AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
▇▇▇▇▇▇▇ ▇▇▇▇▇ NATIONAL BANCORP, INC.
AND
CONSOLIDATED BANK & TRUST COMPANY
February 10, 2005
TABLE OF CONTENTS
ARTICLE I CERTAIN DEFINITIONS...............................................1
1.1. Certain Definitions.......................................1
ARTICLE II THE MERGER.......................................................7
2.1. Merger....................................................7
2.2. Closing; Effective Time...................................7
2.3. Articles of Incorporation and Bylaws......................7
2.4. Directors and Officers of Surviving Corporation...........7
2.5. Effects of the Merger.....................................8
2.6. Tax Consequences..........................................8
2.7. Possible Alternative Structures...........................8
ARTICLE III CONVERSION OF SHARES............................................9
3.1. Conversion of CB&T Common Stock; Merger Consideration.....9
3.2. Procedures for Exchange of CB&T Common Stock.............10
3.3. Reservation of Shares....................................12
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF CB&T..........................12
4.1. Standard.................................................13
4.2. Organization.............................................13
4.3. Capitalization...........................................13
4.4. Authority; No Violation..................................14
4.5. Consents.................................................15
4.6. Financial Statements.....................................15
4.7. Taxes....................................................16
4.8. No Material Adverse Effect...............................16
4.9. Material Contracts; Leases; Defaults.....................16
4.10. Ownership of Property; Insurance Coverage................17
4.11. Legal Proceedings........................................18
4.12. Compliance With Applicable Law...........................19
4.13. Employee Benefit Plans...................................20
4.14. Brokers, Finders and Financial Advisors..................23
4.15. Environmental Matters....................................23
4.16. Loan Portfolio...........................................24
4.17. Securities Documents.....................................25
4.18. Related Party Transactions...............................26
4.19. Deposits.................................................26
4.20. Antitakeover Provisions Inapplicable; Required Vote......26
4.21. Registration Obligations.................................26
4.22. Risk Management Instruments..............................26
4.23. Intellectual Property....................................27
ARTICLE V REPRESENTATIONS AND WARRANTIES OF AANB...........................27
5.1. Standard.................................................27
5.2. Organization.............................................27
5.3. Capitalization...........................................28
5.4. Authority; No Violation..................................28
5.5. Consents.................................................29
5.6. Financial Statements.....................................29
5.7. Taxes....................................................30
5.8. No Material Adverse Effect...............................30
5.9. Ownership of Property; Insurance Coverage................30
5.10. Legal Proceedings........................................31
5.11. Compliance With Applicable Law...........................31
5.12. AANB Common Stock........................................32
5.13. Material Contracts; Leases, Defaults.....................32
5.14. Securities Documents.....................................32
ARTICLE VI COVENANTS OF CB&T...............................................33
6.1. Conduct of Business......................................33
6.2. Current Information......................................36
6.3. Access to Properties and Records.........................36
6.4. Financial and Other Statements...........................37
6.5. Maintenance of Insurance.................................37
6.6. Disclosure Supplements...................................37
6.7. Consents and Approvals of Third Parties..................38
6.8. All Reasonable Efforts...................................38
6.9. Failure to Fulfill Conditions............................38
6.10. No Solicitation..........................................38
6.11. Reserves and Merger-Related Costs........................39
ARTICLE VII COVENANTS OF AANB..............................................40
7.1. Conduct of Business......................................40
7.2. Disclosure Supplements...................................40
7.3. Consents and Approvals of Third Parties..................40
7.4. All Reasonable Efforts...................................40
7.5. Failure to Fulfill Conditions............................41
7.6. Employee Benefits........................................41
7.7. Directors and Officers Indemnification and Insurance.....41
7.8. Stock Listing............................................43
7.9. Employee Proceedings.....................................43
7.10. Access to Properties and Records.........................43
7.11. Capital Contribution.....................................43
ARTICLE VIII REGULATORY AND OTHER MATTERS..................................43
8.1. Meetings of Stockholders.................................43
8.2. Proxy Statement-Prospectus; Merger Registration
Statement.............................................44
8.3. Regulatory Approvals.....................................44
8.4. Affiliates...............................................45
ARTICLE IX CLOSING CONDITIONS..............................................45
9.1. Conditions to Each Party's Obligations under this
Agreement.............................................45
9.2. Conditions to the Obligations of AANB under this
Agreement.............................................47
9.3. Conditions to the Obligations of CB&T under this
Agreement.............................................47
ARTICLE X THE CLOSING......................................................48
10.1. Time and Place...........................................48
10.2. Deliveries at the Pre-Closing and the Closing............48
ARTICLE XI TERMINATION, AMENDMENT AND WAIVER...............................49
11.1. Termination..............................................49
11.2. Effect of Termination....................................50
11.3. Amendment, Extension and Waiver..........................51
ARTICLE XII MISCELLANEOUS..................................................52
12.1. Confidentiality..........................................52
12.2. Public Announcements.....................................52
12.3. Survival.................................................52
12.4. Notices..................................................52
12.5. Parties in Interest......................................53
12.6. Complete Agreement.......................................53
12.7. Counterparts.............................................54
12.8. Severability.............................................54
12.9. Governing Law............................................54
12.10. Interpretation...........................................54
12.11. Specific Performance.....................................54
Exhibit A Form of Voting Agreement
Exhibit B Form of Affiliates Agreement
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "Agreement") is dated as
of February 10, 2005, by and between ▇▇▇▇▇▇▇ ▇▇▇▇▇ NATIONAL BANCORP, INC., a
Delaware corporation ("AANB"), and CONSOLIDATED BANK & TRUST COMPANY, a
Virginia chartered commercial bank ("CB&T").
WHEREAS, the Board of Directors of each of AANB and CB&T (i) has
determined that this Agreement and the business combination and related
transactions contemplated hereby are in the best interests of their respective
companies and stockholders and (ii) has determined that this Agreement and the
transactions contemplated hereby are consistent with and in furtherance
of their respective business strategies, and (iii) has approved this
Agreement at meetings of each of such Boards of Directors;
WHEREAS, in accordance with the terms of this Agreement, a to be f
ormed, wholly-owned subsidiary of AANB will merge with and into CB&T (the
"Merger"). Concurrently, shareholders of CB&T shall exchange their shares of
CB&T for shares of AANB;
WHEREAS, as a condition to the willingness of AANB to enter into this
Agreement, each of the directors and executive officers of CB&T have entered
into a Voting Agreement, substantially in the form of Exhibit A hereto, dated
as of the date hereof, with AANB (the "Voting Agreement"), pursuant to which
each such director and executive officer has agreed, among other things, to
vote all shares of common stock of CB&T owned by such person in favor of the
approval of this Agreement and the transactions contemplated hereby, upon
the terms and subject to the conditions set forth in such Voting Agreements;
WHEREAS, the parties currently intend that the Merger shall qualify as
a reorganization within the meaning of Section 368(a) of the Internal Revenue
Code of 1986, as amended (the "Code"); and
WHEREAS, the parties desire to make certain representations,
warranties and agreements in connection with the business transactions
described in this Agreement and to prescribe certain conditions thereto.
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements herein contained, and of other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.1. Certain Definitions.
As used in this Agreement, the following terms have the following
meanings (unless the context otherwise requires references to Articles and
Sections refer to Articles and Sections of this Agreement).
"AANB" shall mean ▇▇▇▇▇▇▇ ▇▇▇▇▇ National Bancorp, Inc., a Delaware
corporation, with its principal executive offices located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇.
"AANB Common Stock" shall mean the common stock, par value $.01 per
share, of AANB.
"AANB DISCLOSURE SCHEDULE" shall mean a written disclosure
schedule delivered by AANB to CB&T specifically referring to the appropriate
section of this Agreement.
"AANB Financial Statements" shall mean the (i) the audited
consolidated statements of financial condition (including related notes and
schedules) of AANB as of December 31, 2003 and 2002 and the consolidated
statements of income, changes in stockholders' equity and cash flows
(including related notes and schedules, if any) of AANB for each of the three
years ended December 31, 2003, 2002 and 2001, as set forth in AANB's annual
report for the year ended December 31, 2003, and (ii) the unaudited interim
consolidated financial statements of AANB as of the end of the nine month
period ended September 30, 2004, and for the periods then ended, as filed by
AANB in its Securities Documents.
"AANB Subsidiary" means any corporation, 50% or more of the capital
stock of which is owned, either directly or indirectly, by AANB or The ▇▇▇▇▇
National Bank, except any corporation the stock of which is held in
the ordinary course of the lending activities of The ▇▇▇▇▇ National Bank.
"Affiliate" means any Person who directly, or indirectly, through one
or more intermediaries, controls, or is controlled by, or is under common
control with, such Person and, without limiting the generality of the
foregoing, includes any executive officer or director of such Person and any
Affiliate of such executive officer or director.
"Agreement" means this agreement, and any amendment hereto.
"Average Closing Price of AANB Common Stock" shall mean the average
of the daily closing sales prices of a share of AANB Common Stock as reported on
the Nasdaq National Market for the ten (10) consecutive trading days
immediately preceding the Closing Date.
"Bank Regulator" shall mean any Federal or state banking regulator,
including but not limited to the OCC, FDIC, the Bureau and the FRB, which
regulates The ▇▇▇▇▇ National Bank or CB&T, or any of their respective
holding companies or subsidiaries, as the case may be.
"Bureau" shall mean the Bureau of Financial Institutions of the
Commonwealth of Virginia, State Corporation Commission.
"CB&T" shall mean Consolidated Bank & Trust Company, with its
principal offices located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
"CB&T Common Stock" shall mean the common stock, par value $10 per
share, of CB&T.
"CB&T DISCLOSURE SCHEDULE" shall mean a written disclosure
schedule delivered by CB&T to AANB specifically referring to the a
ppropriate section of this Agreement.
"CB&T Financial Statements" shall mean (i) the audited statements
of financial condition (including related notes and schedules, if any) of
CB&T as of December 31, 2003 and 2002 and the statements of income,
changes in stockholders' equity and cash flows (including related notes and
schedules, if any) of CB&T for each of the three years ended December 31,
2003, 2002 and 2001, as set forth in CB&T's annual report for the year
ended December 31, 2003 and (ii) the unaudited interim consolidated financial
statements of CB&T as of the end of the nine month period ended September 30,
2004 and for the periods then ended, as filed by CB&T with the FRB.
"CB&T Stock Benefit Plans" shall mean any and all stock based benefit
plans and amendments thereto.
"CB&T Stockholders Meeting" shall have the meaning set forth in
Section 8.1.1.
"CB&T Subsidiary" means any corporation, 50% or more of the capital
stock of which is owned, either directly or indirectly, by CB&T, except any
corporation the stock of which is held in the ordinary course of the
lending activities of CB&T.
"Certificate" shall mean a certificate evidencing shares of CB&T Common
Stock.
"Closing" shall have the meaning set forth in Section 2.2.
"Closing Date" shall have the meaning set forth in Section 2.2.
"COBRA" shall mean the Consolidated Omnibus Budget Reconciliation Act
of 1985, as amended.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Confidentiality Agreements" shall mean the confidentiality agreements
referred to in Section 12.1 of this Agreement.
"DGCL" shall mean the Delaware General Corporation Law.
"Dissenting Shares" shall have the meaning set forth in Section 3.1.4.
"Dissenting Stockholder" shall have the meaning set forth in Section
3.1.4.
"Effective Time" shall mean the date and time specified pursuant to
Section 2.2 hereof as the effective time of the Merger.
"Environmental Laws" means any applicable Federal, state or local
law, statute, ordinance, rule, regulation, code, license, permit,
authorization, approval, consent, order, judgment, decree, injunction or
agreement with any governmental entity relating to (1) the protection,
preservation or restoration of the environment (including, without
limitation, air, water vapor, surface water, groundwater, drinking water
supply, surface soil, subsurface soil, plant and animal life or any other
natural resource) and/or (2) the use, storage, recycling, treatment,
generation, transportation, processing, handling, labeling, production,
release or disposal of Materials of Environmental Concern. The term
Environmental Law includes without limitation (a) the
Comprehensive Environmental Response, Compensation and Liability Act, as
amended, 42 U.S.C. ss.9601, et seq.; the Resource Conservation and Recovery
Act, as amended, 42 U.S.C. ss.6901, et seq.; the Clean Air Act, as amended, 42
U.S.C. ss.7401, et seq.; the Federal Water Pollution Control Act, as amended,
33 U.S.C. ss.1251, et seq.; the Toxic Substances Control Act, as amended,
15 U.S.C. ss.2601, et seq.; the Emergency Planning and Community Right to Know
Act, 42 U.S.C. ss.11001, et seq.; the Safe Drinking Water Act, 42 U.S.C.
ss.300f, et seq.; and all comparable state and local laws, and (b) any common
law (including without limitation common law that may impose strict liability)
that may impose liability or obligations for injuries or damages due to
the presence of or exposure to any Materials of Environmental Concern.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Exchange Agent" shall mean American Stock Transfer & Trust Company,
or such other bank or trust company or other agent designated by AANB, and
reasonably acceptable to CB&T, which shall act as agent for AANB in
connection with the exchange procedures for exchanging Certificates for the
Merger Consideration.
"Exchange Fund" shall have the meaning set forth in Section 3.2.1.
"Exchange Ratio" shall mean the number of shares (or fraction of
a share) of AANB Common Stock into which a share of CB&T Common Stock shall
be converted which shall be equal to the amount (rounded to the nearest
one thousandth) as set forth below:
(i) If the Average Closing Price of AANB Common Stock is not
less than $14.82 and is not more than $22.24, the Exchange
Ratio shall be 0.534;
(ii) If the Average Closing price of AANB Common Stock is more
than $22.24, the Exchange Ratio shall be calculated by
dividing $11.87 by the Average Closing Price of AANB Common
Stock; and
(iii) If the Average Closing Price of AANB Common Stock is less
than $14.82, AANB shall in its sole discretion pay for CB&T
Common Stock based upon either (i) an Exchange Ratio
calculated by dividing $7.91 by the Average Closing Price
of AANB Common Stock, or (ii) cash in the amount of $7.91
per CB&T Common Stock share.
"FDIC" shall mean the Federal Deposit Insurance Corporation or any
successor thereto.
"FRB" shall mean the Board of Governors of the Federal Reserve System
or any successor thereto.
"GAAP" shall mean accounting principles generally accepted in the
United States of America.
"Governmental Entity" shall mean any Federal or state court,
administrative agency or commission or other governmental authority or
instrumentality.
"IRS" shall mean the United States Internal Revenue Service.
"Proxy Statement-Prospectus" shall have the meaning set forth in
Section 8.2.1.
"Knowledge" as used with respect to a Person (including references
to such Person being aware of a particular matter) means those facts that
are known by the current executive officers and directors of such
Person, and includes any and all facts, matters or circumstances set forth
in any written notice from any Bank Regulator or any other material written
notice received by an executive officer or director of that Person.
"Loan Property" shall have the meaning set forth in Section 4.15.2.
"Material Adverse Effect" shall mean, with respect to AANB or CB&T,
respectively, any effect that (i) is material and adverse to the financial
condition, results of operations or business of AANB and its Subsidiaries
taken as a whole, or CB&T and its Subsidiaries taken as a whole, respectively,
or (ii) does or would materially impair the ability of either CB&T, on the one
hand, or AANB, on the other hand, to perform its obligations under
this Agreement or otherwise materially threaten or materially impede the
consummation of the transactions contemplated by this Agreement; provided that
"Material Adverse Effect" shall not be deemed to include the impact
of (a) changes in laws and regulations affecting banks or thrift
institutions generally or interpretations thereof by courts or governmental
agencies, (b) changes in GAAP or regulatory accounting principles generally
applicable to financial institutions and their holding companies, (c) actions
and omissions of a party hereto (or any of its Subsidiaries) taken with the
prior written consent of the other party, (d) compliance with this
Agreement on the business, financial condition or results of operations
of the parties and their respective Subsidiaries, including the expenses
incurred by the parties hereto in consummating the transactions contemplated
by this Agreement (consistent with the information included in the Disclosure
Schedules) and (e) any change in the value of the securities portfolio of
AANB or CB&T, respectively, whether held as available for sale or held
to maturity, resulting from a change in interest rates generally.
"Materials of Environmental Concern" means pollutants, contaminants,
wastes, toxic substances, petroleum and petroleum products, and any other
materials regulated under Environmental Laws.
"Merger" shall mean the merger of a to be formed wholly-owned
subsidiary of AANB with and into CB&T pursuant to the terms hereof.
"Merger Consideration" shall mean the AANB Common Stock or cash,
to be paid by AANB for each share of CB&T Common Stock, as set forth in
Section 3.1.
"Merger Registration Statement" shall mean the registration
statement, together with all amendments, filed with the SEC under the
Securities Act for the purpose of registering shares of AANB Common Stock
to be offered to holders of CB&T Common Stock in connection with the Merger.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"Nasdaq" shall mean the Nasdaq Stock Market.
"OCC" shall mean the Office of the Comptroller of the Currency.
"Participation Facility" shall have the meaning set forth in
Section 4.15.2.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
successor thereto.
"Pension Plan" shall have the meaning set forth in Section 4.13.2.
"Person" shall mean any individual, corporation, limited liability
company, partnership, joint venture, association, trust "group" (as that term
is defined under the Exchange Act) or entity.
"Regulatory Agreement" shall have the meaning set forth in
Section 4.12.3.
"Regulatory Approvals" means the approval of any Bank Regulator that
is necessary in connection with the consummation of the Merger and the related
transactions contemplated by this Agreement.
"Rights" shall mean warrants, options, rights, convertible securities,
stock appreciation rights and other arrangements or commitments which
obligate an entity to issue or dispose of any of its capital stock or
other ownership interests or which provide for compensation based on the equity
appreciation of its capital stock.
"SBA" shall mean the Small Business Administration or any successor
thereto.
"SEC" shall mean the Securities and Exchange Commission or any
successor thereto.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Securities Documents" shall mean all reports, offering circulars,
proxy statements, registration statements and all similar documents filed
pursuant to the Securities Laws.
"Securities Laws" shall mean the Securities Act; the Exchange Act;
the Investment Company Act of 1940, as amended; the Investment Advisers Act
of 1940, as amended; the Trust Indenture Act of 1939, as amended, and the
rules and regulations of the SEC promulgated thereunder.
"Significant Subsidiary" shall have the meaning set forth in Rule 1-02
of Regulation S-X of the SEC.
