservatorship,
moratorium, or similar Laws affecting the enforcement of creditors' rights
generally and except that the availability of the equitable remedy of specific
performance or injunctive relief is subject to the discretion of the court
before which any proceeding may be brought).
(b) Neither the execution and delivery of this Agreement by ▇▇▇▇▇, nor
the consummation by ▇▇▇▇▇ of the transactions contemplated hereby, nor
compliance by ▇▇▇▇▇ with any of the provisions hereof, will (i) conflict with or
result in a breach of any provision of WAYNE's Articles of Incorporation or
Bylaws, or the Charter, Articles of Incorporation, or Bylaws of any ▇▇▇▇▇
Subsidiary or any resolution adopted by the board of directors or the
shareholders of any ▇▇▇▇▇ Entity, or (ii) except as disclosed in Section 5.2 of
the ▇▇▇▇▇ Disclosure Memorandum, 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 ▇▇▇▇▇ Entity under, any Contract or Permit of any ▇▇▇▇▇ Entity,
where such Default or Lien, or any failure to obtain such Consent, is reasonably
likely to have, individually or in the aggregate, a ▇▇▇▇▇ Material Adverse
Effect, or (iii) subject to receipt of the requisite Consents referred to in
Section 9.1(b), constitute or result in a Default under or require any Consent
pursuant to any Law or Order applicable to any ▇▇▇▇▇ Entity or any of their
respective material Assets (including any FIRST BANKING Entity or any ▇▇▇▇▇
Entity becoming subject to or liable for the payment of any Tax or any of the
Assets owned by any FIRST BANKING Entity or any ▇▇▇▇▇ Entity being reassessed or
revalued by any Taxing authority).
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(c) Other than in connection or compliance with the provisions of
applicable federal banking 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 the HSR Act, 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, no
notice to, filing with, or Consent of, any public body or authority is necessary
for the consummation by ▇▇▇▇▇ of the Merger and the other transactions
contemplated in this Agreement.
5.3 CAPITAL STOCK.
(a) As of the date of this Agreement, the authorized capital stock of
▇▇▇▇▇ consists of Ten Million (10,000,000) shares of ▇▇▇▇▇ Common Stock, of
which Five Hundred Fifty Eight Thousand Six Hundred Forty-Eight (558,648) shares
are issued and outstanding, assuming all warrants to acquire ▇▇▇▇▇ Common Stock
have been exercised. All of the issued and outstanding shares of capital stock
of ▇▇▇▇▇ are duly and validly issued and outstanding and are fully paid and
nonassessable under the GBCC. None of the outstanding shares of capital stock of
▇▇▇▇▇ has been issued in violation of any preemptive rights of the current or
past shareholders of ▇▇▇▇▇. ▇▇▇▇▇ has reserved Fifty-Two Thousand Six Hundred
Fifty (52,650) shares of ▇▇▇▇▇ Common Stock for issuance upon the exercise of
certain authorized Warrants as described in Section 5.3(a) of the ▇▇▇▇▇
Disclosure Memorandum.
(b) Except as set forth in Section 5.3(a), or as disclosed in Section
5.3(b) of the ▇▇▇▇▇ Disclosure Memorandum, there are no shares of capital stock
or other equity securities of ▇▇▇▇▇ outstanding and no outstanding Equity Rights
relating to the capital stock of ▇▇▇▇▇.
5.4 ▇▇▇▇▇ SUBSIDIARIES. ▇▇▇▇▇ has disclosed in Section 5.4 of the ▇▇▇▇▇
Disclosure Memorandum all of the ▇▇▇▇▇ Subsidiaries that are corporations
(identifying its jurisdiction of incorporation, each jurisdiction in which the
character of its Assets or the nature or conduct of its business requires it to
be qualified and/or licensed to transact business, and the number of shares
owned and percentage ownership interest represented by such share ownership) and
all of the ▇▇▇▇▇ Subsidiaries that are general or limited partnerships, limited
liability companies, or other non-corporate entities (identifying the Law under
which such entity is organized, each jurisdiction in which the character of its
Assets or the nature or conduct of its business requires it to be qualified
and/or licensed to transact business, and the amount and nature of the ownership
interest therein). Except as disclosed in Section 5.4 of the ▇▇▇▇▇ Disclosure
Memorandum, ▇▇▇▇▇ or one of its wholly-owned Subsidiaries owns all of the issued
and outstanding shares of capital stock (or other equity interests) of each
▇▇▇▇▇ Subsidiary. No capital stock (or other equity interest) of any ▇▇▇▇▇
Subsidiary is or may become required to be issued (other than to another ▇▇▇▇▇
Entity) by reason of any Equity Rights, and there are no Contracts by which any
▇▇▇▇▇ Subsidiary is bound to issue (other than to another ▇▇▇▇▇ Entity)
additional shares of its capital stock (or other equity interests) or Equity
Rights or by which any ▇▇▇▇▇ Entity is or may be bound to transfer any shares of
the capital stock (or other equity interests) of any ▇▇▇▇▇ Subsidiary (other
than to another ▇▇▇▇▇ Entity). There are no Contracts relating to the rights of
any ▇▇▇▇▇ Entity to vote or
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to dispose of any shares of the capital stock (or other equity interests) of any
▇▇▇▇▇ Subsidiary. All of the shares of capital stock (or other equity interests)
of each ▇▇▇▇▇ Subsidiary held by a ▇▇▇▇▇ Entity are fully paid and (except
pursuant to 12 U.S.C. 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 ▇▇▇▇▇ Entity free and clear of any Lien.
Except as disclosed in Section 5.4 of the ▇▇▇▇▇ Disclosure Memorandum, each
▇▇▇▇▇ Subsidiary is either a bank, savings association or a corporation, and is
duly organized, validly existing, and 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 ▇▇▇▇▇ Subsidiary is duly
qualified or licensed to transact business as a foreign corporation in good
standing in the States of the United States and foreign jurisdictions where the
character of its Assets or the nature or conduct of its business requires it to
be so qualified or licensed, except for such jurisdictions in which the failure
to be so qualified or licensed is not reasonably likely to have, individually or
in the aggregate, a ▇▇▇▇▇ Material Adverse Effect. Each ▇▇▇▇▇ Subsidiary that is
a depository institution is an "insured institution" as defined in the Federal
Deposit Insurance Act and applicable regulations thereunder. The minute book and
other organizational documents for each ▇▇▇▇▇ Subsidiary have been made
available to FIRST BANKING for its review, and, except as disclosed in Section
5.4 of the ▇▇▇▇▇ Disclosure Memorandum, are true and complete in all material
respects as in effect as of the date of this Agreement and accurately reflect in
all material respects all amendments thereto and all proceedings of the Board of
Directors and shareholders thereof.
5.5 SEC FILINGS; FINANCIAL STATEMENTS.
(a) ▇▇▇▇▇ has timely filed and made available to FIRST BANKING all
SEC Documents required to be filed by ▇▇▇▇▇ since December 31, 1995 (the "▇▇▇▇▇
SEC Reports"). The ▇▇▇▇▇ SEC Reports (i)at the time filed complied in all
material respects with the applicable requirements of the Securities Laws and
other applicable Laws and (ii) did not, at the time they were filed (or, if
amended or superseded by a filing prior to the date of this Agreement, then on
the date of such filing) contain any untrue statement of a material fact or omit
to state a material fact required to be stated in such ▇▇▇▇▇ SEC Reports or
necessary in order to make the statements in such ▇▇▇▇▇ SEC Reports, in light of
the circumstances under which they were made, not misleading.
(b) Each of the ▇▇▇▇▇ Financial Statements (including, in each
case, any related notes) was prepared in accordance with GAAP applied on a
consistent basis throughout the periods involved (except as may be indicated in
the notes to such financial statements), and fairly presented in all material
respects the consolidated financial position of ▇▇▇▇▇ and its Subsidiaries as at
the respective dates and the consolidated results of operations and cash flows
for the periods indicated, except that the unaudited interim financial
statements were or are subject to normal and recurring year-end adjustments
which were not or are not expected to be material in amount or effect.
5.6 ABSENCE OF UNDISCLOSED LIABILITIES. No ▇▇▇▇▇ Entity has any
Liabilities that are reasonably likely to have, individually or in the
aggregate, a ▇▇▇▇▇ Material Adverse Effect, except Liabilities which are accrued
or reserved against in the consolidated balance sheets of ▇▇▇▇▇ as of December
31, 1997 or September 30, 1998, included in the ▇▇▇▇▇ Financial
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15
Statements or reflected in the notes thereto. No ▇▇▇▇▇ Entity has incurred or
paid any Liability since September 30, 1998, except for such Liabilities
incurred or paid (i) 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 or (ii) in connection with the
transactions contemplated by this Agreement.
5.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since December 31, 1997,
except as disclosed in the ▇▇▇▇▇ Financial Statements delivered prior to the
date of this Agreement or as disclosed in Section 5.7 of the ▇▇▇▇▇ 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, and (ii) ▇▇▇▇▇ Entities 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 ▇▇▇▇▇
provided in Article 7.
5.8 TAX MATTERS.
(a) All Tax Returns required to be filed by or on behalf of any
▇▇▇▇▇ Entities have been timely filed or requests for extensions have been
timely filed, granted, and, to the Knowledge of ▇▇▇▇▇, have not expired for such
periods, except to the extent that all such failures to file, taken together,
are not reasonably likely to have a ▇▇▇▇▇ Material Adverse Effect, and all Tax
Returns filed are complete and accurate in all material respects. All Taxes
shown on filed Tax Returns have been paid. There is no audit examination,
deficiency, or refund Litigation with respect to any Taxes that is reasonably
likely to result in a determination that would have, individually or in the
aggregate, a ▇▇▇▇▇ Material Adverse Effect, except as reserved against in the
▇▇▇▇▇ Financial Statements delivered prior to the date of this Agreement or as
disclosed in Section 5.8 of the ▇▇▇▇▇ Disclosure Memorandum. 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 ▇▇▇▇▇ Entities, except for any such Liens which are not reasonably
likely to have a ▇▇▇▇▇ Material Adverse Effect or with respect to which the
Taxes are not yet due and payable.
(b) None of the ▇▇▇▇▇ Entities 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) The provision for any Taxes due or to become due for any of the
▇▇▇▇▇ Entities for the period or periods through and including the date of the
respective ▇▇▇▇▇ Financial Statements that has been made and is reflected on
such ▇▇▇▇▇ Financial Statements is sufficient to cover all such Taxes.
(d) Deferred Taxes of ▇▇▇▇▇ Entities have been provided for in
accordance with GAAP.
(e) Except as disclosed in Section 5.8 of the ▇▇▇▇▇ Disclosure
Memorandum, none of the ▇▇▇▇▇ Entities is a party to any Tax allocation or
sharing agreement and none of ▇▇▇▇▇ Entities has been a member of an affiliated
group filing a
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16
consolidated federal income Tax Return (other than a group the common parent of
which was ▇▇▇▇▇) or has any Liability for Taxes of any Person (other than ▇▇▇▇▇
and its Subsidiaries) 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.
(f) Each of the ▇▇▇▇▇ Entities 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, except for such instances of
noncompliance and such omissions as are not reasonably likely to have,
individually or in the aggregate, a ▇▇▇▇▇ Material Adverse Effect.
(g) Except as disclosed in Section 5.8 of the ▇▇▇▇▇ Disclosure
Memorandum, none of the ▇▇▇▇▇ Entities has made any payments, is obligated to
make any payments, or is a party to any Contract that could obligate it to make
any payments that would be disallowed as a deduction under Sections 28OG or
162(m) of the Internal Revenue Code.
(h) Exclusive of the Merger, there has not been an ownership
change, as defined in Internal Revenue Code Section 382(g), of ▇▇▇▇▇ Entities
that occurred during or after any Taxable Period in which ▇▇▇▇▇ Entities
incurred a net operating loss that carries over to any Taxable Period ending
after December 31, 1997.
(i) No ▇▇▇▇▇ Entity has or has had in any foreign country a
permanent establishment, as defined in any applicable tax treaty or convention
between the United States and such foreign country.
(j) All material elections with respect to Taxes affecting ▇▇▇▇▇
Entities have been or will be timely made.
5.9 ALLOWANCE FOR POSSIBLE LOAN LOSSES. The allowance for possible loan
or credit losses (the "Allowance") shown on the consolidated balance sheets of
▇▇▇▇▇ included in the most recent ▇▇▇▇▇ Financial Statements dated prior to the
date of this Agreement was, and the Allowance shown on the consolidated balance
sheets of ▇▇▇▇▇ included in the ▇▇▇▇▇ 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 all known or reasonably anticipated losses relating
to or inherent in the loan and lease portfolios (including accrued interest
receivables) of ▇▇▇▇▇ Entities and other extensions of credit (including letters
of credit and commitments to make loans or extend credit) by ▇▇▇▇▇ Entities as
of the dates thereof, except where the failure of such Allowance to be so
adequate is not reasonably likely to have a ▇▇▇▇▇ Material Adverse Effect.
5.10 ASSETS.
(a) Except as disclosed in Section 5.10 of the ▇▇▇▇▇ Disclosure
Memorandum or as disclosed or reserved against in the ▇▇▇▇▇ Financial Statements
delivered prior to the date of this Agreement, ▇▇▇▇▇ Entities have good and
marketable title, free and clear of all Liens, to all of their respective
Assets, except for any such Liens or other defects of
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17
title which are not reasonably likely to have a ▇▇▇▇▇ Material Adverse Effect.
All tangible properties used in the businesses of the ▇▇▇▇▇ Entities are usable
in the ordinary course of business consistent with WAYNE's past practices.
(b)All Assets which are material to WAYNE's business on a consolidated
basis, held under leases or subleases by any of the ▇▇▇▇▇ Entities, are held
under valid Contracts enforceable against ▇▇▇▇▇ 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,
assuming the enforceability of such Contract against the third party thereto,
each such Contract is in full force and effect.
(c)▇▇▇▇▇ Entities currently maintain the insurance policies described
in Section 5.10(c) of the ▇▇▇▇▇ Disclosure Memorandum. None of the ▇▇▇▇▇
Entities has received written notice from any insurance carrier that (i) any
policy of 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 for amounts
exceeding in any individual case $25,000 pending under such policies of
insurance and no written notices of claims in excess of such amounts have been
given by any ▇▇▇▇▇ Entity under such policies.
(d)The Assets of the ▇▇▇▇▇ Entities include all material Assets
required to operate the business of the ▇▇▇▇▇ Entities as presently conducted.
