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EXHIBIT 2.1
PURCHASE, SALE AND ASSUMPTION AGREEMENT
THIS PURCHASE, SALE AND ASSUMPTION AGREEMENT (this "Agreement") is made
and entered into as of July 10, 1998, by and between Century South Banks, Inc.
("CSBI"), a corporation organized and existing under the laws of the State of
Georgia, with its principal office located in Dahlonega, Georgia, and
Appalachian Bancshares, Inc. ("ABI"), a corporation organized and existing under
the laws of the State of Georgia, with its principal office located in Ellijay,
Georgia, and First National Bank of Union County, a national banking association
and a wholly-owned subsidiary of CSBI ("Bank").
PREAMBLE
The Boards of Directors of CSBI, Bank and ABI are of the opinion that
the transaction described herein is in the best interest of the parties and
their respective shareholders. This Agreement provides for the purchase by ABI
from CSBI of (i) all the issued and outstanding common stock of Bank and (ii)
the purchase by CSBI from Bank of the Designated Assets, and (iii) the
assumption by CSBI of the Designated Deposits. At the effective time of such
purchase, sale and assumption, the stock of Bank shall be purchased by ABI, the
Designated Assets will be purchased by CSBI and the Designated Deposits will be
assumed by CSBI and ABI shall transfer and convey the purchase price (as defined
herein), and the Bank shall transfer and convey to CSBI the Designated Assets
and the Designated Deposits to CSBI. As a result, Bank shall become a
wholly-owned subsidiary of ABI. The transaction described in this Agreement is
subject to the approvals of the Board of Governors of the Federal Reserve
System, the Office of the Comptroller of the Currency and the Department of
Banking and Finance of the State of Georgia and the satisfaction of certain
other conditions described in this Agreement.
Certain terms used in this Agreement are defined in Section 8.1 of this
Agreement.
NOW, THEREFORE, in consideration of the above and the mutual
warranties, representations, covenants and agreements set forth herein, the
parties agree as follows:
ARTICLE I
TRANSACTION AND TERMS OF PURCHASE, SALE AND ASSUMPTION
1.1 Purchase, Sale and Assumption. Subject to the terms and
conditions of this Agreement, at the Effective Time, (i) ABI will deliver the
Purchase Price to CSBI, (ii) the Bank will deliver the Designated Assets to
CSBI, and (iii) CSBI shall deliver the Bank Stock to ABI, duly endorsed in blank
accompanied by valid stock powers, free and clear of any and all liens and
encumbrances of any and every nature whatsoever, and assume the Designated
Liabilities.
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1.2 Payment for Bank Stock. The stock transfer books of Bank shall
be closed as of the Closing, and CSBI, as the sole shareholder of record of Bank
shall receive the Purchase Price from ABI. The Purchase Price is the sum of Six
Million One Hundred Thousand Dollars ($6,100,000) payable by ABI to CSBI at the
Closing in cash by wire transfer or, as the applicable Parties may agree, by
delivery of ABI's negotiable promissory note in form satisfactory to said
Parties (the "Note"). If delivered by ABI, the Note shall be secured by the Bank
Stock and all of the issued and outstanding common stock of ABI's wholly owned
subsidiary, ▇▇▇▇▇▇ County Bank ("▇▇▇▇▇▇ Stock") pursuant to the terms of that
certain stock Loan Agreement in the form satisfactory to said Parties (the "Loan
Agreement"). In the event the Parties do not agree as to the terms of the Note
and the Loan Agreement, then the Purchase Price shall be paid by ABI to CSBI at
the Closing in cash by wire transfer.
1.3 Payment for Designated Assets. As of the Effective Time, CSBI
will purchase from the Bank and the Bank will sell to CSBI the Designated Assets
comprised primarily of loans having a then outstanding principal balance not to
exceed the sum of Nine Million Dollars ($9,000,000) minus the sum of Six Hundred
Thousand Dollars ($600,000). Such sum will be paid by CSBI to ABI by wire
transfer at Closing to such account as ABI shall designate to CSBI within 24
hours prior to the Closing.
1.4 Payment for Designated Liabilities. As of the Effective Time,
one of CSBI's Subsidiaries will assume from Bank and Bank will transfer and
convey to such CSBI Subsidiary the Designated Liabilities not to exceed the sum
of Eleven Million Six Hundred Thousand Dollars ($11,600,000). Such sum will be
paid by Bank to CSBI by wire transfer at Closing to such account as CSBI shall
designate to Bank within 24 hours prior to the Closing.
1.5 Time and Place of Closing. The Closing will take place at 9:30
a.m. on the date that the Effective Time occurs (or the immediately preceding
day if the Effective Time is earlier than 9:30 a.m.), or at such other time as
the Parties, acting through their Chief Executive Officers, may mutually agree.
The place of Closing shall be at the offices of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP, Atlanta,
Georgia, or such other place as may be mutually agreed upon by the Parties.
1.6 Effective Time. The Purchase contemplated by this Agreement
shall become effective on the date and at the time the Purchase Price, the Note
and the Loan Agreement are delivered to CSBI by ABI and CSBI delivers the Bank
Stock to ABI. Subject to the terms and conditions hereof, unless otherwise
mutually agreed upon in writing by the Chief Executive Officers of each Party,
the Parties shall use their reasonable efforts to cause the Effective Time to
occur on the last business day of the month in which occurs the last to occur of
(i) the effective date (including expiration of any applicable waiting period)
of the last required Consent of any Regulatory Authority having authority over
and approving or exempting the Purchase; or (ii) such later date as may be
mutually agreed upon in writing by the Chief Executive Officers of each Party.
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ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF CSBI AND BANK
CSBI and Bank hereby, jointly and severally, represent and warrant to ABI
as follows:
2.1 Organization, Standing, and Power.
(a) CSBI is a corporation duly organized, validly existing, and
in good standing under the Laws of the State of Georgia, and is duly registered
as a bank holding company under the BHC Act.
(b) Bank is a national banking association, duly organized,
validly existing and in good standing under the Laws of the United States.
2.2 Authority, No Breach By Agreement.
(a) CSBI and Bank each has the corporate power and authority
necessary to execute, deliver and perform its obligations under this Agreement
and to consummate the transaction contemplated hereby. The execution, delivery
and performance of this Agreement and the consummation of the Purchase, Sale and
Assumption contemplated herein, have been duly and validly authorized by all
necessary corporate action in respect thereof on the part of CSBI and Bank, and
this Agreement represents a legal, valid, and binding obligation of CSBI and
Bank, enforceable against CSBI and the Bank in accordance with its terms (except
in all cases as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or similar Laws affecting the
enforcement of creditors' rights generally and except that the availability of
the equitable remedy of specific performance or injunctive relief is subject to
the discretion of the court before which any proceeding may be brought).
(b) Neither the execution and delivery of this Agreement by
CSBI or Bank, nor the consummation by CSBI or Bank of the transaction
contemplated hereby, nor compliance by CSBI or Bank with any of the provisions
hereof, will (i) conflict with or result in a breach of any provision of CSBI's
or Bank's Articles of Incorporation or Bylaws, or (ii) constitute or result in a
Default under, or require any Consent pursuant to, or result in the creation of
any Lien on any Asset of Bank under, any Contract or Permit of any CSBI
Companies, where such Default or Lien, or any failure to obtain such Consent, is
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on CSBI or Bank, or, (iii) subject to receipt of the requisite approvals
referred to in Section 6.1 of this Agreement, violate any Law or Order
applicable to any CSBI Companies or any of their respective Assets.
