EXHIBIT 2.1
Agreement and Plan of
Merger By and Between
Southern Security Financial Corporation
and
Southern Security Bank Corporation
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
SOUTHERN SECURITY FINANCIAL CORPORATION,
AND
SOUTHERN SECURITY BANK CORPORATION
DATED AS OF OCTOBER 31, 1997
THIS AGREEMENT AND PLAN OF MERGER is made and entered into
as of this the 31st day of October 1997, by and between SOUTHERN
SECURITY BANK CORPORATION ("Acquired Corporation"), a Florida
corporation, and SOUTHERN SECURITY FINANCIAL CORPORATION
("SSFC"), a Delaware corporation.
WITNESSETH:
WHEREAS, Acquired Corporation operates as a bank holding
company for its subsidiary, Southern Security Bank of Hollywood
(the "Bank"), with its principal office in Hollywood, Florida;
and
WHEREAS, SSFC is desirous of becoming a bank holding
company; and
WHEREAS, Acquired Corporation wishes to merge into SSFC and
SSFC wishes Acquired Corporation to merge into SSFC;
NOW, THEREFORE, in consideration of the mutual covenants
contained herein, the Parties hereto agree as follows:
ARTICLE 1
MERGER-TERMS AND CONDITIONS
1.1 Applicable Law
On the Effective Date, Acquired Corporation shall be merged
with and into SSFC which shall be the surviving corporation in
the merger (the "Merger") and shall continue its corporate
existence under the laws of the State of Delaware. The Merger
shall be undertaken pursuant to the provisions of and with the
effect provided in the Delaware General Corporation Law ("DGCL")
and, to the extent applicable, the Florida Business Corporation
Act ("FBCA"). The offices and facilities of Acquired Corporation
shall become the offices and facilities of SSFC.
1.2 Corporate Existence; Name of Surviving Corporation.
On the Effective Date, the corporate existence of Acquired
Corporation shall be merged into and continued in SSFC. All
rights, franchises and interests of Acquired Corporation and
SSFC, respectively, in and to every type of property (real,
personal and mixed) and chooses in action shall be transferred to
and vested in SSFC by virtue of the Merger without any deed or
other transfer SSFC on the Effective Date, and without any order
or other action on the part of any court or otherwise, shall hold
and enjoy all rights of property, franchises and interests,
including appointments, designations and nominations and all
other rights and interests as trustee, executor, administrator,
transfer agent and registrar of stocks and bonds, guardian of
estates, assignee, and receiver and in every other fiduciary
capacity and in every agency, and capacity, in the same manner
and to the same extent as such rights, franchises and interests
were held or enjoyed by Acquired Corporation on the Effective
Date. Simultaneously with the effective time and date of the
merger, or as soon thereafter as is reasonably practicable the
name of SSFC shall be changed to Southern Security Bank
Corporation.
1.3 Articles of Incorporation and Bylaws.
On the Effective Date, the certificate of incorporation and
bylaws of SSFC shall be the restated certificate of incorporation
and bylaws of SSFC as they exist immediately before the Effective
Date.
1.4 SSFC's Officers and Board
The members of the Board of Directors and the officers of
the Surviving Corporation immediately at the effective time and
date of the Merger shall be those persons who were members of the
Board of Directors and the officers of the Acquired Corporation
at the Effect Date of the Merger. SSFC's stockholders and Board
of Directors shall take all actions necessary to accomplish the
foregoing.
1.5 Stockholder Approval.
This Agreement shall be submitted to the shareholders of
Acquired Corporation at a stockholders meeting ("Stockholder
Meeting") to be held as promptly as practicable consistent with
the satisfaction of the conditions set forth in this Agreement.
Upon approval by the requisite vote of the shareholders of
Acquired Corporation as required by applicable Law, the Merger
shall become effective as soon as practicable thereafter in the
manner provided in section 1.7 hereof.