5.11 INTELLECTUAL PROPERTY. Each ▇▇▇▇▇ Entity owns or has a license to
use all of the Intellectual Property used by such ▇▇▇▇▇ Entity in the ordinary
course of its business. Each ▇▇▇▇▇ Entity is the owner of or has a license to
any Intellectual Property sold or licensed to a third party by such ▇▇▇▇▇ Entity
in connection with such ▇▇▇▇▇ Entity's business operations, and such ▇▇▇▇▇
Entity has the right to convey by sale or license any Intellectual Property so
conveyed. No ▇▇▇▇▇ Entity is in material Default under any of its Intellectual
Property licenses. No proceedings have been instituted, or are pending or, to
the Knowledge of ▇▇▇▇▇, threatened, which challenge the rights of any ▇▇▇▇▇
Entity with respect to Intellectual Property used, sold or licensed by such
▇▇▇▇▇ Entity in the course of its business, nor has any person claimed or
alleged any rights to such Intellectual Property. To the Knowledge of ▇▇▇▇▇, the
conduct of the business of the ▇▇▇▇▇ Entities does not infringe any Intellectual
Property of any other person. Except as disclosed in Section 5.11 of the ▇▇▇▇▇
Disclosure Memorandum, no ▇▇▇▇▇ Entity is obligated to pay any recurring
royalties to any Person with respect to any such Intellectual Property.
5.12 ENVIRONMENTAL MATTERS.
(a)Except as disclosed in Section 5.12 of the ▇▇▇▇▇ Disclosure
Memorandum, to the Knowledge of ▇▇▇▇▇, each ▇▇▇▇▇ Entity, its Participation
Facilities, and its Operating 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.
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18
(b)There is no Litigation pending or, to the Knowledge of ▇▇▇▇▇,
threatened, before any court, governmental agency, or authority or other forum
in which any ▇▇▇▇▇ Entity or any of its Operating Properties or Participation
Facilities (or ▇▇▇▇▇ in respect of such Operating Property or Participation
Facility) 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 emission, migration, release,
discharge, spillage, or disposal into the environment of any Hazardous Material,
whether or not occurring at, on, under, adjacent to, or affecting (or
potentially affecting) a site owned, leased, or operated by any ▇▇▇▇▇ Entity or
any of its Operating Properties or Participation Facilities or any neighboring
property, except for such Litigation pending or threatened that is not
reasonably likely to have, individually or in the aggregate, a ▇▇▇▇▇ Material
Adverse Effect, nor, to the Knowledge of ▇▇▇▇▇, is there any reasonable basis
for any Litigation of a type described in this sentence, except such as is not
reasonably likely to have, individually or in the aggregate, a ▇▇▇▇▇ Material
Adverse Effect.
(c)Except as disclosed in Section 5.12 of the ▇▇▇▇▇ Disclosure
Memorandum, during the period of (i) any ▇▇▇▇▇ Entity's ownership or operation
of any of their respective current Assets, or (ii) any ▇▇▇▇▇ Entity's
participation in the management of any Participation Facility or any Operating
Property, to the Knowledge of ▇▇▇▇▇, there have been no emissions, migrations,
releases, discharges, spillages, or disposals of Hazardous Material in, on, at,
under, adjacent to, or affecting (or potentially affecting) such properties or
any neighboring properties, except such as are not reasonably likely to have,
individually or in the aggregate, a ▇▇▇▇▇ Material Adverse Effect. Except as
disclosed in Section 5.12 of the ▇▇▇▇▇ Disclosure Memorandum, prior to the
period of (i) any ▇▇▇▇▇ Entity's ownership or operation of any of their
respective current properties, (ii) any ▇▇▇▇▇ Entity's participation in the
management of any Participation Facility or any Operating Property, to the
Knowledge of ▇▇▇▇▇, there were no releases, discharges, spillages, or disposals
of Hazardous Material in, on, under, or affecting any such property,
Participation Facility or Operating Property, except such as are not reasonably
likely to have, individually or in the aggregate, a ▇▇▇▇▇ Material Adverse
Effect.
5.13 COMPLIANCE WITH LAWS. Each ▇▇▇▇▇ Entity 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, and, to the Knowledge of ▇▇▇▇▇, there has occurred no
Default under any such Permit, other than Defaults which are not reasonably
likely to have, individually or in the aggregate, a ▇▇▇▇▇ Material Adverse
Effect. Except as disclosed in Section 5.13 of the ▇▇▇▇▇ Disclosure Memorandum,
none of the ▇▇▇▇▇ Entities:
(a)is in Default under any of the provisions of its Articles of
Incorporation or Bylaws (or other governing instruments);
(b)is in Default under any Laws, Orders, or Permits applicable to its
business or employees conducting its business, except for Defaults which are not
reasonably likely to have, individually or in the aggregate, a ▇▇▇▇▇ Material
Adverse Effect; or
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(c)since January 1, 1995, or as of the date of organization, if later,
has received any written notification or written communication from any agency
or department of federal, state, or local government or any Regulatory Authority
or the staff thereof (i) asserting that any ▇▇▇▇▇ Entity 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, (ii)
threatening to revoke any Permits, the revocation of which is reasonably likely
to have, individually or in the aggregate, a ▇▇▇▇▇ Material Adverse Effect, or
(iii) requiring any ▇▇▇▇▇ Entity 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 material manner
relates to its capital adequacy, its credit or reserve policies, its management,
or the payment of dividends. Copies of all material reports, correspondence,
notices and other documents relating to any inspection, audit, monitoring or
other form of review or enforcement action by a Regulatory Authority have been
made available to FIRST BANKING.
5.14 LABOR RELATIONS. No ▇▇▇▇▇ Entity is the subject of any Litigation
asserting that it or any other ▇▇▇▇▇ Entity 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 ▇▇▇▇▇ Entity to bargain with any
labor organization as to wages or conditions of employment, nor is any ▇▇▇▇▇
Entity party to any collective bargaining agreement, nor is there any strike or
other labor dispute involving any ▇▇▇▇▇ Entity, pending or threatened, or to the
Knowledge of ▇▇▇▇▇, is there any activity involving any ▇▇▇▇▇ Entity's employees
seeking to certify a collective bargaining unit or engaging in any other
organization activity.
5.15 EMPLOYEE BENEFIT PLANS.
(a)▇▇▇▇▇ has disclosed in Section 5.15 of the ▇▇▇▇▇ Disclosure
Memorandum, and has delivered or made available to FIRST BANKING 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 ▇▇▇▇▇ Entity or ERISA Affiliate
(as defined in subparagraph (c) below) 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, "▇▇▇▇▇ Benefit Plans"). Each ▇▇▇▇▇ Benefit Plan which
is an "employee pension benefit plan," as that term is defined in Section 3(2)
of ERISA, is referred to herein as an "▇▇▇▇▇ ERISA Plan." Each ▇▇▇▇▇ ERISA Plan
which is also a "defined benefit plan" (as defined in Section 4140 of the
Internal Revenue Code) is referred to herein as an "▇▇▇▇▇ Pension Plan." No
▇▇▇▇▇ Pension Plan is or has been a multiemployer plan within the meaning of
Section 3(37) of ERISA.
(b)All ▇▇▇▇▇ Benefit Plans are in compliance with the applicable terms
of ERISA, the Internal Revenue Code, and any other applicable Laws the breach or
violation of which are reasonably likely to have, individually or in the
aggregate, a ▇▇▇▇▇ Material
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Adverse Effect. Each ▇▇▇▇▇ 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 ▇▇▇▇▇ has no
Knowledge of any circumstances likely to result in revocation of any such
favorable determination letter. To the Knowledge of ▇▇▇▇▇, no ▇▇▇▇▇ Entity has
engaged in a transaction with respect to any ▇▇▇▇▇ Benefit Plan that, assuming
the taxable period of such transaction expired as of the date hereof, would
subject any ▇▇▇▇▇ Entity 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.
(c) No ▇▇▇▇▇ Pension Plan has any "unfunded current liability," as
that term is defined in Section 302(d)(8)(A) of ERISA, based on actuarial
assumptions set forth for such plan's most recent actuarial valuation. Since the
date of the most recent actuarial valuation, there has been (i) no material
change in the financial position of any ▇▇▇▇▇ Pension Plan, (ii) no change in
the actuarial assumptions with respect to any ▇▇▇▇▇ Pension Plan, and (iii) no
increase in benefits under any ▇▇▇▇▇ 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 or materially adversely affect
the funding status of any such plan. Neither any ▇▇▇▇▇ Pension Plan nor any
"single employer plan," within the meaning of Section 4001(a)(15) of ERISA,
currently or formerly maintained by any ▇▇▇▇▇ Entity, or the single-employer
plan of any entity which is considered one employer with ▇▇▇▇▇ 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, which is reasonably likely to have a ▇▇▇▇▇ Material
Adverse Effect. No ▇▇▇▇▇ Entity has provided, or is required to provide,
security to a ▇▇▇▇▇ Pension Plan or to any single-employer plan of an ERISA
Affiliate pursuant to Section 401(a)(29) of the Internal Revenue 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 ▇▇▇▇▇ Entity with respect to any ongoing, frozen, or
terminated single-employer plan or the single-employer plan of any ERISA
Affiliate, which Liability is reasonably likely to have a ▇▇▇▇▇ Material Adverse
Effect. No ▇▇▇▇▇ Entity 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), which Liability is reasonably
likely to have a ▇▇▇▇▇ Material Adverse Effect. 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
▇▇▇▇▇ Pension Plan or by any ERISA Affiliate within the 12-month period ending
on the date hereof.
(e) Except as disclosed in Section 5.15 of the ▇▇▇▇▇ Disclosure
Memorandum, no ▇▇▇▇▇ Entity has any Liability for retiree health and life
benefits under any of the ▇▇▇▇▇ Benefit Plans and there are no restrictions on
the rights of such ▇▇▇▇▇ Entity to amend or terminate any such retiree health or
benefit Plan without incurring any Liability thereunder, which Liability is
reasonably likely to have a ▇▇▇▇▇ Material Adverse Effect.
(f) Except as disclosed in Section 5.15 of the ▇▇▇▇▇ Disclosure
Memorandum, neither the execution and delivery of this Agreement nor the
consummation of the
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transactions contemplated hereby will (i) result in any payment (including
severance, unemployment compensation, golden parachute, or otherwise) becoming
due to any director or any employee of any ▇▇▇▇▇ Entity from any ▇▇▇▇▇ Entity
under any ▇▇▇▇▇ Benefit Plan or otherwise, (ii) increase any benefits otherwise
payable under any ▇▇▇▇▇ Benefit Plan, or (iii) result in any acceleration of the
time of payment or vesting of any such benefit, where such payment, increase, or
acceleration is reasonably likely to have, individually or in the aggregate, a
▇▇▇▇▇ Material Adverse Effect.
(g) The actuarial present values of all accrued deferred compensation
entitlements (including entitlements under any executive compensation,
supplemental retirement, or employment agreement) of employees and former
employees of any ▇▇▇▇▇ Entity and their respective beneficiaries, other than
entitlements accrued pursuant to funded retirement plans subject to the
provisions of Section 412 of the Internal Revenue Code or Section 302 of ERISA,
have been fully reflected on the ▇▇▇▇▇ Financial Statements to the extent
required by and in accordance with GAAP.
5.16 MATERIAL CONTRACTS. Except as disclosed in Section 5.16 of the
▇▇▇▇▇ Disclosure Memorandum or otherwise reflected in the ▇▇▇▇▇ Financial
Statements, none of the ▇▇▇▇▇ Entities, 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 ▇▇▇▇▇ Entity or the guarantee by any ▇▇▇▇▇ Entity of any such
obligation (other than Contracts evidencing deposit liabilities, purchases of
federal funds, fully-secured repurchase agreements, Federal Home Loan Bank
advances and trade payables and Contracts relating to borrowings or guarantees
made in the ordinary course of business), (iii) any Contract which prohibits or
restricts any ▇▇▇▇▇ Entity from engaging in any business activities in any
geographic area, line of business or otherwise in competition with any other
Person, (iv) any Contract between or among the ▇▇▇▇▇ Entities or any Contract
between any ▇▇▇▇▇ Entity and any Affiliate of ▇▇▇▇▇, (v) any Contract relating
to the provision of data processing, network communication, or other technical
services to or by any ▇▇▇▇▇ Entity, (vi) any exchange traded or over-the-counter
swap, forward, future, option, cap, floor, or collar financial Contract, or any
other interest rate or foreign currency protection Contract not included on its
balance sheet which is a financial derivative Contract, and (vii) any other
Contract or amendment thereto that would be required to be filed as an exhibit
to a Form 10-K filed by ▇▇▇▇▇ with the SEC as of the date of this Agreement that
has not been filed as an exhibit to WAYNE's Form 10-K filed for the fiscal year
ended December 31, 1997 or in an SEC Document and identified to ▇▇▇▇▇ (together
with all Contracts referred to in Sections 5.10 and 5.15(a), the "▇▇▇▇▇
Contracts"). With respect to each ▇▇▇▇▇ Contract and except as disclosed in
Section 5.16 of the ▇▇▇▇▇ Disclosure Memorandum: (i) assuming the enforceability
of such Contract against the third party thereto, each such Contract is in full
force and effect; (ii) no ▇▇▇▇▇ Entity is in Default thereunder, other than
Defaults which are not reasonably likely to have, individually or in the
aggregate, a ▇▇▇▇▇ Material Adverse Effect; (iii) no ▇▇▇▇▇ Entity 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 ▇▇▇▇▇, in Default in any respect,
other than Defaults which are not reasonably likely to have, individually or in
the aggregate, a ▇▇▇▇▇ Material Adverse Effect, or has repudiated or waived any
material provision thereunder. Except as disclosed in Section 5.16 of the ▇▇▇▇▇
Disclosure Memorandum, no officer, director or employee of any ▇▇▇▇▇
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Entity is party to any Contract which restricts or prohibits such officer,
director or employee from engaging in activities competitive with any Person,
including any ▇▇▇▇▇ Entity. All of the indebtedness of any ▇▇▇▇▇ Entity for
money borrowed is prepayable at any time by such ▇▇▇▇▇ Entity without penalty or
premium.
5.17 LEGAL PROCEEDINGS. There is no Litigation instituted or pending
or, to the Knowledge of ▇▇▇▇▇, 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 ▇▇▇▇▇ Entity, or against any director,
employee or employee benefit plan (acting in such capacity) of any ▇▇▇▇▇ Entity,
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, nor are there any Orders of any Regulatory Authorities, other
governmental authorities, or arbitrators outstanding against any ▇▇▇▇▇ Entity,
that are reasonably likely to have, individually or in the aggregate, a ▇▇▇▇▇
Material Adverse Effect. Section 5.17 of the ▇▇▇▇▇ Disclosure Memorandum
contains a summary of all Litigation as of the date of this Agreement to which
any ▇▇▇▇▇ Entity is a party and which names a ▇▇▇▇▇ Entity as a defendant or
cross-defendant or for which, to the Knowledge of ▇▇▇▇▇, any ▇▇▇▇▇ Entity has
any potential Liability.
5.18 REPORTS. Since January 1, 1995, each ▇▇▇▇▇ Entity 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 Regulatory Authorities,
except for such filings which the failure to so file is not reasonably likely to
have, individually or in the aggregate, a ▇▇▇▇▇ Material Adverse Effect. 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. Since January 1, 1995, no ▇▇▇▇▇
Entity has filed any Suspicious Activity Report or any claim under any fidelity,
blanket bond, general liability, errors and omissions, directors and officers or
other insurance policies that pertain to the operation of its business or the
ownership of its assets.