(c) No notice to, filing with, or Consent of, any public body
or authority is necessary for the consummation by CSBI or Bank of the
transactions contemplated in this Agreement other than (i) Consents required
from Regulatory Authorities, (ii) Consents, filings or notifications which, if
not obtained or made, are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on CSBI or Bank.
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2.3 Capital Stock.
(a) The authorized capital stock of Bank consists of 75,000
shares of common stock. At the close of business on July 8, 1998, there were
75,000 shares of Bank Stock issued and outstanding which are owned in their
entirety by CSBI. All of the issued and outstanding shares of Bank Stock are
duly and validly issued and outstanding and fully paid and nonassessable under
applicable law.
(b) There are no shares of capital stock or other equity
securities of Bank outstanding and no outstanding options, warrants, scrip,
rights to subscribe to, calls, or commitments of any character whatsoever
relating to, or securities or rights convertible into or exchangeable for,
shares of the capital stock of Bank or contracts, commitments, understandings,
or arrangements by which Bank is or may be bound to issue additional shares of
its capital stock or options, warrants, or rights to purchase or acquire any
additional shares of its capital stock.
2.4 Financial Statements. CSBI has Previously Disclosed and
delivered to ABI prior to the execution of this Agreement copies of all Bank
Financial Statements for periods ended prior to the date hereof and will deliver
to ABI copies of all Bank Financial Statements prepared subsequent to the date
hereof. The Bank Financial Statements (as of the dates thereof and the periods
covered thereby) (i) are or, if dated after the date of this Agreement, will be
in accordance with the books and records of Bank, which are or will be, complete
and correct and which have been or will have been, maintained in accordance with
good business practices, and (ii) present or will present, fairly the financial
position of Bank as of the dates indicated and the results of operations,
changes in shareholder's equity, and cash flows of Bank for the periods
indicated, in accordance with GAAP (subject to exceptions as to consistency
specified therein or as may be indicated in the notes thereto or, in the case of
interim financial statements, to normal recurring year-end adjustments that are
not material).
2.5 Absence of Undisclosed Liabilities. Neither Bank nor any CSBI
Company has Liabilities that are reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on Bank except Liabilities which are
accrued or reserved against in the balance sheets of Bank as of December 31,
1997 and March 31, 1998 included in the Bank Financial Statements or reflected
in the notes thereto. Bank has not incurred nor paid any Liability since March
31, 1998, except for such Liabilities incurred or paid in the ordinary course of
business consistent with past business practice and which are not reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
Bank.
2.6 Absence of Certain Changes or Events. Since March 31, 1998,
(i) there have been no events, changes or occurrences which have had, or are
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Bank, and (ii) Bank has not taken any action, nor failed to take any
action, prior to the date of this Agreement,
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which action or failure, if taken after the date of this Agreement, would
represent or result in a material breach or violation of any of the covenants
and agreements of CSBI provided in Article 4 of this Agreement.
2.7 Tax Matters.
(a) All tax returns required to be filed by or on behalf of
CSBI or Bank have been timely filed or requests for extensions have been timely
filed, granted, and have not expired for periods ended on or before December 31,
1997, and on or before the date of the most recent fiscal year end immediately
preceding the Effective Time, except to the extent that all such failures to
file, taken together, are not reasonably likely to have a Material Adverse
Effect on Bank, and all returns filed are complete and accurate to the Knowledge
of CSBI and Bank. All Taxes shown on filed returns have been paid. As of the
date of this Agreement, there is no audit examination, deficiency, or refund
Litigation with respect to any Taxes that is reasonably likely to result in a
determination that would have, individually or in the aggregate, a Material
Adverse Effect on Bank, except as reserved against in the Bank Financial
Statements delivered prior to the date of this Agreement. All Taxes and other
Liabilities due with respect to completed and settled examinations or concluded
Litigation have been paid.
(b) Except as Previously Disclosed, neither CSBI nor Bank has
executed an extension or waiver of any statute of limitations on the assessment
or collection of any Tax due that is currently in effect, and no unpaid tax
deficiency has been asserted in writing against or with respect to CSBI or Bank,
which deficiency is reasonably likely to have, individually or in the aggregate,
a Material Adverse Effect on Bank.
(c) Deferred Taxes of Bank have been provided for in accordance
with GAAP. Effective January 1, 1993, CSBI adopted Financial Accounting
Standards Board Statement 109, "Accounting for Income Taxes."
(d) Bank has performed all due diligence procedures required
under Internal Revenue Code Section 6722 relating to taxpayer identification
numbers, has complied with all other information reporting requirements of the
IRS, and Bank complied with the withholding requirements under Internal Revenue
Code Section 3406, except for any nonperformance or noncompliance which,
individually or in the aggregate, is not reasonably likely to have a Material
Adverse Effect on Bank
2.8 Compliance with Laws.
(a) CSBI is duly registered as a bank holding company under the
BHC Act.
(b) Bank has in effect all permits necessary to own, lease or
operate their Assets and to carry on its business as now conducted, except for
those Permits the absence of which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Bank, and there
has occurred no Default under any such
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Permit, other than Defaults which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Bank.
(c) Neither CSBI nor Bank is in violation of any Laws, Orders
or Permits applicable to its business or employees conducting its business,
except for violations which are not reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on Bank.
(d) Except as Previously Disclosed, neither CSBI nor Bank has
received any notification or communication from any agency or department of
federal, state, or local government or any Regulatory Authority or the staff
thereof (i) asserting that Bank is not in compliance with any of the Laws or
Orders which such governmental authority or Regulatory Authority enforces, where
such noncompliance is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Bank, (ii) threatening to revoke any
Permits, the revocation of which is reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on Bank, or (iii) requiring Bank to
enter into or consent to the issuance of a cease and desist order, formal
agreement, directive, commitment or memorandum of understanding, or to adopt any
board of directors resolution or similar undertaking, which restricts materially
the conduct of its business, or in any manner relates to its capital adequacy,
its credit or reserve policies, its management, or the payment of dividends.
2.9 Legal Proceedings. Except for the ▇▇▇▇▇▇ litigation or as
Previously Disclosed, there is no Litigation instituted or pending, or, to the
Knowledge of CSBI or Bank, threatened against CSBI or Bank, or against any
Asset, interest, or right of it, that is reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on Bank, nor are there any Orders
of any Regulatory Authorities, other governmental authorities, or arbitrators
outstanding against Bank, that are reasonably likely to have, individually or in
the aggregate a Material Adverse Effect on Bank.
2.10 Reports. Since March 31, 1995, Bank has filed all reports and
statements, together with any amendments required to be made with respect
thereto, that it was required to file with Regulatory Authorities. As of their
respective dates, each of such reports and documents, including the financial
statements, exhibits, and schedules thereto, complied in all material respects
with all applicable Laws. As of their respective dates, each such report and
document did not, in all material respects, contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading.