"Surviving Corporation" shall have the meaning set forth in Section 2.1
hereof.
"Termination Date" shall mean September 30, 2005.
"Virginia Banking Law" shall mean Title 6 of the Code of Virginia
of 1950, Virginia Banking Act as amended, and the Rules and Regulations
promulgated thereunder, as amended, as administered by the Bureau.
Other terms used herein are defined in the preamble and elsewhere in
this Agreement.
ARTICLE II
THE MERGER
2.1. Merger.
Subject to the terms and conditions of this Agreement, at the
Effective Time, a to be formed wholly-owned subsidiary of AANB shall merge
with CB&T, with CB&T as the resulting or surviving corporation (the
"Surviving Corporation"). As part of the Merger, each share of CB&T Common
Stock will be converted into the right to receive the Merger Consideration
pursuant to the terms of Article III hereof.
2.2. Closing; Effective Time.
Subject to the satisfaction or waiver of all conditions to closing
contained in Article IX hereof, the Closing shall occur no later than five
(5) business days following the latest to occur of (i) the receipt of all
required Regulatory Approvals, and the expiration of any applicable waiting
periods, (ii) the approval of the Merger by the stockholders of CB&T, or
(iii) at such other date or time upon which AANB and CB&T mutually agree
(the "Closing"). The Merger shall be effected by the filing of a certificate
of merger with the Virginia State Corporation Commission on the day of the
Closing (the "Closing Date"), in accordance with Virginia Law. The
"Effective Time" means the date and time upon which the certificate of merger
is filed with the Virginia State Corporation Commission, or as otherwise
stated in the certificate of merger, in accordance with Virginia Law.
2.3. Articles of Incorporation and Bylaws.
The Articles of Incorporation and Bylaws of CB&T as in effect
immediately prior to the Effective Time shall be the Articles of Incorporation
and Bylaws of the Surviving Corporation, until thereafter amended as
provided therein and by applicable law.
2.4. Directors and Officers of Surviving Corporation.
The directors of the Surviving Corporation shall consist of ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, III and ▇▇▇ ▇. ▇▇▇▇▇▇ and (4) four directors
to be designated by AANB, each to hold office in accordance with the
Articles of Incorporation and Bylaws of the Surviving Corporation. he officers
of CB&T immediately prior to the Effective Time shall be the initial officers
of Surviving Corporation, in each case until their respective
successors are duly elected or appointed and qualified.
2.5. Effects of the Merger.
At and after the Effective Time, the Merger shall have the effects
as set forth in the Virginia Stock Corporation Act.
2.6. Tax Consequences.
It is intended that the Merger shall constitute a reorganization
within the meaning of Section 368(a) of the Code, and that this Agreement shall
constitute a "plan of reorganization" as that term is used in Sections
354 and 361 of the Code. From and after the date of this Agreement and until
the Closing, each party hereto shall use its reasonable best efforts to
cause the Merger to qualify, and will not knowingly take any action,
cause any action to be taken, fail to take any action or cause any action
to fail to be taken which action or failure to act could prevent the Merger
from qualifying as a reorganization under Section 368(a) of the Code
other than is contemplated by this Agreement. Following the Closing,
neither AANB nor CB&T nor any of their affiliates shall knowingly take any
action, cause any action to be taken, fail to take any action or cause any
action to fail to be taken, which action or failure to act could cause
the Merger to fail to qualify as a reorganization under Section 368(a)
of the Code. Each of AANB and CB&T hereby agrees to deliver certificates
substantially in compliance with IRS published advance ruling guidelines,
with customary exceptions and modifications thereto, to enable counsel
to deliver the legal opinions contemplated by Section 9.1.6, which
certificates shall be effective as of the date of such opinions.
2.7. Possible Alternative Structures.
Notwithstanding anything to the contrary contained in this Agreement
and subject to the satisfaction of the conditions set forth in Article IX,
prior to the Effective Time AANB shall be entitled to revise the
structure of the Merger described in Section 2.1 hereof, provided that (i)
that there are no adverse Federal or state income tax consequences to CB&T
stockholders as a result of the modification; (ii) the consideration to be
paid to the holders of CB&T Common Stock under this Agreement is not thereby
changed in kind or value, or reduced in amount; and (iii) such modification
will not delay materially or jeopardize receipt of any required regulatory
approvals or other consents and approvals relating to the consummation of
the Merger. The parties hereto agree to appropriately amend this Agreement
and any related documents in order to reflect any such revised structure.
2.8 CB&T Branch.
AANB agrees that so long as it maintains a branch in the ▇▇▇▇▇▇▇
▇▇▇▇ area of the City of Richmond, Virginia such branch shall be designated as
the Consolidated Branch.
ARTICLE III
CONVERSION OF SHARES
3.1. Conversion of CB&T Common Stock; Merger Consideration.
At the Effective Time, by virtue of the Merger and without any action
on the part of AANB, CB&T or the holders of any of the shares of CB&T Common
Stock, the Merger shall be effected in accordance with the following
terms:
3.1.1. Each share of AANB Common Stock that is issued and outstanding
immediately prior to the Effective Time shall remain issued and outstanding
following the Effective Time and shall be unchanged by the Merger.
3.1.2. All shares of CB&T Common Stock held in the treasury of
CB&T and each share of CB&T Common Stock owned by AANB or any direct or
indirect wholly owned subsidiary of AANB or of CB&T immediately prior to
the Effective Time (other than shares held in a fiduciary capacit or in
connection with debts previously contracted) ("Treasury Stock"), shall,
at the Effective Time, cease to exist, and the certificates for such shares
shall be canceled as promptly as practicable thereafter, and no payment or
distribution shall be made in consideration
therefor.
3.1.3. Each share of CB&T Common Stock issued and outstanding
immediately prior to the Effective Time (other than Treasury Stock and
Dissenting Shares) shall become and be converted into, as provided in and
subject to the limitations set forth in this Agreement, the right to receive
shares of AANB Common Stock based on the Exchange Ratio in place as of the
Closing Date or cash as set forth in (iii) to the definition of "Exchange
Ratio" at Section 1.1. (the "Merger Consideration").
3.1.4. Each outstanding share of CB&T Common Stock the holder of
which has perfected his right to dissent under Virginia law and has not
effectively withdrawn or lost such right as of the Effective Time (the
"Dissenting Shares") shall not be converted into or represent a right to
receive the Merger Consideration hereunder, and the holder thereof shall
be entitled only to such rights as are granted by Virginia law. CB&T shall
give AANB prompt notice upon receipt by CB&T of any such demands for payment
of the fair value of such shares of CB&T Common Stock and of withdrawals of
such notice and any other instruments provided pursuant to applicable law
(any stockholder duly making such demand being hereinafter called a
"Dissenting Stockholder"), and AANB shall have the right to participate in
all negotiations and proceedings with respect to any such demands. CB&T
shall not, except with the prior written consent of AANB, voluntarily make
any payment with respect to, or settle or offer to settle, any such demand for
payment, or waive any failure to timely deliver a written demand for
appraisal or the taking of any other action by such Dissenting Stockholder as
may be necessary to perfect appraisal rights under Virginia law. Any payments
made in respect of Dissenting Shares shall be made by the Surviving Company.
3.1.5. If any Dissenting Stockholder shall effectively withdraw
or lose (through failure to perfect or otherwise) his right to such payment at
or prior to the Effective Time, such holder's shares of CB&T Common Stock
shall be converted into a right to receive the Merger Consideration in
accordance with the applicable provisions of this Agreement.
3.1.6. After the Effective Time, shares of CB&T Common Stock
shall no longer be outstanding and shall automatically be canceled and
shall cease to exist, and shall thereafter by operation of this section be the
right to receive the Merger Consideration.
3.1.7. In the event AANB changes (or establishes a record date for
changing) the number of, or provides for the exchange of, shares of AANB Common
Stock issued and outstanding prior to the Effective Time as a result of a
stock split, stock dividend, recapitalization, reclassification, or similar
transaction with respect to the outstanding AANB Common Stock and the record
date therefor shall be prior to the Effective Time, the Exchange
Ratio shall be proportionately and appropriately adjusted; provided, that no
such adjustment shall be made with regard to AANB Common Stock if AANB issues
additional shares of AANB Common Stock and receives fair market value
consideration for such shares or if AANB issues shares of AANB common stock
through the exercise of options which have been granted or are available for
grant pursuant to previously adopted stock benefit plans.
3.1.8. No Fractional Shares. Notwithstanding anything to the
contrary contained herein, no certificates or scrip representing fractional
shares of AANB Common Stock shall be issued upon the surrender for exchange of
Certificates, no dividend or distribution with respect to AANB Common Stock
shall be payable on or with respect to any fractional share interest, and such
fractional share interests shall not entitle the owner thereof to vote or to
any other rights of a stockholder of AANB. In lieu of the issuance of any
such fractional share, AANB shall pay to each former holder of CB&T Common
Stock who otherwise would be entitled to receive a fractional
share of AANB Common Stock, an amount in cash, rounded to the nearest cent
and without interest, equal to the product of (i) the fraction of a share to
which such holder would otherwise have been entitled and (ii) the
average of the daily closing sales prices of a share of AANB Common Stock
as reported on the Nasdaq for the ten (10) consecutive trading days immediately
preceding the Closing Date. For purposes of determining any fractional
share interest, all shares of CB&T Common Stock owned by a CB&T stockholder
shall be combined so as to calculate the maximum number of whole shares of AANB
Common Stock issuable to such CB&T stockholder.
3.2. Procedures for Exchange of CB&T Common Stock.
3.2.1. AANB to Make Merger Consideration Available. No later than
the Closing Date, AANB shall deposit, or shall cause to be deposited,
with the Exchange Agent for the benefit of the holders of CB&T Common Stock or
cash, for exchange in accordance with this Section 3.2, certificates
representing the shares of AANB Common Stock and an aggregate amount of cash
sufficient to pay the aggregate amount of cash payable pursuant to this
Article III (such cash and certificates for shares of AANB Common Stock,
together with any dividends or distributions with respect thereto (without
any interest thereon) being hereinafter referred to as the "Exchange Fund").
3.2.2. Exchange of Certificates. AANB shall take all steps
necessary to cause the Exchange Agent, within five (5) business days after
the Effective Time, to mail to each holder of a Certificate or Certificates,
a form letter of transmittal for return to the Exchange Agent and instructions
for use in effecting the surrender of the Certificates in exchange for the
Merger Consideration and cash in lieu of fractional shares into which the
CB&T Common Stock represented by such Certificates shall have been converted
as a result of the Merger. The letter of transmittal shall be in customary
form and shall specify that delivery shall be effected, and risk of loss and
title to the Certificates shall pass, only upon delivery of the Certificates
to the Exchange Agent. Upon proper surrender of a Certificate for exchange
and cancellation to the Exchange Agent, together with a properly
completed letter of transmittal, duly executed, the holder of such Certificate
shall be entitled to receive in exchange therefor the Merger Consideration
to which such holder of CB&T common stock shall have become entitled
pursuant to Section 3.1.3 and 3.18 hereof, and the Certificate so surrendered
shall forthwith be cancelled. No interest will be paid or accrued on any cash
payable in lieu of fractional shares or any unpaid dividends and
distributions, if any, payable to holders of Certificates.
3.2.3. Rights of Certificate Holders after the Effective Time.
The holder of a Certificate that prior to the Merger represented issued and
outstanding CB&T Common Stock shall have no rights, after the Effective Time,
with respect to such CB&T Common Stock except to surrender the Certificate in
exchange for the Merger Consideration as provided in this Agreement. No
dividends or other distributions declared after the Effective Time with respect
to AANB Common Stock or interest with respect to cash shall be paid to
the holder of any unsurrendered Certificate until the holder thereof shall
surrender such Certificate in accordance with this Section 3.2. After the
surrender of a Certificate in accordance with this Section 3.2, the record
holder thereof shall be entitled to receive any such dividends or other
distributions, without any interest thereon, which theretofore had become
payable with respect to shares of AANB Common Stock represented by such
Certificate.
3.2.4. Surrender by Persons Other than Record Holders. If the Person
surrendering a Certificate and signing the accompanying letter of transmittal
is not the record holder thereof, then it shall be a condition of the
payment of the Merger Consideration that: (i) such Certificate is properly
endorsed to such Person or is accompanied by appropriate stock powers, in
either case signed exactly as the name of the record holder appears on such
Certificate, and is otherwise in proper form for transfer, or is accompanied
by appropriate evidence of the authority of the Person surrendering such
Certificate and signing the letter of transmittal to do so on behalf of the
record holder; and (ii) the person requesting such exchange shall pay to
the Exchange Agent in advance any transfer or other taxes required by
reason of the payment to a Person other than the registered holder of the
Certificate surrendered, or required for any other reason, or shall establish
to the satisfaction of the Exchange Agent that such tax has been paid or is
not payable.
3.2.5. Closing of Transfer Books. rom and after the Effective Time,
there shall be no transfers on the stock transfer books of CB&T of the CB&T
Common Stock that were outstanding immediately prior to the Effective Time.
If, after the Effective Time, Certificates representing such shares are
presented for transfer to the Exchange Agent, they shall be exchanged for the
Merger Consideration and canceled as provided in this Section 3.2.
3.2.6. Return of Exchange Fund. At any time following the twelve
(12) month period after the Effective Time, AANB shall be entitled to require
the Exchange Agent to deliver to it any portions of the Exchange Fund which
had been made available to the Exchange Agent and not disbursed to holders
of Certificates (including, without limitation, all interest and other
income received by the Exchange Agent in respect of all funds made available
to it), and thereafter such holders shall be entitled to look to AANB (subject
to abandoned property, escheat and other similar laws) with respect to
any Merger Consideration that may be payable upon due surrender of the
Certificates held by them. Notwithstanding the foregoing, neither AANB nor
the Exchange Agent shall be liable to any holder of a Certificate for any
Merger Consideration delivered in respect of such Certificate to a public
official pursuant to any abandoned property, escheat or other similar law.
3.2.7. Lost, Stolen or Destroyed Certificates. In the event any
Certificate shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the person claiming such Certificate to be lost,
stolen or destroyed and, if required by AANB, the posting by such person
of a bond in such amount as AANB may reasonably direct as indemnity against
any claim that may be made against it with respect to such Certificate,
the Exchange Agent will issue in exchange for such lost, stolen or destroyed
Certificate the Merger Consideration deliverable in respect thereof.
3.2.8. Withholding. AANB or the Exchange Agent will be entitled to
deduct and withhold from the consideration otherwise payable pursuant to this
Agreement or the transactions contemplated hereby to any holder of CB&T Common
Stock such amounts as AANB (or any Affiliate thereof) or the Exchange Agent
are required to deduct and withhold with respect to the making of such payment
under the Code, or any applicable provision of U.S. federal, state,
local or non-U.S. tax law. To the extent that such amounts are properly
withheld by AANB or the Exchange Agent, such withheld amounts will be treated
for all purposes of this Agreement as having been paid to the holder of the
CB&T Common Stock in respect of whom such deduction and withholding were made
by AANB or the Exchange Agent and such amounts shall be delivered to the
applicable taxing authorities.
3.3. Reservation of Shares.
AANB shall reserve for issuance a sufficient number of shares of
the AANB Common Stock for the purpose of issuing shares of AANB Common Stock
to the CB&T stockholders in accordance with this Article III.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF CB&T
CB&T represents and warrants to AANB that the statements contained
in this Article IV are correct as of the date of this Agreement, except as set
forth in the CB&T DISCLOSURE SCHEDULE delivered by CB&T to AANB on the
date hereof, and except as to any representation or warranty which specifically
relates to an earlier date. CB&T has made a good faith effort to ensure that
the disclosure on each schedule of the CB&T DISCLOSURE SCHEDULE
corresponds to the section referenced herein. However, for purposes of the
CB&T DISCLOSURE SCHEDULE, any item disclosed on any schedule therein is
deemed to be fully disclosed with respect to all schedules under which such
item may be relevant as and to the extent that it is reasonably apparent
that such item applies to such other schedule.
4.1. Standard.
No representation or warranty of CB&T contained in this Article IV
shall be deemed untrue or incorrect, and CB&T shall not be deemed to have
breached a representation or warranty, as a consequence of the existence of
any fact, circumstance or event unless such fact, circumstance or event,
individually or taken together with all other facts, circumstances or events
inconsistent with any paragraph of Article IV, has had or is reasonably
expected to have a Material Adverse Effect; provided, however, that the
foregoing standard shall not apply to representations and warranties contained
in Sections 4.2 (other than the second sentence of Section 4.2.1 and the
last sentence of Section 4.2.2), 4.3, 4.4, 4.13.4, 4.13.6, 4.13.9, 4.13.10,
4.13.11 and 4.13.13, which shall be deemed untrue, incorrect and breached if
they are not true and correct in all material respects.
4.2. Organization.
4.2.1. CB&T is a Virginia chartered bank duly organized, validly
existing and in good standing under the laws of the Commonwealth of Virginia.
The deposits of CB&T are insured by the FDIC to the fullest extent permitted by
law, and all premiums and assessments required to be paid in connection
therewith have been paid by CB&T when due. CB&T is regulated by the FRB.
4.2.2. CB&T DISCLOSURE SCHEDULE 4.2.2 sets forth each CB&T
Subsidiary. Each CB&T Subsidiary is a corporation, limited liability company
or other legal entity duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation or organization.
4.2.3. The respective minute books of CB&T and each CB&T
Subsidiary accurately records, in all material respects, all material
corporate actions of their respective stockholders and boards of director
(including committees) since January 1, 2002.
4.2.4. Prior to the date of this Agreement, CB&T has made available
to AANB true and correct copies of the articles of incorporation or charter
and bylaws of CB&T and each CB&T Subsidiary. CB&T DISCLOSURE SCHEDULE 4.2.4
sets forth any and all current noncompliance with CB&T's charter and bylaws.
Such noncompliance has not, and will not have, a Material Adverse Effect
on CB&T.