5.19 STATEMENTS TRUE AND CORRECT. No statement, certificate,
instrument, or other writing furnished or to be furnished by any ▇▇▇▇▇ Entity to
FIRST BANKING 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 ▇▇▇▇▇
Entity for inclusion in the registration statement to be filed by FIRST BANKING
with the SEC in accordance with Section 8.1 will, when such 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. All documents that any ▇▇▇▇▇ Entity 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. No documents to be filed by a ▇▇▇▇▇ Entity with
any Regulatory Authority in connection with the transactions contemplated
hereby, will, at the respective time such documents are filed, be false or
misleading with respect to any material fact, or omit to state any material fact
necessary to
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make the statements therein, in light of the circumstances under which they were
made, not misleading.
5.20 ACCOUNTING, TAX AND REGULATORY MATTERS. No ▇▇▇▇▇ Entity has taken
or agreed to take any action or has any Knowledge of any fact or circumstance
that is reasonably likely to (i) prevent the Merger from qualifying for pooling
of interest accounting treatment and 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)
or result in the imposition of a condition or restriction of the type referred
to in the last sentence of such Section.
5.21 CHARTER PROVISIONS. Each ▇▇▇▇▇ Entity 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 Charter, Articles of
Incorporation, Bylaws or other governing instruments of any ▇▇▇▇▇ Entity or
restrict or impair the ability of FIRST BANKING or any of its Subsidiaries to
vote, or otherwise to exercise the rights of a shareholder with respect to,
shares of any ▇▇▇▇▇ Entity that may be directly or indirectly acquired or
controlled by them.
5.22 BOARD RECOMMENDATION. The Board of Directors of ▇▇▇▇▇, at a
meeting duly called and held, has by unanimous vote of those directors present
(who constituted all of the directors then in office) (i) determined that this
Agreement and the transactions contemplated hereby are fair to and in the best
interests of the shareholders and (ii) resolved to recommend that the holders of
the shares of ▇▇▇▇▇ Common Stock approve this Agreement.
5.23 Y-2K. ▇▇▇▇▇ has formed a committee to review policies and
directives issued by Regulatory Authorities with respect to preparedness for
year 2000 data processing and other operations, and intends to implement such
committee's recommendations for ensuring compliance with such policies and
directives.
ARTICLE 6.
REPRESENTATIONS AND WARRANTIES OF FIRST BANKING
FIRST BANKING hereby represents and warrants to ▇▇▇▇▇ as follows:
6.1 ORGANIZATION, STANDING, AND POWER. FIRST BANKING is a corporation
duly organized, validly existing, and in good standing under the Laws of the
State of Georgia, and has the corporate power and authority to carry on its
business as now conducted and to own, lease and operate its material Assets.
FIRST BANKING 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 FIRST BANKING
Material Adverse Effect. The minute book and other organizational documents for
FIRST BANKING have been made available to ▇▇▇▇▇ for its review and, except as
disclosed in Section 6.1 of the FIRST BANKING Disclosure Memorandum, are true
and complete in all material respects as in effect as of the date of this
Agreement and accurately reflect in all
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material respects all amendments thereto and all proceedings of the Board of
Directors and shareholders thereof.
6.2 AUTHORITY OF FIRST BANKING; NO BREACH BY AGREEMENT.
(a) FIRST BANKING 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 FIRST
BANKING. This Agreement represents a legal, valid, and binding obligation of
FIRST BANKING, enforceable against FIRST BANKING in accordance with its terms
(except in all cases as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, receivership, conservatorship,
moratorium, or similar Laws affecting the enforcement of creditors' rights
generally and except that the availability of the equitable remedy of specific
performance or injunctive relief is subject to the discretion of the court
before which any proceeding may be brought).
(b) Neither the execution and delivery of this Agreement by FIRST
BANKING, nor the consummation by FIRST BANKING of the transactions contemplated
hereby, nor compliance by FIRST BANKING with any of the provisions hereof, will
(i) conflict with or result in a breach of any provision of FIRST BANKING's
Articles of Incorporation or Bylaws, or the Charter, or Articles of
Incorporation or Bylaws of any FIRST BANKING Entity, or any resolution adopted
by the Board of Directors or the shareholders of any FIRST BANKING Entity, 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 FIRST BANKING
Entity under, any Contract or Permit of any FIRST BANKING Entity, where such
Default or Lien, or any failure to obtain such Consent, is reasonably likely to
have, individually or in the aggregate, a FIRST BANKING Material Adverse Effect,
or (iii) subject to receipt of the requisite Consents referred to in Section 9.1
(b), constitute or result in a Default under, or require any Consent pursuant
to, any Law or Order applicable to any FIRST BANKING Entity or any of their
respective material Assets (including any FIRST BANKING Entity becoming subject
to or liable for the payment of any Tax or any of the Assets owned by any FIRST
BANKING Entity being reassessed or revalued by any Taxing authority).
(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,
or under the HSR Act, 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 FIRST BANKING Material Adverse Effect, no notice to, filing
with, or Consent of, any public body or authority is necessary for the
consummation by FIRST BANKING of the Merger and the other transactions
contemplated in this Agreement.
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6.3 CAPITAL STOCK.
(a) The authorized capital stock of FIRST BANKING consists of
10,000,000 shares of FIRST BANKING Common Stock, of which 4,702,607 shares are
issued and outstanding as of the date of this Agreement. All of the issued and
outstanding shares of FIRST BANKING Capital Stock are, and all of the shares of
FIRST BANKING Common Stock to be issued in exchange for shares of ▇▇▇▇▇ 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 under the GBCC. None of the outstanding shares of FIRST
BANKING Capital Stock has been, and none of the shares of FIRST BANKING Common
Stock to be issued in exchange for shares of ▇▇▇▇▇ Common Stock upon
consummation of the Merger will be, issued in violation of any preemptive rights
of the current or past shareholders of FIRST BANKING.
(b) Except as set forth in Section 6.3(a), or as disclosed in
Section 6.3 of the FIRST BANKING Disclosure Memorandum, there are no shares of
capital stock or other equity securities of FIRST BANKING outstanding and no
outstanding Equity Rights relating to the capital stock of FIRST BANKING.
6.4 FIRST BANKING SUBSIDIARIES. FIRST BANKING has disclosed in Section
6.4 of the FIRST BANKING Disclosure Memorandum all of the FIRST BANKING
Subsidiaries that are corporations (identifying its jurisdiction of
incorporation, each jurisdiction in which the character of its Assets or the
nature or conduct of its business requires it to be qualified and/or licensed to
transact business, and the number of shares owned and percentage ownership
interest represented by such share ownership) and all of the FIRST BANKING
Subsidiaries that are general or limited partnerships, limited liability
companies, or other non-corporate entities (identifying the Law under which such
entity is organized, each jurisdiction in which the character of its Assets or
the nature or conduct of its business requires it to be qualified and/or
licensed to transact business, and the amount and nature of the ownership
interest therein). Except as disclosed in Section 6.4 of the FIRST BANKING
Disclosure Memorandum, FIRST BANKING or one of its wholly-owned Subsidiaries
owns all of the issued and outstanding shares of capital stock (or other equity
interests) of each FIRST BANKING Subsidiary. No capital stock (or other equity
interest) of any FIRST BANKING Subsidiary are or may become required to be
issued (other than to another FIRST BANKING Entity) by reason of any Equity
Rights, and there are no Contracts by which any FIRST BANKING Subsidiary is
bound to issue (other than to another FIRST BANKING Entity) additional shares of
its capital stock (or other equity interests) or Equity Rights or by which any
FIRST BANKING Entity is or may be bound to transfer any shares of the capital
stock (or other equity interests) of any FIRST BANKING Subsidiary (other than to
another FIRST BANKING Entity). There are no Contracts relating to the rights of
any FIRST BANKING Entity to vote or to dispose of any shares of the capital
stock (or other equity interests) of any FIRST BANKING Subsidiary. All of the
shares of capital stock (or other equity interests) of each FIRST BANKING
Subsidiary held by a FIRST BANKING Entity are fully paid and nonassessable under
the applicable corporation Law of the jurisdiction in which such Subsidiary is
incorporated or organized and are owned by the FIRST BANKING Entity free and
clear of any Lien. Each FIRST BANKING Subsidiary is either a bank, 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
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carry on its business as now conducted. Each FIRST BANKING Subsidiary is duly
qualified or licensed to transact business as a foreign corporation in good
standing in the States of the United States and foreign jurisdictions where the
character of its Assets or the nature or conduct of its business requires it to
be so qualified or licensed, except for such jurisdictions in which the failure
to be so qualified or licensed is not reasonably likely to have, individually or
in the aggregate, a FIRST BANKING Material Adverse Effect. Each FIRST BANKING
Subsidiary that is a depository institution is an "insured institution" as
defined in the Federal Deposit Insurance Act and applicable regulations
thereunder. The minute book and other organizational documents for each FIRST
BANKING Subsidiary have been made available to ▇▇▇▇▇ for its review, and, except
as disclosed in Section 6.4 of the FIRST BANKING Disclosure Memorandum, are true
and complete in all material respects as in effect as of the date of this
Agreement and accurately reflect in all material respects all amendments thereto
and all proceedings of the Board of Directors and shareholders thereof.
6.5 SEC FILINGS, FINANCIAL STATEMENTS.
(a) FIRST BANKING has timely filed and made available to ▇▇▇▇▇ all
SEC Documents required to be filed by FIRST BANKING since December 31, 1995 (the
"FIRST BANKING SEC Reports"). The FIRST BANKING SEC Reports (i) at the time
filed complied in all material respects with the applicable requirements of the
Securities Laws and other applicable Laws and (ii) did not, at the time they
were filed (or, if amended or superseded by a filing prior to the date of this
Agreement, then on the date of such filing) contain any untrue statement of a
material fact or omit to state a material fact required to be stated in such
FIRST BANKING SEC Reports or necessary in order to make the statements in such
FIRST BANKING SEC Reports, in light of the circumstances under which they were
made, not misleading. No FIRST BANKING Subsidiary is required to file any SEC
Documents.
(b) Each of the FIRST BANKING Financial Statements (including, in
each case, any related notes) contained in the FIRST BANKING SEC Reports,
including any FIRST BANKING SEC Reports filed after the date of this Agreement
until the Effective Time, complied as to form in all material respects with the
applicable published rules and regulations of the SEC with respect thereto, was
prepared in accordance with GAAP applied on a consistent basis throughout the
periods involved (except as may be indicated in the notes to such financial
statements or, in the case of unaudited interim statements, as permitted by Form
10-Q of the SEC), and fairly presented in all material respects the consolidated
financial position of FIRST BANKING and its Subsidiaries as at the respective
dates and the consolidated results of operations and cash flows for the periods
indicated, except that the unaudited interim financial statements were or are
subject to normal and recurring year-end adjustments which were not or are not
expected to be material in amount or effect.
6.6 ABSENCE OF UNDISCLOSED LIABILITIES. No FIRST BANKING Entity has any
Liabilities that are reasonably likely to have, individually or in the
aggregate, a FIRST BANKING Material Adverse Effect, except Liabilities which are
accrued or reserved against in the consolidated balance sheets of FIRST BANKING
as of December 31, 1997 and September 30, 1998, included in the FIRST BANKING
Financial Statements delivered prior to the date of this Agreement or reflected
in the notes thereto. No FIRST BANKING Entity has incurred or paid any Liability
since September 30, 1998, except for such Liabilities incurred or paid (i) in
the ordinary course of business consistent with past business practice and which
are not reasonably
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likely to have, individually or in the aggregate, a FIRST BANKING Material
Adverse Effect or (ii) in connection with the transactions contemplated by this
Agreement.
6.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since December 31, 1997,
except as disclosed in the FIRST BANKING Financial Statements delivered prior to
the date of this Agreement or as disclosed in Section 6.7 of the FIRST BANKING
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 FIRST BANKING Material Adverse Effect, and (ii) the FIRST BANKING
Entities 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 FIRST BANKING provided in Article 7.
6.8 TAX MATTERS.
(a) All Tax Returns required to be filed by or on behalf of any of
the FIRST BANKING Entities 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, 1997, and on or before the date of the most recent fiscal
year end immediately preceding the Effective Time, except to the extent that all
such failures to file, taken together, are not reasonably likely to have a FIRST
BANKING Material Adverse Effect, and all Tax Returns filed are complete and
accurate in all material respects. All Taxes shown on filed Tax Returns have
been paid. There is no audit examination, deficiency, or refund Litigation with
respect to any Taxes that is reasonably likely to result in a determination that
would have, individually or in the aggregate, a FIRST BANKING Material Adverse
Effect, except as reserved against in the FIRST BANKING Financial Statements
delivered prior to the date of this Agreement or as disclosed in Section 6.8 of
the FIRST BANKING Disclosure Memorandum. 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
the FIRST BANKING Entities, except for any such Liens which are not reasonably
likely to have a FIRST BANKING Material Adverse Effect or with respect to which
the Taxes are not vet due and payable.
(b) None of the FIRST BANKING Entities 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 veers currently under examination by
the Internal Revenue Service or other applicable taxing authorities) that is
currently in effect.
(c) The provision for any Taxes due or to become due for any of the
FIRST BANKING Entities for the period or periods through and including the date
of the respective FIRST BANKING Financial Statements that has been made and is
reflected on such FIRST BANKING Financial Statements is sufficient to cover all
such Taxes.
(d) Deferred Taxes of the FIRST BANKING Entities have been provided
for in accordance with GAAP.
(e) None of the FIRST BANKING Entities is a party to any Tax
allocation or sharing agreement and none of the FIRST BANKING Entities has been
a member of an affiliated group filing a consolidated federal income Tax Return
(other than a group the common
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parent of which was FIRST BANKING) or has any Liability for Taxes of any Person
(other than FIRST BANKING and its Subsidiaries) 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.
(f) Each of the FIRST BANKING Entities 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, except for such
instances of noncompliance and such omissions as are not reasonably likely to
have, individually or in the aggregate, a FIRST BANKING Material Adverse Effect.
(g) Except as disclosed in Section 6.8 of the FIRST BANKING
Disclosure Memorandum, none of the FIRST BANKING Entities has made any payments,
is obligated to make any payments, or is a party to any Contract that could
obligate it to make any payments that would be disallowed as a deduction under
Sections 28OG or 162(m) of the Internal Revenue Code.
(h) There has not been an ownership change, as defined in Internal
Revenue Code Section 382(g), of the FIRST BANKING Entities that occurred during
or after any Taxable Period in which the FIRST BANKING Entities incurred a net
operating loss that carries over to any Taxable Period ending after December 31,
1997.
(i) No FIRST BANKING Entity has or has had in any foreign country a
permanent establishment, as defined in any applicable tax treaty or convention
between the United States and such foreign country.
(j) All material elections with respect to Taxes affecting the
FIRST BANKING Entities have been or will be timely made.
6.9 ALLOWANCE FOR POSSIBLE LOAN LOSSES. The Allowance shown on the
consolidated balance sheets of FIRST BANKING included in the most recent FIRST
BANKING Financial Statements dated prior to the date of this Agreement was, and
the Allowance shown on the consolidated balance sheets of FIRST BANKING included
in the FIRST BANKING 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 all known or reasonably anticipated losses relating to or inherent
in the loan and lease portfolios (including accrued interest receivables) of the
FIRST BANKING Entities and other extensions of credit (including letters of
credit and commitments to make loans or extend credit) by the FIRST BANKING
Entities as of the dates thereof, except where the failure of such Allowance to
be so adequate is not reasonably likely to have a FIRST BANKING Material Adverse
Effect.