2.11 Accounting, Tax and Regulatory Matters. Neither CSBI nor Bank
has taken any action nor has any Knowledge of any fact or circumstance that is
reasonably likely to materially impede or delay receipt of any Consents of
Regulatory Authorities referred to in Section 6.1 of this Agreement. To the
Knowledge of CSBI and Bank, there exists no fact, circumstance, or reason why
the requisite Consents referred to in Section 6.1 of this Agreement cannot be
received in a timely manner without the imposition of any condition or
restriction of the type described in the second sentence of such Section 6.1.
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2.12 Assets. Except as Previously Disclosed or as disclosed or
reserved against in the Bank Financial Statements, Bank has good and marketable
title, free and clear of all Liens, to all of its Assets or for the Designated
Assets. All material tangible properties used in the business of Bank are in
good condition, reasonable wear and tear excepted, and are usable in the
ordinary course of business consistent with Bank's past practices. All Assets
which are material to Bank's businesses held under leases or subleases by Bank,
are held under valid Contracts enforceable in accordance with their respective
terms (except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or other Laws affecting the enforcement
of creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the discretion
of the court before which any proceedings may be brought), and each such
Contract is in full force and effect. The policies of fire, theft, liability,
and other insurance maintained with respect to the Assets or businesses of Bank
provide adequate coverage under current industry practices against loss or
Liability, and the fidelity and blanket bonds in effect as to which Bank is a
named insured are reasonably sufficient. Except for the Designated Assets, the
Assets of Bank include all assets required to operate the business of Bank as
presently conducted.
2.13 Environmental Matters.
(a) To the Knowledge of CSBI and Bank, Bank's Participation
Facilities, and its Loan Properties are, and have been, in substantial
compliance with all Environmental Laws, except for violations which are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Bank.
(b) There is no Litigation pending or, to the Knowledge of CSBI
and Bank, threatened before any court, governmental agency or authority or other
forum in which Bank or any of its Participation Facilities have been or, with
respect to threatened Litigation, may be named as a defendant (i) for alleged
noncompliance (including by any predecessor) with any Environmental Law or (ii)
relating to the release into the environment of any Hazardous Material (as
defined below) or oil, whether or not occurring at, on, under or involving a
site owned, leased or operated by Bank or any of its Participation Facilities,
except for such Litigation pending or threatened that is not reasonably likely
to have, individually or in the aggregate, a Material Adverse Effect on Bank.
(c) There is no Litigation pending or, to the Knowledge of CSBI
and Bank, threatened before any court, governmental agency or board or other
forum in which any of Bank's Loan Properties has been or, with respect to
threatened Litigation, may be named as a defendant or potentially responsible
party (i) for alleged noncompliance (including by any predecessor) with any
Environmental Law or (ii) relating to the release into the environment of any
Hazardous Material or oil, whether or not occurring at, on, under or involving a
Loan Property, except for such Litigation pending or threatened that is not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Bank.
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(d) To the Knowledge of CSBI and Bank, there is no reasonable
basis for any Litigation of a type described in subsections (b) or (c), except
such as is not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Bank.
(e) To the Knowledge of CSBI and Bank, there have been no
releases of Hazardous Material or oil in, on, under or affecting any
Participation Facility or Loan Property, except such as are not reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
Bank.
(f) Notwithstanding the foregoing, with respect to any of
Bank's Loan Properties, CSBI has not conducted any independent investigation and
is making these representations and warranties only with respect to its
Knowledge.
2.14 Employee Benefit Plans. CSBI has Previously Disclosed, and
delivered or made available to ABI prior to the execution of this Agreement
copies in each case of, all pension, retirement, profit-sharing, deferred
compensation, stock option, employee stock ownership, severance pay, vacation,
bonus, or other incentive plan, all other written employee programs,
arrangements, or agreements, all medical, vision, dental, or other health plans,
all life insurance plans, and all other employee benefit plans or fringe benefit
plans, including, without limitation, "employee benefit plans" as that term is
defined in Section 3(3) of ERISA, currently adopted, maintained by, sponsored in
whole or in part by, or contributed to by Bank or CSBI for the benefit of Bank's
employees, retirees, dependents, spouses, directors, independent contractors, or
other beneficiaries and under which such persons are eligible to participate
(collectively, the "Bank Benefit Plans").
2.15 Material Contracts. Except as Previously Disclosed or
otherwise reflected in the Bank Financial Statements, neither Bank nor any of
its Assets, businesses or operations, is a party to, or is bound or affected by,
or receives benefits under, (i) any employment, severance, termination,
consulting or retirement Contract providing for aggregate payments to any Person
in any calendar year in excess of $100,000, and (ii) any Contract relating to
the borrowing of money by Bank or the guarantee by Bank of any such obligation
(other than Contracts evidencing deposit liabilities, purchases of federal
funds, fully-secured repurchase agreements, trade payables, and Contracts
relating to borrowings or guarantees made in the ordinary course of business),
(collectively, the "Bank Contracts"). Bank is not in Default under any Bank
Contract, other than Defaults which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Bank.
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ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF ABI
ABI hereby represents and warrants to CSBI as follows:
3.1 Organization, Standing, and Power. ABI is a corporation duly
organized, validly existing, and in good standing under the Laws of the State of
Georgia, and is duly registered as a bank holding company under the BHC Act. ABI
has the corporate power and authority to carry on its business as now conducted
and to own, lease and operate its Assets.
3.2 Authority, No Breach By Agreement.
(a) ABI has the corporate power and authority necessary to
execute, deliver and perform its obligations under this Agreement and to
consummate the transaction contemplated hereby. The execution, delivery and
performance of this Agreement and the consummation of the Purchase contemplated
herein, have been duly and validly authorized by all necessary corporate action
in respect thereof on the part of ABI. This Agreement represents a legal, valid,
and binding obligation of ABI, enforceable against ABI in accordance with its
terms (except in all cases as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, or similar Laws affecting
the enforcement of creditors' rights generally and except that the availability
of the equitable remedy of specific performance or injunctive relief is subject
to the discretion of the court before which any proceeding may be brought).
(b) Neither the execution and delivery of this Agreement by
ABI, nor the consummation by ABI of the transaction contemplated hereby, nor
compliance by ABI with any of the provisions hereof, will (i) conflict with or
result in a breach of any provision of ABI's Articles of Incorporation or
Bylaws, or (ii) constitute or result in a Default under, or require any Consent
pursuant to, or result in the creation of any Lien on any Asset of any ABI
Companies under, any Contract or Permit of any ABI Companies, where such Default
or Lien, or any failure to obtain such Consent, is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on ABI, or, (iii)
subject to receipt of the requisite approvals referred to in Section 6.1 of this
Agreement, violate any Law or Order applicable to any ABI Companies or any of
their respective Assets.
(c) No notice to, filing with, or Consent of, any public body
or authority is necessary for the consummation by ABI of the Purchase and the
other transactions contemplated in this Agreement other than (i) Consents
required from Regulatory Authorities and (ii) Consents, filings or notifications
which, if not obtained or made, are not reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on ABI.