4.3. Capitalization.
4.3.1. The authorized capital stock of CB&T consists of 2,000,000
shares of CB&T Common Stock, of which 260,488 shares are outstanding, validly
issued, fully paid and nonassessable and free of preemptive rights, and
500,000 shares of preferred stock, $10 par value ("CB&T Preferred Stock"),
none of which are outstanding. There are no shares of CB&T Common Stock held
by CB&T as treasury stock. CB&T has no outstanding options, warrants or
other rights which are convertible into shares of CB&T Common Stock or CB&T
Preferred Stock. Neither CB&T nor any CB&T Subsidiary has or is bound by any
Rights of any character relating to the purchase, sale or issuance or voting
of, or right to receive dividends or other distributions on any shares
of CB&T Common Stock, or any other security of CB&T or any securities
representing the right to vote, purchase or otherwise receive any shares of
CB&T Common Stock or any other security of CB&T, other than shares issuable
under the CB&T Stock Benefit Plans. CB&T DISCLOSURE SCHEDULE 4.3.1 sets
forth: the name of each holder of an award granted under any CB&T Stock
Benefit Plan, identifying the nature, number of shares, grant and vesting dates
of the award.
4.3.2. Except for the CB&T Subsidiaries and as set forth in CB&T
Disclosure Schedule 4.3.2, CB&T does not possess, directly or indirectly,
any material equity interest in any corporate entity, except for equity
interests held in the investment portfolios of CB&T or any CB&T Subsidiary,
equity interests held by CB&T Subsidiaries in a fiduciary capacity, and
equity interests held in connection with the lending activities of CB&T
Subsidiaries. CB&T owns all of the outstanding shares of capital stock of
each CB&T Subsidiary free and clear of all liens, security interests, pledges,
charges, encumbrances, agreements and restrictions of any kind or
nature.
4.3.3. To CB&T's Knowledge, except as set forth on CB&T DISCLOSURE
SCHEDULE 4.3.3, no Person is the beneficial owner (as defined in Section 13(d)
of the Exchange Act) of 5% or more of the outstanding shares of CB&T Common
Stock.
4.3.4. No bonds, debentures, notes or other indebtedness having
the right to vote on any matters on which CB&T's stockholders may vote has
been issued by CB&T and are outstanding.
4.4. Authority; No Violation.
4.4.1. CB&T has full corporate power and authority to execute and
deliver this Agreement and, subject to the receipt of the Regulatory Approvals
described in Section 8.3 and the approval of this Agreement by CB&T's
stockholders, to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement by CB&T and the completion by CB&T of
the transactions contemplated hereby, up to and including the Merger, have
been duly and validly approved by the Board of Directors of CB&T. This
Agreement has been duly and validly executed and delivered by CB&T, and
subject to approval by the stockholders of CB&T and receipt of the Regulatory
Approvals, constitutes the valid and binding obligation of CB&T, enforceable
against CB&T in accordance with its terms, subject to applicable bankruptcy,
insolvency and similar laws affecting creditors' rights generally, and
subject, as to enforceability, to general principles of equity.
4.4.2. (A) The execution and delivery of this Agreement by CB&T,
(B) subject to receipt of Regulatory Approvals, and CB&T's and AANB's
compliance with any conditions contained therein, and subject to the receipt of
the approval of the stockholders of CB&T, the consummation of the
transactions contemplated hereby, and (C) compliance by CB&T with any of the
terms or provisions hereof will not (i) conflict with or result in a breach of
any provision of the Articles of Incorporation or Bylaws of CB&T or any
CB&T Subsidiary; (ii) violate any statute, code, ordinance, rule, regulation,
judgment, order, writ, decree or injunction applicable to CB&T or any CB&T
Subsidiary or any of their respective properties or assets; or (iii) except
as set forth in CB&T DISCLOSURE SCHEDULE 4.4.2, violate, conflict with,
result in a breach of any provisions of, constitute a default (or an
event which, with notice or lapse of time, or both, would constitute a default),
under, result in the termination of, accelerate the performance required by,
or result in a right of termination or acceleration or the creation of any
lien, security interest, charge or other encumbrance upon any of the
properties or assets of CB&T or any CB&T Subsidiary under any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, deed of
trust, license, lease, agreement or other investment or obligation to which
CB&T is a party, or by which they or any of their respective properties or
assets may be bound or affected, except for such violations, conflicts,
breaches or defaults under clause (ii) or (iii) hereof which, either
individually or in the aggregate, will not have a Material Adverse Effect on
CB&T and the CB&T Subsidiaries taken as a whole.
4.5. Consents.
Except for the regulatory approvals referred to in Section 8.3
hereof and consents set forth in CB&TDISCLOSURE SCHEDULE 4.5 and compliance
with any conditions contained therein, and the approval of this Agreement
by the requisite vote of the stockholders of CB&T, no consents, waivers
or approvals of, or filings or registrations with, any Governmental
Entity or Bank Regulator are necessary, and, to CB&T's Knowledge, no
consents, waivers or approvals of, or filings or registrations with, any
other third parties are necessary, in connection with the execution and
delivery of this Agreement by CB&T, and the completion by CB&T of the Merger.
To CB&T's knowledge, it has not received notice as of the date hereof
that any Bank Regulator intends to disapprove or object to the completion of
the transactions contemplated by this Agreement.
4.6. Financial Statements.
4.6.1. CB&T has previously made available to AANB the CB&T
Financial Statements. Except as disclosed in CB&T DISCLOSURE SCHEDULE 4.6,
the CB&T Financial Statements have been prepared in accordance with GAAP, and
(including the related notes where applicable) fairly present in each case in
all material respects (subject in the case of the unaudited interim statements
to normal year-end adjustments) the consolidated financial position, results
of operations and cash flows of CB&T and the CB&T Subsidiaries on a
consolidated basis as of and for the respective periods ending on the dates
thereof, in accordance with GAAP during the periods involved, except as
indicated in the notes thereto, or in the case of unaudited statements as
permitted by Form 10-Q.
4.6.2. Except as disclosed in CB&T DISCLOSURE SCHEDULE 4.6, at the
date of each balance sheet included in the CB&T Financial Statements, CB&T
did not have any liability, obligation or loss contingency of any nature
(whether absolute, accrued, contingent or otherwise) of a type required to
be reflected in such CB&T Financial Statements or in the footnotes thereto
which were not fully reflected or reserved against therein or fully disclosed
in a footnote thereto, except for liabilities, obligations and loss
contingencies which were not material individually or in the aggregate or which
are incurred in the ordinary course of business, consistent with past practice,
and except for liabilities, obligations and loss contingencies which are
within the subject matter of a specific representation and warranty herein
and subject, in the case of any unaudited statements, to normal, recurring
audit adjustments and the absence of footnotes.
4.7. Taxes.
Except as set forth in CB&T DISCLOSURE SCHEDULE 4.7, CB&T and the
CB&T Subsidiaries that are at least 80 percent owned by CB&T are members of
the same affiliated group within the meaning of Code Section 1504(a) and (A)
CB&T has duly filed all federal, state and material local tax returns
required to be filed by or with respect to CB&T and each Significant
Subsidiary of CB&T on or prior to the Closing Date, taking into account any
extensions (all such returns, to CB&T's Knowledge, being accurate and correct
in all material respects) and has duly paid or made provisions for the payment
of all material federal, state and local taxes which have been incurred by or
are due or claimed to be due from CB&T and any Significant Subsidiary of CB&T
by any taxing authority or pursuant to any written tax sharing agreement on
or prior to the Closing Date other than taxes or other charges which (i) are
not delinquent, (ii) are being contested in good faith, or (iii) have not
yet been fully determined, (B) as of the date of this Agreement, CB&T has
received no written notice of, and to CB&T's Knowledge there is no audit
examination, deficiency assessment, tax investigation or refund litigation
with respect to any taxes of CB&T or any of its Significant Subsidiaries,
and no claim has been made by any authority in a jurisdiction where CB&T or
any of its Significant Subsidiaries do not file tax returns that CB&T or
any such Significant Subsidiary is subject to taxation in that jurisdiction
and (C) CB&T and its Significant Subsidiaries have not executed an
extension or waiver of any statute of limitations on the assessment or
collection of any material tax due that is currently in effect. CB&T and each
of its Significant Subsidiaries has withheld and paid all taxes required to
have been withheld and paid in connection with amounts paid or owing to any
employee, independent contractor, creditor, stockholder or other third
party, and CB&T and each of its Significant Subsidiaries, to CB&T's
Knowledge, has timely complied with all applicable information reporting
requirements under Part III, Subchapter A of Chapter 61 of the Code and similar
applicable state and local information reporting requirements.
4.8. No Material Adverse Effect.
Except as disclosed in CB&T DISCLOSURE SCHEDULE 4.8, CB&T and the
CB&T Subsidiaries, taken as a whole, have not suffered any Material Adverse
Effect since December 31, 2003 and no event has occurred or circumstance
arisen since that date which, in the aggregate, has had or is reasonably
likely to have a Material Adverse Effect on CB&T and the CB&T Subsidiaries,
taken as a whole.
4.9. Material Contracts; Leases; Defaults.
4.9.1. Except as set forth in CB&T DISCLOSURE SCHEDULE 4.9.1,
neither CB&T nor any CB&T Subsidiary is a party to or subject to: (i) any
employment, consulting or severance contract with any past or present officer,
director or employee of CB&T or any CB&T Subsidiary, except for "at will"
arrangements; (ii) any plan or contract providing for bonuses, pensions,
options, deferred compensation, retirement payments, profit sharing or similar
material arrangements for or with any past or present officers, directors
or employees of CB&T or any CB&T Subsidiary; (iii) any collective
bargaining agreement with any labor union relating to employees of CB&T or any
CB&T Subsidiary; (iv) any agreement which by its terms limits the payment
of dividends by CB&T or any CB&T Subsidiary; (v) any instrument evidencing
or related to material indebtedness for borrowed money whether directly
or indirectly, by way of purchase money obligation, conditional sale, lease
purchase, guaranty or otherwise, in respect of which CB&T or any CB&T
Subsidiary is an obligor to any person, which instrument evidences or relates
to indebtedness other than deposits, repurchase agreements, bankers'
acceptances, and "treasury tax and loan" accounts established in the ordinary
course of business and transactions in "federal funds" or which contains
financial covenants or other restrictions (other than those relating to
the payment of principal and interest when due) which would be applicable
on or after the Closing Date to AANB or any AANB Subsidiary; (vi) any other
agreement, written or oral, that obligates CB&T or any CB&T Subsidiary
for the payment of more than $100,000 annually; or (vii) any agreement
(other than this Agreement), contract, arrangement, commitment or
understanding (whether written or oral) that restricts or limits in any
material way the conduct of business by CB&T or any CB&T Subsidiary (it being
understood that any non-compete or similar provision shall be deemed material).
4.9.2. Each real estate lease that will require the consent of
the lessor or its agent or the assignment to AANB as a result of the Merger
by virtue of the terms of any such lease, is listed in CB&T DISCLOSURE
SCHEDULE 4.9.2 identifying the section of the lease that contains such
prohibition or restriction. Subject to any consents that may be required as
a result of the transactions contemplated by this Agreement, to its
Knowledge, neither CB&T nor any CB&T Subsidiary is in default in any
material respect under any material contract, agreement, commitment,
arrangement, lease, insurance policy or other instrument to which it is a party,
by which its assets, business, or operations may be bound or affected, or
under which it or its assets, business, or operations receive benefits, and
there has not occurred any event that, with the lapse of time or the giving of
notice or both, would constitute such a default.
4.9.3. True and correct copies of agreements, contracts, arrangements
and instruments referred to in Section 4.9.1 and 4.9.2 have been made
available to AANB on or before the date hereof, are listed on CB&T
DISCLOSURE SCHEDULE 4.9.1 and 4.9.2 and are in full force and effect
on the date hereof. Except as set forth in CB&T DISCLOSURE SCHEDULE 4.9.3, no
plan, contract, employment agreement, termination agreement, or similar
agreement or arrangement to which CB&T or any CB&T Subsidiary is a party or
under which CB&T or any CB&T Subsidiary may be liable contains provisions
which permit an employee or independent contractor to terminate it without
cause and continue to accrue future benefits thereunder. No such agreement,
plan, contract, or arrangement (x) provides for acceleration in the vesting
of benefits or payments due thereunder upon the occurrence of a change
in ownership or control of CB&T or any CB&T Subsidiary or upon the occurrence
of a subsequent event; or (y) requires CB&T or any CB&T Subsidiary to provide
a benefit in the form of CB&T Common Stock or determined by reference to
the value of CB&T Common Stock. CB&T DISCLOSURE SCHEDULE 4.9.3 sets forth
an analysis of CB&T Pension Fund liability including the amounts that are
funded and unfunded.
4.10. Ownership of Property; Insurance Coverage.
4.10.1. CB&T and each CB&T Subsidiary has good and, as to real
property, marketable title to all material assets and properties owned by
CB&T or each CB&T Subsidiary in the conduct of its businesses, whether such
assets and properties are real or personal, tangible or intangible, including
assets and property reflected in the balance sheet contained in the most recent
CB&T Financial Statements or acquired subsequent thereto (except to the extent
that such assets and properties have been disposed of in the ordinary course
of business, since the date of such balance sheet), subject to no material
encumbrances, liens, mortgages, security interests or pledges, except
(i) those items which secure liabilities for public or statutory obligations
or any discount with, borrowing from or other obligations to FHLB, inter-bank
credit facilities, reverse repurchase agreements or any transaction by a
CB&T Subsidiary acting in a fiduciary capacity, and (ii) statutory liens
for amounts not yet delinquent or which are being contested in good faith.
CB&T and the CB&T Subsidiaries, as lessee, have the right under valid and
existing leases of real and personal properties used by CB&T and the CB&T
Subsidiaries in the conduct of their businesses to occupy or use all such
properties as presently occupied and used by each of them. Such existing
leases and commitments to lease constitute or will constitute operating
leases for both tax and financial accounting purposes and the lease expense
and minimum rental commitments with respect to such leases and lease
commitments are as disclosed in all material respects in the notes to the CB&T
Financial Statements.
4.10.2. With respect to all material agreements pursuant to which
CB&T or any CB&T Subsidiary has purchased securities subject to an agreement
to resell, if any, CB&T or such CB&T Subsidiary, as the case may be, has a
lien or security interest (which to CB&T's Knowledge is a valid, perfected
first lien) in the securities or other collateral securing the repurchase
agreement, and the value of such collateral equals or exceeds the amount of
the debt secured thereby.
4.10.3. CB&T and each Significant Subsidiary of CB&T currently
maintain insurance considered by each of them to be reasonable for their
respective operations. Neither CB&T nor any Significant Subsidiary of CB&T
has received notice from any insurance carrier that (i) such insurance will
be canceled or that coverage thereunder will be reduced or eliminated, or
(ii) premium costs with respect to such policies of insurance will be
substantially increased. There are presently no material claims pending
under such policies of insurance and no notices have been given by CB&T or any
Significant Subsidiary of CB&T under such policies. All such insurance is
valid and enforceable and in full force and effect, and within the last
three (3) years CB&T and each Significant Subsidiary of CB&T has received
each type of insurance coverage for which it has applied and during such
periods has not been denied indemnification for any material claims submitted
under any of its insurance policies. CB&T DISCLOSURE SCHEDULE 4.10.3
identifies all policies of insurance maintained by CB&T and each
Significant Subsidiary of CB&T as well as the other matters required to be
disclosed under this Section.
4.11. Legal Proceedings.
Except as set forth in CB&T DISCLOSURE SCHEDULE 4.11, neither CB&T
nor any CB&T Subsidiary is a party to any, and there are no pending or, to
CB&T's Knowledge, threatened legal, administrative, arbitration or other
proceedings, claims (whether asserted or unasserted), actions or governmental
investigations or inquiries of any nature (i) against CB&T or any CB&T
Subsidiary, (ii) to which CB&T or any CB&T Subsidiary's assets are or may be
subject, (iii) challenging the validity or propriety of any of the
transactions contemplated by this Agreement, or (iv) which could adversely
affect the ability of CB&T to perform under this Agreement, except for
any proceeding, claim, action, investigation or inquiry referred to in clauses
(i) and (ii) which, individually or in the aggregate, would not be reasonably
expected to have a Material Adverse Effect.
]
4.12. Compliance With Applicable Law.
4.12.1. Except as set forth in CB&T DISCLOSURE SCHEDULE 4.12.1, To
CB&T's Knowledge, each of CB&T and each CB&T Subsidiary is in compliance
in all material respects with all applicable federal, state, local and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders
or decrees applicable to it, its properties, assets and deposits, its
business, and its conduct of business and its relationship with its
employees, including, without limitation, the USA Patriot Act, The Bank
Secrecy Act, the Equal Credit Opportunity Act, the Fair Housing Act, the
Community Reinvestment Act of 1977 ("CRA"), the Home Mortgage Disclosure Act,
and all other applicable fair lending laws and other laws relating to
discriminatory business practices and neither CB&T nor any CB&T Subsidiary
has received any written notice to the contrary.
4.12.2. Each of CB&T and each CB&T Subsidiary has all material
permits, licenses, authorizations, orders and approvals of, and has made all
filings, applications and registrations with, all Bank Regulators that
are required in order to permit it to own or lease its properties and to
conduct its business as presently conducted; all such permits, licenses,
certificates of authority, orders and approvals are in full force and effect
and, to the Knowledge of CB&T, no suspension or cancellation of any such permit,
license, certificate, order or approval is threatened or will result from the
consummation of the transactions contemplated by this Agreement, subject to
obtaining the approvals set forth in Section 8.3.
4.12.3. Except as set forth in CB&T DISCLOSURE SCHEDULE 4.12.3 for the
period beginning January 1, 2002, neither CB&T nor any CB&T Subsidiary has
received any written notification or, to CB&T's Knowledge, any other
communication from any Bank Regulator (i) asserting that CB&T or any
CB&T Subsidiary is not in material compliance with any of the statutes,
regulations or ordinances which such Bank Regulator enforces; (ii)
threatening to revoke any license, franchise, permit or governmental
authorization which is material to CB&T or any CB&T Subsidiary; (iii)
requiring or threatening to require CB&T or any CB&T Subsidiary, or
indicating that CB&T or any CB&T Subsidiary may be required, to enter into
a cease and desist order, agreement or memorandum of understanding or any
other agreement with any federal or state governmental agency or authority
which is charged with the supervision or regulation of banks or engages in the
insurance of bank deposits restricting or limiting, or purporting to restrict
or limit, in any material respect the operations of CB&T or any CB&T
Subsidiary, including without limitation any restriction on the payment of
dividends; or (iv) directing, restricting or limiting, or purporting to
direct, restrict or limit, in any material manner the operations of CB&T or
any CB&T Subsidiary (any such notice, communication, memorandum, agreement
or order described in this sentence is hereinafter referred to as a
"Regulatory Agreement"). Except as set forth in CB&T DISCLOSURE SCHEDULE
4.12.3, neither CB&T nor any CB&T Subsidiary has consented to or entered into
any Regulatory Agreement that is currently in effect. Any such Regulatory
Agreement and all correspondence relating thereto is set forth in CB&T
DISCLOSURE SCHEDULE 4.12.3. The most recent regulatory rating given to
CB&T as to compliance with the CRA is satisfactory or better.