6.10 ASSETS.
(a) Except as disclosed in Section 6.10 of the FIRST BANKING
Disclosure Memorandum or as disclosed or reserved against in the FIRST BANKING
Financial Statements
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delivered prior to the date of this Agreement, the FIRST BANKING Entities have
good and marketable title, free and clear of all Liens, to all of their
respective Assets, except for any such Liens or other defects of title which are
not reasonably likely to have a FIRST BANKING Material Adverse Effect. All
tangible properties used in the businesses of the FIRST BANKING Entities are in
good condition, reasonable wear and tear excepted, and are usable in the
ordinary course of business consistent with FIRST BANKING's past practices.
(b) All Assets which are material to FIRST BANKING's business on a
consolidated basis, held under leases or subleases by any of the FIRST BANKING
Entities, 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.
(c) The FIRST BANKING Entities currently maintain insurance
similar in amounts, scope and coverage to that maintained by other peer banking
organizations. None of the FIRST BANKING Entities has received notice from any
insurance carrier that (i) any policy of insurance will be cancelled 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 for amounts exceeding in any individual case $25,000 pending
under such policies of insurance and no notices of claims in excess of such
amounts have been given by any FIRST BANKING Entity under such policies.
(d) The Assets of the FIRST BANKING Entities include all Assets
required to operate the business of the FIRST BANKING Entities as presently
conducted.
6.11 INTELLECTUAL PROPERTY. Each FIRST BANKING Entity owns or has a
license to use all of the Intellectual Property used by such FIRST BANKING
Entity in the course of its business. Each FIRST BANKING Entity is the owner of
or has a license to any Intellectual Property sold or licensed to a third party
by such FIRST BANKING Entity in connection with such FIRST BANKING Entity's
business operations, and such FIRST BANKING Entity has the right to convey by
sale or license any Intellectual Property so conveyed. No FIRST BANKING Entity
is in Default under any of its Intellectual Property licenses. No proceedings
have been instituted, or are pending or to the Knowledge of FIRST BANKING
threatened, which challenge the rights of any FIRST BANKING Entity with respect
to Intellectual Property used, sold or licensed by such FIRST BANKING Entity in
the course of its business, nor has any person claimed or alleged any rights to
such Intellectual Property. The conduct of the business of the FIRST BANKING
Entities does not infringe any Intellectual Property of any other person. Except
as disclosed in Section 6.11 of the FIRST BANKING Disclosure Memorandum, no
FIRST BANKING Entity is obligated to pay any recurring royalties to any Person
with respect to any such Intellectual Property. Except as disclosed in Section
6.11 of the FIRST BANKING Disclosure Memorandum, no officer, director or
employee of any FIRST BANKING Entity is party to any Contract which restricts or
prohibits such officer, director or employee from engaging in activities
competitive with any Person, including any FIRST BANKING Entity.
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6.12 ENVIRONMENTAL MATTERS.
(a) To the Knowledge of FIRST BANKING, each FIRST BANKING Entity,
its Participation Facilities, and its Operating 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 FIRST BANKING
Material Adverse Effect.
(b) There is no Litigation pending or, to the Knowledge of FIRST
BANKING, threatened before any court, governmental agency, or authority or other
forum in which any FIRST BANKING Entity or any of its Operating Properties or
Participation Facilities (or FIRST BANKING in respect of such Operating Property
or Participation Facility) 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 emission,
migration, release, discharge, spillage, or disposal into the environment of any
Hazardous Material, whether or not occurring at, on, under, adjacent to, or
affecting (or potentially affecting) a site owned, leased, or operated by any
FIRST BANKING Entity or any of its Operating Properties or Participation
Facilities or any neighboring property, except for such Litigation pending or
threatened that is not reasonably likely to have, individually or in the
aggregate, a FIRST BANKING Material Adverse Effect, nor is there any reasonable
basis for any Litigation of a type described in this sentence, except such as is
not reasonably likely to have, individually or in the aggregate, a FIRST BANKING
Material Adverse Effect.
(c) During the period of (i) any FIRST BANKING Entity's ownership
or operation of any of their respective current properties, (ii) any FIRST
BANKING Entity's participation in the management of any Participation Facility
or any Operating Property, there have been no emissions, migrations, releases,
discharges, spillages, or disposals of Hazardous Material in, on, at, under,
adjacent to, or affecting (or potentially affecting) such properties or any
neighboring properties, except such as are not reasonably likely to have,
individually or in the aggregate, a FIRST BANKING Material Adverse Effect. Prior
to the period of (i) any FIRST BANKING Entity's ownership or operation of any of
their respective current properties, (ii) any FIRST BANKING Entity's
participation in the management of any Participation Facility or any Operating
Property, to the Knowledge of FIRST BANKING, there were no releases, discharges,
spillages, or disposals of Hazardous Material in, on, under, or affecting any
such property, Participation Facility or Operating Property, except such as are
not reasonably likely to have, individually or in the aggregate, a FIRST BANKING
Material Adverse Effect.
6.13 COMPLIANCE WITH LAWS. Each FIRST BANKING Entity 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
FIRST BANKING Material Adverse Effect, and there has occurred no Default under
any such Permit, other than Defaults which are not reasonably likely to have,
individually or in the aggregate, a FIRST BANKING Material Adverse Effect.
Except as disclosed in Section 6.13 of the FIRST BANKING Disclosure Memorandum,
none of the FIRST BANKING Entities:
(a) is in Default under any of the provisions of its Articles of
Incorporation or Bylaws (or other governing instruments); or
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(b) is in Default under any Laws, Orders or Permits applicable to
its business or employees conducting its business, except for Defaults which are
not reasonably likely to, have, individually or in the aggregate, a FIRST
BANKING Material Adverse Effect; or
(c) since January 1, 1995, 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 FIRST BANKING Entity 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
FIRST BANKING Material Adverse Effect, (ii) threatening to revoke any Permits,
the revocation of which is reasonably likely to have, individually or in the
aggregate, a FIRST BANKING Material Adverse Effect, or (iii) requiring any FIRST
BANKING Entity 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. Copies of all material reports, correspondence, notices and other
documents relating to any inspection, audit, monitoring or other form of review
or enforcement action by a Regulatory Authority have been made available to
▇▇▇▇▇.
6.14 LABOR RELATIONS. No FIRST BANKING Entity is the subject of any
Litigation asserting that it or any other FIRST BANKING Entity 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 FIRST BANKING Entity
to bargain with any labor organization as to wages or conditions of employment,
nor is any FIRST BANKING Entity party to any collective bargaining agreement,
nor is there any strike or other labor dispute involving any FIRST BANKING
Entity, pending or threatened, or to the Knowledge of FIRST BANKING, is there
any activity involving any FIRST BANKING Entity's employees seeking to certify a
collective bargaining unit or engaging in any other organization activity.
6.15 EMPLOYEE BENEFIT PLANS.
(a) FIRST BANKING has disclosed in Section 6.15 of the FIRST
BANKING Disclosure Memorandum and has delivered or made available to ▇▇▇▇▇ 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 FIRST BANKING Entity
or ERISA 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 "FIRST BANKING Benefit Plans"). Each FIRST BANKING Benefit Plan which is an
"employee pension benefit plan," as that term is defined in Section 3(2) of
ERISA, is referred to herein as a "FIRST BANKING ERISA Plan." Each FIRST BANKING
ERISA Plan which is also a "defined benefit plan" (as defined in Section 4140)
of the Internal Revenue Code) is referred to herein as a "FIRST BANKING
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Pension Plan." No FIRST BANKING Pension Plan is or has been a multiemployer plan
within the meaning of Section 3(37) of ERISA.
(b) All FIRST BANKING Benefit Plans are in compliance with the
applicable terms of ERISA, the Internal Revenue Code, and any other applicable
Laws the breach or violation of which are reasonably likely to have,
individually or in the aggregate, a FIRST BANKING Material Adverse Effect. Each
FIRST BANKING 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 FIRST BANKING is not aware of any
circumstances likely to result in revocation of any such favorable determination
letter. To the Knowledge of First Banking, no FIRST BANKING Entity has engaged
in a transaction with respect to any FIRST BANKING Benefit Plan that, assuming
the taxable period of such transaction expired as of the date hereof, would
subject any FIRST BANKING Entity 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 FIRST BANKING Material
Adverse Effect.
(c) No FIRST BANKING Pension Plan has any "unfunded current
liability," as that term is defined in Section 302(d)(8)(A) of ERISA, based on
actuarial assumptions set forth for such plan's most recent actuarial valuation.
Since the date of the most recent actuarial valuation, there has been (i) no
material change in the financial position of a FIRST BANKING Pension Plan, (ii)
no change in the actuarial assumptions with respect to any FIRST BANKING Pension
Plan, and (iii) no increase in benefits under any FIRST BANKING 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 FIRST BANKING Material
Adverse Effect or materially adversely affect the funding status of any such
plan. Neither any FIRST BANKING Pension Plan nor any "single-employer plan,"
within the meaning of Section 4001(a)(15) of ERISA, currently or formerly
maintained by any FIRST BANKING Entity, or the single-employer plan of any ERISA
Affiliate has an "accumulated funding deficiency" within the meaning of Section
412 of the Internal Revenue Code or Section 302 of ERISA, which is reasonably
likely to have a FIRST BANKING Material Adverse Effect. No FIRST BANKING Entity
has provided, or is required to provide, security to a FIRST BANKING Pension
Plan or to any single-employer plan of an ERISA Affiliate pursuant to Section 40
1 (a)(29) of the Internal Revenue 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 FIRST BANKING Entity with respect to any ongoing, frozen or
terminated single-employer plan or the single-employer plan of any ERISA
Affiliate, which Liability is reasonably likely to have a FIRST BANKING Material
Adverse Effect. No FIRST BANKING Entity 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), which
Liability is reasonably likely to have a FIRST BANKING Material Adverse Effect.
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 FIRST BANKING Pension Plan or by any ERISA
Affiliate within the 12-month period ending on the date hereof.
(e) Except as disclosed in Section 6.15 of the FIRST BANKING
Disclosure Memorandum, no FIRST BANKING Entity has any Liability for retiree
health and life benefits
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under any of the FIRST BANKING Benefit Plans and there are no restrictions on
the rights of such FIRST BANKING Entity to amend or terminate any such retiree
health or benefit Plan without incurring any Liability thereunder, which
Liability is reasonably likely to have a FIRST BANKING Material Adverse Effect.
(f)Except as disclosed in Section 6.15 of the FIRST BANKING 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 or any employee of any FIRST BANKING
Entity from any FIRST BANKING Entity under any FIRST BANKING Benefit Plan or
otherwise, (ii) increase any benefits otherwise payable under any FIRST BANKING
Benefit Plan, or (iii) result in any acceleration of the time of payment or
vesting of any such benefit, where such payment, increase, or acceleration is
reasonably likely to have, individually or in the aggregate, a FIRST BANKING
Material Adverse Effect.
(g)The actuarial present values of all accrued deferred compensation
entitlements (including entitlements under any executive compensation,
supplemental retirement, or employment agreement) of employees and former
employees of any FIRST BANKING Entity and their respective beneficiaries, other
than entitlements accrued pursuant to funded retirement plans subject to the
provisions of Section 412 of the Internal Revenue Code or Section 302 of ERISA,
have been fully reflected on the FIRST BANKING Financial Statements to the
extent required by and in accordance with GAAP.
6.16 MATERIAL CONTRACTS. Except as disclosed in Section 6.16 of the
FIRST BANKING Disclosure Memorandum or otherwise reflected in the FIRST BANKING
Financial Statements, none of the FIRST BANKING Entities, 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 FIRST BANKING Entity or the guarantee
by any FIRST BANKING Entity of any such obligation (other than Contracts
evidencing deposit liabilities, purchases of federal funds, fully-secured
repurchase agreements, and Federal Home Loan Bank advances of depository
institution Subsidiaries, trade payables and Contracts relating to borrowings or
guarantees made in the ordinary course of business), (iii) any Contract which
prohibits or restricts any FIRST BANKING Entity from engaging in any business
activities in any geographic area, line of business or otherwise in competition
with any other Person, (iv) any Contract between or among FIRST BANKING
Entities, (v) any Contract relating to the provision of data processing, network
communication, or other technical services to or by any FIRST BANKING Entity,
(vi) any exchange-traded or over-the-counter swap, forward, future, option, cap,
floor, or collar financial Contract, or any other interest rate or foreign
currency protection Contract not included on its balance sheet which is a
financial derivative Contract, or (vii) any other Contract or amendment thereto
that would be required to be filed as an exhibit to a Form 10-K filed by FIRST
BANKING with the SEC as of the date of this Agreement that has not been filed as
an exhibit to FIRST BANKING's Form 10-K filed for the fiscal year ended December
31, 1997, or in an SEC Document and identified to FIRST BANKING (together with
all Contracts referred to in Sections 6.10 and 6.15(a), the "FIRST BANKING
Contracts"). With respect to each FIRST BANKING Contract and except as disclosed
in Section 6.16 of the FIRST BANKING Disclosure Memorandum: (i) the Contract is
in full force and effect; (ii) no FIRST
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BANKING Entity is in Default thereunder, other than Defaults which are not
reasonably likely to have, individually or in the aggregate, a FIRST BANKING
Material Adverse Effect; (iii) no FIRST BANKING Entity 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 FIRST BANKING, in Default in any respect, other
than Defaults which are not reasonably likely to have, individually or in the
aggregate, a FIRST BANKING Material Adverse Effect, or has repudiated or waived
any material provision thereunder. All of the indebtedness of any FIRST BANKING
Entity for money borrowed is prepayable at any time by such FIRST BANKING Entity
without penalty or premium.
6.17 LEGAL PROCEEDINGS. There is no Litigation instituted or pending
or, to the Knowledge of FIRST BANKING, 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 FIRST BANKING Entity, or
against any director, employee or employee benefit plan of any FIRST BANKING
Entity, or against any Asset, interest, or right of any of them, that is
reasonably likely to have, individually or in the aggregate, a FIRST BANKING
Material Adverse Effect, nor are there any Orders of any Regulatory Authorities,
other governmental authorities, or arbitrators outstanding against any FIRST
BANKING Entity, that are reasonably likely to have, individually or in the
aggregate, a FIRST BANKING Material Adverse Effect. Section 6.17 of the FIRST
BANKING Disclosure Memorandum contains a summary of all Litigation as of the
date of this Agreement to which any FIRST BANKING Entity is a party and which
names a FIRST BANKING Entity as a defendant or cross-defendant or for which any
FIRST BANKING Entity has any potential Liability.
6.18 REPORTS. Since January 1, 1995, each FIRST BANKING Entity 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 Regulatory
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 FIRST BANKING Material Adverse Effect). 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. Since January 1, 1995, no FIRST BANKING Entity has not
filed any Suspicious Activity Report or any claim under any fidelity, blanket
bond, general liability, errors and omissions, directors and officers or other
insurance policies that pertain to the operations of its business or the
ownership of its assets.