1.6 Further Acts.
If, at any time after the Effective Date, SSFC shall
consider or be advised that any further assignments or assurances
in law or any other acts are necessary or desirable (i) to vest,
perfect, confirm or record, in SSFC, title to and possession of
any property or right of Acquired Corporation, acquired as a
result of the Merger, or (ii) otherwise to carry out the purposes
of this Agreement, Acquired Corporation's officers and directors
shall execute and deliver all such proper deeds, assignments and
assurances in law and do all acts necessary or property to vest,
perfect or confirm title to, and possession of, such property or
rights in SSFC and otherwise to carry out the purposes of this
Agreement; and the proper officers and directors of SSFC are
fully authorized in the name of Acquired Corporation to take any
and all such action.
1.7 Effective Date.
Subject to the terms of all requirements of Law and the
conditions specified in this Agreement, the Merger shall become
effective on the date specified in the Certificate of Merger to
be issued by the Secretary of State of the State of Delaware
(such time being herein called the "Effective Date"). On the
Effective Date or as soon as practicable thereafter, SSFC shall
cause itself to be qualified to conduct business as a foreign
corporation in the State of Florida.
ARTICLE 2
CONVERSION OF ACQUIRED CORPORATION STOCK
2.1 Conversion of Acquired Corporation Stock.
(a) On the Effective Date, each share of Class A common
stock of Acquired Corporation outstanding and held by
Acquired Corporation's shareholders shall be converted
by operation of law and without any action by any
holder thereof into one-third the number of shares of
SSFC Class A Common Stock.
(b) On the Effective Date, each of Series A convertible
preferred stock of Acquired Corporation outstanding and
held by Acquired Corporation's shareholders shall be
converted by operation of law and without any action by
the holder thereof into one-third the number of SSFC
Series A Convertible Preferred Stock.
(c)
(i) On the Effective Date, SSFC shall assume all
Acquired Corporation Options outstanding, and each
such option shall cease to represent a right to
acquire Acquired Corporation common stock and
shall, instead, represent the right to acquire
SSFC Common Stock on substantially the same terms
applicable to the Acquired Corporation Options
except that the number of shares of SSFC Common
Stock to be issued pursuant to such options shall
equal one-third the number of shares of Acquired
Corporation's Class A common stock subject to such
Acquired Corporation Options.
(ii) Subsequent to becoming a reporting company under
the rules of the Securities Exchange Act of 1934,
SSFC shall file at its expense a registration
statement in an appropriate form with respect to
the shares of the SSFC's Common Stock to be issued
pursuant to such options and shall use its
reasonable best efforts to secure and maintain the
effectiveness of such registration statement for
so long as such options remain outstanding. Such
shares shall also be registered or qualified for
sale under the securities laws of any state in
which registration or qualification is necessary.
2.2 Surrender of Acquired Corporation Stock
After the Effective Date, each holder of an outstanding
certificate or certificates which prior thereto represented
shares of Acquired Corporation Stock who is entitled to receive
SSFC Common or Preferred Stock shall be entitled, upon surrender
to SSFC of his certificate or certificates representing shares of
Acquired Corporation Stock (or an affidavit or affirmation by
such holder of the loss, theft, or destruction of such
certificate or certificates in such form as SSFC may reasonably
require and, if SSFC reasonably requires, a bond of indemnity in
form and amount, and issued by such sureties, as SSFC may
reasonably require), to receive in exchange therefor a
certificate or certificates representing the number of whole
shares of SSFC Common or Preferred Stock into and for which the
shares of Acquired Corporation Stock so surrendered shall have
been converted, such certificates to be of such denominations and
registered in such names as such holder may reasonably request.
Until so surrendered and exchanged, each such outstanding
certificate which, prior to the Effective Date, represented
shares of Acquired Corporation Stock and which is to be converted
into SSFC Common or Preferred Stock shall for all purposes
evidence ownership of SSFC Common or Preferred Stock into and for
which shares shall have been so converted, except that no
dividends or other distributions with respect to such SSFC Common
or Preferred Stock shall be made until the certificates
previously representing shares of Acquired Corporation Stock
shall have been properly tendered.
2.3 Fractional Shares.
No fractional shares of SSFC Common or Preferred Stock shall
be issued, and each holder of shares of Acquired Corporation
Stock having fractional interest arising upon the conversion of
such shares into SSFC Common or Preferred Stock shall, at the
time of surrender of the certificates previously representing
Acquired Corporation Stock, be paid by SSFC an amount in cash
equal to the book value of such fractional share on the financial
statements of SSFC as of the Effective Date.