4.13. Employee Benefit Plans.
4.13.1. CB&T DISCLOSURE SCHEDULE 4.13.1 includes a descriptive list
of all existing bonus, incentive, deferred compensation, pension, retirement,
profit-sharing, thrift, savings, employee stock ownership, stock bonus, stock
purchase, restricted stock, stock option, stock appreciation, phantom stock,
severance, welfare benefit plans, fringe benefit plans, employment,
severance and change in control agreements and all other material benefit
practices, policies and arrangements maintained by CB&T or any CB&T
Subsidiary in which any employee or former employee, consultant or former
consultant or director or former director of CB&T or any CB&T Subsidiary
participates or to which any such employee, consultant or director is a party
or is otherwise entitled to receive benefits (the "Compensation and Benefit
Plans"). Except as set forth in CB&T DISCLOSURE SCHEDULE 4.13.1, neither
CB&T nor any of its Subsidiaries has any commitment to create any additional
Compensation and Benefit Plan or to materially modify, change or renew any
existing Compensation and Benefit Plan (any modification or change that
increases the cost of such plans would be deemed material), except as required
to maintain the qualified status thereof. CB&T has made available to AANB
true and correct copies of the Compensation and Benefit Plans. There
are no outstanding unvested or unexercised awards under any CB&T benefit
plans and there are no awards available for issuance under any such plan.
4.13.2. Except as disclosed in CB&T DISCLOSURE SCHEDULE 4.13.2,
each Compensation and Benefit Plan has been operated and administered in
all material respects in accordance with its terms and with applicable
law, including, but not limited to, ERISA, the Code, the Securities Act, the
Exchange Act, the Age Discrimination in Employment Act, COBRA, the Health
Insurance Portability and Accountability Act and any regulations or rules
promulgated thereunder, and all material filings, disclosures and notices
required by ERISA, the Code, the Securities Act, the Exchange Act, the Age
Discrimination in Employment Act and any other applicable law have been
timely made or any interest, fines, penalties or other impositions for late
filings have been paid in full. Each Compensation and Benefit Plan which is an
"employee pension benefit plan" within the meaning of Section 3(2) of
ERISA (a "Pension Plan") and which is intended to be qualified under Section
401(a) of the Code has received a favorable determination letter from the
IRS, and CB&T is not aware of any circumstances which are reasonably
likely to result in revocation of any such favorable determination letter.
There is no material pending or, to the Knowledge of CB&T, threatened action,
suit or claim relating to any of the Compensation and Benefit Plans
(other than routine claims for benefits). Neither CB&T nor any CB&T
ubsidiary has engaged in a transaction, or omitted to take any action, with
respect to any Compensation and Benefit Plan that would reasonably be expected
to subject CB&T or any CB&T Subsidiary to an unpaid tax or penalty imposed by
either Section 4975 of the Code or Section 502 of ERISA.
4.13.3. Except as set forth in CB&T DISCLOSURE SCHEDULE 4.13.3, no
liability, other than PBGC premiums arising in the ordinary course of
business, has been or is expected by CB&T or any of its Subsidiaries to be
incurred with respect to any CB&T Compensation and Benefit Plan which is a
defined benefit plan subject to Title IV of ERISA ("CB&T Defined Benefit
Plan"), or with respect to any "single-employer plan" (as defined in Section
4001(a) of ERISA) currently or formerly maintained by CB&T or any entity which
is considered one employer with CB&T under Section 4001(b)(1) of ERISA or
Section 414 of the Code (an "ERISA Affiliate") (such plan hereinafter referred
to as an "ERISA Affiliate Plan"). To the Knowledge of CB&T and any CB&T
Subsidiary, except as set forth in CB&T DISCLOSURE SCHEDULE 4.13.3, no CB&T
Defined Benefit Plan had an "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived, as of the last day of the end
of the most recent plan year ending prior to the date hereof. Except as set
forth in CB&T DISCLOSURE SCHEDULE 4.13.3, the fair market value of the
assets of each CB&T Defined Benefit Plan exceeds the present value of the
benefits guaranteed under Section 4022 of ERISA under such CB&T Defined
Benefit Plan as of the end of the most recent plan year with respect to the
respective CB&T Defined Benefit Plan ending prior to the date hereof,
calculated on the basis of the actuarial assumptions used in the most recent
actuarial valuation for such CB&T Defined Benefit Plan as of the date hereof;
and no notice of a "reportable event" (as defined in Section 4043 of
ERISA) for which the 30-day reporting requirement has not been waived
has been required to be filed for an y CB&T Defined Benefit Plan within
the 12-month period ending on the date hereof. Except as set forth in CB&T
DISCLOSURE SCHEDULE 4.13.3, neither CB&T nor any of its Subsidiaries has
provided, or is required to provide, security to any CB&T Defined Benefit
Plan or to any single-employer plan of an ERISA Affiliate pursuant to
Section 401(a)(29) of the Code or has taken any action, or omitted to take
any action, that has resulted, or would reasonably be expected to result in
the imposition of a lien under Section 412(n) of the Code or pursuant to ERISA.
To the Knowledge of CB&T, and except as set forth in CB&T DISCLOSURE
SCHEDULE 4.13.3, there is no pending investigation or enforcement action by
any Bank Regulator with respect to any Compensation and Benefit Plan or any
ERISA Affiliate Plan.
4.13.4. With respect to any CB&T Defined Benefit Plan that is a
"multi-employer plan" as such term is defined in section 3(37) of ERISA,
covering employees of CB&T or any ERISA Affiliate, (i) neither the Company
nor any ERISA Affiliate has made or suffered a "complete withdrawal" or
"partial withdrawal," as such terms are respectively defined in sections
4203 and 4205 of ERISA, (ii) no event has occurred, and no circumstances exist,
that alone or with the passage of time present a material risk of a complete or
partial withdrawal, and (iii) neither CB&T or any ERISA Affiliate has any
contingent liability under section 4204 of ERISA and no circumstances exist
that present a material risk that any such plan will go into reorganization
CB&T DISCLOSURE SCHEDULE 4.13.4 lists CB&T's best estimate of the amount
of withdrawal liability that would be incurred if CB&T and each ERISA
Affiliate were to make a complete withdrawal from such plan as of the
Effective Time and also states the aggregate withdrawal liability of CB&T
and the ERISA Affiliates. There are no "unfunded vested benefits" (within
the meaning of section 4211 of ERISA) as of the end of the most recently
completed plan year and as of the date of this Agreement.
4.13.5. All material contributions required to be made under the
terms of any Compensation and Benefit Plan or ERISA Affiliate Plan or any
employee benefit arrangements to which CB&T or any CB&T Subsidiary is a
party or a sponsor have been timely made, and all anticipated contributions
and funding obligations are accrued on CB&T's consolidated financial
statements to the extent required by GAAP. CB&T and its Subsidiaries have
expensed and accrued as a liability the present value of future benefits under
each applicable Compensation and Benefit Plan for financial reporting
purposes as required by GAAP.
4.13.6. Neither CB&T nor any CB&T Subsidiary has any obligations to
provide retiree health, life insurance, disability insurance, or other
retiree death benefits under any Compensation and Benefit Plan, other
than benefits mandated by Section 4980B of the Code. Except as set forth in
CB&T DISCLOSURE SCHEDULE 4.13.6, there has been no communication to
employees by CB&T or any CB&T Subsidiary that would reasonably be expected
to promise or guarantee such employees retiree health, life insurance,
disability insurance, or other retiree death benefits.
4.13.7. Except as set forth in CB&T DISCLOSURE SCHEDULE 4.13.7,
CB&T and its Subsidiaries do not maintain any Compensation and Benefit Plans
covering employees who are not United States residents.
4.13.8. Except as set forth in CB&T DISCLOSURE SCHEDULE 4.13.8,
with respect to each Compensation and Benefit Plan, if applicable, CB&T
has provided or made available to AANB copies of the: (A) trust instruments
and insurance contracts, (B) two (2) most recent Forms 5500 filed with the
IRS, (C) two (2) most recent actuarial report and financial statement;
(D) most recent summary plan description, (E) most recent determination letter
issued by the IRS; (F) any Form 5310 or Form 5330 filed with the IRS within
the last two years, and (G) most recent nondiscrimination tests performed
under ERISA and the Code (including 401(k) and 401(m) tests), if
applicable.
4.13.9. The consummation of the Merger will not, directly or
indirectly (including, without limitation, as a result of any termination
of employment or service at any time prior to or following the Effective
Time) (A) entitle any employee, consultant or director to any payment or
benefit (including severance pay, change in control benefit, or similar
compensation) or any increase in compensation, (B) result in the vesting
or acceleration of any benefits under any Compensation and Benefit Plan or
(C) result in any material increase in benefits payable under any Compensation
and Benefit Plan.
4.13.10. Neither CB&T nor any CB&T Subsidiary maintains any
compensation plans, programs or arrangements under which any payment is
reasonably likely to become non-deductible, in whole or in part, for tax
reporting purposes as a result of the limitations under Section 162(m) of the
Code and the regulations issued thereunder.
4.13.11. To the Knowledge of CB&T, the consummation of the Merger
will not, directly or indirectly (including without limitation, as a result
of any termination of employment or service at any time prior to or following
the Effective Time), entitle any current or former employee, director or
independent contractor of CB&T or any CB&T Subsidiary to any actual or deemed
payment (or benefit) which could constitute a "parachute payment" (as such
term is defined in Section 280G of the Code).
4.13.12. There are no stock appreciation or similar rights, earned
dividends or dividend equivalents, or shares of restricted stock,
outstanding under any of the Compensation and Benefit Plans or otherwise
as of the date hereof and none will be granted, awarded, or credited after the
date hereof.
4.13.13. CB&T DISCLOSURE SCHEDULE 4.13.13 includes a schedule of
all termination benefits and related payments that would be payable to the
individuals identified thereon, under any and all employment agreements,
special termination agreements, change in control agreements, supplemental
executive retirement plans, deferred bonus plans, deferred compensation plans,
salary continuation plans, or any material compensation arrangement, or other
pension benefit or welfare benefit plan maintained by CB&T or any CB&T
Subsidiary for the benefit of officers, employee or directors of CB&T or any
CB&T Subsidiary (the "Benefits Schedule"), assuming their employment or
service is terminated as of December 31, 2004 and the Closing Date occurs
on such date and based on the other assumptions specified in such schedule.
No other individuals are entitled to benefits under any such plans.
4.14. Brokers, Finders and Financial Advisors.
Neither CB&T nor any CB&T Subsidiary, nor any of their respective
officers, directors, employees or agents, has employed any broker, finder
or financial advisor other than ▇▇▇▇▇ ▇▇▇▇▇▇ & Co. and ▇▇▇▇▇▇ & Company,
Inc. in connection with the transactions contemplated by this Agreement,
or incurred any liability or commitment for any fees or commissions to any
such person other than ▇▇▇▇▇ ▇▇▇▇▇▇ & Co. and ▇▇▇▇▇▇ & Company, Inc. in
connection with the transactions contemplated by this Agreement. CB&T
DISCLOSURE SCHEDULE 4.14 sets forth the executed engagement letters between
CB&T and ▇▇▇▇▇ ▇▇▇▇▇▇ & Co. and ▇▇▇▇▇▇ & Company, Inc.
4.15. Environmental Matters.
4.15.1. Except as may be set forth in CB&T DISCLOSURE SCHEDULE
4.15 and any Phase I Environmental Report identified therein, with respect
to CB&T and each CB&T Subsidiary:
(A) Each of CB&T and the CB&T Subsidiaries and, to CB&T's Knowledge,
the Participation Facilities and Loan Properties are, and have been, in
substantial compliance with, and are not liable under, any Environmental Laws;
(B) CB&T has received no written notice that there is
any suit, claim, action, demand, executive or administrative order,
directive, investigation or proceeding pending and, to CB&T's Knowledge,
no such action is threatened, before any court, governmental agency or other
forum against it or any of the CB&T Subsidiaries or any Participation Facility
(x) for alleged noncompliance (including by any predecessor) with, or liability
under, any Environmental Law or (y) relating to the presence of or release
into the environment of any Materials of Environmental Concern (as defined
herein), whether or not occurring at or on a site owned, leased or operated by
it or any of the CB&T Subsidiaries or any Participation Facility;
(C) CB&T has received no written notice that there is
any suit, claim, action, demand, executive or administrative order,
directive, investigation or proceeding pending and, to CB&T's Knowledge no
such action is threatened, before any court, governmental agency or other
forum relating to or against any Loan Property (or CB&T or any of the CB&T
Subsidiaries in respect of such Loan Property) (x) relating to alleged
noncompliance (including by any predecessor) with, or liability under, any
Environmental Law or (y) relating to the presence of or release into the
environment of any Materials of Environmental Concern, whether or not
occurring at or on a site owned, leased or operated by a Loan Property;
(D) To CB&T's Knowledge, the properties currently owned
or operated by CB&T or any CB&T Subsidiary (including, without limitation,
soil, groundwater or surface water on, or under the properties, and buildings
thereon) are not contaminated with and do not otherwise contain any Materials
of Environmental Concern other than as permitted under applicable Environmental
Law;
(E) Neither CB&T nor any CB&T Subsidiary has received any
written notice, demand letter, executive or administrative order,
directive or request for information from any federal, state, local or
foreign governmental entity or any third party indicating that it may be in
violation of, or liable under, any Environmental Law;
(F) To CB&T's Knowledge, there are no underground storage
tanks on, in or under any properties owned or operated by CB&T or any of
the CB&T Subsidiaries or any Participation Facility, and to CB&T's
Knowledge, no underground storage tanks have been closed or removed from any
properties owned or operated by CB&T or any of the CB&T Subsidiaries or any
Participation Facility; and
(G) To CB&T's Knowledge, during the period of (s) CB&T's or
any of the CB&T Subsidiaries' ownership or operation of any of their
respective current properties or (t) CB&T's or any of the CB&T
Subsidiaries' participation in the management of any Participation Facility,
there has been no contamination by or release of Materials of Environmental
Concerns in, on, under or affecting such properties that could reasonably be
expected to result in material liability under the Environmental Laws. To
CB&T's Knowledge, prior to the period of (x) CB&T's or any of the CB&T
Subsidiaries' ownership or operation of any of their respective current
properties or (y) CB&T's or any of the CB&T Subsidiaries' participation in the
management of any Participation Facility, there was no contamination by or
release of Materials of Environmental Concern in, on, under or affecting
such properties that could reasonably be expected to result in material
liability under the Environmental Laws.
4.15.2. "Loan Property" means any property in which the
applicable party (or a Subsidiary of it) holds a security interest,
and, where required by the context, includes the owner or operator of such
property, but only with respect to such property. "Participation Facility"
means any facility in which the applicable party (or a Subsidiary of it)
participates in the management (including all property held as trustee
or in any other fiduciary capacity) and, where required by the context,
includes the owner or operator of such property, but only with respect to
such property.
4.16. Loan Portfolio.
4.16.1. The allowance for loan losses reflected in the notes to
CB&T's audited consolidated statement of financial condition at December
31, 2003 was, and the allowance for loan losses shown in the notes to the
CB&T's unaudited consolidated financial statements for periods ending
after December 31, 2003 were, or will be, adequate, as of the dates thereof,
under GAAP.
4.16.2. CB&T DISCLOSURE SCHEDULE 4.16.2 sets forth a listing, as
of the most recently available date, by account, of: (A) each borrower,
customer or other party which has notified CB&T or any other CB&T Subsidiary
during the past twelve months of, or has asserted against CB&T or any other
CB&T Subsidiary, in each case in writing, any "lender liability" or similar
claim, and, to the knowledge of CB&T, each borrower, customer or other
party which has given CB&T or any other CB&T Subsidiary any oral
notification of, or orally asserted to or against CB&T or any other CB&T
Subsidiary, any such claim; and (B) all loans, (1) that are contractually
past due 90 days or more in the payment of principal and/or interest, (2)
that are on non-accrual status, (3) that as of the date of this Agreement are
classified as "Other Loans Specially Mentioned", "Special Mention",
"Substandard", "Doubtful", "Loss", "Classified", "Criticized", "Watch
list" or words of similar import, together with the principal amount of
and accrued and unpaid interest on each such Loan and the identity of the
obligor thereunder, (4) where the interest rate terms have been reduced
and/or the maturity dates have been extended subsequent to the agreement
under which the loan was originally created due to concerns regarding the
borrower's ability to pay in accordance with such initial terms, or (5) where a
specific reserve allocation exists in connection therewith; and (C) all other
assets classified by CB&T or any other CB&T Subsidiary as real estate
acquired through foreclosure or in lieu of foreclosure, including in-substance
foreclosures, and all other assets currently held that were acquired through
foreclosure or in lieu of foreclosure.
4.16.3. All loans receivable (including discounts) and accrued
interest entered on the books of CB&T and the CB&T Subsidiaries arose out of
bona fide arm's-length transactions, were made for good and valuable
consideration in the ordinary course of CB&T's or the appropriate CB&T
Subsidiary's respective business, and the notes or other evidences of
indebtedness with respect to such loans (including discounts) are true and
genuine and are what they purport to be, except as set forth in CB&T
DISCLOSURE SCHEDULE 4.16.3. To the Knowledge of CB&T, the loans,
discounts and the accrued interest reflected on the books of CB&T and the
CB&T Subsidiaries are subject to no defenses, set-offs or counterclaims
(including, without limitation, those afforded by usury or truth-in-lending
laws), except as may be provided by bankruptcy, insolvency or similar laws
affecting creditors' rights generally or by general principles of equity.
Except as set forth in CB&T DISCLOSURE SCHEDULE 4.16.3, all such loans are
owned by CB&T or the appropriate CB&T Subsidiary free and clear of any liens.
4.16.4. The notes and other evidences of indebtedness evidencing
the loans described above, and all pledges, mortgages, deeds of trust and
other collateral documents or security instruments relating thereto are,
in all material respects, valid, true and genuine, and what they purport to be.