6.19 STATEMENTS TRUE AND CORRECT. No statement, certificate, instrument
or other writing furnished or to be furnished by any FIRST BANKING Entity to
▇▇▇▇▇ 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 FIRST
BANKING Entity for inclusion in the Registration Statement to be filed by FIRST
BANKING with the SEC, will, when such 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
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misleading. None of the documents to be filed by any FIRST BANKING Entity with
the SEC or any other Regulatory Authority in connection with the transactions
contemplated hereby, will, at the respective time such documents are filed, be
false or misleading with respect to any material fact, or omit to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. All documents that any
FIRST BANKING Entity 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.
6.20 ACCOUNTING, TAX AND REGULATORY MATTERS. No FIRST BANKING Entity
has taken or agreed to take any action or has any knowledge of any fact or
circumstance that is reasonably likely to (i) prevent the Merger from qualifying
for pooling of interests accounting treatment and 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.l(b) or result in the imposition of a condition or restriction of the
type referred to in the last sentence of such Section.
6.21 CHARTER PROVISIONS. Each FIRST BANKING Entity 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 Charter, Articles of
Incorporation, Bylaws or other governing instruments of any FIRST BANKING Entity
or restrict or impair the ability of FIRST BANKING or any of its Subsidiaries to
vote, or otherwise to exercise the rights of a shareholder with respect to,
shares of any FIRST BANKING Entity that may be directly or indirectly acquired
or controlled by them.
6.22 BOARD RECOMMENDATION. The Board of Directors of FIRST BANKING, at
a meeting duly called and held, has by unanimous vote of those directors present
(who constituted all of the directors then in office) determined that this
Agreement and the transactions contemplated hereby, including the Merger, taken
together, are fair to and in the best interests of the FIRST BANKING
shareholders.
6.23 Y2K. Each FIRST BANKING Entity is in compliance with all policies
and directives issued by Regulatory Authorities with respect to preparedness for
year 2000 data processing and other operations. Section 6.23 of the FIRST
BANKING Disclosure Memorandum sets forth a summary of the steps taken by FIRST
BANKING to ensure such compliance.
ARTICLE 7.
CONDUCT OF BUSINESS PENDING CONSUMMATION
7.1 AFFIRMATIVE COVENANTS OF ▇▇▇▇▇. From the date of this Agreement
until the earlier of the Effective Time or the termination of this Agreement,
unless the prior written consent of FIRST BANKING shall have been obtained, and
except as otherwise expressly contemplated herein, ▇▇▇▇▇ 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)
materially adversely affect the ability of any Party to obtain any Consents
required for
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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), or (ii) materially adversely affect the ability of any Party to perform
its covenants and agreements under this Agreement.
7.2 NEGATIVE COVENANTS OF ▇▇▇▇▇. From the date of this Agreement until
the earlier of the Effective Time or the termination of this Agreement, unless
the prior written consent of FIRST BANKING shall have been obtained, and except
as otherwise expressly contemplated herein, ▇▇▇▇▇ 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:
(a) amend the Articles of Incorporation, Bylaws or other governing
instruments of any ▇▇▇▇▇ entity, or
(b) incur any additional debt obligation or other obligation for
borrowed money (other than indebtedness of a ▇▇▇▇▇ Entity to another ▇▇▇▇▇
Entity) in excess of an aggregate of $100,000 (for ▇▇▇▇▇ Entities on a
consolidated basis) except in the ordinary course of the business of the ▇▇▇▇▇
Subsidiaries consistent with past practices (which shall include, for the ▇▇▇▇▇
Subsidiaries that are depository institutions, 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 ▇▇▇▇▇ Entity of any Lien or permit any such Lien to exist (other
than in connection with deposits, repurchase agreements, bankers acceptances,
"treasury tax and loan" accounts established in the ordinary course of business,
the satisfaction of legal requirements in the exercise of trust powers, and
Liens in effect as of the date hereof that are disclosed in Section 7.2(b) of
the ▇▇▇▇▇ Disclosure Memorandum); or
(c) repurchase, redeem, or otherwise acquire or exchange (other than
exchanges in the ordinary course under employee benefit plans), directly or
indirectly, any shares, or any securities convertible into any shares, of the
capital stock of any ▇▇▇▇▇ Entity, or, except as set forth in Section 7.2(c) of
the ▇▇▇▇▇ Disclosure Memorandum, declare or pay any dividend or make any other
distribution in respect of WAYNE's capital stock; or
(d) except for this Agreement, or pursuant to the exercise of warrants
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 ▇▇▇▇▇ 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 ▇▇▇▇▇ Common
Stock or any other capital stock of any ▇▇▇▇▇ Entity, or any stock appreciation
rights, or any option, warrant, or other Equity Right; or
(e) adjust, split, combine or reclassify any capital stock of any ▇▇▇▇▇
Entity or issue or authorize the issuance of any other securities in respect of
or in substitution for shares of ▇▇▇▇▇ Common Stock, or sell, lease, mortgage or
otherwise dispose of or otherwise encumber any Asset having a book value in
excess of $100,000 other than in the ordinary course of business for reasonable
and adequate consideration or any shares of capital stock of any ▇▇▇▇▇
Subsidiary (unless any such shares of stock are sold or otherwise transferred to
another ▇▇▇▇▇ Entity); or
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(f) except for loans made in the ordinary course of its business, make
any material investment, either by purchase of stock or securities,
contributions to capital, Asset transfers, or purchase of any Assets, in any
Person other than a wholly owned ▇▇▇▇▇ 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 ▇▇▇▇▇ Entity, except in accordance with past practice
specifically disclosed in Section 7.2(g) of the ▇▇▇▇▇ 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 ▇▇▇▇▇ Disclosure Memorandum;
and enter into or amend any severance agreements with officers of any ▇▇▇▇▇
Entity; grant any material increase in fees or other increases in compensation
or other benefits to directors of any ▇▇▇▇▇ Entity except in accordance with
past practice disclosed in Section 7.2(g) of the ▇▇▇▇▇ Disclosure Memorandum; or
voluntarily accelerate the vesting of any stock options or other stock-based
compensation or employee benefits or other Equity Rights; or
(h) enter into or amend any employment Contract between any ▇▇▇▇▇
Entity and any Person having a salary thereunder in excess of $50,000 per year
(unless such amendment is required by Law) that the ▇▇▇▇▇ Entity 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; or
(i) adopt any new employee benefit plan of any ▇▇▇▇▇ Entity or
terminate or withdraw from, or make any material change in or to, any existing
employee benefit plans of any ▇▇▇▇▇ Entity 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 make any distributions
from such employee benefit plans, except as required by Law, the terms of such
plans or consistent with past practice; 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
(k) commence any Litigation other than in accordance with past practice
or except as set forth in Section 7.2(k) of the ▇▇▇▇▇ Disclosure Memorandum,
settle any Litigation involving any Liability of any ▇▇▇▇▇ Entity for material
money damages or restrictions upon the operations of any ▇▇▇▇▇ Entity; or
(l) except in the ordinary course of business, enter into, modify,
amend or terminate any material Contract (including any loan Contract with an
unpaid balance exceeding $50,000) or waive, release, compromise or assign any
material rights or claims.
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7.3 AFFIRMATIVE COVENANTS OF FIRST BANKING. From the date of this
Agreement until the earlier of the Effective Time or the termination of this
Agreement, unless the prior written consent of ▇▇▇▇▇ shall have been obtained,
and except as otherwise expressly contemplated herein, FIRST BANKING 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) 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), or (ii) materially adversely affect the
ability of any Party to perform its covenants and agreements under this
Agreement.
7.4 NEGATIVE COVENANTS OF FIRST BANKING. From the date of this
Agreement until the earlier of the Effective Time or the termination of this
Agreement, unless the prior written consent of ▇▇▇▇▇ shall have been obtained,
and except as otherwise expressly contemplated herein, FIRST BANKING covenants
and agrees that it will not amend the Articles of Incorporation or Bylaws of
FIRST BANKING in any manner adverse to the holders of ▇▇▇▇▇ Common Stock, or
take any action which will materially adversely impact the ability of FIRST
BANKING Entities to consummate the transactions contemplated by this Agreement.
7.5 ADVERSE CHANGES IN CONDITION. Each of FIRST BANKING and ▇▇▇▇▇
agrees to give written notice promptly to the other 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 or a FIRST BANKING Material
Adverse Effect, as applicable, or (ii) would cause or constitute a material
breach of any of its representations, warranties, or covenants contained herein,
and to use its reasonable efforts to prevent or promptly to remedy the same.
7.6 REPORTS. Each of FIRST BANKING and ▇▇▇▇▇ and their Subsidiaries
shall file all reports required to be filed by it with Regulatory Authorities
between the date of this Agreement and the Effective Time and shall deliver to
the other 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 another
Regulatory Authority shall be prepared in accordance with Laws applicable to
such reports.
ARTICLE 8.
ADDITIONAL AGREEMENTS
8.1 REGISTRATION STATEMENT. As soon as practicable after execution of
this Agreement, FIRST BANKING shall prepare and file the Registration Statement
with the SEC,
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and shall use its reasonable efforts to 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 FIRST BANKING Common Stock upon consummation of the
Merger. ▇▇▇▇▇ shall cooperate in the preparation and filing of the Registration
Statement and shall furnish all information concerning it and the holders of its
capital stock as FIRST BANKING may reasonably request in connection with such
action. FIRST BANKING and ▇▇▇▇▇ shall make all necessary filings with respect to
the Merger under the Securities Laws.
8.2 NASDAQ LISTING. FIRST BANKING shall use its reasonable efforts to
list, prior to the Effective Time, on the Nasdaq National Market the shares of
FIRST BANKING Common Stock to be issued to the holders of ▇▇▇▇▇ Common Stock
pursuant to the Merger, and FIRST BANKING shall give all notices and make all
filings with the NASD required in connection with the transactions contemplated
herein.
8.3 SHAREHOLDER APPROVAL. ▇▇▇▇▇ 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, the Board of Directors of ▇▇▇▇▇ shall recommend
to its shareholders, subject to the conditions in such authorization and
recommendation by the Board of Directors, the approval of the matters submitted
for approval (subject to the Board of Directors of ▇▇▇▇▇, after having consulted
with and considered the advice of outside counsel, reasonably determining in
good faith that the making of such recommendation, or the failure to withdraw or
modify its recommendation, would constitute a breach of fiduciary duties of the
members of such Board of Directors to WAYNE's shareholders, under applicable
law), and the Board of Directors and officers of ▇▇▇▇▇ shall use their
reasonable efforts to obtain such shareholders' approval (subject to the Board
of Directors of ▇▇▇▇▇, after having consulted with and considered the advice of
outside counsel, reasonably determining in good faith that the taking of such
actions would constitute a breach of fiduciary duties of the members of such
Board of Directors to the ▇▇▇▇▇ shareholders, under applicable law).
8.4 APPLICATIONS. FIRST BANKING shall promptly prepare and file, and
▇▇▇▇▇ shall cooperate in the preparation and, where appropriate, filing of,
applications with all Regulatory Authorities having jurisdiction over the
transactions contemplated by this Agreement, including without limitation, the
Board of Governors of the Federal Reserve System and the Georgia Department of
Banking and Finance, seeking the requisite Consents necessary to consummate the
transactions contemplated by this Agreement. The Parties shall deliver to each
other copies of all filings, correspondence and orders to and from all
Regulatory Authorities in connection with the transactions contemplated hereby.
8.5 FILINGS WITH STATE OFFICES. Upon the terms and subject to the
conditions of this Agreement, FIRST BANKING shall cause to be filed the
Certificate of Merger with the Secretary of State of the State of Georgia.
8.6 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
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necessary, proper, or advisable under applicable Laws to consummate and make
effective, as soon as reasonably 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; 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. The parties agree to use
reasonable efforts to cause the Effective Date to occur prior to any record date
set by FIRST BANKING for the payment of any dividends in 1999 (such record date
or dates in 1999 shall be referred to hereafter as the "1999 FIRST BANKING
Record Date"). FIRST BANKING agrees that, if the Effective Date does not occur
prior to the 1999 FIRST BANKING Record Date, ▇▇▇▇▇ will declare and pay a
special dividend to its shareholders as set forth in Section 7.2(c) of the ▇▇▇▇▇
Disclosure Memorandum.
8.7 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 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 any other Party.
(b) Each Party shall, and shall cause its advisers and agents to,
maintain the confidentiality of all confidential information furnished to it by
the other 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.
(c) Each Party shall use its reasonable efforts to exercise its rights
under confidentiality agreements entered into with Persons which were
considering an Acquisition Proposal with respect to such Party to preserve the
confidentiality of the information relating to such Party and its Subsidiaries
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 material
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
or a FIRST BANKING Material Adverse Effect, as applicable.
8.8 PRESS RELEASES. Prior to the Effective Time, ▇▇▇▇▇ and FIRST
BANKING 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;
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provided, that nothing in this Section 8.8 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.
8.9 CERTAIN ACTIONS. Except with respect to this Agreement and the
transactions contemplated hereby, no ▇▇▇▇▇ Entity nor any Representatives
thereof retained by any ▇▇▇▇▇ Entity shall directly or indirectly solicit any
Acquisition Proposal by any Person. Except to the extent the Board of Directors
of ▇▇▇▇▇, after having consulted with and considered the advice of outside
counsel, reasonably determines in good faith that the failure to take such
actions would constitute a breach of fiduciary duties of the members of such
Board of Directors to WAYNE's shareholders, under applicable Law, no ▇▇▇▇▇
Entity 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 ▇▇▇▇▇ 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. ▇▇▇▇▇ shall promptly advise FIRST BANKING following the
receipt of any Acquisition Proposal and the details thereof, and advise FIRST
BANKING of any developments with respect to such Acquisition Proposal promptly
upon the occurrence thereof. ▇▇▇▇▇ 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 its Representatives not to engage in any of
the foregoing.
8.10 ACCOUNTING AND TAX TREATMENT. Each of the Parties undertakes and
agrees to use its reasonable efforts to cause the Merger to, and to take no
action which would cause the Merger not to, qualify for pooling of interests
accounting treatment and as a "reorganization" within the meaning of Section
368(a) of the Internal Revenue Code for federal income tax purposes.
8.11 CHARTER PROVISIONS. Each Party shall take, and shall cause its
Subsidiaries to 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 charter, articles of incorporation, bylaws or other governing
instruments of such Party or any of its Subsidiaries or restrict or impair the
ability of FIRST BANKING or any of its Subsidiaries to vote, or otherwise to
exercise the rights of a shareholder with respect to, shares of any ▇▇▇▇▇ Entity
that may be directly or indirectly acquired by them.