2.4 Adjustments.
In the event that prior to the Effective Date SSFC Common
Stock shall be changed into a different number of shares or a
different class of shares by reason of any recapitalization or
reclassification, stock dividend, combination, stock split, or
reverse stock split of the SSFC Common Stock, an appropriate and
proportionate adjustment shall be made in the number of shares of
SSFC Common Stock into which the Acquired Corporation Stock shall
be converted.
2.5 SSFC Stock.
The shares of Common issued and outstanding immediately
before the Effective Date shall continue to be issued and
outstanding shares of SSFC, subject to Section 3.2 below. No
shares of Preferred Stock of SSFC shall be issued and outstanding
immediately before the Effective Date.
2.6 Dissenting Rights.
Any shareholder of Acquired Corporation who shall not have
voted in favor of this Agreement and who has complied with the
applicable procedures set forth in the FBCA relating to rights of
dissenting shareholders, shall be entitled to receive payment for
the fair value of his/her/its Acquired Corporation stock. If,
after the Effective Date, a dissenting shareholder of Acquired
Corporation fails to perfect, or effectively withdraws or loses,
his/her/its right to appraisal and payment for his shares of
Acquired Corporation Stock is entitled under Section 2.1 (without
interest) upon surrender of such holder of the certificate or
certificates representing shares of Acquired Corporation Stock
held by him/her/it.
ARTICLE 3
REPRESENTATIONS, WARRANTIES AND COVENANTS OF SSFC
SSFC represents, warrants and covenants to and with Acquired
Corporation as follows:
3.1 Organization.
SSFC is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware. SSFC
has the necessary corporate powers to carry on its business as
presently conducted and is qualified to do business in every
jurisdiction in which the character and location of the assets
owned by it or the nature of the business transacted by it
requires qualification or in which the failure to qualify could,
individually or in the aggregate, have a material adverse effect.
3.2 Capital Stock.
The authorized capital stock of SSFC consists of (a)
30,000,000 shares of Class A Common Stock, $0.01 par value per
share, of which, 602,500 shares are validly issued and
outstanding, fully paid and nonassessable and are not subject to
preemptive rights, (b) 5,000,000 shares of Class B Common Stock,
$0.01 par value, none of which are issued and outstanding, and
(c) 5,000,000 shares of Preferred Stock $0.01 par value per
share, none of which are issued and outstanding. Prior to the
Effective Date SSFC shall effectuate a 2.352707 to 1 reverse
split of its outstanding and issued Class A Common Stock. The
shares of SSFC Common Stock to be issued in the Merger are or
will be upon the stockholder approval referenced in the following
sentence duly authorized and, when so issued, will be validly
issued and outstanding, fully paid and nonassessable.
3.3 Financial Statements; Taxes.
(a) SSFC has delivered to Acquired Corporation copies of
the audited financial statements dated as of June 30,
1997.
All such financial statements are in all material
respects in accordance with the books and records of
SSFC and have been prepared in accordance with
generally accepted accounting principles applied on a
consistent basis throughout the periods indicated, all
as more particularly set forth in the notes to such
statements.
(b) All tax returns required to be filed by or on behalf of
SSFC have been timely filed (or requests for extensions
therefor have been timely filed and granted and have
not expired), and all returns filed are complete and
accurate in all material respects. All taxes shown on
these returns to be due and all additional assessments
received have been paid.
3.4 No Conflict with Other Instruments.
The consummation of the transactions contemplated by this
Agreement will not result in a breach of or constitute a default
(without regard to the giving of notice or the passage of time)
under any material contract, indenture, mortgage, deed of trust
or other material agreement or instrument to which SSFC is a
party or by which its assets may be bound; will not conflict with
any provision of the amended certificate of incorporation or
bylaws of SSFC; and will not violate any provision of any Law,
regulation, judgment or decree binding on it or any of its
assets.
3.5 Absence of Material Adverse Change.
Since the date of the most recent balance sheet provided
under section 3.3(a) above, 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
SSFC.