4.17. Securities Documents.
CB&T has made available to AANB copies of its (i) annual reports
on Form 10-K for the years ended December 31, 2003, 2002 and 2001, (ii)
quarterly reports on Form 10-Q for the quarters ended March 31, June 30
and September 30, 2004, and (iii) proxy materials used or for use in connection
with its meetings of stockholders held in 2004, 2003 and 2002. Such reports
and proxy materials complied, at the time filed with the FRB, in all
material respects, with the applicable regulations of the FRB.
4.18. Related Party Transactions.
Except as described in CB&T's Proxy Statement distributed in
connection with the annual meeting of stockholders held in June 2004 (which
has previously been provided to AANB), or as set forth in CB&T DISCLOSURE
SCHEDULE 4.18, neither CB&T nor any CB&T Subsidiary is a party to any
transaction (including any loan or other credit accommodation) with any
Affiliate of CB&T or any CB&T Subsidiary. Except as described in CB&T's Proxy
Statement, all such transactions (a) were made in the ordinary course of
business, (b) were made on substantially the same terms, including interest
rates and collateral, as those prevailing at the time for comparable
transactions with other Persons, and (c) did not involve more than the normal
risk of collectibility or present other unfavorable features. No loan or
credit accommodation to any Affiliate of CB&T or any CB&T Subsidiary is
presently in default or, during the three (3) year period prior to the
date of this Agreement, has been in default or has been restructured,
modified or extended except for rate modifications pursuant to CB&T's loan
modification policy that is applicable to all Persons. Neither CB&T nor any
CB&T Subsidiary has been notified that principal and interest with respect to
any such loan or other credit accommodation will not be paid when due
or that the loan grade classification accorded such loan or credit accommodation
by CB&T is inappropriate.
4.19. Deposits.
None of the deposits of any CB&T Subsidiary is a "brokered deposit"
as defined in 12 C.F.R. Section 337.6(a)(2).
4.20. Antitakeover Provisions Inapplicable; Required Vote.
The Board of Directors of CB&T has, to the extent such statute
is applicable, taken all action (including appropriate approvals of the
Board of Directors of CB&T) necessary to exempt AANB, the Merger, this
Agreement and the transactions contemplated hereby from Article 14.1 of the
Virginia Stock Corporation Act. The affirmative vote of a majority of the
issued and outstanding shares of CB&T Common Stock is required to approve
this Agreement and the Merger under CB&T's articles of incorporation and
Virginia law.
4.21. Registration Obligations.
Neither CB&T nor any CB&T Subsidiary is under any obligation,
contingent or otherwise, which will survive the Effective Time by reason of
any agreement to register any transaction involving any of its securities
under the Securities Act, or with the FRB.
4.22. Risk Management Instruments.
All material interest rate swaps, caps, floors, option agreements,
futures and forward contracts and other similar risk management arrangements,
whether entered into for CB&T's own account, or for the account of one or
more of CB&T's Subsidiaries or their customers (all of which are set forth
in CB&T DISCLOSURE SCHEDULE 4.22), were in all material respects entered
into in compliance with all applicable laws, rules, regulations and
regulatory policies, and to the Knowledge of CB&T and each CB&T Subsidiary,
with counterparties believed to be financially responsible at the time; and
to CB&T's and each CB&T Subsidiary's Knowledge each of them constitutes
the valid and legally binding obligation of CB&T or such CB&T Subsidiary,
enforceable in accordance with its terms (except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and similar laws of general applicability relating to or
affecting creditors' rights or by general equity principles), and is in full
force and effect. Neither CB&T nor any CB&T Subsidiary, nor, to the
Knowledge of CB&T, any other party thereto, is in breach of any of its
obligations under any such agreement or arrangement in any material respect.
4.23. Intellectual Property.
CB&T and each Significant Subsidiary of CB&T owns or, to CB&T's
Knowledge, possesses valid and binding licenses and other rights to use all
patents, copyrights, trade secrets, trade names, servicemarks and trademarks
used in their business, each without payment, and neither CB&T nor any
Significant Subsidiary of CB&T has received any notice of conflict with
respect thereto that asserts the rights of others. CB&T and each
Significant Subsidiary of CB&T have performed all the obligations required
to be performed, and are not in default in any respect, under any contract,
agreement, arrangement or commitment relating to any of the foregoing.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF AANB
AANB represents and warrants to CB&T that the statements contained
in this Article V are correct as of the date of this Agreement, except as set
forth in the AANB DISCLOSURE SCHEDULE delivered by AANB to CB&T on the
date hereof. AANB has made a good faith effort to ensure that the
disclosure on each schedule of the AANB DISCLOSURE SCHEDULE corresponds
to the section referenced herein. However, or purposes of the AANB DISCLOSURE
SCHEDULE, any item disclosed on any schedule therein is deemed to be
fully disclosed with respect to all schedules under which such item may
be relevant as and to the extent that it is reasonably apparent that such
item applies to such other schedule. References to the Knowledge of AANB
shall include the Knowledge of The ▇▇▇▇▇ National Bank.
5.1. Standard.
No representation or warranty of AANB contained in this Article V
shall be deemed untrue or incorrect, and AANB shall not be deemed to have
breached a representation or warranty, as a consequence of the existence of
any fact, circumstance or event unless such fact, circumstance or event,
individually or taken together with all other facts, circumstances or events
inconsistent with any paragraph of Article V, has had or is reasonably
expected to have a Material Adverse Effect; provided, however, that the
foregoing standard shall not apply to representations and warranties
contained in Sections 5.2, 5.3 and 5.4, which shall be deemed untrue,
incorrect and breached if they are not true and correct in all material
respects.
5.2. Organization.
5.2.1. AANB is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, and is duly
registered as a bank holding company under the Bank Holding Company Act of
1956, as amended. AANB has full corporate power and authority to carry on
its business as now conducted and is duly licensed or qualified to do
business in the states of the United States and foreign jurisdictions where
its ownership or leasing of property or the conduct of its business requires
such qualification.
5.2.2. The ▇▇▇▇▇ National Bank is a national bank duly organized,
validly existing and in good standing under the laws of the United States.
The deposits of The ▇▇▇▇▇ National Bank are insured by the FDIC to the
fullest extent permitted by law, and all premiums and assessments required
to be paid in connection therewith have been paid when due. The ▇▇▇▇▇ National
Bank is a member in good standing of the FHLB and owns the requisite amount of
stock therein.
5.2.3. AANB DISCLOSURE SCHEDULE 5.2.3 sets forth each AANB
Subsidiary. Each AANB Subsidiary (other than The ▇▇▇▇▇ National Bank) is
a corporation or limited liability company duly organized, validly existing
nd in good standing under the laws of its jurisdiction of incorporation or
organization.
5.3. Capitalization.
5.3.1. The authorized capital stock of AANB consists of
5,000,000 shares of AANB Common Stock, of which 3,322,820 shares are
outstanding, validly issued, fully paid and nonassessable and free of
preemptive rights. There are 18,084 shares of AANB Common Stock held
by AANB as treasury stock. Neither AANB nor any AANB Subsidiary has or
is bound by any Rights of any character relating to the purchase, sale or
issuance or voting of, or right to receive dividends or other distributions
on any shares of AANB Common Stock, or any other security of AANB or any
securities representing the right to vote, purchase or otherwise receive
any shares of AANB Common Stock or any other security of AANB, other than shares
issuable under the AANB Stock Benefit Plans.
5.3.2. AANB owns all of the common stock of The ▇▇▇▇▇ National Bank.
Either AANB or The ▇▇▇▇▇ National Bank owns all of the outstanding shares of
capital stock of each AANB Subsidiary.
5.3.3. Except as set forth in AANB DISCLOSURE SCHEDULE 5.3.3, or
as is set forth in the AANB proxy statement, to the Knowledge of AANB, no
Person is the beneficial owner (as defined in Section 13(d) of the Exchange
Act) of 5% or more of the outstanding shares of AANB Common Stock.
5.3.4. No bonds, debentures, notes or other indebtedness having
the right to vote on any matters on which AANB's stockholders may vote has
been issued by AANB and are outstanding.
5.4. Authority; No Violation.
5.4.1. AANB has full corporate power and authority to execute
and deliver this Agreement and, subject to receipt of the required
Regulatory Approvals, to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement by AANB and the completion by AANB
of the transactions contemplated hereby, up to and including the Merger,
have been duly and validly approved by the Board of Directors of AANB, and
no other corporate proceedings on the part of AANB are necessary to complete
the transactions contemplated hereby, up to and including the Merger. This
Agreement has been duly and validly executed and delivered by AANB, and
subject to the receipt of the Regulatory Approvals described in Section
8.3 hereof constitutes the valid and binding obligations of AANB and The
▇▇▇▇▇ National Bank, enforceable against AANB in accordance with its terms,
subject to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally, and subject, as to enforceability, to general
principles of equity.
5.4.2. (A) The execution and delivery of this Agreement by AANB,
(B) subject to receipt of the Regulatory Approvals, and CB&T's and AANB's
compliance with any conditions contained therein, and subject to the receipt
of the approval of the stockholders of CB&T, the consummation of the
transactions contemplated hereby, and (C) compliance by AANB with any of
the terms or provisions hereof will not (i) conflict with or result in a
breach of any provision of the certificate of incorporation or bylaws of
AANB or any AANB Subsidiary; (ii) violate any statute, code, ordinance, rule,
regulation, judgment, order, writ, decree or injunction applicable to AANB or
any AANB Subsidiary or any of their respective properties or assets; or
(iii) violate, conflict with, result in a breach of any provisions of,
constitute a default (or an event which, with notice or lapse of time, or
both, would constitute a default), under, result in the termination of,
accelerate the performance required by, or result in a right of termination
or acceleration or the creation of any lien, security interest, charge or other
encumbrance upon any of the properties or assets of AANB or any AANB
Subsidiary under any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, deed of trust, license, lease, agreement or
other investment or obligation to which any of them is a party, or by
which they or any of their respective properties or assets may be bound or
affected, except for such violations, conflicts, breaches or defaults under
clause (ii) or (iii) hereof which, either individually or in the aggregate,
will not have a Material Adverse Effect on AANB and the AANB Subsidiaries
taken as a whole.
5.5. Consents.
Except for the regulatory approvals referred to in Section 8.3 hereof
and compliance with any conditions contained therein, and the approval of this
Agreement by the requisite vote of the stockholders of CB&T, no consents,
waivers or approvals of, or filings or registrations with, any Governmental
Entity or Bank Regulator are necessary, and, to the Knowledge of AANB, no
consents, waivers or approvals of, or filings or registrations with, any
other third parties are necessary, in connection with the execution and
delivery of this Agreement by AANB and the completion by AANB of the Merger.
To AANB's knowledge, it has not received notice as of the date hereof that,
any Bank Regulator intends to disapprove or object to the completion
of the transactions contemplated by this Agreement.
5.6. Financial Statements.
AANB has previously made available to CB&T the AANB Financial
Statements. The AANB Financial Statements have been prepared in accordance
with GAAP, and (including the related notes where applicable) fairly present
in each case in all material respects (subject in the case of the unaudited
interim statements to normal year-end adjustments) the consolidated
financial position, results of operations and cash flows of AANB and the
AANB Subsidiaries on a consolidated basis as of and for the respective
periods ending on the dates thereof, in accordance with GAAP during the
periods involved, except as indicated in the notes thereto, or in the
case of unaudited statements, as permitted by Form 10-Q.
5.7. Taxes.
AANB and the AANB Subsidiaries that are at least 80 percent
owned by AANB are members of the same affiliated group within the meaning of
Code Section 1504(a). AANB has duly filed all federal, state and material
local tax returns required to be filed by or with respect to AANB and each
Significant Subsidiary of AANB on or prior to the Closing Date, taking into
account any extensions (all such returns, to the Knowledge of AANB, being
accurate and correct in all material respects) and has duly paid or made
provisions for the payment of all material federal, state and local taxes
which have been incurred by or are due or claimed to be due from AANB and
any Significant Subsidiary of AANB by any taxing authority or pursuant to any
written tax sharing agreement on or prior to the Closing Date other than
taxes or other charges which (i) are not delinquent, (ii) are being
contested in good faith, or (iii) have not yet been fully determined. As of
the date of this Agreement, AANB has received no notice of, and to the
Knowledge of AANB, there is no audit examination, deficiency assessment,
tax investigation or refund litigation with respect to any taxes of AANB or
any of its Significant Subsidiaries, and no claim has been made by any
authority in a jurisdiction where AANB or any of its Significant Subsidiaries
do not file tax returns that AANB or any such Significant Subsidiary is
subject to taxation in that jurisdiction. Except as set forth in AANB
DISCLOSURE SCHEDULE 5.7, AANB and its Significant Subsidiaries have not
executed an extension or waiver of any statute of limitations on the
assessment or collection of any material tax due that is currently in effect.
AANB and each of its Significant Subsidiaries has withheld and paid all taxes
required to have been withheld and paid in connection with amounts paid or
owing to any employee, independent contractor, creditor, stockholder or
other third party, and AANB and each of its Significant Subsidiaries, to
the Knowledge of AANB, has timely complied with all applicable information
reporting requirements under Part III, Subchapter A of Chapter 61 of the Code
and similar applicable state and local information reporting requirements.
5.8. No Material Adverse Effect.
Except as disclosed in AANB's Securities Documents filed on or
prior to the date hereof, AANB and the AANB Subsidiaries, taken as a whole,
have not suffered any Material Adverse Effect since December 31, 2003 and no
event has occurred or circumstance arisen since that date which, in the
aggregate, has had or is reasonably likely to have a Material Adverse Effect
on AANB and the AANB Subsidiaries, taken as a whole.
5.9. Ownership of Property; Insurance Coverage.
5.9.1. AANB and each Significant Subsidiary of AANB has good and,
as to real property, marketable title to all material assets and properties
owned by AANB or each Significant Subsidiary of AANB in the conduct of its
businesses, whether such assets and properties are real or personal, tangible
or intangible, including assets and property reflected in the balance sheets
contained in the AANB Financial Statements or acquired subsequent
thereto (except to the extent that such assets and properties have been
disposed of in the ordinary course of business, since the date of such
balance sheets), subject to no material encumbrances, liens, mortgages,
security interests or pledges, except (i) those items which secure liabilities
for public or statutory obligations or any discount with, borrowing from or
other obligations to FHLB, inter-bank credit facilities, or any transaction by
a Significant Subsidiary of AANB acting in a fiduciary capacity, and (ii)
statutory liens for amounts not yet delinquent or which are being contested in
good faith. AANB and the Significant Subsidiaries of AANB, as lessee,
have the right under valid and subsisting leases of real and personal
properties used by AANB and the Significant Subsidiaries of AANB in the
conduct of their businesses to occupy or use all such properties as
presently occupied and used by each of them.
5.9.2. AANB and each Significant Subsidiary of AANB currently
maintain insurance considered by AANB to be reasonable for their respective
operations. Neither AANB nor any Significant Subsidiary of AANB has received
notice from any insurance carrier that such insurance will be canceled or
that coverage thereunder will be reduced or eliminated. All such insurance
is valid and enforceable and in full force and effect, and within the
last three (3) years AANB and each Significant Subsidiary of AANB has
received each type of insurance coverage for which it has applied and during
such periods has not been denied indemnification for any material claims
submitted under any of its insurance policies except as disclosed in AANB
DISCLOSURE SCHEDULE 5.9.2.
5.10. Legal Proceedings.
Except as disclosed in AANB DISCLOSURE SCHEDULE 5.10, neither AANB
nor any AANB Subsidiary is a party to any, and there are no pending or, to
AANB's Knowledge, threatened legal, administrative, arbitration or other
proceedings, claims (whether asserted or unasserted), actions or governmental
investigations or inquiries of any nature (i) against AANB or any AANB
Subsidiary, (ii) to which AANB or any AANB Subsidiary's assets are or may be
subject, (iii) challenging the validity or propriety of any of the
transactions contemplated by this Agreement, or (iv) which could adversely
affect the ability of AANB to perform under this Agreement, except for any
proceeding, claim, action, investigation or inquiry referred to in clauses
(i) and (ii) which, individually or in the aggregate, would not be reasonably
expected to have a Material Adverse Effect.
5.11. Compliance With Applicable Law.
5.11.1. To the Knowledge of AANB, each of AANB and each AANB
Subsidiary is in compliance in all material respects with all applicable
federal, state, local and foreign statutes, laws, regulations, ordinances,
rules, judgments, orders or decrees applicable to it, its properties, assets
and deposits, its business, and its conduct of business and its relationship
with its employees, including, without limitation, the USA Patriot Act, the
Bank Secrecy Act, the Equal Credit Opportunity Act, the Fair Housing Act,
the CRA, the Home Mortgage Disclosure Act, and all other applicable fair
lending laws and other laws relating to discriminatory business practices
and neither AANB nor any AANB Subsidiary has received any written notice to the
contrary.
5.11.2. Each of AANB and each AANB Subsidiary has all material
permits, licenses, authorizations, orders and approvals of, and has made
all filings, applications and registrations with, all Bank Regulators
that are required in order to permit it to own or lease its properties and to
conduct its business as presently conducted; all such permits, licenses,
certificates of authority, orders and approvals are in full force and effect
and, to the Knowledge of AANB, no suspension or cancellation of any such permit,
license, certificate, order or approval is threatened or will result from the
consummation of the transactions contemplated by this Agreement, subject to
obtaining the approvals set forth in Section 8.3.
5.11.3. For the period beginning January 1, 2002, neither AANB nor
any AANB Subsidiary has received any written notification or, to the Knowledge
of AANB, any other communication from any Bank Regulator (i) asserting that
AANB or any AANB Subsidiary is not in material compliance with any of the
statutes, regulations or ordinances which such Bank Regulator enforces;
(ii) threatening to revoke any license, franchise, permit or governmental
authorization which is material to AANB or any AANB Subsidiary; (iii)
requiring or threatening to require AANB or any AANB Subsidiary, or indicating
that AANB or any AANB Subsidiary may be required, to enter into a cease and
desist order, agreement or memorandum of understanding or any other
agreement with any federal or state governmental agency or authority which
is charged with the supervision or regulation of banks or engages in the
insurance of bank deposits restricting or limiting, or purporting to restrict
or limit, in any material respect the operations of AANB or any AANB
Subsidiary, including without limitation any restriction on the payment of
dividends; or (iv) directing, restricting or limiting, or purporting to direct,
restrict or limit, in any manner the operations of AANB or any AANB Subsidiary,
including without limitation any restriction on the payment of
dividends (any such notice, communication, memorandum, agreement or
order described in this sentence is hereinafter referred to as a
"Regulatory Agreement"). Neither AANB nor any AANB Subsidiary has consented
to or entered into any currently effective Regulatory Agreement. The most
recent regulatory rating given to The ▇▇▇▇▇ National Bank as to compliance with
the CRA is satisfactory or better.