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ARTICLE 4
CONDUCT OF BUSINESS PENDING CONSUMMATION
4.1 Affirmative Covenants of CSBI and Bank. Unless the prior
written consent of ABI shall have been obtained, and except as otherwise
contemplated herein, CSBI and Bank, jointly and severally, agree:
(a) to operate its business and cause Bank to operate its
businesses in the usual, regular, and ordinary course;
(b) to preserve intact Bank's business organizations and Assets
and maintain its rights and franchises;
(c) to use its best efforts to cause its representations and
warranties to be correct at all times; and
(d) to take no action which would (i) adversely affect the
ability of any Party to obtain any Consents required for the transactions
contemplated hereby without imposition of a condition or restriction of the type
referred to in the last sentence of Section 6.1 of this Agreement or (ii)
adversely affect in any material respect the ability of either Party to perform
its covenants and agreements under this Agreement.
4.2 Negative Covenants of CSBI and Bank. From the date of this
Agreement until the earlier of the Effective Time or the termination of this
Agreement, CSBI and Bank covenant and agree that neither CSBI nor Bank will do
or agree or commit to do, any of the following without the prior written consent
of the Chief Executive Officer of ABI, which consent shall not be unreasonably
withheld:
(a) amend the Articles of Incorporation, Articles of
Association, Bylaws or other governing instruments of Bank; or
(b) incur any additional debt obligation or other obligation
for borrowed money in excess of an aggregate of $100,000 except in the ordinary
course of the business of Bank consistent with past practices (which shall
include creation of deposit liabilities, purchases of federal funds, and entry
into repurchase agreements fully secured by U.S. government or agency
securities), or impose, or suffer the imposition, on any share of stock of Bank
held by CSBI of any Lien or permit any such Lien to exist; or
(c) repurchase, redeem, or otherwise acquire or exchange
directly or indirectly, any shares, or any securities convertible into any
shares, of the capital stock of Bank, or declare or pay any dividend or make any
other distribution in respect of Bank Stock provided that Bank shall declare and
pay a cash dividend to CSBI in the amount of $300,000 on or before the Effective
Time (the "Special Dividend"); or
(d) except for this Agreement, issue or sell, pledge, encumber,
authorize the issuance of, enter into any Contract to issue, sell, pledge,
encumber, or authorize the
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issuance of, or otherwise permit to become outstanding, any additional shares of
Bank Stock, or any stock appreciation rights, or any option, warrant,
conversion, or other right to acquire any such stock; or
(e) except as set forth herein, issue or authorize the issuance
of any other securities in respect of or in substitution for shares of Bank's
common stock or sell, lease, mortgage or otherwise dispose of or otherwise
encumber any Asset having a book value in excess of $100,000 other than in the
ordinary course of business for reasonable and adequate consideration; or
(f) acquire direct or indirect control over any Person, other
than in connection with (i) foreclosures in the ordinary course of business, or
(ii) acquisitions of control by CSBI in its fiduciary capacity; or
(g) grant any increase in compensation or benefits to the
employees or officers of Bank (including such discretionary increases as may be
contemplated by existing employment agreements) exceeding five percent (5%)
individually or in the aggregate on an annual basis, except in accordance with
past practice Previously Disclosed or as required by Law; pay any bonus except
in accordance with past practice Previously Disclosed or the provisions of any
applicable program or plan adopted by its Board of Directors prior to the date
of this Agreement; enter into or amend any severance agreements with officers of
Bank; grant any increase in fees or other increases in compensation or other
benefits to directors of Bank except in accordance with past practice Previously
Disclosed; or
(h) except as Previously Disclosed, enter into or amend any
employment Contract between Bank and any Person (unless such amendment is
required by Law, by any existing employment Contract or this Agreement).
(i) adopt any new employee benefit plan of Bank or make any
material change in or to any existing employee benefit plans of Bank other than
any such change that is required by Law or that, in the opinion of counsel, is
necessary or advisable to maintain the tax qualified status of any such plan; or
(j) make any significant change in any accounting methods or
systems of internal accounting controls, except as may be appropriate to conform
to changes in regulatory accounting requirements or GAAP; or
(k) commence any Litigation other than in accordance with past
practice, settle any Litigation involving any Liability of Bank for money
damages in excess of $100,000 or material restrictions upon the operations of
Bank; or
(l) except in the ordinary course of business, modify, amend or
terminate any material Contract or waive, release, compromise or assign any
material rights or claims.
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4.3 Affirmative Covenants of ABI. Unless the prior written consent
of CSBI shall have been obtained, and except as otherwise contemplated herein,
ABI agrees:
(a) to use its best efforts to cause its representations and
warranties to be correct at all times; and
(b) to take no action which would (i) adversely affect the
ability of any Party to obtain any Consents required for the transactions
contemplated hereby without imposition of a condition or restriction of the type
referred to in the last sentence of Section 6.1 of this Agreement or (ii)
adversely affect in any material respect the ability of either Party to perform
its covenants and agreements under this Agreement.
4.4 Adverse Changes in Condition. Each Party agrees to give
written notice promptly to the other Party upon becoming aware of the occurrence
or impending occurrence of any event or circumstance relating to it or any of
its Subsidiaries which (i) is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on it or (ii) is reasonably likely to cause
or constitute a material breach of any of its representations, warranties, or
covenants contained herein, and to use its reasonable efforts to prevent or
promptly to remedy the same.
4.5 Reports. Each Party and its Subsidiaries shall file all
reports required to be filed by it with Regulatory Authorities between the date
of this Agreement and the Effective Time and shall deliver to the other Party
copies of all such reports (other than currency transaction reports) promptly
after the same are filed. If financial statements are contained in any such
reports filed with the SEC, such financial statements will fairly present the
consolidated financial position of the entity filing such statements as of the
dates indicated and the consolidated results of operations, changes in
shareholders' equity, and cash flows for the periods then ended in accordance
with GAAP (subject in the case of interim financial statements to normal
recurring year-end adjustments that are not material). As of their respective
dates, such reports filed with the SEC will comply in all material respects with
the Securities Laws and will not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. Any financial statements contained in any other
reports to another Regulatory Authority shall be prepared in accordance with
Laws applicable to such reports.
ARTICLE 5
ADDITIONAL AGREEMENTS
5.1 Applications. ABI shall promptly prepare and file, and CSBI
and Bank shall cooperate in the preparation and, where appropriate, filing of,
applications with all Regulatory Authorities having jurisdiction over the
transactions contemplated by this Agreement seeking the requisite Consents
necessary to consummate the transactions contemplated by this Agreement. ABI
shall permit CSBI to review such applications prior to filing same.
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5.2 Agreement as to Efforts to Consummate. Subject to the terms
and conditions of this Agreement, each Party agrees to use its reasonable
efforts to take all actions, and to do all things necessary, proper, or
advisable under applicable Laws, as promptly as practicable so as to permit
consummation of the purchase at the earliest possible date and to otherwise
enable consummation of the transactions contemplated hereby and shall cooperate
fully with the other Party hereto to that end, including, without limitation,
using its reasonable efforts to lift or rescind any Order adversely affecting
its ability to consummate the transactions contemplated herein and to cause to
be satisfied the conditions referred to in Article 6 of this Agreement. Each
Party shall use its reasonable efforts to obtain all Consents necessary or
desirable for the consummation of the transactions contemplated by this
Agreement.
5.3 Investigation and Confidentiality.
(a) Prior to the Effective Time, each Party will keep the
other Party advised of all material developments relevant to its business and to
consummation of the Purchase and shall permit the other Party to make or cause
to be made such investigation of the business and properties of it and its
Subsidiaries and of their respective financial and legal conditions as the other
Party reasonably requests, provided that such investigation shall be reasonably
related to the transaction contemplated hereby and shall not interfere
unnecessarily with normal operations. No investigation by a Party shall affect
the representations and warranties of the other Party.