3.6 Approval of Agreements.
The Board of Directors of SSFC and the stockholders of SSFC
have approved this Agreement and the transactions contemplated by
it and has authorized the execution and delivery by SSFC of this
Agreement. This Agreement constitutes the legal, valid and
binding obligation of SSFC, enforceable against it in accordance
with its terms. Subject to the matters referred to in section
7.2 hereof, SSFC has full power, authority and legal right to
enter into this Agreement and to consummate the transactions
contemplated by this Agreement. SSFC has no knowledge of any
fact or circumstance under which the appropriate regulatory
approvals required by section 7.2 will not be granted without the
imposition of material conditions or material delays.
3.7 Tax Treatment.
SSFC has no present plan to sell or otherwise dispose of any
of the assets of Acquired Corporation, subsequent to the Merger,
and SSFC intends to continue the historic business of Acquired
Corporation.
3.8 Title and Related Matters.
SSFC has good and marketable title to all the properties,
interests in properties and assets, real and personal, reflected
in the most recent balance sheet referred to in section 3.3(a),
or acquired after the date of such balance sheet (except
properties, interests and assets sold or otherwise disposed of
since such date, in the ordinary course of business), free and
clear of all mortgages, liens, pledges, charges or encumbrances
except (i) mortgages and other encumbrances referred to in the
notes of such balance sheet, (ii) lines for current taxes not yet
due and payable and (iii) such imperfections of title and
easements as do not materially detract from or interfere with the
present use of the properties subject thereto or affected
thereby, or otherwise materially impair present business
operations at such properties. To the knowledge of SSFC, the
material structure and equipment of SSFC comply in all material
respects with the requirements of all applicable laws.
3.9 Contracts.
SSFC is not in default in any material respect under the
terms of any material contract, agreement, lease or other
commitment which is or may be material to the business,
operations, properties or assets, or the condition, financial or
otherwise, of such company and, to the knowledge of SSFC, there
is no event which, with notice or lapse of time, or both, may be
or become an event of default under any such material contract,
agreement, lease or other commitment in respect of which adequate
steps have not been taken to prevent such a default from
occurring.
3.10 Litigation.
There is no litigation before or by any court or agency,
domestic or foreign, now pending, nor, to the knowledge of SSFC,
threatened against or affecting (nor is SSFC aware of any facts
which could give rise to any such litigation).
3.11 Compliance.
SSFC to the knowledge of SSFC, is in material compliance
with all material federal, state or local laws applicable to
their or the conduct of its business.
3.12 Registration Statement.
SSFC has filed a registration statement on Form 10SB which,
when it becomes effective, will comply in all material respects
with the requirements of the Securities Exchange Act of 1934 and
the rules and regulations thereunder, will not contain an untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light
of the circumstances under which they were made; not misleading.
3.13 Brokers.
All negotiations relative to this Agreement and the
transactions contemplated by this Agreement have been carried on
by SSFC directly with Acquired Corporation and without the
intervention of any other person, either as a result of any act
of SSFC or otherwise in such manner as to give rights to any
valid claim against SSFC for finders fees, brokerage commissions
or other like payments.
3.14 Disclosure.
No representation or warranty, or any statement or
certificate furnished or to be furnished to Acquired Corporation
by SSFC, contains or will contain any untrue statement of a
material fact, or omits or will omit to state a material fact
necessary to make the statements contained in this Agreement or
in any such statement or certificate not misleading.
ARTICLE 4
REPRESENTATIONS, WARRANTIES AND COVENANTS
OF ACQUIRED CORPORATION
Acquired Corporation represents, warrants and covenants to
and with SSFC, as follows:
4.1 Organization.
Acquired Corporation is a Florida corporation, and the Bank
is a Florida state bank. The Acquired Corporation and the Bank
are duly organized, validly existing and in good standing under
the respective Laws of their jurisdictions of incorporation and
each has all requisite power and authority to carry on its
business as it is now being conducted and is qualified to do
business in every jurisdiction in which the character and
location of the assets owned by it or the nature of the business
transacted by it requires qualification or in which the failure
to qualify could, individually, or in the aggregate, have a
material adverse effect.