8.12 AGREEMENTS OF AFFILIATES. ▇▇▇▇▇ has disclosed in Section 8.12 of
the ▇▇▇▇▇ Disclosure Memorandum each Person whom it reasonably believes is an
"affiliate" of ▇▇▇▇▇ for purposes of Rule 145 under the 1933 Act. ▇▇▇▇▇ shall
use its reasonable efforts to cause each such Person to deliver to FIRST BANKING
not later than 30 days after the date of this Agreement a written agreement,
substantially in the form of Exhibit 1, providing that such Person will not
sell, pledge, transfer, or otherwise dispose of the shares of the ▇▇▇▇▇ 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 FIRST BANKING Common Stock to be received by such Person upon
consummation of the Merger except in compliance with applicable provisions of
the 1933 Act and the rules and regulations thereunder and until
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such time as financial results covering at least 30 days of combined operations
of FIRST BANKING and ▇▇▇▇▇ have been published within the meaning of Section
201.01 of the SEC's Codification of Financial Reporting Policies, except that
transfers may be made in compliance with Staff Accounting Bulletin No. 76 issued
by the SEC. Except for transfers made in compliance with Staff Accounting
Bulletin No. 76, shares of FIRST BANKING Common Stock issued to such affiliates
of ▇▇▇▇▇ shall not be transferable until such time as financial results covering
at least 30 days of combined operations of FIRST BANKING and ▇▇▇▇▇ 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. FIRST BANKING
shall be entitled to place restrictive legends upon certificates for shares of
FIRST BANKING Common Stock issued to affiliates of ▇▇▇▇▇ pursuant to this
Agreement to enforce the provisions of this Section 8.12. FIRST BANKING shall
not be required to maintain the effectiveness of the Registration Statement
under the 1933 Act for the purposes of resale of FIRST BANKING Common Stock by
such affiliates.
8.13 EMPLOYEE BENEFITS AND CONTRACTS. Following the Effective Time,
FIRST BANKING shall either (i) continue to provide to officers and employees of
the ▇▇▇▇▇ Entities employee benefits under WAYNE's existing employee benefit and
welfare plans or, (ii) if FIRST BANKING shall determine to provide to officers
and employees of the ▇▇▇▇▇ Entities employee benefits under other employee
benefit plans and welfare plans, provide generally to officers and employees of
the ▇▇▇▇▇ Entities employee benefits under employee benefit and welfare plans,
on terms and conditions which when taken as a whole are substantially similar to
those currently provided by the FIRST BANKING Entities to their similarly
situated officers and employees. For purposes of participation and vesting (but
not accrual of benefits) under FIRST BANKING's employee benefit plans, (i)
service under any qualified defined benefit plan of ▇▇▇▇▇ shall be treated as
service under FIRST BANKING's defined benefit plan, if any, (ii) service under
any qualified defined contribution plans of ▇▇▇▇▇ shall be treated as service
under FIRST BANKING's qualified defined contribution plans, and (iii) service
under any other employee benefit plans of ▇▇▇▇▇ shall be treated as service
under any similar employee benefit plans maintained by FIRST BANKING. With
respect to officers and employees of the ▇▇▇▇▇ Entities who, at or after the
Effective Time, become employees of a FIRST BANKING Entity and who, immediately
prior to the Effective Time, are participants in one or more employee welfare
benefit plans maintained by the ▇▇▇▇▇ Entities, FIRST BANKING shall cause each
comparable employee welfare benefit plan which is substituted for a ▇▇▇▇▇
welfare benefit plan to waive any evidence of insurability or similar provision,
to provide credit for such participation prior to such substitution with regard
to the application of any pre-existing condition limitation, and to provide
credit towards satisfaction of any deductible or out-of-pocket provisions for
expenses incurred by such participants during the period prior to such
substitution, if any, that overlaps with the then current plan year for each
such substituted employee welfare benefit plans. FIRST BANKING also shall cause
the Surviving Bank and its Subsidiaries to honor in accordance with their terms
all employment, severance, consulting and other compensation Contracts disclosed
in Section 8.13 of the ▇▇▇▇▇ Disclosure Memorandum to FIRST BANKING between any
▇▇▇▇▇ Entity and any current or former director, officer, or employee thereof,
and all provisions for vested benefits or other vested amounts earned or accrued
through the Effective Time under the ▇▇▇▇▇ Benefit Plans.
8.14 INDEMNIFICATION.
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(a) Subject to the conditions set forth in paragraph (b) below, for a
period of six years after the Effective Time, FIRST BANKING shall indemnify,
defend and hold harmless each person entitled to indemnification from a ▇▇▇▇▇
Entity (each, an "Indemnified Party") against all Liabilities arising out of
actions or omissions occurring at or prior to the Effective Time (including the
transactions contemplated by this Agreement) to the fullest extent permitted
under Georgia Law and by WAYNE's Articles of Incorporation and Bylaws as in
effect on the date hereof, including provisions relating to advances of expenses
incurred in the defense of any Litigation. Without limiting the foregoing, in
any case in which approval by FIRST BANKING is required to effectuate any
indemnification, FIRST BANKING shall direct, at the election of the Indemnified
Party, that the determination of any such approval shall be made by independent
counsel mutually agreed upon between FIRST BANKING and the Indemnified Party.
(b) Any Indemnified Party wishing to claim indemnification under
paragraph (a) of this Section 8.14, upon learning of any such Liability or
Litigation, shall promptly notify FIRST BANKING thereof. In the event of any
such Liability or Litigation (whether arising before or after the Effective
Time), (i) FIRST BANKING shall have the right to assume the defense thereof
(provided FIRST BANKING acknowledges responsibility for such indemnification)
and FIRST BANKING shall not be liable to such Indemnified Parties for any legal
expenses of other counsel or any other expenses subsequently incurred by such
Indemnified Parties in connection with the defense thereof, except that if FIRST
BANKING elects not to assume such defense or counsel for the Indemnified Parties
advises that there are substantive issues which raise conflicts of interest
between FIRST BANKING and the Indemnified Parties, the Indemnified Parties may
retain counsel satisfactory to them, and FIRST BANKING shall pay all reasonable
fees and expenses of such counsel for the Indemnified Parties promptly as
statements therefor are received; provided, that FIRST BANKING shall be
obligated pursuant to this paragraph (b) to pay for only one firm of counsel for
all Indemnified Parties in any jurisdiction, (ii) the Indemnified Parties will
cooperate in the defense of any such Litigation, and (iii) FIRST BANKING shall
not be liable for any settlement effected without its prior written consent; and
provided further that FIRST BANKING shall not have any obligation hereunder to
any Indemnified Party when and if a court of competent jurisdiction shall
determine, and such determination shall have become final, that the
indemnification of such Indemnified Party in the manner contemplated hereby is
prohibited by applicable Law.
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:
(a) SHAREHOLDER APPROVAL. The shareholders of ▇▇▇▇▇ shall have approved
this Agreement, and the consummation of the transactions contemplated hereby,
including the Merger, as and to the extent required by Law or by the provisions
of any governing instruments. The shareholders of FIRST BANKING shall have
approved the issuance of shares
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of FIRST BANKING Common Stock pursuant to the Merger, as and to the extent
required by Law, by the provisions of any governing instruments, or by the rules
of the NASD.
(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 any Party would so materially adversely impact 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)) 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 or a
FIRST BANKING Material Adverse Effect, as applicable. 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 any Party would so materially adversely impact 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.
(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 or makes illegal consummation of the
transactions contemplated by this Agreement.
(e) REGISTRATION STATEMENT. The Registration Statement shall be
effective under the 1933 Act, and no stop orders suspending the effectiveness of
the Registration Statement shall have been issued, no action, suit, 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 FIRST BANKING Common Stock issuable pursuant to the Merger shall have
been received.
(f) NASDAQ LISTING. The shares of FIRST BANKING Common Stock issuable
pursuant to the Merger shall have been approved for listing on the Nasdaq
National Market.
(g) TAX MATTERS. Each Party shall have received a written opinion of
counsel from Powell, Goldstein, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, 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 ▇▇▇▇▇ Common Stock
for FIRST BANKING Common Stock will not give rise to gain or loss to the
shareholders of ▇▇▇▇▇ with respect to such exchange (except to the extent of any
cash
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received), and (iii) neither ▇▇▇▇▇ nor FIRST BANKING will recognize gain or loss
as a consequence of the Merger (except for amounts resulting from any required
change in accounting methods and any income and deferred gain recognized
pursuant to Treasury regulations issued under Section 1502 of the Internal
Revenue Code). In rendering such Tax Opinion, such counsel shall be entitled to
rely upon representations of officers of ▇▇▇▇▇ and FIRST BANKING reasonably
satisfactory in form and substance to such counsel.
(h) ▇▇▇▇▇▇ EMPLOYEE AGREEMENT. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ shall have negotiated
a mutually satisfactory employment relationship with FIRST BANKING, as the
Surviving Corporation.
9.2 CONDITIONS TO OBLIGATIONS OF FIRST BANKING. The obligations of
FIRST BANKING 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 FIRST BANKING pursuant to Section
11.6(a):
(a) REPRESENTATIONS AND WARRANTIES. For purposes of this Section
9.2(a), the accuracy of the representations and warranties of ▇▇▇▇▇ set forth in
this Agreement shall be assessed 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). The representations and warranties set forth in
Section 5.3 shall be true and correct (except for inaccuracies which are de
minimus in amount). The representations and warranties set forth in Sections
5.20 and 5.21 shall be true and correct in all material respects. There shall
not exist inaccuracies in the representations and warranties of ▇▇▇▇▇ set forth
in this Agreement (including the representations and warranties set forth in
Sections 5.3, 5.20 and 5.21) such that the aggregate effect of such inaccuracies
has, or is reasonably likely to have, a ▇▇▇▇▇ Material Adverse Effect; provided
that, for purposes of this sentence only, those representations and warranties
which are qualified by references to "material" or "Material Adverse Effect" or
to the "Knowledge" of any Person shall be deemed not to include such
qualifications.
(b) PERFORMANCE OF AGREEMENTS AND COVENANTS. Each and all of the
agreements and covenants of ▇▇▇▇▇ 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 in all material
respects.
(c) CERTIFICATES. ▇▇▇▇▇ shall have delivered to FIRST BANKING (i) a
certificate, dated as of the Effective Time and signed on its behalf by its
chief executive officer and its secretary, to the effect that to the best of
their Knowledge the conditions set forth in Section 9.1 as relates to ▇▇▇▇▇ and
in Section 9.2(a) and 9.2(b) have been satisfied; provided, however, that the
representations, warranties and covenants to which such certificate relates
shall not been deemed to have survived the Closing, and (ii) certified copies of
resolutions duly adopted by WAYNE'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 FIRST
BANKING and its counsel shall request.
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(d) OPINION OF COUNSEL. FIRST BANKING shall have received an opinion of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Scarborough, L.L.P., counsel to ▇▇▇▇▇, dated as of the
Closing Date, in form reasonably satisfactory to FIRST BANKING.
(e) POOLING LETTERS. FIRST BANKING shall have received an opinion of
Deloitte & Touche, dated as of the date of filing of the Registration Statement
with the SEC and as of the Closing Date, addressed to FIRST BANKING and in form
and substance reasonably acceptable to FIRST BANKING, to the effect that the
Merger, for accounting purposes, shall qualify for treatment as a pooling of
interests.
(f) AFFILIATES AGREEMENTS. FIRST BANKING shall have received, within
thirty (30) days of the execution of this Agreement, from each affiliate of
▇▇▇▇▇ the affiliates letter referred to in Section 8.12 and Exhibit 1.
(g) CLAIMS LETTERS. Each of the directors and officers of ▇▇▇▇▇ shall
have executed and delivered to FIRST BANKING letters in substantially the form
of Exhibit 2.
9.3 CONDITIONS TO OBLIGATIONS OF ▇▇▇▇▇. The obligations of ▇▇▇▇▇ 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 ▇▇▇▇▇ pursuant to Section 11.6(b):
(a) REPRESENTATIONS AND WARRANTIES. For purposes of this Section
9.3(a), the accuracy of the representations and warranties of FIRST BANKING set
forth in this Agreement shall be assessed 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). The representations and warranties set forth in
Section 6.3 shall be true and correct (except for inaccuracies which are de
minimus in amount). The representations and warranties of FIRST BANKING set
forth in Section 6.20 and 6.21 shall be true and correct in all material
respects. There shall not exist inaccuracies in the representations and
warranties of FIRST BANKING set forth in this Agreement (including the
representations and warranties set forth in Sections 6.3, 6.20 and 6.21) such
that the aggregate effect of such inaccuracies has, or is reasonably likely to
have, a FIRST BANKING Material Adverse Effect; provided that, for purposes of
this sentence only, those representations and warranties which are qualified by
references to "material" or "Material Adverse Effect" or to the "Knowledge" of
any Person shall be deemed not to include such qualifications.
(b) PERFORMANCE OF AGREEMENTS AND COVENANTS. Each and all of the
agreements and covenants of FIRST BANKING 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 in all
material respects.
(c) CERTIFICATES. FIRST BANKING shall have delivered to ▇▇▇▇▇ (i) a
certificate, dated as of the Closing Date and signed on its behalf by its chief
executive officer and its chief financial officer, to the effect that to the
best of their knowledge the conditions set forth in Section 9.1 as relates to
FIRST BANKING and in Section 9.3(a) and 9.3(b) have been satisfied, provided,
however, that the representations, warranties and covenants to which such
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certificate relates shall not been deemed to have survived the Closing, and (ii)
certified copies of resolutions duty adopted by FIRST BANKING'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 ▇▇▇▇▇ and its counsel shall request.
(d) OPINION OF COUNSEL. ▇▇▇▇▇ shall have received an opinion of Powell,
Goldstein, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, counsel to FIRST BANKING, dated as of the
Closing Date, in form reasonably acceptable to ▇▇▇▇▇.
(e) FAIRNESS OPINION. ▇▇▇▇▇ shall have received an opinion from ▇▇▇▇▇▇▇
& Company that the Merger is fair from a financial point of view to the ▇▇▇▇▇
shareholders (the "Fairness Opinion"). Such Fairness Opinion shall be received
by ▇▇▇▇▇ within 14 days of the date of this Agreement.
ARTICLE 10.
TERMINATION
10.1 TERMINATION. Notwithstanding any other provision of this
Agreement, and notwithstanding the approval of this Agreement by the
shareholders of ▇▇▇▇▇, this Agreement may be terminated and the Merger abandoned
at any time prior to the Effective Time:
(a) By mutual consent of FIRST BANKING and ▇▇▇▇▇; or
(b) By 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 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 and which breach is reasonably likely, in the
opinion of the non-breaching Party, to have, individually or in the aggregate, a
▇▇▇▇▇ Material Adverse Effect or a FIRST BANKING Material Adverse Effect, as
applicable, on the breaching Party; or
(c) By 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 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 non-appealable 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 ▇▇▇▇▇ fail to vote their
approval of the matters relating to this Agreement and the transactions
contemplated hereby at the
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Shareholders' Meeting where such matters were presented to such shareholders for
approval and voted upon; or
(e) By either Party in the event that the Merger shall not have been
consummated by April 30, 1999, 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).
10.2 EFFECT OF TERMINATION. In the event of the termination and
abandonment of this Agreement pursuant to Section 10.1, this Agreement shall
become void and have no effect, except that (i) the provisions of this Section
10.2 and Article 11 and Section 8.7(b) shall survive any such termination and
abandonment, and (ii) a termination pursuant to Sections 10.1(b), 10.1(c) or
10.1(e) 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 1, 2, 3, 4 and 11 and Section 8.10.
ARTICLE 11.