(b) Each Party shall, and shall cause its advisers and agents
to, maintain the confidentiality of all confidential information furnished to it
by other Party concerning its and its Subsidiaries' businesses, operations, and
financial condition except in furtherance of the transaction contemplated by
this Agreement. If this Agreement is terminated prior to the Effective Time,
each Party shall promptly return all documents and copies thereof, and all work
papers containing confidential information received from the other Party.
(c) Each Party agrees to give the other Party notice as soon
as practicable after any determination by it of any fact or occurrence relating
to the other Party which it has discovered through the course of its
investigation and which represents, or is reasonably likely to represent, either
a material breach of any representation, warranty, covenant or agreement of the
other Party or which has had or is reasonably likely to have a Material Adverse
Effect on the other Party.
5.4 Press Releases. Prior to the Effective Time, CSBI and ABI
shall consult with each other as to the form and substance of any press release
or other public disclosure materially related to this Agreement or any other
transaction contemplated hereby; provided, however, that nothing in this Section
5.4 shall be deemed to prohibit any Party from making any disclosure which its
counsel deems necessary or advisable in order to satisfy such Party's disclosure
obligations imposed by Law.
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5.5 Transfer of Designated Assets. As of the Effective Time, Bank
shall transfer the Designated Assets to such CSBI Subsidiary as CSBI designates.
After the Effective Time, ABI and Bank shall cooperate with CSBI to take all
steps reasonably necessary to transfer and evidence ownership, right, title and
interest in and to the Designated Assets. The Designated Assets shall include
accrued interest receivable, in the case of loans, deeds, in the case of real
estate owned as a result of foreclosures, and the notes, deeds to secure debt,
life insurance policies, financing statements, security agreements, guaranties
and collateral representing, evidencing or securing such loans or foreclosed
properties. The standard "dragnet" provisions of security documents which secure
or are contained in other promissory notes made or held by Bank not constituting
the Designated Assets being acquired by CSBI and shall not reach collateral for
a loan comprising the Designated Assets transferred to CSBI hereunder.
5.6 Transfer of Designated Deposits. At the Effective Time Bank
shall transfer to such CSBI Subsidiary as CSBI designates, the Designated
Deposits and such CSBI Subsidiary will assume such Designated Deposits in
accordance with their respective terms.
5.7 No Solicitation by CSBI.
(a) For a period of 24 months after the Effective Time, no
CSBI Company shall:
(i) Specifically target and solicit customers of Bank
utilizing any customer or mailing list which consists primarily of customers of
Bank; provided, however, these restrictions shall not apply to those customers
associated with the Designated Assets or the Designated Deposits or both, nor
shall they restrict general mass mailings, telemarketing calls, statement
stuffers and other similar communications directed to all the current customers
of any CSBI Company other than Bank or to the public by newspaper, radio or
television advertisements of a general nature (provided that such newspaper,
radio or television advertisements shall not specifically target Union County,
Georgia) or otherwise prevent CSBI from taking such action as may be required to
comply with any applicable federal or state law, rule or regulation; or
(ii) Own or operate a facility which accepts deposits or
extends credit or both in Union
County, Georgia; or
(b) For the period beginning on the Effective Time and ending
June 1, 1999, no CSBI Company shall contact ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ and
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ regarding employment opportunities available at any CSBI
Company or hire them as employees of any CSBI Company.
5.8 ▇▇▇▇▇▇ Litigation. After the Effective Time, CSBI will assume
the defense of Bank in the lawsuit brought on behalf of ▇▇▇▇▇ ▇▇▇▇▇▇ and shall
indemnify and hold harmless Bank from and against any costs or expenses,
judgments, fines, losses, claims, damages or liabilities incurred in connection
with such lawsuit and any appeal therefrom.
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CSBI shall assume and control the defense of such litigation at its expense and
through counsel of its choice. Bank shall reasonably cooperate with CSBI in such
defense by making available its employees, records and documents as CSBI shall
reasonably request.
ARTICLE 6
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
6.1 Conditions to Obligations of Each Party. The respective
obligations of each Party to perform this Agreement and consummate the purchase
are subject to the satisfaction of the following conditions, unless waived by
both Parties pursuant to Section 8.6 of this Agreement:
(a) Regulatory Approvals. All Consents of, filings and
registrations with, and notifications to, all Regulatory Authorities required
for consummation of the purchase shall have been obtained or made and shall be
in full force and effect and all waiting periods required by Law shall have
expired. No Consent obtained from any Regulatory Authority which is necessary to
consummate the transactions contemplated hereby shall be conditioned or
restricted in a manner (including, without limitation, requirements relating to
the raising of additional capital or the disposition of Assets) which in the
reasonable judgment of the Board of Directors of either Party would so
materially adversely impact the economic or business benefits of the
transactions contemplated by this Agreement so as to render inadvisable the
consummation of the purchase.
(b) Consents and Approvals. Each Party shall have obtained any
and all Consents required for consummation of the purchase or for the preventing
of any Default under any Contract or Permit of such Party which, if not obtained
or made, is reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on such Party.
(c) Legal Proceedings. No court or governmental or regulatory
authority of competent jurisdiction shall have enacted, issued, promulgated,
enforced or entered any Law or Order (whether temporary, preliminary or
permanent) or taken any other action which prohibits, restricts or makes illegal
consummation of the transactions contemplated by this Agreement.
6.2 Conditions to Obligations of ABI. The obligations of ABI to
perform this Agreement and consummate the Purchase and the other transactions
contemplated hereby are subject to the satisfaction of the following conditions,
unless waived by ABI pursuant to Section 8.6(a) of this Agreement:
(a) Representations and Warranties. The representations and
warranties of CSBI and Bank set forth or referred to in this Agreement shall be
true and correct in all material respects as of the date of this Agreement and
as of the Effective Time with the same effect as though all such representations
and warranties had been made on and as of the Effective Time (provided that
representations and warranties which are confined to a specified date shall
speak only as of such date), except (i) as expressly contemplated by
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this Agreement, or (ii) for representations and warranties the inaccuracies of
which relate to matters that are not reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on Bank.
(b) Performance of Agreements and Covenants. Each and all of
the agreements and covenants of CSBI and Bank to be performed and complied with
pursuant to this Agreement and the other agreements contemplated hereby prior to
the Effective Time shall have been duly performed and complied with in all
material respects.
(c) Certificates. CSBI and Bank shall have delivered to ABI
(i) a certificate, dated as of the Effective Time and signed on its behalf by
its Chief Executive Officer, to the effect that the conditions of its
obligations set forth in Section 6.2 of this Agreement have been satisfied, and
(ii) certified copies of resolutions duly adopted by CSBI's and Bank's
respective Board of Directors and Bank's shareholder evidencing the taking of
all corporate action necessary to authorize the execution, delivery and
performance of this Agreement, and the consummation of the transactions
contemplated hereby, all in such reasonable detail as ABI and its counsel shall
reasonably request.
(d) Due Diligence Investigation. On or before August 15, 1998,
ABI shall have completed a due diligence investigation in regard to Bank and
shall have resolved to its sole satisfaction any issues which arise in the
course of such investigation.