5.12. AANB Common Stock
The shares of AANB Common Stock to be issued pursuant to this
Agreement, when issued in accordance with the terms of this Agreement, will be
duly authorized, validly issued, fully paid and non-assessable and subject
to no preemptive rights.
5.13. Material Contracts; Leases, Defaults.
Neither AANB nor any AANB Subsidiary is a party to or subject
to: (i) any collective bargaining agreement with any labor union relating to
employees of AANB or any AANB Subsidiary; nor (ii) any agreement which
by its terms limits the payment of dividends by AANB or any AANB Subsidiary.
5.14. Securities Documents.
AANB has made available to CB&T copies of its (i) annual reports
on Form 10-K for the years ended December 31, 2003, 2002 and 2001, (ii)
quarterly reports on Form 10-Q for the quarters ended March 31, June 30
and September 30, 2004, and (iii) proxy materials used or for use in connection
with its meetings of stockholders held in 2004, 2003 and 2002. Such
reports and proxy materials complied, at the time filed with the OCC and/or
the SEC, in all material respects, with the Securities Laws, or OCC Regulations
as the case may be.
ARTICLE VI
COVENANTS OF CB&T
6.1. Conduct of Business.
6.1.1. Affirmative Covenants. During the period from the date of
this Agreement to the Effective Time, except with the written consent of
AANB, which consent will not be unreasonably withheld, conditioned or delayed,
CB&T will, and will cause each CB&T Subsidiary to: operate its business only
in the usual, regular and ordinary course of business; use reasonable
efforts to preserve intact its business organization and assets and maintain
its rights and franchises; and voluntarily take no action which would:
(i) adversely affect the ability of the parties to obtain the regulatory
approvals referenced in Section 8.3 or materially increase the period of time
necessary to obtain such approvals, or (ii) adversely affect its ability to
perform its covenants and agreements under this Agreement.
6.1.2. Negative Covenants. CB&T agrees that from the date of this
Agreement to the Effective Time, except as otherwise specifically permitted
or required by this Agreement, set forth in CB&T DISCLOSURE SCHEDULE 6.1.2, or
consented to by AANB in writing (which consent shall not be unreasonably
withheld, conditioned or delayed), it will not, and it will cause each of the
CB&T Subsidiaries not to:
(A) change or waive any provision of its Articles of Incorporation,
Charter or Bylaws, except as required by law;
(B) change the number of authorized or issued shares of its capital
stock, issue any shares of CB&T Common Stock that are held as "treasury
shares" as of the date of this Agreement, or issue or grant any Right or
agreement of any character relating to its authorized or issued capital stock
or any securities convertible into shares of such stock, make any grant or
award under the CB&T Stock Benefit Plans, or split, combine or reclassify
any shares of capital stock, or declare, set aside or pay any dividend
or other distribution in respect of capital stock, or redeem or otherwise
acquire any shares of capital stock.
(C) enter into, amend in any material respect or terminate any
material contract or agreement (including without limitation any settlement
agreement with respect to litigation) except in the ordinary course of business;
(D) except for the establishment of an automated banking facility
(ATM) at the main office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, make application for the opening or closing of any, or open or close
any, branch or automated banking facility;
(E) grant or agree to pay any bonus, severance or termination to,
or enter into, renew or amend any employment agreement, severance agreement
and/or supplemental executive agreement with, or increase in any manner
the compensation or fringe benefits of, any of its directors, officers or
employees except that CB&T may (i) authorize compensation increases
including bonuses to non-executive officers in the ordinary course of business
not to exceed $35,000.00 in the aggregate, after the execution of this
Agreement through May 31, 2005, and (ii) hire at-will, non-officer employees
to fill vacancies that may from time to time arise in the ordinary course of
business;
(F) enter into or, except as may be required by law, materially
modify any pension, retirement, stock option, stock purchase, stock
appreciation right, stock grant, savings, profit sharing, deferred compensation,
supplemental retirement, consulting, bonus, group insurance or other
employee benefit, incentive or welfare contract, plan or arrangement, or
any trust agreement related thereto, in respect of any of its directors,
officers or employees; or make any contributions to any defined contribution
or defined benefit plan without the prior consent of AANB (and CB&T's past
practice has been to contribute up to $350,000 in cash per year to its
defined benefit plan in the ordinary course of business);
(G) merge or consolidate CB&T or any CB&T Subsidiary with any other
corporation; sell or lease all or any substantial portion of the assets or
business of CB&T or any CB&T Subsidiary (except for subletting the
Bookbindery office space located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇); make any acquisition of all or any substantial portion of
the business or assets of any other Person other than in connection with
foreclosures, settlements in lieu of foreclosure, troubled loan or debt
restructuring, or the collection of any loan or credit arrangement between
CB&T, or any CB&T Subsidiary, and any other Person; enter into a purchase and
assumption transaction with respect to deposits and liabilities; permit the
revocation or surrender by any CB&T Subsidiary of its certificate of
authority to maintain, or file an application for the relocation of, any
existing branch office, or file an application for a certificate of authority
to establish a new branch office;
(H) sell or otherwise dispose of the capital stock of CB&T or sell
or otherwise dispose of any asset of CB&T or of any CB&T Subsidiary other than
in the ordinary course of business consistent with past practice; except for
transactions with the FHLB, subject any asset of CB&T or of any CB&T
Subsidiary to a lien, pledge, security interest or other encumbrance
(other than in connection with deposits, repurchase agreements, bankers
acceptances, "treasury tax and loan" accounts established in the ordinary
course of business and transactions in "federal funds" and the satisfaction
of legal requirements in the exercise of trust powers) other than in the
ordinary course of business consistent with past practice; incur any
indebtedness for borrowed money (or guarantee any indebtedness for borrowed
money), except in the ordinary course of business consistent with past
practice;
(I) take any action which would result in any of the representations
and warranties of CB&T set forth in this Agreement becoming untrue as of
any date after the date hereof or in any of the conditions set forth in
Article IX hereof not being satisfied, except in each case as may be required
by applicable law;
(J) change any method, practice or principle of accounting, except
as may be required from time to time by GAAP (without regard to any optional
early adoption date) or any Bank Regulator responsible for regulating CB&T;
(K) waive, release, grant or transfer any material rights of value or
modify or change in any material respect any existing material agreement or
indebtedness to which CB&T or any CB&T Subsidiary is a party, other than in the
ordinary course of business, consistent with past practice;
(L) purchase any equity securities, or purchase any security for its
investment portfolio inconsistent with CB&T's or any CB&T Subsidiary's current
investment policy;
(M) except for commitments issued prior to the date of this Agreement
which have not yet expired and which have been disclosed on the CB&T DISCLOSURE
SCHEDULE 6.1.2(M), and the renewal of existing lines of credit, make any new
loan or other credit facility commitment (including without limitation, lines of
credit and letters of credit) in an amount in excess of $300,000 for a
commercial real estate loan, $300,000 for a construction loan, $300,000 for a
commercial business loan, or in excess of $300,000 for a residential loan,
except that if AANB does not object within 24 hours after confirmation of
receipt of notification from CB&T of an intent to originate a loan in excess of
the amounts set forth in this paragraph, consent shall be deemed to have been
given by AANB. Notwithstanding Section 12.4 notice under this Section 6.1.2(M)
may also be provided by facsimile or electronic mail.
(N) except as set forth on the CB&T DISCLOSURE SCHEDULE 6.1.2(N), enter
into, renew, extend or modify any other transaction (other than a deposit
transaction) with any Affiliate other than pursuant to CB&T's existing Insider
Loan Policy;
(O) enter into any futures contract, option, interest rate caps,
interest rate floors, interest rate exchange agreement or other agreement or
take any other action for purposes of hedging the exposure of its
interest-earning assets and interest-bearing liabilities to changes in market
rates of interest;
(P) except for the execution of this Agreement, and actions taken or
which will be taken in accordance with this Agreement and performance
thereunder, take any action that would give rise to a right of payment to any
individual under any employment agreement;
(Q) make any change in policies in existence on the date of this
Agreement with regard to: the extension of credit, or the establishment of
reserves with respect to the possible loss thereon or the charge off of losses
incurred thereon; investments; asset/liability management; or other material
banking policies in any material respect except as may be required by changes in
applicable law or regulations or by a Bank Regulator;
(R) except for the execution of this Agreement, and the transactions
contemplated therein, take any action that would give rise to an acceleration of
the right to payment to any individual under any CB&T Compensation and Benefit
Plan;
(S) except as set forth in CB&T DISCLOSURE SCHEDULE 6.1.2(S), make any
capital expenditures in excess of $50,000 individually and in the aggregate,
other than pursuant to binding commitments existing on the date hereof and other
than expenditures necessary to maintain existing assets in good repair;
(T) except as set forth in CB&T DISCLOSURE SCHEDULE 6.1.2(T), purchase
or otherwise acquire, or sell or otherwise dispose of, any assets or incur any
liabilities other than in the ordinary course of business consistent with past
practices and policies;
(U) sell any participation interest in any loan (other than sales of
loans secured by one- to four-family real estate that are consistent with past
practice) unless The ▇▇▇▇▇ National Bank has been given prior written notice of
any loan participation being sold;
(V) undertake or enter into any lease, contract or other commitment for
its account, other than in the normal course of banking business;
(W) pay, discharge, settle or compromise any claim, action, litigation,
arbitration or proceeding in an amount exceeding $50,000; or
(X) agree to do any of the foregoing.
6.2. Current Information.
6.2.1. Subject to Section 12.1 hereof, during the period from the date
of this Agreement to the Effective Time, CB&T will cause one or more of its
representatives to confer with representatives of AANB and report the general
status of its ongoing operations at such times as AANB may reasonably request.
CB&T will promptly notify AANB of any material change in the normal course of
its business or in the operation of its properties and, to the extent permitted
by applicable law, of any governmental complaints, investigations or hearings
(or communications indicating that the same may be contemplated), or the
institution or the threat of material litigation involving CB&T or any CB&T
Subsidiary.
6.2.2. Subject to Section 12.1 hereof, CB&T shall provide AANB, within
thirty (30) days after the end of each month, a written list of nonperforming
assets (the term "nonperforming assets," for purposes of this subsection, means
(i) loans that are "troubled debt restructuring" as defined in Statement of
Financial Accounting Standards No. 15, "Accounting by Debtors and Creditors for
Troubled Debt Restructuring," (ii) loans on nonaccrual, (iii) real estate owned,
(iv) all loans ninety (90) days or more past due) as of the end of such month
and (iv) and impaired loans. On a monthly basis, CB&T shall provide AANB with a
schedule of all loan approvals, which schedule shall indicate the loan amount,
loan type and other material features of the loan.
6.2.3. CB&T shall promptly inform AANB upon receiving notice of any
legal, administrative, arbitration or other proceedings, demands, notices,
audits or investigations (by any federal, state or local commission, agency or
board) relating to the alleged liability of CB&T or any CB&T Subsidiary under
any labor or employment law.
6.3. Access to Properties and Records.
Subject to Section 12.1 hereof, CB&T shall permit AANB access upon
reasonable notice to its properties and those of the CB&T Subsidiaries, and
shall disclose and make available to AANB to the extent permitted by applicable
law during normal business hours all of its books, papers and records relating
to the assets, properties, operations, obligations and liabilities, including,
but not limited to, all books of account (including the general ledger), tax
records, minute books of directors' (other than minutes that discuss any of the
transactions contemplated by this Agreement or any other subject matter CB&T
reasonably determines should be treated as confidential) and stockholders'
meetings, organizational documents, Bylaws, material contracts and agreements,
filings with any regulatory authority, litigation files, plans affecting
employees, and any other business activities or prospects in which AANB may have
a reasonable interest. CB&T shall provide and shall request its auditors to
provide AANB with such historical financial information regarding it (and
related audit reports and consents) as AANB may request for securities
disclosure purposes. CB&T and each CB&T Subsidiary shall permit AANB at its own
expense to cause a "phase I environmental audit" and a "phase II environmental
audit" to be performed at any physical location owned or occupied by CB&T or any
CB&T Subsidiary.
6.4. Financial and Other Statements.
6.4.1. Promptly upon receipt thereof, CB&T will furnish to AANB copies
of each annual, interim or special audit of the books of CB&T and the CB&T
Subsidiaries made by its independent accountants and copies of all internal
control reports submitted to CB&T by such accountants in connection with each
annual, interim or special audit of the books of CB&T and the CB&T Subsidiaries
made by such accountants.
6.4.2. As soon as reasonably available, but in no event later than five
(5) business days after such documents are filed with the FRB, CB&T will deliver
to AANB the Securities Documents filed by it with the FRB under the Securities
Laws, and any call reports filed with the FDIC or the Bureau. Promptly after
CB&T's board meeting but no later than thirty (30) days after the end of each
month, CB&T will deliver to AANB a consolidated balance sheet and a consolidated
statement of operations, without related notes, for such month prepared in
accordance with current financial reporting practices.
6.4.3. CB&T will advise AANB promptly of the receipt of any examination
report of any Bank Regulator with respect to the condition or activities of CB&T
or any of the CB&T Subsidiaries.
6.4.4. With reasonable promptness, CB&T will furnish to AANB such
additional financial data that CB&T possesses and as AANB may reasonably
request, including without limitation, detailed monthly financial statements and
loan reports.
6.5. Maintenance of Insurance.
CB&T shall maintain, and cause the CB&T Subsidiaries to maintain,
insurance in such amounts as are reasonable to cover such risks as are customary
in relation to the character and location of its properties and the nature of
its business
6.6. Disclosure Supplements.
From time to time prior to the Effective Time, CB&T will promptly
supplement or amend the CB&T DISCLOSURE SCHEDULE delivered in connection
herewith with respect to any matter hereafter arising which, if existing,
occurring or known at the date of this Agreement, would have been required to be
set forth or described in such CB&T DISCLOSURE SCHEDULE or which is necessary to
correct any information in such CB&T DISCLOSURE SCHEDULE which has been rendered
materially inaccurate thereby. No supplement or amendment to such CB&T
DISCLOSURE SCHEDULE shall have any effect for the purpose of determining
satisfaction of the conditions set forth in Article IX.
6.7. Consents and Approvals of Third Parties.
CB&T shall use all commercially reasonable efforts, and shall cause
each CB&T Subsidiary to use all commercially reasonable efforts to obtain as
soon as practicable all consents and approvals of any other persons necessary or
desirable for the consummation of the transactions contemplated by this
Agreement. Without limiting the generality of the foregoing, CB&T may utilize
the services of a professional proxy soliciting firm to provide assistance in
obtaining the stockholder vote required to be obtained by it hereunder.
6.8. All Reasonable Efforts.
Subject to the terms and conditions herein provided, CB&T agrees to use
all commercially reasonable efforts to take, or cause to be taken, all action
and to do, or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement.
6.9. Failure to Fulfill Conditions.
In the event that CB&T determines that a condition to its obligation to
complete the Merger cannot be fulfilled and that it will not waive that
condition, it will promptly notify AANB.
6.10. No Solicitation.
From and after the date hereof until the termination of this Agreement,
neither CB&T, nor any CB&T Subsidiary, nor any of their respective officers,
directors, employees, representatives, agents and affiliates (including, without
limitation, any investment banker, attorney or accountant retained by CB&T or
any of the CB&T Subsidiaries), will, directly or indirectly, initiate, solicit
or knowingly encourage (including by way of furnishing non-public information or
assistance) any inquiries or the making of any proposal that constitutes, or may
reasonably be expected to lead to, any Acquisition Proposal (as defined below),
or enter into or maintain or continue discussions or negotiate with any Person
in furtherance of such inquiries or to obtain an Acquisition Proposal or agree
to or endorse any Acquisition Proposal, or authorize or permit any of its
officers, directors, or employees or any of its Subsidiaries or any investment
banker, financial advisor, attorney, accountant or other representative retained
by any of its Subsidiaries to take any such action, and CB&T shall notify AANB
orally (within one business day) and in writing (as promptly as practicable) of
all of the relevant details relating to all inquiries and proposals which it or
any of its Subsidiaries or any such officer, director or employee, or, to CB&T's
Knowledge, investment banker, financial advisor, attorney, accountant or other
representative of CB&T may receive relating to any of such matters, provided,
however, that nothing contained in this Section 6.10 shall prohibit the Board of
Directors of CB&T from (i) complying with its disclosure obligations under
federal or state law; or (ii) furnishing information to, or entering into
discussions or negotiations with, any person or entity that makes an unsolicited
Acquisition Proposal, if, and only to the extent that, (A) the Board of
Directors of CB&T determines in good faith (after consultation with its
financial and legal advisors), taking into account all legal, financial and
regulatory aspects of the proposal and the Person making the proposal, that such
proposal, if consummated, is reasonably likely to result in a transaction more
favorable to CB&T's stockholders from a financial point of view than the Merger;
(B) the Board of Directors of CB&T determines in good faith (after consultation
with its financial and legal advisors) that the failure to furnish information
to or enter into discussions with such Person would likely cause the Board of
Directors to breach its fiduciary duties to stockholders under applicable law
(such proposal that satisfies clauses (A) and (B) being referred to herein as a
"Superior Proposal"); (C) CB&T promptly notifies AANB of such inquiries,
proposals or offers received by, any such information requested from, or any
such discussions or negotiations sought to be initiated or continued with CB&T
or any of its representatives indicating, in connection with such notice, the
name of such Person and the material terms and conditions of any inquiries,
proposals or offers, and receives from such Person an executed confidentiality
agreement in form and substance identical in all material respects to the
confidentiality agreements that CB&T and AANB entered into; and (D) the CB&T
Stockholders Meeting has not occurred. For purposes of this Agreement,
"Acquisition Proposal" shall mean any proposal or offer as to any of the
following (other than the transactions contemplated hereunder) involving CB&T or
any of its Subsidiaries: (i) any merger, consolidation, share exchange, business
combination, or other similar transactions; (ii) any sale, lease, exchange,
mortgage, pledge, transfer or other disposition of 25% or more of the assets of
CB&T and the CB&T Subsidiaries, taken as a whole, in a single transaction or
series of transactions; (iii) any sale or tender offer or exchange offer for 25%
or more of the outstanding shares of capital stock of CB&T or the filing of a
registration statement under the Securities Act in connection therewith; or (iv)
any public announcement of a proposal, plan or intention to do any of the
foregoing or any agreement to engage in any of the foregoing.