4.2 Capital Stock.
The authorized capital stock of Acquired Corporation
consists of 20,000,000 shares of Class A common stock $0.01 par
value per share, of which 14,910,613 shares are issued and
outstanding; 5,000,000 shares of Class B common stock $0.01 par
value, none of which are issued and outstanding; 1.200,000 shares
of Series A preferred convertible shares, $0.01 par value, of
which no shares are issued and outstanding. In addition, the
Acquired Corporation has authorized and issued to its Officers
and directors options that expire over ten year terms, at option
exercise prices when granted equating to 110% of the then net
book value per share for common stock, 2,311,080 of which options
have been granted as of September 30, 1997.
Except for the foregoing, Acquired Corporation does not have
any other arrangements or commitments obligating it to issue
shares of its capital stock or any securities convertible into or
having the right to purchase shares of its capital stock, other
than the stock option plans incorporated in the employment
contracts entered into with ▇▇▇▇▇▇ ▇. Modder and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
4.3 Subsidiaries.
Acquired Corporation has not direct Subsidiaries other than
the Bank, and there are no Subsidiaries of the Bank. Acquired
Corporation owns 96.6% of the issued and outstanding capital
stock of the Bank fee and clear of any liens, claims or
encumbrances of any kind. All of the issued and outstanding
shares of capital stock of the Subsidiaries have been validly
issued and are fully paid and nonassessable. The Bank has no
arrangements or commitments obligating it to issue shares of its
capital stock or any securities convertible into or having the
right to purchase shares of its capital stock, other than its
stock option plan for its officers and directors.
4.4 Financial Statements; Taxes.
(a) Acquired Corporation has delivered to SSFC copies of
its audited financial statements dated December 31,
1996.
All of the foregoing financial statements are in all
material respects in accordance with the books and
records of Acquired Corporation and have been prepared
in accordance with generally accepted accounting
principles applied on a consistent basis throughout the
periods indicated, except for changes required by GAAP,
all as more particularly set forth in the notes to such
statements.
Each of such balance sheet presents fairly as of its
date the financial condition of Acquired Corporation.
Except as and to the extent reflected or reserved
against in such balance sheets (including the notes
thereto), Acquired Corporation did not have, as of the
date of such balance sheets, any material Liabilities
or obligations (absolute or contingent) of a nature
customarily reflected in a balance sheet or the notes
thereto. The statements of income, stockholders'
equity and cash flows present fairly the results of
operation, changes in shareholders equity and cash
flows of Acquired Corporation for the periods
indicated.
(b) All tax returns required to be filed by or on behalf of
Acquired Corporation have been timely filed (or
requests for extensions therefor have been timely filed
and granted and have not expired), and all returns
filed are complete and accurate in all material
respects. All Taxes shown on these returns to be due
and all additional assessments received have been paid.
The amounts recorded for Taxes on the balance sheets
provided under section 4.4(a) are, to the knowledge of
Acquired Corporation, sufficient in all material
respects for the payment of all unpaid federal, state,
county, local, foreign and other Taxes (including any
interest or penalties) of Acquired Corporation accrued
for or applicable to the period ended on the dates
thereof, and all years and periods prior thereto and
for which Acquired Corporation may at such dates have
been liable in its own right or as a transferee of the
assets of, or as successor to, any other corporation or
other party. No audit, examination or investigation is
presently being conducted or, to the knowledge of
Acquired Corporation, threatened by any taxing
authority which is likely to result in a material tax
liability, no material unpaid tax deficiencies or
additional liability of any sort have been proposed by
any governmental representative and no agreements for
extension of time for the assessment of any material
amount of Tax have been entered into by or on behalf of
Acquired Corporation. Acquire Corporation has not
executed an extension or waiver of any statute of
limitations on the assessment or collection of any tax
due that is currently in effect.
(c) Acquired Corporation and the Bank have withheld from
their employees (and timely paid to the appropriate
governmental entity) proper and accurate amounts for
all periods in material compliance with all Tax
withholding provisions of applicable federal, state,
foreign and local Laws (including without limitation,
income, social security and employment tax withholding
for all types of compensation).