MISCELLANEOUS
11.1 DEFINITIONS.
(a) Except as otherwise provided herein, the capitalized terms set
forth below shall have the following meanings:
"1933 ACT" shall mean the Securities Act of 1933, as amended.
"1934 ACT" shall mean the Securities Exchange Act of 1934, as amended.
"ACQUISITION PROPOSAL" with respect to a Party shall mean any tender
offer or exchange offer or any proposal for a merger, acquisition of all of the
stock or assets of, or other business combination involving the acquisition of
such Party or any of its Subsidiaries or the acquisition of a substantial equity
interest in, or a substantial portion of the assets of, such Party or any of its
Subsidiaries.
"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 10% 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, the FIRST BANKING Disclosure Memorandum and the ▇▇▇▇▇ Disclosure
Memorandum delivered pursuant hereto and incorporated herein by reference.
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"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, or any Affiliate of such Person and wherever
located.
"CERTIFICATE OF MERGER" shall mean the Certificate of Merger to be
executed by FIRST BANKING and ▇▇▇▇▇ and filed with the Secretary of State of the
State of Georgia relating to the Merger as contemplated by Section 1.1.
"CLOSING DATE" shall mean the date on which the Closing occurs.
"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 (provided such oral
agreement is, in any one year period, in excess of $5,000 individually, or
$25,000 in the aggregate), 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, default under,
contravention of, or conflict with, any Contract, Law, Order, or Permit, after
failing to cure any such breach, violation, default, contravention or conflict
within any applicable grace or cure period (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, default under, contravention of, or conflict with, any
Contract, Law, 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 of any Person to exercise any remedy or obtain any relief under, terminate
or revoke, suspend, cancel, or modify or change the current terms of, or
renegotiate, or to accelerate the maturity or performance of, or to increase or
impose any Liability under, any Contract, Law, Order, or Permit.
"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 other federal, 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, migrations, discharges, releases, or
threatened releases of any Hazardous Material, or otherwise relating to the
manufacture, processing, distribution use, treatment, storage, disposal,
generation, recycling, transport, or handling of any Hazardous Material.
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"EQUITY 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 Equity Rights.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"EXHIBITS 1 THROUGH 4," 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.
"FIRST BANKING CAPITAL STOCK" shall mean, collectively, the FIRST
BANKING Common Stock and any other class or series of capital stock of FIRST
BANKING.
"FIRST BANKING COMMON STOCK" shall mean the $1.00 par value common
stock of FIRST BANKING.
"FIRST BANKING DISCLOSURE MEMORANDUM" shall mean the written
information entitled "First Banking Company of Southeast Georgia Disclosure
Memorandum" delivered prior to execution of this Agreement to ▇▇▇▇▇ 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, unless it is clear
from the disclosure of such information that it applies to other Sections.
"FIRST BANKING ENTITIES" shall mean, collectively, FIRST BANKING and
all FIRST BANKING Subsidiaries.
"FIRST BANKING FINANCIAL STATEMENTS" shall mean (i) the consolidated
balance sheets (including related notes and schedules, if any) of FIRST BANKING
as of September 30, 1998 and as of December 31, 1997 and 1996, and the related
statements of income, changes in shareholders' equity, and cash flows (including
related notes and schedules, if any) for the three months ended September 30,
1998, and for each of the three fiscal years ended December 31, 1997, 1996 and
1995, as filed by FIRST BANKING in SEC Documents, and (ii) the consolidated
balance sheets of FIRST BANKING (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 September 30, 1998.
"FIRST BANKING MATERIAL ADVERSE EFFECT" shall mean an event, change or
occurrence which, individually or together with any other event, change or
occurrence, has a material adverse impact on (i) the financial position,
business, or results of operations of FIRST BANKING and its Subsidiaries, taken
as a whole, or (ii) the ability of FIRST BANKING Entities to perform their
obligations under this Agreement or to consummate the Merger or the other
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transactions contemplated by this Agreement, provided that "Material Adverse
Effect" shall not be deemed to include the impact of (a) changes in banking and
similar Laws of general applicability or interpretations thereof by courts or
governmental authorities, (b) changes in generally accepted accounting
principles or regulatory accounting principles generally applicable to savings
associations, banks, and their holding companies, and (c) actions and omissions
of FIRST BANKING (or any of its Subsidiaries) taken with the prior informed
written Consent of ▇▇▇▇▇ in contemplation of the transactions contemplated
hereby.
"FIRST BANKING SUBSIDIARIES" shall mean the Subsidiaries of FIRST
BANKING, which shall include the FIRST BANKING Subsidiaries described in Section
6.4 and any corporation, bank, savings association, or other organization
acquired as a Subsidiary of FIRST BANKING in the future and held as a Subsidiary
by FIRST BANKING at the Effective Time.
"GAAP" shall mean generally accepted accounting principles,
consistently applied during the periods involved.
"GBCC" shall mean the Georgia Business Corporation Code.
"HAZARDOUS MATERIAL" shall mean (i) any hazardous substance, hazardous
constituent, hazardous waste, solid waste, special waste, regulated substance,
or toxic substance (as those terms are listed, defined or regulated 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).
"HSR ACT" shall mean Section 7A of the ▇▇▇▇▇▇▇ Act, as added by Title
II of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended, and
the rules and regulations promulgated thereunder.
"INTELLECTUAL PROPERTY" shall mean copyrights, patents, trademarks,
service marks, service names, trade names, applications therefor, and licenses,
computer software (including any source or object codes therefor or
documentation relating thereto), trade secrets, franchises, inventions, and
other intellectual property rights.
"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 FIRST BANKING Entity (including
references to being aware of a particular matter) shall mean those facts that
are known or should reasonably have been known after due inquiry by the
chairman, president, chief financial officer, chief accounting officer, chief
operating officer, chief credit officer, general counsel, any assistant or
deputy general counsel, or any senior, executive or other vice president of such
FIRST BANKING Entity. "Knowledge" as used with respect to a ▇▇▇▇▇ Entity
(including references to being aware of a particular matter) shall mean those
facts that are actually known (with no obligation of inquiry) by the president
and chief executive officer of such ▇▇▇▇▇ Entity.
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"LAW" shall mean any code, law (including common law), ordinance,
regulation, decision, judicial interpretation, reporting or licensing
requirement, rule, or statute 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 do not materially impair the use of or title to
the Assets subject to such Lien.
"LITIGATION" shall mean any action, arbitration, cause of action.
claim, complaint investigation hearing, criminal prosecution, governmental or
other examination or other administrative or other proceeding 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.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"NASDAQ NATIONAL MARKET" shall mean the National Market System of the
National Association of Securities Dealers Automated Quotations System.
"OPERATING PROPERTY" shall mean any property owned, leased, or operated
by the Party in question or by any of its Subsidiaries and, where required by
the context, includes the owner or operator of such property, but only with
respect to such property.
"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.
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"PARTY" shall mean either ▇▇▇▇▇ or FIRST BANKING, and "Parties" shall
mean ▇▇▇▇▇ and FIRST BANKING.
"PERMIT" shall mean any federal, state, local, and foreign governmental
approval, authorization, certificate, easement, filing, franchise, license,
notice, permit, or right to which any Person is a party or that is or may be
binding upon or inure to the benefit of any Person or its securities, Assets, or
business.
"PERSON" shall mean a natural person or any legal, commercial or
governmental entity, such as, but not limited to, a corporation, general
partnership, joint venture, limited partnership, limited liability company,
trust, business association, group acting in concert, or any person acting in a
representative capacity.
"REGISTRATION STATEMENT" shall mean the Registration Statement on Form
S-4, or other appropriate form, including any pre-effective or post-effective
amendments or supplements thereto, filed with the SEC by FIRST BANKING under the
1933 Act with respect to the shares of FIRST BANKING Common Stock to be issued
to the shareholders of ▇▇▇▇▇ in connection with the transactions contemplated by
this Agreement.
"REGULATORY AUTHORITIES" shall mean, collectively, the SEC, the NASD,
the Federal Trade Commission, the United States Department of Justice, the Board
of the Governors of the Federal Reserve System, the Federal Deposit Insurance
Corporation, the Georgia Department of Banking and Finance, and all other
federal, state, county, local or other governmental or regulatory agencies,
authorities (including self-regulatory authorities), instrumentalities,
commissions, boards or bodies having jurisdiction over the Parties and their
respective Subsidiaries.
"REPRESENTATIVE" shall mean any investment banker, financial advisor,
attorney, accountant, consultant, or other representative engaged by a Person.
"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.
"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
▇▇▇▇▇ to be held pursuant to Section 8.3, including any adjournment or
adjournments thereof.
"SUBSIDIARIES" shall mean all those corporations, associations, or
other business entities of which the entity in question either (i) 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 the equity securities of
which are owned or controlled in a fiduciary capacity), (ii) in the case
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of partnerships, serves as a general partner, (iii) in the case of a limited
liability company, serves as a managing member, or (iv) otherwise has the
ability to elect a majority of the directors, trustees or managing members
thereof.
"SURVIVING CORPORATION" shall mean FIRST BANKING as the surviving
corporation resulting from the Merger.
"TAX RETURN" shall mean any report, return, information return, or
other information required to be supplied to a taxing authority in connection
with Taxes, including any return of an affiliated or combined or unitary group
that includes a Party or its Subsidiaries.
"TAX" or TAXES" shall mean any federal, state, county, local, or
foreign taxes, charges, fees, levies, imposts, duties, or other assessments,
including income, gross receipts, excise, employment, sales, use, transfer,
license, payroll, franchise, severance, stamp, occupation, windfall profits,
environmental, federal highway use, commercial rent, customs duties, capital
stock, paid-up capital, profits, withholding, Social Security, single business
and unemployment, disability, real property, personal property, registration, ad
valorem, value added, alternative or add-on minimum, estimated, or other tax or
governmental fee of any kind whatsoever, imposed or required to be withheld by
the United States or any state, county, local or foreign government or
subdivision or agency thereof, including any interest, penalties, and additions
imposed thereon or with respect thereto.
"▇▇▇▇▇ COMMON STOCK" shall mean the $1.00 par value common stock of
▇▇▇▇▇.
"▇▇▇▇▇ DISCLOSURE MEMORANDUM" shall mean the written information
entitled "▇▇▇▇▇ Disclosure Memorandum" delivered prior to execution of this
Agreement to FIRST BANKING 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, unless it is clear from the disclosure of such information that
it applies to other Sections.
"▇▇▇▇▇ ENTITIES" shall mean, collectively, ▇▇▇▇▇ and all ▇▇▇▇▇
Subsidiaries.
"▇▇▇▇▇ FINANCIAL STATEMENTS" shall mean (i) the consolidated balance
sheets (including related notes and schedules, if any) of ▇▇▇▇▇ as of September
30, 1998, and as of December 31, 1997 and the related statements of income,
changes in shareholders' equity, and cash flows (including related notes and
schedules, if any) for the three months ended September 30, 1998, and for the
Fiscal year ended December 31, 1997, and (ii) the consolidated balance sheets of
▇▇▇▇▇ (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 September 30,
1998.
"▇▇▇▇▇ MATERIAL ADVERSE EFFECT" shall mean an event, change or
occurrence which, individually or together with any other event, change or
occurrence, has a material adverse impact on (i) the financial position,
business, or results of operations of ▇▇▇▇▇ and its
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Subsidiaries, taken as a whole, or (ii) the ability of ▇▇▇▇▇ to perform its
obligations under this Agreement or to consummate the Merger or the other
transactions contemplated by this Agreement, provided that an "▇▇▇▇▇ Material
Adverse Effect" shall not be deemed to include the impact of (a) changes in
banking and similar Laws of general applicability or interpretations thereof by
courts or governmental authorities, (b) changes in generally accepted accounting
principles or regulatory accounting principles generally applicable to banks and
their holding companies, and (c) actions and omissions of ▇▇▇▇▇ (or any of its
Subsidiaries) taken with the prior informed written Consent of FIRST BANKING in
contemplation of the transactions contemplated hereby.
"▇▇▇▇▇ SUBSIDIARIES" shall mean the Subsidiaries of ▇▇▇▇▇, which shall
include the ▇▇▇▇▇ Subsidiaries described in Section 5.4 and any corporation,
bank, savings association, or other organization acquired as a Subsidiary of
▇▇▇▇▇ in the future and held as a Subsidiary by ▇▇▇▇▇ at the Effective Time.
(b) The terms set forth below shall have the meanings ascribed thereto
in the referenced sections:
Allowance Section 5.9
Certificates Section 4.1
Closing Section 1.2
Effective Time Section 1.3
ERISA Affiliate Section 5.15(c)
Exchange Agent Section 4.1
Exchange Ratio Section 3.1(b)
FIRST BANKING Benefit Plans Section 6.15(a)
FIRST BANKING ERISA Plan Section 6.15(a)
FIRST BANKING Pension Plan Section 6.15(a)
FIRST BANKING SEC Reports Section 6.5(a)
Indemnified Party Section 8.14(a)
Merger Section 1.1
Tax Opinion Section 9.1(g)
▇▇▇▇▇ Benefit Plans Section 5.15(a)
▇▇▇▇▇ Contracts Section 5.16
▇▇▇▇▇ ERISA Plan Section 5.15(a)
▇▇▇▇▇ Pension Plan Section 5.15(a)
▇▇▇▇▇ SEC Reports Section 5.5 (a)
(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."
11.2 EXPENSES.
(a) Except as otherwise provided in this Section 11.2, each Party 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
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fees, and fees and expenses of its own financial or other consultants,
investment bankers, accountants, and counsel.
(b) If this Agreement is terminated by FIRST BANKING (i) pursuant to
Sections 10.1(b), (c) or (d)(ii), or (ii) due to the failure of the condition in
Section 9.2(e) solely because of the exercise of dissenters' rights by any
director of ▇▇▇▇▇ or any member of any such director's immediate family, ▇▇▇▇▇
shall pay to FIRST BANKING an amount equal to the lesser of $100,000 or FIRST
BANKING's actual out-of-pocket expenses incurred in connection with the
transactions contemplated by this Agreement.
(c) If this Agreement is terminated by ▇▇▇▇▇ pursuant to Sections
10.1(b) or (c), FIRST BANKING shall pay to ▇▇▇▇▇ an amount equal to the lesser
of $100,000 or WAYNE's actual out-of-pocket expenses incurred in connection with
the transactions contemplated by this Agreement.
(d) 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 as set forth in Section 11.3 of the
▇▇▇▇▇ Disclosure Memorandum with respect to ▇▇▇▇▇▇▇ & Company, 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 ▇▇▇▇▇ or by FIRST BANKING, each of
▇▇▇▇▇ and FIRST BANKING, as the case may be, agrees to indemnify and hold the
other Party harmless of and from any Liability in respect of any such claim.
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. Nothing in this Agreement,
expressed or implied, is intended to confer upon any Person, other than the
Parties or their respective successors, any rights, remedies, obligations, or
liabilities under or by reason of this Agreement.