6.11. Reserves and Merger-Related Costs.
On or before the Effective Time, and to the extent consistent with
GAAP, the rules and regulations of the SEC and applicable banking laws and
regulations, CB&T shall establish such additional accruals and reserves as may
be necessary to conform the accounting reserve practices and methods (including
credit loss practices and methods) of CB&T to those of AANB (as such practices
and methods are to be applied to CB&T from and after the Closing Date) and
AANB's plans with respect to the conduct of the business of CB&T following the
Merger and otherwise to reflect Merger-related expenses and costs incurred by
CB&T, provided, however, that CB&T shall not be required to take such action
unless AANB agrees in writing that all conditions to closing set forth in
Article IX have been satisfied or waived (except for the expiration of any
applicable waiting periods); prior to the delivery by AANB of the writing
referred to in the preceding clause, CB&T shall provide AANB a written
statement, certified without personal liability by the chief executive officer
of CB&T and dated the date of such writing, that the representation made in
Section 4.16.1 hereof is true as of such date or, alternatively, setting forth
in detail the circumstances that prevent such representation from being true as
of such date; and no accrual or reserve made by CB&T or any CB&T Subsidiary
pursuant to this subsection, or any litigation or regulatory proceeding arising
out of any such accrual or reserve, shall constitute or be deemed to be a breach
or violation of any representation, warranty, covenant, condition or other
provision of this Agreement or to constitute a termination event within the
meaning of Section 11.1.2 hereof.
ARTICLE VII
COVENANTS OF AANB
7.1. Conduct of Business.
During the period from the date of this Agreement to the Effective
Time, except with the written consent of CB&T, which consent will not be
unreasonably withheld, conditioned or delayed, AANB will, and it will cause each
AANB Subsidiary to: conduct its business only in the usual, regular and ordinary
course consistent with past practices; use reasonable efforts to preserve intact
its business organization and assets and maintain its rights and franchises; and
voluntarily take no action that would: (i) adversely affect the ability of the
parties to obtain the Regulatory Approvals or materially increase the period of
time necessary to obtain such approvals; (ii) adversely affect its ability to
perform its covenants and agreements under this Agreement; (iii) result in the
representations and warranties contained in Article V of this Agreement not
being true and correct on the date of this Agreement or at any future date on or
prior to the Closing Date or in any of the conditions set forth in Article IX
hereof not being satisfied; (iv) change or waive any provision of its
Certificate of Incorporation or Charter, except as required by law; or (v)
change any method, practice or principle of accounting, except as may be
required from time to time by GAAP (without regard to any optional early
adoption date) or any Bank Regulator responsible for regulating AANB or The
▇▇▇▇▇ National Bank. Additionally, AANB will not declare an extraordinary
dividend or distribution on shares of AANB Common Stock.
7.2. Disclosure Supplements.
From time to time prior to the Effective Time, AANB will promptly
supplement or amend the AANB DISCLOSURE SCHEDULE delivered in connection
herewith with respect to any matter hereafter arising which, if existing,
occurring or known at the date of this Agreement, would have been required to be
set forth or described in such AANB DISCLOSURE SCHEDULE or which is necessary to
correct any information in such AANB DISCLOSURE SCHEDULE which has been rendered
inaccurate thereby. No supplement or amendment to such AANB DISCLOSURE SCHEDULE
shall have any effect for the purpose of determining satisfaction of the
conditions set forth in Article IX.
7.3. Consents and Approvals of Third Parties.
AANB shall use all commercially reasonable efforts to obtain as soon as
practicable all consents and approvals of any other Persons necessary or
desirable for the consummation of the transactions contemplated by this
Agreement.
7.4. All Reasonable Efforts.
Subject to the terms and conditions herein provided, AANB agrees to use
all commercially reasonable efforts to take, or cause to be taken, all action
and to do, or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement.
7.5. Failure to Fulfill Conditions.
In the event that AANB determines that a condition to its obligation to
complete the Merger cannot be fulfilled and that it will not waive that
condition, it will notify CB&T.
7.6. Employee Benefits.
7.6.1 AANB will review all other CB&T Compensation and Benefit Plans to
determine whether to maintain, terminate or continue such plans. In the event
employee compensation and/or benefits as currently provided by CB&T are changed
or terminated by AANB, in whole or in part, AANB shall provide continuing
employees with compensation and benefits that are, in the aggregate,
substantially similar to the compensation and benefits currently provided to
CB&T employees. All CB&T Employees who become participants in an AANB
Compensation and Benefit Plan shall, for purposes of determining eligibility for
and for any applicable vesting periods of such employee benefits only (and not
for benefit accrual purposes) be given credit for meeting eligibility and
vesting requirements in such plans for service as an employee of CB&T or any
predecessor thereto prior to the Effective Time, provided, however, that credit
for prior service shall not be given under the AANB ESOP or under the AANB
retiree health plan. This Agreement shall not be construed to limit the ability
of AANB to terminate the employment of any employee or to review employee
benefits programs from time to time and to make such changes as they deem
appropriate.
7.7. Directors and Officers Indemnification and Insurance.
7.7.1. AANB shall maintain, or shall cause The ▇▇▇▇▇ National Bank to
maintain, in effect for three years following the Effective Time, the current
directors' and officers' liability insurance policies maintained by CB&T
(provided, that AANB may substitute therefor policies of at least the same
coverage containing terms and conditions which are not materially less
favorable) with respect to matters occurring prior to the Effective Time;
provided, however, that in no event shall AANB be required to expend pursuant to
this Section 7.7.1 in the aggregate more than 125% of the annual cost currently
expended by CB&T with respect to such insurance (the "Maximum Amount");
provided, further, that if the amount of the annual premiums necessary to
maintain or procure such insurance coverage exceeds the Maximum Amount, AANB
shall maintain the most advantageous policies of directors' and officers'
insurance obtainable for an annual premium equal to the Maximum Amount. In
connection with the foregoing, CB&T agrees in order for AANB to fulfill its
agreement to provide directors and officers liability insurance policies for
three years to provide such insurer or substitute insurer with such
representations as such insurer may request with respect to the reporting of any
prior claims.
7.7.2. In addition to Section 7.7.1, for a period of three years after
the Effective Time, AANB shall indemnify, defend and hold harmless each person
who is now, or who has been at any time before the date hereof or who becomes
before the Effective Time, an officer or director of CB&T or an CB&T Subsidiary
(the "Indemnified Parties") against all losses, claims, damages, costs, expenses
(including attorneys' fees), liabilities or judgments or amounts that are paid
in settlement (which settlement shall require the prior written consent of AANB,
which consent shall not be unreasonably withheld, conditioned or delayed) of or
in connection with any claim, action, suit, proceeding or investigation, whether
civil, criminal, or administrative (each a "Claim"), in which an Indemnified
Party is, or is threatened to be made, a party or witness in whole or in part on
or arising in whole or in part out of the fact that such person is or was a
director, officer or employee of CB&T or a CB&T Subsidiary if such Claim
pertains to any matter of fact arising, existing or occurring before the
Effective Time (including, without limitation, the Merger and the other
transactions contemplated hereby), regardless of whether such Claim is asserted
or claimed before, or after, the Effective Time (the "Indemnified Liabilities"),
to the fullest extent permitted under Virginia law (to the extent not prohibited
by federal law) and under CB&T's Articles of Incorporation and Bylaws. AANB
shall pay expenses in advance of the final disposition of any such action or
proceeding to each Indemnified Party to the fullest extent permitted by Virginia
law (to the extent not prohibited by federal law) upon receipt of an undertaking
to repay such advance payments if the Indemnified Party shall be adjudicated or
determined to be not entitled to indemnification in the manner set forth below.
Any Indemnified Party wishing to claim indemnification under this Section 7.7.2
upon learning of any Claim, shall notify AANB (but the failure so to notify AANB
shall not relieve it from any liability which it may have under this Section
7.7.2, except to the extent such failure materially prejudices AANB) and shall
deliver to AANB the undertaking referred to in the previous sentence. In the
event of any such Claim (whether arising before or after the Effective Time) (1)
AANB shall have the right to assume the defense thereof (in which event the
Indemnified Parties will cooperate in the defense of any such matter) and upon
such assumption AANB shall not be liable to any Indemnified Party for any legal
expenses of other counsel or any other expenses subsequently incurred by any
Indemnified Party in connection with the defense thereof, except that if AANB
elects not to assume such defense, or counsel for the Indemnified Parties
reasonably advises the Indemnified Parties that there are or may be (whether or
not any have yet actually arisen) issues which raise conflicts of interest
between AANB and the Indemnified Parties, the Indemnified Parties may retain
counsel reasonably satisfactory to them, and AANB shall pay the reasonable fees
and expenses of such counsel for the Indemnified Parties, (2) except to the
extent otherwise required due to conflicts of interest, AANB shall be obligated
pursuant to this paragraph to pay for only one firm of counsel for all
Indemnified Parties whose reasonable fees and expenses shall be paid promptly as
statements are received, (3) AANB shall not be liable for any settlement
effected without its prior written consent (which consent shall not be
unreasonably withheld, conditioned or delayed), and (4) no Indemnified Party
shall be entitled to indemnification hereunder with respect to a matter as to
which (x) he shall have been adjudicated in any non-appealable proceeding to
have engaged in willful misconduct in, or a knowing violation of criminal law,
or (y) in the event that a proceeding is compromised or settled so as to impose
any liability or obligation upon an Indemnified Party, if there is a
determination that with respect to said matter said Indemnified Party engaged in
willful misconduct or a knowing violation of criminal law. Such determination
shall be made in accordance with Article VII, Section 5 of the CB&T Articles of
Incorporation in effect on the date hereof. Notwithstanding anything herein to
the contrary, if any claim, action, suit, proceeding or investigation is made
against any Indemnified Party on or prior to the third anniversary of the
Effective Time, the provisions of this Section 7.7.2 shall continue in effect
until the final disposition of such claim, action, suit, proceeding or
investigation.
7.8. Stock Listing.
AANB agrees to list on the Nasdaq (or such other national securities
exchange on which the shares of the AANB Common Stock shall be listed as of the
Closing Date), subject to official notice of issuance, the shares of AANB Common
Stock to be issued in the Merger.
7.9. Employee Proceedings.
AANB shall promptly inform CB&T upon receiving notice of any legal,
administrative, arbitration or other proceedings, demands, notices, audits or
investigations (by any federal, state or local commission, agency or board)
relating to the alleged liability of AANB or any AANB Subsidiary under any labor
or employment law.
7.10. Access to Properties and Records.
Subject to Section 12.1 hereof, AANB shall permit CB&T access upon
reasonable notice to its properties, and shall disclose and make available to
CB&T, to the extent permitted by applicable law and consistent with AANB's legal
obligations, during normal business hours all of its books, papers and records
relating to the assets, properties, operations, obligations and liabilities,
including, but not limited to, all books of account (including the general
ledger), tax records, minute books of directors' (other than minutes that
discuss any of the transactions contemplated by this Agreement or any other
subject matter AANB reasonably determines should be treated as confidential) and
stockholders' meetings, organizational documents, Bylaws, material contracts and
agreements, and any other business activities or prospects in which CB&T may
have a reasonable interest.
7.11. Capital Contribution.
AANB shall make a capital contribution to CB&T in an amount sufficient
to obtain regulatory approval of the Merger.
ARTICLE VIII
REGULATORY AND OTHER MATTERS
8.1. Meetings of Stockholders.
8.1.1. CB&T will (i) as promptly as practicable after the Merger
Registration Statement is declared effective by the SEC, take all steps
necessary to duly call, give notice of, convene and hold a meeting of its
stockholders for the purpose of considering this Agreement and the Merger, and
for such other purposes as may be, in CB&T's reasonable judgment, necessary or
desirable (the "CB&T Stockholders Meeting"), (ii) in connection with the
solicitation of proxies with respect to the CB&T Stockholders Meeting, have its
Board of Directors recommend approval of this Agreement to the CB&T stockholders
unless the Board of Directors shall have determined that such recommendation
would violate its fiduciary duties under applicable law; and (iii) cooperate and
consult with AANB with respect to each of the foregoing matters.
8.2. Proxy Statement-Prospectus; Merger Registration Statement.
8.2.1. For the purposes (x) of registering AANB Common Stock to be
offered to holders of CB&T Common Stock in connection with the Merger with the
SEC under the Securities Act and (y) of holding the CB&T stockholder's meeting,
AANB shall draft and prepare, and CB&T shall cooperate in the preparation of,
the Merger Registration Statement, including a proxy statement and prospectus
satisfying all applicable requirements of applicable state securities and
banking laws, and of the Securities Act and the Exchange Act, and the rules and
regulations thereunder (such proxy statement/prospectus in the form mailed by
CB&T to the CB&T stockholders, together with any and all amendments or
supplements thereto, being herein referred to as the "Proxy
Statement-Prospectus"). AANB shall provide CB&T and its counsel with appropriate
opportunity to review and comment on the Proxy Statement-Prospectus prior to the
time it is initially filed with the SEC or any amendments are filed with the
SEC. AANB shall file the Merger Registration Statement, including the Proxy
Statement-Prospectus, with the SEC. Each of AANB and CB&T shall use their best
efforts to have the Merger Registration Statement declared effective under the
Securities Act as promptly as practicable after such filing, and CB&T shall
thereafter promptly mail the Proxy Statement-Prospectus to its stockholders.
AANB shall also use its best efforts to obtain all necessary state securities
law or "Blue Sky" permits and approvals required to carry out the transactions
contemplated by this Agreement, and CB&T shall furnish all information
concerning CB&T and the holders of CB&T Common Stock as may be reasonably
requested in connection with any such action.
8.2.2. Each party acknowledges that time is of the essence in
connection with the preparation and filing of the Merger Registration Statement.
AANB will advise CB&T promptly after AANB receives notice of the time when the
Merger Registration Statement has become effective or any supplement or
amendment has been filed, of the issuance of any stop order or the suspension of
the qualifications of the shares of AANB Common Stock issuable pursuant to the
Merger Registration Statement, or the initiation or threat of any proceeding for
any such purpose, or of any request by the SEC for the amendment or supplement
of the Merger Registration Statement, or for additional information, and AANB
will provide CB&T with as many copies of such Merger Registration Statement and
all amendments thereto promptly upon the filing thereof as CB&T may reasonably
request.
8.2.3. CB&T and AANB shall promptly notify the other party if at any
time it becomes aware that the Proxy Statement-Prospectus or the Merger
Registration Statement contains any untrue statement of a material fact or omits
to state a material fact required to be stated therein or necessary to make the
statements contained therein, in light of the circumstances under which they
were made, not misleading. In such event, CB&T shall cooperate with AANB in the
preparation of a supplement or amendment to such Proxy Statement-Prospectus that
corrects such misstatement or omission, and AANB shall file an amended Merger
Registration Statement with the SEC, and each of CB&T and AANB shall mail an
amended Proxy Statement-Prospectus to CB&T's stockholders.
8.3. Regulatory Approvals.
Each of CB&T and AANB will cooperate with the other and use all
reasonable efforts to promptly prepare and, within 60 days after the date hereof
or as soon thereafter as practicable, file all necessary documentation to obtain
all necessary permits, consents, waivers, approvals and authorizations of the
OCC, the FRB, FDIC and the Bureau and any other third parties and governmental
bodies necessary to consummate the transactions contemplated by this Agreement.
CB&T and AANB will furnish each other and each other's counsel with all
information concerning themselves, their Subsidiaries, directors, officers and
stockholders and such other matters as may be necessary or advisable in
connection with any application, petition or other statement made by or on
behalf of CB&T or AANB to any Bank Regulator or governmental body in connection
with the Merger and the other transactions contemplated by this Agreement. Each
party acknowledges that time is of the essence in connection with the
preparation and filing of the documentation referred to above. CB&T shall have
the right to review in advance all characterizations of the information relating
to CB&T and any of its Subsidiaries which appear in any filing made in
connection with the transactions contemplated by this Agreement with any
governmental body.
8.4. Affiliates.
8.4.1. CB&T shall use all reasonable efforts to cause each director,
executive officer and other person who is an "affiliate" (for purposes of Rule
145 under the Securities Act) of CB&T to deliver to AANB, as soon as practicable
after the date of this Agreement, and at least thirty (30) days prior to the
date of the CB&T Stockholders Meeting, a written agreement, in the form of
Exhibit B hereto, providing that such person will not sell, pledge, transfer or
otherwise dispose of any shares of AANB Common Stock to be received by such
"affiliate" as a result of the Merger otherwise than in compliance with the
applicable provisions of the Securities Act and the rules and regulations
thereunder.
ARTICLE IX
CLOSING CONDITIONS
9.1. Conditions to Each Party's Obligations under this Agreement.
The respective obligations of each party under this Agreement shall be
subject to the fulfillment at or prior to the Closing Date of the following
conditions, none of which may be waived:
9.1.1. Stockholder Approval. This Agreement and the transactions
contemplated hereby shall have been approved by the requisite vote of the
stockholders of CB&T.
9.1.2. Injunctions. None of the parties hereto shall be subject to any
order, decree or injunction of a court or agency of competent jurisdiction, and
no statute, rule or regulation shall have been enacted, entered, promulgated,
interpreted, applied or enforced by any Governmental Entity or Bank Regulator,
that enjoins or prohibits the consummation of the transactions contemplated by
this Agreement.
9.1.3. Regulatory Approvals. All required Regulatory Approvals shall
have been obtained and shall remain in full force and effect and all waiting
periods relating thereto shall have expired; and no such Regulatory Approval
shall include any condition or requirement, excluding standard conditions that
are normally imposed by the regulatory authorities in bank merger transactions,
that would, in the good faith reasonable judgment of the Board of Directors of
AANB, materially and adversely affect the business, operations, financial
condition, property or assets of the combined enterprise of CB&T and AANB or
otherwise materially impair the value of CB&T to AANB.
9.1.4. Effectiveness of Merger Registration Statement. The Merger
Registration Statement shall have become effective under the Securities Act and
no stop order suspending the effectiveness of the Merger Registration Statement
shall have been issued, and no proceedings for that purpose shall have been
initiated or threatened by the SEC and, if the offer and sale of AANB Common
Stock in the Merger is subject to the blue sky laws of any state, shall not be
subject to a stop order of any state securities commissioner.