4.5 Absence of Certain Changes or Events.
Since the date of the most recent balance sheet provided
under section 4.4(a) above, neither Acquired Corporation nor the
Bank have
(a) issued, delivered or agreed to issue or deliver any
stock, bonds or other corporate securities (whether
authorized and unissued or held in the treasury) except
shares of common stock issued upon the exercise of
Acquired Corporation. Options and shares issued as
director's qualifying shares;
(b) borrowed or agreed to borrow any funds or incurred, or
become subject to, any liability (absolute or
contingent) except borrowings, obligations (including
purchase of federal funds) and Liabilities incurred in
the ordinary course of business and consistent with
past practice;
(c) paid any material obligation or Liability (absolute or
contingent) other than current liabilities reflected in
or shown on the most recent balance sheet referred to
in section 4.4(a) and current liabilities incurred
since that date in the ordinary course of business and
consistent with past practice;
(d) declared or made, or agreed to declare or make, any
payment of dividends or distributions of any assets of
any kind whatsoever to shareholders, or purchased or
redeemed, or agreed to purchase or redeem, directly or
indirectly, or otherwise acquire, any of its
outstanding securities;
(e) except in the ordinary course of business, sold or
transferred, or agreed to sell or transfer, any of its
assets, or canceled, or agreed to cancel any debts or
claims;
(f) except in the ordinary course of business, entered or
agreed to enter into any agreement or arrangement
granting any preferential rights to purchase any of its
assets, or requiring the consent of any party to the
transfer and assignment of any of its assets;
(g) suffered any Losses or waived any rights of value which
in either event in the aggregate are material
considering its business as a whole;
(h) except in the ordinary course of business, made or
permitted any amendment or termination of any contract,
agreement or license to which it is a party if such
amendment or termination is material considering its
business as a whole;
(i) except in accordance with normal and usual practice,
made any accrual or arrangement for or payment of
bonuses or special compensation of any kind or any
severance or termination pay to any present or former
officer or employee;
(j) except in accordance with normal and usual practice,
increased the rate of compensation payable to or to
become payable to any of its officers or employees or
made any material increase in any profit sharing,
bonus, deferred compensation, savings, insurance,
pension, retirement or other employee benefit plan,
payment or arrangement made to, for or with any of its
officers or employees;
(k) received notice or had knowledge or reason to believe
that any of its substantial customers has terminated or
intends to terminate its relationship, which
termination would have a material adverse effect on its
financial condition, results of operations, business,
assets or properties;
(l) failed to operate its business in the ordinary course
so as to preserve its business intact and to preserve
the goodwill of its customers and others with whom it
has business relations;
(m) entered into any other material transaction other than
in the ordinary course of business; or
(n) agreed in writing, or otherwise, to take any action
described in clauses (a) through (m) above.
Between the date hereof and the Effective Date, neither
Acquired Corporation nor the Bank, without the express written
approval of SSFC, will do any of the things listed in clauses (a)
through (n) of this section 4.5 except as permitted therein or as
contemplated in this Agreement, and no Acquired Corporation
Company will enter into or amend any material Contract, other
than Loans or renewals thereof entered into in the ordinary
course of business, without the express written consent of SSFC.
4.6 Title.
Acquired Corporation has good and marketable title to all
the properties, interest in properties and assets, real and
personal, reflected in the most recent balance sheet referred to
in section 4.4(a) hereof, or acquired after the date of such
balance sheet (except properties, interests and assets sold or
otherwise disposed of since such date, in the ordinary course of
business), free and clear of all mortgages, liens, pledges,
charges or encumbrances except (i) mortgages and other
encumbrances referred to in the notes to such balance sheet, (ii)
liens for current taxes not yet due and payable and (iii) such
imperfections of title and easements as do not materially detract
from or interfere with the present use of the properties subject
thereto or affected thereby, or otherwise materially impair
present business operations at such properties. To the knowledge
of Acquired Corporation, the material structures and equipment of
the Bank comply in all material respects with the requirements of
all applicable Laws.