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 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 ▇▇▇▇▇ Common Stock, there shall be made no amendment that, pursuant
to the GBCC, 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 FIRST BANKING Common Stock, the provisions of this
Agreement relating to the manner or basis in which shares of ▇▇▇▇▇ Common Stock
will be exchanged for shares of FIRST BANKING Common Stock shall not be amended
after the Shareholders' Meeting in a manner adverse to the holders of FIRST
BANKING Common Stock without any requisite
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approval of the holders of the issued and outstanding shares of FIRST BANKING
Common Stock entitled to vote thereon.
11.6 WAIVERS.
(a) Prior to or at the Effective Time, FIRST BANKING, 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 ▇▇▇▇▇, to waive or extend the time for the compliance or
fulfillment by ▇▇▇▇▇ of any and all of its obligations under this Agreement, and
to waive any or all of the conditions precedent to the obligations of FIRST
BANKING under this Agreement, except any condition which, if not satisfied,
would result in the violation of any Law. No such waiver shall be effective
unless in writing signed by a duly authorized officer of FIRST BANKING.
(b) Prior to or at the Effective Time, ▇▇▇▇▇, 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 FIRST BANKING, to waive or extend the time for the compliance or fulfillment
by FIRST BANKING, of any and all of its obligations under this Agreement, and to
waive any or all of the conditions precedent to the obligations of ▇▇▇▇▇ 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 ▇▇▇▇▇.
(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:
▇▇▇▇▇: ▇▇▇▇▇ Bancorp, Inc.
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: J. ▇▇▇▇▇▇ ▇▇▇▇▇
51
58
Copy to Counsel: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇▇, L.L.P.
First Union Plaza, Suite 1400
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
FIRST BANKING: First Banking Company of Southeast Georgia
▇.▇. ▇▇▇ ▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
Copy to Counsel: Powell, Goldstein, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
Sixteenth Floor
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇, Esq.
11.9 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the Laws of the State of Georgia, without regard to any
applicable conflicts of Laws.
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, ARTICLES AND SECTIONS. The captions contained in this
Agreement are for reference purposes only and are not part of this Agreement.
Unless otherwise indicated, all references to particular Articles or Sections
shall mean and refer to the referenced Articles and Sections 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.
52
59
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 by its duly authorized officers as of the day and year
first above written.
FIRST BANKING COMPANY OF SOUTHEAST GEORGIA
By: /s/ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
---------------------------------------
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇.
President & Chief Executive Officer
▇▇▇▇▇ BANCORP, INC.
By: /s/ J. ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------------
J. ▇▇▇▇▇▇ ▇▇▇▇▇
Chairman of the Board
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EXHIBIT 1
AFFILIATE AGREEMENT
First Banking Company of Southeast Georgia
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, President and Chief Executive Officer
Gentlemen:
The undersigned is a shareholder of ▇▇▇▇▇ Bancorp, Inc. ("▇▇▇▇▇"), a
Georgia Corporation, and will become a shareholder of First Banking Company of
Southeast Georgia ("FIRST BANKING"), a Georgia corporation, pursuant to the
transactions described in the Agreement and Plan of Merger, dated as of November
30, 1998 (the "Agreement"), by and between FIRST BANKING and ▇▇▇▇▇. Under the
terms of the Agreement, ▇▇▇▇▇ will be merged with and into FIRST BANKING (the
"Merger"), and the shares of the $_.__ par value common stock of ▇▇▇▇▇ ("▇▇▇▇▇
Common Stock") will be converted into and exchanged for shares of the $___.___
par value common stock of FIRST BANKING ("FIRST BANKING Common Stock"). This
Affiliate Agreement represents an agreement between the undersigned and FIRST
BANKING regarding certain rights and obligations of the undersigned in
connection with the shares of FIRST BANKING to be received by the undersigned as
a result of the Merger.
In consideration of the Merger and the mutual covenants contained
herein, the undersigned and FIRST BANKING hereby agree as follows:
1. Affiliate Status. The undersigned understands and agrees that as to
▇▇▇▇▇ he is an "affiliate" under Rule 145(c) as defined in Rule 405 of the Rules
and Regulations of the Securities and Exchange Commission ("SEC") under the
Securities Act of 1933, as amended ("1933 Act"), and the undersigned anticipates
that he will be such an "affiliate" at the time of the Merger.
2. Initial Restrictions on Disposition. The undersigned agrees that he
will not sell, transfer or otherwise dispose of his interests in, or reduce his
risk relative to, any of the shares of FIRST BANKING Common Stock into which his
shares of ▇▇▇▇▇ Common Stock are converted upon consummation of the Merger until
such time as FIRST BANKING notifies the undersigned that the requirements of SEC
Accounting Series Release Nos. 130 and 135 ("ASR 130 and 135") have been met,
except that transfers may be made in compliance with Staff Accounting Bulletin
No. 76 issued by the SEC. The undersigned understands that ASR 130 and 135
relate to publication of financial results of post-Merger combined operations of
FIRST BANKING and ▇▇▇▇▇. FIRST BANKING agrees that it will publish such results
within 45 days after the end of the first fiscal quarter of FIRST BANKING
containing the required period of post-Merger combined operations and that it
will notify the undersigned promptly following such publication.
61
3. Covenants and Warranties of Undersigned. The undersigned represents,
warrants and agrees that:
(a) At any meeting of shareholders of ▇▇▇▇▇ called to vote upon the
Merger and the Merger Agreement or at any adjournment thereof or in any other
circumstances upon which a vote, consent or other approval with respect to the
Merger and the Merger Agreement is sought (the "Shareholders' Meeting"), the
undersigned shall vote (or cause to be voted) the Shareholder's Shares in favor
of the Merger, the execution and delivery by ▇▇▇▇▇ of the Merger Agreement, and
the approval of the terms thereof and each of the other transactions
contemplated by the Merger Agreement, provided that the terms of the Merger
Agreement shall not have been amended to reduce the consideration payable in the
Merger to a lesser amount of FIRST BANKING Common Stock or otherwise to
materially and adversely impair the Shareholder's rights or increase the
Shareholder's obligations thereunder. The undersigned hereby waives any rights
of appraisal, or rights to dissent from the Merger, that the undersigned may
have.
(b) The FIRST BANKING Common Stock received by the undersigned as a
result of the Merger will be taken for his own account and not for others,
directly or indirectly, in whole or in part.
(c) FIRST BANKING has informed the undersigned that any distribution by
the undersigned of FIRST BANKING Common Stock has not been registered under the
1933 Act and that shares of FIRST BANKING Common Stock received pursuant to the
Merger can only be sold by the undersigned (1) following registration under the
1933 Act, or (2) in conformity with the volume and other requirements of Rule
145(d) promulgated by the SEC as the same now exist or may hereafter be amended,
or (3) to the extent some other exemption from registration under the 1933 Act
might be available. The undersigned understands that FIRST BANKING is under no
obligation to file a registration statement with the SEC covering the
disposition of the undersigned's shares of FIRST BANKING Common Stock or to take
any other action necessary to make compliance with an exemption from such
registration available.
(d) The undersigned will, and will cause each of the other parties
whose shares are deemed to be beneficially owned by the undersigned pursuant to
Section 9 hereof, have all shares of ▇▇▇▇▇ Common Stock beneficially owned by
the undersigned registered in the name of the undersigned or such parties, as
applicable, prior to the effective date of the Merger and not in the name of any
bank, broker-dealer, nominee or clearinghouse.
(e) During the thirty (30) days immediately preceding the Effective
Time of the Merger, the undersigned has not sold, transferred, or otherwise
disposed of his interests in, or reduced his risk relative to, any of the shares
of ▇▇▇▇▇ Common Stock beneficially owned by the undersigned as of the record
date for determination of shareholders entitled to vote at the Shareholders'
Meeting of ▇▇▇▇▇ held to approve the Merger.
(f) The undersigned is aware that FIRST BANKING intends to treat the
Merger as a tax-free reorganization under Section 368 of the Code for federal
income tax purposes. The
Affiliate Agreement - Page 2
62
undersigned agrees to treat the transaction in the same manner as FIRST BANKING
for federal income tax purposes.
4. Restrictions on Transfer. The undersigned understands and agrees
that stop-transfer instructions with respect to the shares of FIRST BANKING
Common Stock received by the undersigned pursuant to the Merger will be given to
FIRST BANKING's Transfer Agent and that there will be placed on the certificates
for such shares, or shares issued in substitution thereof, a legend stating in
substance:
The shares represented by this certificate were issued
pursuant to a business combination which is accounted for as a "pooling
of interests" and may not be sold, nor may the owner thereof reduce his
risks relative thereto in any way, until such time as First Banking
Company of Southeast Georgia ("FIRST BANKING") has published the
financial results covering at least 30 days of combined operations
after the effective date of the merger through which the business
combination was effected. In addition, the shares represented by this
certificate may not be sold, transferred or otherwise disposed of
except or unless (1) covered by an effective registration statement
under the Securities Act of 1933, as amended, (2) in accordance with
(i) Rule 145(d) (in the case of shares issued to an individual who is
an affiliate of FIRST BANKING) of the Rules and Regulations of such
Act, or (3) in accordance with a legal opinion satisfactory to counsel
for FIRST BANKING that such sale or transfer is otherwise exempt from
the registration requirements of such Act.
Such legend will also be placed on any certificate representing FIRST BANKING
securities issued subsequent to the original issuance of FIRST BANKING Common
Stock pursuant to the Merger as a result of any transfer of such shares or any
stock dividend, stock split, or other recapitalization as long as the FIRST
BANKING Common Stock issued to the undersigned pursuant to the Merger has not
been transferred in such manner as to justify the removal of the legend
therefrom. Upon the request of the undersigned, FIRST BANKING shall cause the
certificates representing the shares of FIRST BANKING Common Stock issued to the
undersigned in connection with the Merger to be reissued free of any legend
relating to restrictions on transfer by virtue of ASR 130 and 135 as soon as
practicable after the requirements of ASR 130 and 135 have been met. In
addition, if the provisions of Rules 144 and 145 are amended to eliminate
restrictions applicable to the FIRST BANKING Common Stock received by the
undersigned pursuant to the Merger, or at the expiration of the restrictive
period set forth in Rule 145(d), FIRST BANKING, upon the request of the
undersigned, will cause the certificates representing the shares of FIRST
BANKING Common Stock issued to the undersigned in connection with the Merger to
be reissued free of any legend relating to the restrictions set forth in Rules
144 and 145(d) upon receipt by FIRST BANKING of an opinion of its counsel to the
effect that such legend may be removed.
5. Understanding of Restrictions on Disposition. The undersigned has
carefully read the Agreement and this Affiliate Agreement and has discussed
their requirements and impact upon his ability to sell, transfer or otherwise
dispose of the shares of FIRST BANKING Common Stock received by the undersigned,
to the extent he believes necessary, with his counsel or counsel for ▇▇▇▇▇.
Affiliate Agreement - Page 3
63
6. Filing of Reports by FIRST BANKING. FIRST BANKING agrees, for a
period of three years after the effective date of the Merger, to file on a
timely basis all reports required to be filed by it pursuant to Section 13 of
the Securities Exchange Act of 1934, as amended, so that the public information
provisions of Rule 145(d) promulgated by the SEC as the same are presently in
effect will be available to the undersigned in the event the undersigned desires
to transfer any shares of FIRST BANKING Common Stock issued to the undersigned
pursuant to the Merger.
7. Transfer Under Rule 145(d). If the undersigned desires to sell or
otherwise transfer the shares of FIRST BANKING Common Stock received by him in
connection with the Merger at any time during the restrictive period set forth
in Rule 145(d), the undersigned will provide the necessary representation letter
to the transfer agent for FIRST BANKING Common Stock, together with such
additional information as the transfer agent may reasonably request. If FIRST
BANKING's counsel concludes that such proposed sale or transfer complies with
the requirements of Rule 145(d), FIRST BANKING shall cause such counsel to
provide such opinions as may be necessary to FIRST BANKING's transfer agent so
that the undersigned may complete the proposed sale or transfer.
8. Acknowledgments. The undersigned recognizes and agrees that the
foregoing provisions also apply to all shares of the capital stock of ▇▇▇▇▇ and
FIRST BANKING that are deemed to be beneficially owned by the undersigned
pursuant to applicable federal securities laws, which the undersigned agrees may
include, without limitation, shares owned or held in the name of (i) the
undersigned's spouse, (ii) any relative of the undersigned or of the
undersigned's spouse who has the same home as the undersigned, (iii) any trust
or estate in which the undersigned, the undersigned's spouse and any such
relative collectively own at least a ten percent (10%) beneficial interest or of
which any of the foregoing serves as trustee, executor, or in any similar
capacity, and (iv) any corporation or other organization in which the
undersigned, the undersigned's spouse and any such relative collectively own at
least ten percent (10%) of any class of equity securities or of the equity
interest. The undersigned further recognizes that, in the event that the
undersigned is a director or officer of FIRST BANKING or becomes a director or
officer of FIRST BANKING upon consummation of the Merger, among other things,
any sale of FIRST BANKING Common Stock by the undersigned within a period of
less than six (6) months following the Effective Time of the Merger may subject
the undersigned to liability pursuant to Section 16(b) of the Securities
Exchange Act of 1934, as amended.
9. Miscellaneous. This Affiliate Agreement is the complete agreement
between FIRST BANKING and the undersigned concerning the subject matter hereof.
Any notice required to be sent to any party hereunder shall be sent by
registered or certified mail, return receipt requested, using the addresses set
forth herein or such other address as shall be furnished in writing by the
parties. This Affiliate Agreement shall be governed by the laws of the State of
Georgia.
Affiliate Agreement - Page 4
64
This Affiliate Agreement is executed as of the _________ day of
________________, 1998.
Very truly yours,
---------------------------------------------
Signature
---------------------------------------------
Print Name
Address:
-----------------------------------
---------------------------------------------
---------------------------------------------
[add below the signatures of all registered
owners of shares deemed beneficially owned
by the affiliate]
---------------------------------------------
Name
---------------------------------------------
Name
---------------------------------------------
Name
AGREED TO AND ACCEPTED as of
the _______ day of _____________________, 1998.
FIRST BANKING COMPANY OF
SOUTHEAST GEORGIA
By:
------------------------------------------
Affiliate Agreement - Page 5
65
EXHIBIT 2
1998
--------------------,
First Banking Company of Southeast Georgia, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
RE: Merger between First Banking Company of Southeast Georgia,
Inc. ("FIRST BANKING"), Statesboro, Georgia, and ▇▇▇▇▇
Bancorp, Inc. "(▇▇▇▇▇"), Jesup, Georgia
Ladies and Gentlemen:
This letter is delivered pursuant to Section 9.2(g) of the Agreement
and Plan of Merger, dated as of November 30, 1998, by and between FIRST BANKING
and ▇▇▇▇▇.
In my capacity as an officer or a director of ▇▇▇▇▇, and as of the date
of this letter, I do not, to the best of my knowledge, have any claims, and I am
not aware of any facts or circumstances that I believe are likely to give rise
to any claim, for indemnification under WAYNE'S Articles of Incorporation or
Bylaws as existing on the date hereof or as may be afforded by the laws of the
State of Georgia or the United States.
Very truly yours,
-----------------------------------------
Signature of Officer or Director
-----------------------------------------
Name of Officer or Director
-----------------------------------------
Position at ▇▇▇▇▇