9.1.5. Nasdaq Listing. The shares of AANB Common Stock to be issued in
the Merger shall have been authorized for listing on the Nasdaq Stock Market,
subject to official notice of issuance.
9.1.6. Tax Opinion. On the basis of facts, representations and
assumptions which shall be consistent with the state of facts existing at the
Closing date, AANB and CB&T shall have received an opinion of ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C. reasonably acceptable in form and substance to AANB,
dated as of the Closing Date, substantially to the effect that, for Federal
income tax purposes:
(A) The Merger, when consummated in accordance with the terms hereof,
either will constitute a reorganization within the meaning of Section 368(a) of
the Code or will be treated as part of a reorganization within the meaning of
Section 368(a) of the Code;
(B) No gain or loss will be recognized by AANB or CB&T by reason of the
Merger;
(C) The exchange of CB&T Common Stock to the extent exchanged for AANB
Common Stock will not give rise to recognition of gain or loss for Federal
income tax purposes to the stockholders of CB&T;
(D) The basis of the AANB Common Stock to be received (including any
fractional shares deemed received for tax purposes) by a CB&T stockholder will
be the same as the basis of the CB&T Common Stock surrendered pursuant to the
Merger in exchange therefore, increased by any gain recognized by such CB&T
stockholder as a result of the Merger; and
(E) The holding period of the shares of AANB Common Stock to be
received by a stockholder of CB&T will include the period during which the
stockholder held the shares of CB&T Common Stock surrendered in exchange
therefor, provided the CB&T Common Stock surrendered is held as a capital asset
at the Effective Time;
provided, however, that opinions (A), (C), (D)
and (E) need not be rendered in the event that the Merger Consideration
is paid in cash.
9.2. Conditions to the Obligations of AANB under this Agreement.
The obligations of AANB under this Agreement shall be further subject
to the satisfaction of the conditions set forth in Sections 9.2.1 through 9.2.5
at or prior to the Closing Date:
9.2.1. Representations and Warranties. Each of the representations and
warranties of CB&T set forth in this Agreement shall be true and correct as of
the date of this Agreement and upon the Effective Time with the same effect as
though all such representations and warranties had been made at the Effective
Time (except to the extent such representations and warranties speak as of an
earlier date), in any case subject to the standard set forth in Section 4.1; and
CB&T shall have delivered to AANB a certificate to such effect signed by the
Chief Executive Officer and the Chief Financial Officer of CB&T as of the
Effective Time.
9.2.2. Agreements and Covenants. CB&T shall have performed in all
material respects all obligations and complied in all material respects with all
agreements or covenants to be performed or complied with by each of them at or
prior to the Effective Time, and AANB shall have received a certificate signed
on behalf of CB&T by the Chief Executive Officer and Chief Financial Officer of
CB&T to such effect dated as of the Effective Time.
9.2.3. Permits, Authorizations, Etc. CB&T and the CB&T Subsidiaries
shall have obtained any and all material permits, authorizations, consents,
waivers, clearances or approvals required to be obtained by it for the lawful
consummation of the Merger.
9.2.4. Audit of CB&T Pension Plan. CB&T shall have obtained an audit of
its Defined Benefit Pension Plan as of December 31, 2004. Such audit shall not
reveal there to be an unfunded pension liability materially and adversely
different from that set forth in CB&T DISCLOSURE SCHEDULE 4.13.
9.2.5 Dissenters' Rights. The holders of no more than 10% of the CB&T
shares have indicated their intention to seek dissenters' rights of appraisal.
CB&T will furnish AANB with such certificates of its officers or others
and such other documents to evidence fulfillment of the conditions set forth in
this Section 9.2 as AANB may reasonably request.
9.3. Conditions to the Obligations of CB&T under this Agreement.
The obligations of CB&T under this Agreement shall be further subject
to the satisfaction of the conditions set forth in Sections 9.3.1 through 9.3.5
at or prior to the Closing Date:
9.3.1. Representations and Warranties. Each of the representations and
warranties of AANB set forth in this Agreement shall be true and correct as of
the date of this Agreement and upon the Effective Time with the same effect as
though all such representations and warranties had been made at the Effective
Time (except to the extent such representations and warranties speak as of an
earlier date), in any case subject to the standard set forth in Section 5.1; and
AANB shall have delivered to CB&T a certificate to such effect signed by the
Chief Executive Officer or Chief Operating Officer and the Chief Financial
Officer of AANB as of the Effective Time.
9.3.2. Agreements and Covenants. AANB shall have performed in all
material respects all obligations and complied in all material respects with all
agreements or covenants to be performed or complied with by each of them at or
prior to the Effective Time, and CB&T shall have received a certificate signed
on behalf of AANB by the Chief Executive Officer or Chief Operating Officer and
Chief Financial Officer of AANB to such effect dated as of the Effective Time.
9.3.3. Permits, Authorizations, Etc. AANB and its Subsidiaries shall
have obtained any and all material permits, authorizations, consents, waivers,
clearances or approvals required to be obtained by it for the lawful
consummation of the Merger.
9.3.4. Payment of Merger Consideration. AANB shall have delivered the
Exchange Fund to the Exchange Agent on or before the Closing Date and the
Exchange Agent shall provide CB&T with a certificate evidencing such delivery.
AANB will furnish CB&T with such certificates of their officers or
others and such other documents to evidence fulfillment of the conditions set
forth in this Section 9.3 as CB&T may reasonably request.
ARTICLE X
THE CLOSING
10.1. Time and Place.
Subject to the provisions of Articles IX and XI hereof, the Closing of
the transactions contemplated hereby shall take place at the offices of ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇.▇. at 10:00 a.m., or at such other place or time upon which AANB and CB&T
mutually agree. A pre-closing of the transactions contemplated hereby (the
"Pre-Closing") shall take place at the offices of ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇,
P.C. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇.▇. at 10:00 a.m. on the day
prior to the Closing Date.
10.2. Deliveries at the Pre-Closing and the Closing.
At the Pre-Closing there shall be delivered to AANB and CB&T the
opinions, certificates, and other documents and instruments required to be
delivered at the Closing under Article IX hereof. At or prior to the Closing,
AANB shall deliver the Merger Consideration as set forth under Section 9.3.4
hereof.
ARTICLE XI
TERMINATION, AMENDMENT AND WAIVER
11.1. Termination.
This Agreement may be terminated at any time prior to the Closing Date,
whether before or after approval of the Merger by the stockholders of CB&T:
11.1.1. At any time by the mutual written agreement of AANB and CB&T;
11.1.2. By either party (provided, that the terminating party is not
then in material breach of any representation, warranty, covenant or other
agreement contained herein) if there shall have been a material breach of any of
the representations or warranties set forth in this Agreement on the part of the
other party, which breach by its nature cannot be cured prior to the Termination
Date or shall not have been cured within 30 days after written notice of such
breach by the terminating party to the other party;
11.1.3. By either party (provided, that the terminating party is not
then in material breach of any representation, warranty, covenant or other
agreement contained herein) if there shall have been a material failure to
perform or comply with any of the covenants or agreements set forth in this
Agreement on the part of the other party, which failure by its nature cannot be
cured prior to the Termination Date or shall not have been cured within 30 days
after written notice of such failure by the terminating party to the other
party;
11.1.4. At the election of either party, if the Closing shall not have
occurred by the Termination Date, or such later date as shall have been agreed
to in writing by AANB and CB&T; provided, that no party may terminate this
Agreement pursuant to this Section 11.1.4 if the failure of the Closing to have
occurred on or before said date was due to such party's material breach of any
representation, warranty, covenant or other agreement contained in this
Agreement;
11.1.5. By either party, if the stockholders of CB&T shall have voted
at the CB&T Stockholders Meeting on the transactions contemplated by this
Agreement and such vote shall not have been sufficient to approve such
transactions;
11.1.6. By either party if (i) final action has been taken by a Bank
Regulator whose approval is required in connection with this Agreement and the
transactions contemplated hereby, which final action (x) has become unappealable
and (y) does not approve this Agreement or the transactions contemplated hereby,
(ii) any Bank Regulator whose approval or nonobjection is required in connection
with this Agreement and the transactions contemplated hereby has stated in
writing that it will not issue the required approval or nonobjection, or (iii)
any court of competent jurisdiction or other governmental authority shall have
issued an order, decree, ruling or taken any other action restraining, enjoining
or otherwise prohibiting the Merger and such order, decree, ruling or other
action shall have become final and unappealable;
11.1.7. By the Board of Directors of either party (provided, that the
terminating party is not then in material breach of any representation,
warranty, covenant or other agreement contained herein) in the event that any of
the conditions precedent to the obligations of such party to consummate the
Merger cannot be satisfied or fulfilled by the date specified in Section 11.1.4
of this Agreement.
11.1.8. By the Board of Directors of AANB if CB&T has received a
Superior Proposal and the Board of Directors of CB&T has entered into an
acquisition agreement with respect to the Superior Proposal, terminated this
Agreement, withdrawn its recommendation of this Agreement, has failed to make
such recommendation or has modified or qualified its recommendation in a manner
adverse to AANB.
11.1.9. By the Board of Directors of CB&T if CB&T has received a
Superior Proposal and the Board of Directors of CB&T has made a determination to
accept such Superior Proposal; provided that CB&T shall not terminate this
Agreement pursuant to this Section 11.1.9 and enter in a definitive agreement
with respect to the Superior Proposal until the expiration of five (5) business
days following AANB's receipt of written notice advising AANB that CB&T has
received a Superior Proposal, specifying the material terms and conditions of
such Superior Proposal (and including a copy thereof with all accompanying
documentation, if in writing) identifying the person making the Superior
Proposal and stating whether CB&T intends to enter into a definitive agreement
with respect to the Superior Proposal. After providing such notice, CB&T shall
provide a reasonable opportunity to AANB during the five-day period to make such
adjustments in the terms and conditions of this Agreement as would enable CB&T
to proceed with the Merger on such adjusted terms.
11.2. Effect of Termination.
11.2.1. In the event of termination of this Agreement pursuant to any
provision of Section 11.1, this Agreement shall forthwith become void and have
no further force, except that (i) the provisions of Sections 11.2, 12.1, 12.2,
12.6, 12.9, 12.10, and any other Section which, by its terms, relates to
post-termination rights or obligations, shall survive such termination of this
Agreement and remain in full force and effect.
11.2.2. If this Agreement is terminated, expenses and damages of the
parties hereto shall be determined as follows:
(A) Except as provided below, whether or not the Merger is consummated,
all costs and expenses incurred in connection with this Agreement and the
transactions contemplated by this Agreement shall be paid by the party incurring
such expenses.
(B) In the event of a termination of this Agreement because of a
willful breach of any representation, warranty, covenant or agreement contained
in this Agreement, the breaching party shall remain liable for any and all
damages, costs and expenses, including all reasonable attorneys' fees, sustained
or incurred by the non-breaching party as a result thereof or in connection
therewith or with respect to the enforcement of its rights hereunder.
(C) As a condition of AANB's willingness, and in order to induce AANB
to enter into this Agreement, and to reimburse AANB for incurring the costs and
expenses related to entering into this Agreement and consummating the
transactions contemplated by this Agreement, CB&T hereby agrees to pay AANB, and
AANB shall be entitled to payment of, a fee of $275,000 plus all expenses, up to
$75,000, incurred by AANB in connection with negotiating the Agreement
undertaking the actions to complete the Merger (the "Fee"), within three
business days after written demand for payment is made by AANB, following the
occurrence of any of the events set forth below:
(i) CB&T terminates this Agreement pursuant to Section 11.1.9 or AANB
terminates this Agreement pursuant to Section 11.1.8; or
(ii) The entering into a definitive agreement by CB&T relating to an
acquisition proposal by another company ("Acquisition Proposal") or the
consummation of an Acquisition Proposal involving CB&T within twelve months
after the occurrence of any of the following: (i) the termination of the
Agreement by AANB pursuant to Section 11.1.2 or 11.1.3 because of a willful
breach by CB&T or any CB&T Subsidiary; or (ii) the failure of the stockholders
of CB&T to approve this Agreement after the occurrence of an Acquisition
Proposal.
(D) If demand for payment of the Fee is made pursuant to Section
11.2.2(C) and payment is timely made, then AANB will not have any other rights
or claims against CB&T or its Subsidiaries, or their respective officers and
directors, under this Agreement, it being agreed that the acceptance of the Fee
under Section 11.2.2(C) will constitute the sole and exclusive remedy of AANB
against CB&T and its Subsidiaries and their respective officers and directors.
11.3. Amendment, Extension and Waiver.
Subject to applicable law, at any time prior to the Effective Time
(whether before or after approval thereof by the stockholders of CB&T), the
parties hereto by action of their respective Boards of Directors, may (a) amend
this Agreement, (b) extend the time for the performance of any of the
obligations or other acts of any other party hereto, (c) waive any inaccuracies
in the representations and warranties contained herein or in any document
delivered pursuant hereto, or (d) waive compliance with any of the agreements or
conditions contained herein; provided, however, that after any approval of this
Agreement and the transactions contemplated hereby by the stockholders of CB&T,
there may not be, without further approval of such stockholders, any amendment
of this Agreement which reduces the amount or value, or changes the form of, the
Merger Consideration to be delivered to CB&T's stockholders pursuant to this
Agreement. This Agreement may not be amended except by an instrument in writing
signed on behalf of each of the parties hereto. Any agreement on the part of a
party hereto to any extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party, but such waiver or failure
to insist on strict compliance with such obligation, covenant, agreement or
condition shall not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure. Any termination of this Agreement pursuant to
Article XI may only be effected upon a vote of a majority of the entire Board of
Directors of the terminating party.
ARTICLE XII
MISCELLANEOUS
12.1. Confidentiality.
Except as specifically set forth herein, AANB and CB&T mutually agree
to be bound by the terms of the confidentiality agreements dated October 11,
2004 (the "Confidentiality Agreements") previously executed by the parties
hereto, which Confidentiality Agreements are hereby incorporated herein by
reference. The parties hereto agree that such Confidentiality Agreements shall
continue in accordance with their respective terms, notwithstanding the
termination of this Agreement.
12.2. Public Announcements.
CB&T and AANB shall cooperate with each other in the development and
distribution of all news releases and other public disclosures with respect to
this Agreement, and except as may be otherwise required by law, neither CB&T nor
AANB shall issue any news release, or other public announcement or communication
with respect to this Agreement unless such news release or other public
announcement or communication has been mutually agreed upon by the parties
hereto.
12.3. Survival.
All representations, warranties and covenants in this Agreement or in
any instrument delivered pursuant hereto shall expire and be terminated and
extinguished at the Effective Time, except for those covenants and agreements
contained herein which by their terms apply in whole or in part after the
Effective Time.
12.4. Notices.
All notices or other communications hereunder shall be in writing and
shall be deemed given if delivered by receipted hand delivery or mailed by
prepaid registered or certified mail (return receipt requested) or by recognized
overnight courier addressed as follows:
If to CB&T, to: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
President and Chief Executive Officer
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
With required copies to: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., Esq.
▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
J. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇ ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
If to AANB, to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chairwoman of the Board, Chief Executive
Officer
and President
▇▇▇▇▇▇▇ ▇▇▇▇▇ National Bancorp, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
With required copies to:
and
▇▇▇▇ ▇▇▇▇▇▇, Esq.
▇▇▇ ▇▇▇▇▇, Esq.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
or such other address as shall be furnished in writing by any party,
and any such notice or communication shall be deemed to have been given: (a) as
of the date delivered by hand; (b) three (3) business days after being delivered
to the U.S. mail, postage prepaid; or (c) one (1) business day after being
delivered to the overnight courier.
12.5. Parties in Interest.
This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and assigns; provided,
however, that neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any party hereto without the prior
written consent of the other party, and that (except as provided in Article III
and Section 7.9 and 7.10 of this Agreement) nothing in this Agreement is
intended to confer upon any other person any rights or remedies under or by
reason of this Agreement.
12.6. Complete Agreement.
This Agreement, including the Exhibits and Disclosure Schedules hereto
and the documents and other writings referred to herein or therein or delivered
pursuant hereto, and the Confidentiality Agreements referred to in Section 12.1,
contains the entire agreement and understanding of the parties with respect to
its subject matter. There are no restrictions, agreements, promises, warranties,
covenants or undertakings between the parties other than those expressly set
forth herein or therein. This Agreement supersedes all prior agreements and
understandings (other than the Confidentiality Agreements referred to in Section
12.1 hereof) between the parties, both written and oral, with respect to its
subject matter.
12.7. Counterparts.
This Agreement may be executed in one or more counterparts all of which
shall be considered one and the same agreement and each of which shall be deemed
an original.
12.8. Severability.
In the event that any one or more provisions of this Agreement shall
for any reason be held invalid, illegal or unenforceable in any respect, by any
court of competent jurisdiction, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Agreement and the parties shall
use their reasonable efforts to substitute a valid, legal and enforceable
provision which, insofar as practical, implements the purposes and intents of
this Agreement.
12.9. Governing Law.
This Agreement shall be governed by the laws of Delaware, without
giving effect to its principles of conflicts of laws.
12.10. Interpretation.
When a reference is made in this Agreement to Sections or Exhibits,
such reference shall be to a Section of or Exhibit to this Agreement unless
otherwise indicated. The recitals hereto constitute an integral part of this
Agreement. References to Sections include subsections, which are part of the
related Section (e.g., a section numbered "Section 5.5.1" would be part of
"Section 5.5" and references to "Section 5.5" would also refer to material
contained in the subsection described as "Section 5.5.1"). The table of
contents, index and headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. Whenever the words "include", "includes" or "including" are used
in this Agreement, they shall be deemed to be followed by the words "without
limitation". The phrases "the date of this Agreement", "the date hereof" and
terms of similar import, unless the context otherwise requires, shall be deemed
to refer to the date set forth in the Recitals to this Agreement.
12.11. Specific Performance.
The parties hereto agree that irreparable damage would occur in the
event that the provisions contained in this Agreement were 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 thereof 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.
IN WITNESS WHEREOF, AANB and CB&T have caused this Agreement to be
executed under seal by their duly authorized officers as of the date first set
forth above.
▇▇▇▇▇▇▇ ▇▇▇▇▇ National Bancorp, Inc.
Dated: February 9, 2005 By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chairwoman,
Chief Executive Officer and President
Consolidated Bank & Trust Company
Dated: February 9, 2005 By:/s/ Walton M. Belle
Name: Walton M. Belle
Title: Chairman of the Board