6.3 Conditions to Obligations of CSBI. The obligations of CSBI to
perform this Agreement and consummate the Purchase and the other transactions
contemplated hereby are subject to the satisfaction of the following conditions,
unless waived by CSBI pursuant to Section 8.6(b) of this Agreement:
(a) Representations and Warranties. The representations and
warranties of ABI set forth or referred to in this Agreement shall be true and
correct in all material respects as of the date of this Agreement and as of the
Effective Time with the same effect as though all such representations and
warranties had been made on and as of the Effective Time (provided that
representations and warranties which are confined to a specified date shall
speak only as of such date), except (i) as expressly contemplated by this
Agreement, or (ii) for representations and warranties the inaccuracies of which
relate to matters that are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on ABI.
(b) Performance of Agreements and Covenants. Each and all of
the agreements and covenants of ABI to be performed and complied with pursuant
to this Agreement and the other agreements contemplated hereby prior to the
Effective Time shall have been duly performed and complied with in all material
respects.
(c) Certificates. ABI shall have delivered to CSBI (i) a
certificate, dated as of the Effective Time and signed on its behalf by its
Chief Executive Officer and its Chief Financial Officer, to the effect that the
conditions of its obligations set forth in
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Section 6.3 of this Agreement have been satisfied, and (ii) certified copies of
resolutions duly adopted by ABI Board of Directors evidencing the taking of all
corporate action necessary to authorize the execution, delivery and performance
of this Agreement, and the consummation of the transaction contemplated hereby,
all in such reasonable detail as CSBI and its counsel shall reasonably request.
ARTICLE 7
TERMINATION
7.1 Termination. Notwithstanding any other provision of this
Agreement, this Agreement may be terminated and the Purchase, Sale and
Assumption abandoned at any time prior to the Effective Time:
(a) By mutual consent of the Board of Directors of ABI and the
Board of Directors of CSBI; or
(b) By the Board of Directors of either ABI or CSBI (provided
that the terminating Party is not then in material breach of any representation,
warranty, covenant, or other agreement contained in this Agreement) in the event
of a breach by the other Parties of any representation or warranty contained in
this Agreement which cannot be or has not been cured within 30 days after the
giving of written notice to the breaching Party of such breach and which breach
would provide the non-breaching Party the ability to refuse to consummate the
purchase; or
(c) By the Board of Directors of either CSBI or ABI (provided
that the terminating Party is not then in material breach of any representation,
warranty, covenant, or other agreement contained in this Agreement) in the event
any Consent of any Regulatory Authority required for consummation of the
Purchase shall have been denied by final nonappealable action of such authority
or if any action taken by such authority is not appealed within the time limit
for appeal; or
(d) By the Board of Directors of either CSBI or ABI in the
event that the Purchase shall not have been consummated by November 30, 1998,
but only if the failure to consummate the transactions contemplated hereby on or
before such date is not caused by any breach of this Agreement by the Party
electing to terminate pursuant to this Section 7.1(d) and further, if ABI shall
have filed all applications necessary to obtain the necessary consents of
Regulatory Authorities within 60 days after the date hereof, and if the Closing
shall not have occurred because of a delay caused by a Regulatory Authority in
its review of the application before it, then the November 30, 1998 date shall
be extended to December 30, 1998 in order for ABI to obtain such Consents
required and for the expiration of any stipulated waiting periods; or
(e) By the Board of Directors of either CSBI or ABI (provided
that the terminating Party is not then in material breach of any representation,
warranty, covenant, or other agreement contained in this Agreement) in the event
that any of the conditions precedent to the obligations of such Party to
consummate the Purchase cannot be satisfied or fulfilled by the date specified
in Section 7.1(d) of this Agreement.
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7.2 Effect of Termination. In the event of the termination and
abandonment of this Agreement pursuant to Section 7.1 of this Agreement, this
Agreement shall become void and have no effect, except that (i) the provisions
of this Section 7.2 and Section 5.3 of this Agreement shall survive any such
termination and abandonment. In the event this Agreement is terminated as a
consequence of a willful breach by either CSBI or ABI of their respective
obligations hereunder, then such breaching Party shall pay to the other Party
the sum of Two Hundred and Fifty Thousand Dollars ($250,000) in cash which sum
represents compensation for loss as a result of the transaction contemplated by
this Agreement not being consummated as and for full and complete liquidated
damages caused by such breach.
7.3 Non-Survival of Representations and Covenants. The respective
representations, warranties, obligations, covenants, and agreements of the
Parties shall not survive the Effective Time except for this Section 7.3 and
Article 5 of this Agreement.
ARTICLE 8
MISCELLANEOUS
8.1 Definitions. Except as otherwise provided herein, the
capitalized terms set forth below (in their singular and plural forms as
applicable) shall have the following meanings:
"ABI COMPANIES" shall mean ABI and ▇▇▇▇▇▇ County Bank.
"AFFILIATE" of a Person shall mean: (i) any other Person
directly, or indirectly through one or more intermediaries,
controlling, controlled by or under common control with such Person or
(ii) any officer, director, partner, employee, or direct or indirect
beneficial owner of any 10% or greater equity or voting interest of
such Person.
"AGREEMENT" shall mean this Agreement, including the Exhibits
delivered pursuant hereto and incorporated herein by reference.
"ASSETS" of a Person shall mean all of the assets, properties,
businesses and rights of such Person of every kind, nature, character
and description, whether real, personal or mixed, tangible or
intangible, accrued or contingent, or otherwise relating to or utilized
in such Person's business, directly or indirectly, in whole or in part,
whether or not carried on the books and records of such Person, and
whether or not owned in the name of such Person or any Affiliate of
such Person and wherever located.
"BHC ACT" shall mean the federal Bank Holding Company Act of
1956, as amended.
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"BANK STOCK" shall mean 75,000 shares of the common stock of
Bank, constituting all the issued and outstanding shares thereto.
"CSBI COMPANY" shall mean CSBI or any wholly owned subsidiary
financial institution or corporation.
"CSBI FINANCIAL STATEMENTS" shall mean (i) the consolidated
balance sheets (including related notes and schedules, if any) of CSBI
as of March 31, 1998 and as of December 31, 1997 and 1996, and the
related statements of income, changes in shareholders' equity, and cash
flows (including related notes and two fiscal years ended December 1,
1997 and 1996, as filed by CSBI in SEC Documents, and (ii) the
consolidated balance sheets of CSBI (including related notes and
schedules, if any) and related statements of income, changes in
shareholders' equity, and cash flows (including related notes and
schedules, if any) included in SEC Documents filed with respect to
periods ended subsequent to March 31, 1998, with related prior year
comparable financial statements.
"CLOSING" shall mean the closing of the transaction
contemplated hereby, as described in Section 1.2 of this Agreement.
"CONSENT" shall mean any consent, approval, authorization,
clearance, exemption, waiver, or similar affirmation by any Person
pursuant to any Contract, Law, Order, or Permit.
"CONTRACT" shall mean any written or oral agreement,
arrangement, authorization, commitment, contract, indenture,
instrument, lease, obligation, plan, practice, restriction,
understanding or undertaking of any kind or character, or other
document to which any Person is a party or that is binding on any
Person or its capital stock, Assets or business.