4.7 Commitments.
Neither Acquired Corporation and the bank are a party to any
undisclosed oral or written (i) Contracts for the employment of
any officer or employee which is not terminable on 30 days' (or
less) notice, other than the employment contracts recited in
section 9.7 hereof, (ii) profit retirement plan, agreement or
arrangement, (iii) loan agreement, indenture or similar agreement
relating to the borrowing of money by such party, (iv) guaranty
of any obligation for the borrowing of money or otherwise,
excluding endorsements made for collection, and guaranties made
in the ordinary course of business, (v) consulting or other
similar material Contract, (vi) collective bargaining agreement,
(vii) agreement with any present or former officer, director or
shareholder of such party, or (viii) other contract, agreement or
other commitment which is material to the business, operations,
property, prospects or assets or to the condition, financial or
otherwise, of the Bank. Complete and accurate copies of all
contracts, plans and other items so listed have been made or will
be made available to SSFC for inspection.
4.8 Charter and Bylaws.
The articles of incorporation and bylaws of Acquired
Corporation and the Bank, including all amendments thereto,
previously provided to SSFC, are currently in effect. There will
be no changes in such articles of incorporation or bylaws prior
to the Effective Date, without the prior written consent of SSFC.
4.9 Litigation.
There is no Litigation (whether or not purportedly on behalf
of Acquired Corporation) pending or, to the knowledge of Acquired
Corporation, threatened against or affecting Acquired Corporation
and the Bank (nor is Acquired Corporation aware of any facts
which are likely to give rise to any such Litigation) at law or
in equity, or before or by any governmental department,
commission, board, bureau, agency or instrumentality, domestic or
foreign, or before any arbitrator of any kind, which involves the
possibility of any judgment or Liability not fully covered by
insurance in excess of a reasonable deductible amount or which
may have a material adverse effect on Acquired Corporation, and
neither Acquired Corporation nor the Bank is in default with
respect to any judgement, order, writ, injunction, decree, award,
rule or regulation of any court, arbitrator or governmental
department, commission, board, bureau, agency or instrumentality,
which default would have material adverse effect on Acquired
Corporation. To the knowledge of Acquired Corporation, each
Acquired Corporation Company has complied in all material
respects with all material applicable laws and regulations
including those imposing Taxes, of any applicable jurisdiction
and of all states, municipalities, other political subdivisions
and agencies, in respect of the ownership of its properties and
the conduct of its business, which, if not complied with, would
have material adverse effect on Acquired Corporation.
4.10 Material Contract Defaults.
Neither Acquired Corporation nor the Bank is in default in
any material respect under the terms of any material contract,
agreement, lease or other commitment which is or may be material
to the business, operations, properties or assets, or the
condition, financial or otherwise, of such company and, to the
knowledge of Acquired Corporation, there is no event which, with
notice or lapse of time, or both, may be or become an event of
default under any such material contract, agreement, lease or
other commitment in respect of which adequate steps have not been
taken to prevent such a default from occurring.
4.11 No Conflict with Other Instrument.
The consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision
of or constitute a default under any material contract,
indenture, mortgage, deed of trust or other material agreement or
instrument to which either Acquired Corporation or the Bank is a
party and will not conflict with any provision of the charter or
bylaws of Acquired Corporation or the Bank.
4.12 Governmental Authorization.
Acquired Corporation and the Bank have all permits that, to
the knowledge of Acquired Corporation, are or will be legally
required to enable Acquired Corporation and the Bank to conduct
their business in all material respects as now conducted by
Acquired Corporation and the Bank.
4.13 Absence of Regulatory Communications.
Neither Acquired Corporation nor the Bank is subject to, nor
has Acquired Corporation or the Bank received during the past
three years, any written communication directed specifically to
it from any agency to which it is subject or pursuant to which
such agency has imposed or has indicated it may impose any
material restrictions on the operations of it or the business
conducted by it or in which such Agency has raised any material
question concerning the condition, financial or otherwise, of
such company.
4.14 Absence of Material Adverse Change.
To the knowledge of Acquired Corporation, since the date of
the most recent balance sheet provided under section 4.4(a)
hereof, 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 Acquired Corporation
or the Bank.