"DEFAULT" shall mean (i) any breach or violation of or default
under any Contract, Order or Permit, (ii) any occurrence of any event
that with the passage of time or the giving of notice or both would
constitute a breach or violation of or default under any Contract,
Order or Permit, or (iii) any occurrence of any event that with or
without the passage of time or the giving of notice would give rise to
a right to terminate or revoke, change the current terms of, or
renegotiate, or to accelerate, increase, or impose any Liability under,
any Contract, Order or Permit.
"DESIGNATED DEPOSITS" shall mean the deposits maintained by
Bank originated by a CSBI Company's customer and any other deposit
designated by CSBI not to exceed the sum of $11,600,000 with a weighted
rate of 5.4% per annum in the aggregate.
"DESIGNATED ASSETS" shall mean those loans and collateral as
determined by written agreement of the Parties, and the allowance for
loan losses associated therewith.
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"EFFECTIVE TIME" shall mean the date and time at which the
Bank Stock is transferred of record from CSBI to ABI.
"ENVIRONMENTAL LAWS" shall mean all Laws which are
administered, interpreted or enforced by the United States
Environmental Protection Agency and state and local agencies with
jurisdiction over pollution or protection of the environment.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
"EXHIBITS" A through C, inclusive, shall mean the Exhibits so
marked, copies of which are attached to this Agreement. Such Exhibits
are hereby incorporated by reference herein and made a part hereof, and
may be referred to in this Agreement and any other related instrument
or document without being attached hereto.
"GAAP" shall mean generally accepted accounting principles,
consistently applied during the periods involved.
"HAZARDOUS MATERIAL" shall mean any pollutant, contaminant, or
hazardous substance within the meaning of the Comprehensive Environment
Response, Compensation, and Liability Act, 42 U.S.C. " 9601 et seq., or
any similar federal, state or local Law.
"IRS" shall mean the Internal Revenue Service.
"INTERNAL REVENUE CODE" shall mean the Internal Revenue Code
of 1986, as amended, and the rules and regulations promulgated
thereunder.
"KNOWLEDGE" as used with respect to a Person shall mean the
knowledge after due inquiry of the Chairman, President, Chief Financial
Officer, Chief Accounting Officer, Chief Credit Officer, any Senior or
Executive Vice President of such Person.
"LAW" shall mean any code, law, ordinance, regulation,
reporting or licensing requirement, rule, or statute applicable to a
Person or its Assets, Liabilities or business, including, without
limitation, those promulgated, interpreted or enforced by any of the
Regulatory Authorities.
"LIABILITY" shall mean any direct or indirect, primary or
secondary, liability, indebtedness, obligation, penalty, cost or
expense (including, without limitation, costs of investigation,
collection and defense), claim, deficiency, guaranty or endorsement of
or by any Person (other than endorsements of notes,
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bills, checks, and drafts presented for collection or deposit in the
ordinary course of business) of any type, whether accrued, absolute or
contingent, liquidated or unliquidated, matured or unmatured, or
otherwise.
"LIEN" shall mean any conditional sale agreement, default of
title, easement, encroachment, encumbrance, hypothecation,
infringement, lien, mortgage, pledge, reservation, restriction,
security interest, title retention or other security arrangement, or
any adverse right or interest, charge, or claim of any nature
whatsoever of, on, or with respect to any property or property
interest, other than (i) Liens for current property Taxes not yet due
and payable, (ii) for depository institution Subsidiaries of a Party,
pledges to secure deposits and other Liens incurred in the ordinary
course of the banking business, and (iii) Liens which are not
reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on a Party.
"LITIGATION" shall mean any action, arbitration, cause of
action, claim, complaint, criminal prosecution, demand letter,
governmental or other examination or investigation, hearing, inquiry,
administrative or other proceeding, or notice (written or oral) by any
Person alleging potential Liability or requesting information relating
to or affecting a Party, its business, its Assets (including, without
limitation, Contracts related to it), or the transactions contemplated
by this Agreement, but shall not include regular, periodic examinations
of depository institutions and their Affiliates by Regulatory
Authorities.
"LOAN PROPERTY" shall mean any property owned by the Party in
question or by any of its Subsidiaries or in which such Party or
Subsidiary holds a security interest, and, where required by the
context, includes the owner or operator of such property, but only with
respect to such property.
"MATERIAL" for purposes of this Agreement shall be determined
in light of the facts and circumstances of the matter in question;
provided that any specific monetary amount stated in this Agreement
shall determine materiality in that instance.
"MATERIAL ADVERSE EFFECT" on a Party shall mean an event,
change or occurrence which has a material adverse impact on (i) the
financial position, business, or results of operations of such Party
and its Subsidiaries, taken as a whole, or (ii) the ability of such
Party to perform its obligations under this Agreement or to consummate
the Purchase or the other transactions contemplated by this Agreement,
provided that "material adverse impact" shall not be deemed to include
the impact of (x) changes in banking and similar Laws of general
applicability or interpretations thereof by courts or governmental
authorities and (y) changes in GAAP or regulatory accounting principles
generally applicable to Banks and their holding companies.
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"ORDER" shall mean any administrative decision or award,
decree, injunction, judgment, order, quasi judicial decision or award,
ruling, or writ of any federal, state, local or foreign or other court,
arbitrator, mediator, tribunal, administrative agency or Regulatory
Authority.
"PARTICIPATION FACILITY" shall mean any facility or property
in which the Party in question or any of its Subsidiaries participates
in the management (including any property or facility held in a joint
venture) and, where required by the context, said term means the owner
or operator of such facility or property, but only with respect to such
facility or property.
"PARTY" shall mean either CSBI, Bank or ABI, and "Parties"
shall mean CSBI, Bank and ABI.
"PERMIT" shall mean any federal, state, local, and foreign
governmental approval, authorization, certificate, easement, filing,
franchise, license, notice, permit, or right to which any Person is a
party or that is or may be binding upon or inure to the benefit of any
Person or its capital stock, Assets, Liabilities, or business.
"PERSON" shall mean a natural person or any legal, commercial
or governmental entity, such as, but not limited to, a corporation,
general partnership, joint venture, limited partnership, limited
liability company, trust, business association, group acting in
concert, or any person acting in a representative capacity.
"PREVIOUSLY DISCLOSED" shall mean information delivered in
writing prior to the date of this Agreement in the manner and to the
Party or counsel or both described in Section 8.8 of this Agreement and
entitled "Previously Disclosed Information Delivered Pursuant to the
Agreement" describing in reasonable detail the matters contained
therein or identifying the information disclosed, provided that in the
case of Subsidiaries acquired after the date of this Agreement, such
information may be so delivered by the acquiring Party to the other
Party prior to the date of such acquisition.
"REGULATORY AUTHORITIES" shall mean, collectively, the Federal
Trade Commission, the United States Department of Justice, the Board of
the Governors of the Federal Reserve System, the Office of the
Comptroller of the Currency, the Federal Deposit Insurance Corporation,
all state regulatory agencies having jurisdiction over the Parties and
their respective Subsidiaries.
"SEC" shall mean the United States Securities and Exchange
Commission.
"SEC DOCUMENTS" shall mean all reports and registration
statements filed, or required to be filed, by a Party or any of its
Subsidiaries with any Regulatory Authority pursuant to the Securities
Laws.
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"SECURITIES LAWS" shall mean the 1933 Act, the 1934 Act, the
Investment Company Act of 1940, as amended, the Investment Advisors Act
of 1940, as amended, the Trust Indenture Act of 1939, as amended, and
the rules and regulations of any Regulatory Authority promulgated
thereunder.
"SUBSIDIARIES" shall mean all those corporations, banks,
associations, or other entities of which the entity in question owns or
controls 5% or more of the outstanding equity securities either
directly or through an unbroken chain of entities as to each of which
5% or more of the outstanding equity securities is owned directly or
indirectly by its parent; provided, however, there shall not be
included any such entity acquired through foreclosure or any such
entity the equity securities of which are owned or controlled in a
fiduciary capacity.
"TAXES" shall mean any federal, state, county, local, foreign
and other taxes, assessments, charges, fares, and impositions,
including interest and penalties thereon or with respect thereto.
8.2 Expenses. Each of the Parties shall bear and pay all direct
costs and expenses incurred by it or on its behalf in connection with the
transactions contemplated hereunder, including filing, registration and
application fees, printing fees, and fees and expenses of its own financial or
other consultants, investment bankers, accountants, and counsel.
8.3 Brokers and Finders. Each Party represents and warrants to the
other Party that neither it nor any of its officers, directors, employees, or
Affiliates has employed any broker or finder or incurred any Liability for any
financial advisory fees, investment bankers' fees, brokerage fees, commissions,
or finders' fees in connection with this Agreement or the transactions
contemplated hereby. In the event of a claim by any broker or finder based upon
his or its representing or being retained by or allegedly representing or being
retained by any Party, such Party agrees to indemnify and hold the other Party
harmless of and from any Liability in respect of any such claim.
8.4 Entire Agreement. Except as otherwise expressly provided
herein, this Agreement (including the documents and instruments referred to
herein) constitutes the entire agreement between the Parties with respect to the
transaction contemplated hereunder and supersedes all prior arrangements or
understandings with respect thereto, written or oral. Nothing in this Agreement
expressed or implied, is intended to confer upon any Person, other than the
Parties or their respective successors, any rights, remedies, obligations, or
liabilities under or by reason of this Agreement.
8.5 Amendments. To the extent permitted by Law, this Agreement may
be amended by a subsequent writing signed by each of the Parties upon the
approval of the Boards of Directors of each of the Parties.
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8.6 Waivers.
(a) Prior to or at the Effective Time, ABI, acting through its
Board of Directors, Chief Executive Officer or other authorized officer, shall
have the right to waive any Default in the performance of any term of this
Agreement by CSBI or Bank, to waive or extend the time for the compliance or
fulfillment by CSBI or Bank of any and all of its obligations under this
Agreement, and to waive any or all of the conditions precedent to the
obligations of ABI under this Agreement, except any condition which, if not
satisfied, would result in the violation of any Law. No such waiver shall be
effective unless in writing signed by a duly authorized officer of ABI.
(b) Prior to or at the Effective Time, CSBI, acting through
its Board of Directors, Chief Executive Officer or other authorized officer,
shall have the right to waive any Default in the performance of any term of this
Agreement by ABI, to waive or extend the time for the compliance or fulfillment
by ABI of any and all of its obligations under this Agreement, and to waive any
or all of the conditions precedent to the obligations of CSBI under this
Agreement, except any condition which, if not satisfied, would result in the
violation of any Law. No such waiver shall be effective unless in writing signed
by a duly authorized officer of CSBI.
(c) The failure of any Party at any time or times to require
performance of any provision hereof shall in no manner affect the right of such
Party at a later time to enforce the same or any other provision of this
Agreement. No waiver of any condition or of the breach of any term contained in
this Agreement in one or more instances shall be deemed to be or construed as a
further or continuing waiver of such condition or breach or a waiver of any
other condition or of the breach of any other term of this Agreement.
8.7 Assignment. Except as expressly contemplated hereby, neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by any Party hereto (whether by operation of Law or otherwise)
without the prior written consent of the other Party. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and be
enforceable by the Parties and their respective successors and assigns.
8.8 Notices. All notices or other communications which are
required or permitted hereunder shall be in writing and sufficient if delivered
by hand, by facsimile transmission, by registered or certified mail, postage
pre-paid, or by courier or overnight carrier, to the persons at the addresses
set forth below (or at such other address as may be provided hereunder), and
shall be deemed to have been delivered as of the date so delivered:
CSBI: Century South Banks, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
706/▇▇▇-▇▇▇▇ - FAX
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ - Vice-Chairman
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with a copy to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.,
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
404/▇▇▇-▇▇▇▇ - FAX
ABI: Appalachian Bancshares, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
706/▇▇▇-▇▇▇▇ - FAX
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
with a copy to: W. ▇▇▇▇▇▇ ▇▇▇▇, Esquire
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLP
1230 Peachtree Street, N.E.
Suite 3100, Promenade II
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
404/685-6978- FAX
8.9 Governing Law. This Agreement shall be governed by and
construed in accordance with the Laws of the State of Georgia, without regard to
any applicable conflicts of Laws.
8.10 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
8.11 Captions. The captions contained in this Agreement are for
reference purposes only and are not part of this Agreement.
8.12 Enforcement of Agreement. The Parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement was not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the Parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity.
8.13 Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
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8.14 Interpretation of Agreement. The Parties hereto acknowledge
and agree that each party has participated in the drafting of this Agreement and
that this document has been reviewed by the respective counsel for the parties
hereto and the normal rule of construction to the effect that any ambiguities
are to be resolved against the drafting party shall not be applied to the
interpretation of this Agreement. No inference in favor, or against, any party
shall be drawn from the fact that one party has drafted any portion hereof.
8.15. Representation of Legal Counsel. The Parties acknowledge that
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP ("▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇") has served as legal counsel to CSBI
and its subsidiaries and ABI and its subsidiaries, prior to the date of this
Agreement. The Parties further acknowledge that ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ has served
solely as legal counsel to the CSBI in connection with the subject matter set
forth herein, and the execution of this Agreement and any other agreements
related hereto. The Parties acknowledge that ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ has advised each
Party other than CSBI and Bank to obtain separate legal counsel in connection
with the execution of this Agreement and any other agreements related hereto and
hereby affirm and acknowledge that they have had sufficient and reasonable
opportunity to consult with such legal counsel. The Parties acknowledge that
each of them has separately and individually requested that ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
draft and prepare this Agreement at the direction of all parties to this
Agreement and each have waived fully and completely any conflicts which may
arise from the prior representation by ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ of each party and the
representation of CSBI and Bank in this transaction.
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
executed on its behalf and its corporate seal to be hereunto affixed and
attested by officers thereunto as of the day and year first above written.
ATTEST: "ABI"
APPALACHIAN BANCSHARES, INC.
By: By:
----------------------------- ---------------------------------
Its: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
-----------------------
[CORPORATE SEAL]
ATTEST: "CSBI"
CENTURY SOUTH BANKS, INC.
By:
-------------------------------- ---------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Secretary ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Vice Chairman
[CORPORATE SEAL]
ATTEST: "Bank"
FIRST NATIONAL BANK OF UNION COUNTY
By:
-------------------------------- ---------------------------------
▇▇▇▇▇ ▇▇▇▇▇, Secretary ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
[BANK SEAL]
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