4.15 Insurance.
Acquired Corporation and the Bank have in effect insurance
overage and bonds with reputable insurers which, in respect to
amounts, types and risks insured, management of Acquired
Corporation reasonably believes to be adequate for the type of
business conducted by Acquired Corporation and the Bank. Neither
Acquired nor the Bank is liable for any material retroactive
premium adjustment. All insurance policies and bonds are valid,
enforceable and in full force and effect, and neither Acquired
Corporation nor the Bank has received any notice of any material
premium increase or cancellation with respect to any of its
insurance policies or bonds. Within the last three years,
neither Acquired Corporation nor the Bank has been refused any
insurance coverage which it has sought or applied for, and it has
no reason to believe that existing insurance coverage cannot be
renewed as and when the same shall expire, upon terms and
conditions as favorable as those presently in effect, other than
possible increases in premiums that do not result from any
extraordinary loss experience. All policies of insurance
presently held or policies containing substantially equivalent
coverage will be outstanding and in full force with respect to
Acquired Corporation and the Bank at all times from the date
hereof to the Effective Date.
4.16 Pension and Employee Benefit Plans.
(a) To the knowledge of Acquired Corporation, all employee
benefit plans of Acquired Corporation and the Bank have
been established in compliance with, and such plans
have been operated in material compliance with, all
applicable Laws.
Except as may have been previously disclosed to SSFC,
neither Acquired Corporation nor the Bank sponsors or
otherwise maintains a "pension plan" within the meaning
of section 3(2) of ERISA or any other retirement plan
other than the defined benefit plan of
Acquired Corporation that is intended to qualify under
section 401 of the Code, nor do any unfunded
Liabilities exist with respect to any employee benefit
plan, past or present. To the knowledge of Acquired
Corporation, no employee benefit plan, any trust
created thereunder or any trustee or administrator
thereof has engaged in a "prohibited transaction," as
defined in section 4975 of the Code, which may have a
material adverse effect on the condition, financial or
otherwise, of any Acquired Corporation Company.
(b) To the knowledge of Acquired Corporation, no amounts
payable to any employee of Acquired Corporation or the
Bank will fail to be deductible for federal income tax
purposes by virtue of Section 280G of the Code and
regulations thereunder.
4.17 Buy-Sell Agreement.
To the knowledge of Acquired Corporation, there are no
agreements among any of its shareholders granting to any person
or persons a right of first refusal in respect of the sale,
transfer, or other disposition of shares of outstanding
securities by any shareholder of Acquired Corporation, any
similar agreement or any voting agreement or voting trust in
respect of any such shares.
4.18 Brokers.
All negotiations relative to this Agreement and the
transactions contemplated by this Agreement have been carried on
by Acquired Corporation directly with SSFC and without the
intervention of any other person, either as a result of any act
of Acquired Corporation, or otherwise, in such manner as to give
rise to any valid claim against Acquired Corporation for a
finder's fee, brokerage commission or other like payment.
4.19 Approval of Agreement.
The Board of Directors of Acquired Corporation has approved
this Agreement and the transactions contemplated by this
Agreement and has authorized the execution and delivery by
Acquired Corporation of this Agreement.
Subject to the matters referred to in section 7.2, Acquired
Corporation has full power, authority and legal right to enter
into this Agreement, and, upon appropriate vote of the
shareholders of Acquired Corporation in accordance with this
Agreement, Acquired Corporation shall have full power, authority
and legal right to consummate the transactions contemplated by
this Agreement.
4.20 Disclosure.
No representation or warranty, nor any statement or
certificate furnished or to be furnished to SSFC by Acquired
Corporation, contains or will contain any untrue statement of a
material fact, or omits or will omit to state a material fact
necessary to make the statements contained in this Agreement or
in any such statement or certificate not misleading.
4.21 Registration Statement.
At the time the registration statement on Form 10SB becomes
effective and at the time of the stockholders meeting, the
Registration Statement will not contain an untrue statement of a
material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
4.22 Loans; Adequacy of Allowance for Loan Losses.
All reserves for loan losses shown on the most recent
financial statements furnished by Acquired Corporation have been
calculated in accordance with prudent and customary banking
practices and are adequate in all material respects to reflect
the risk inherent in the loans of Acquired Corporation. Acquired
Corporation has no knowledge of any fact which is likely to
require a future material increase in the provision for loan
losses or a material decrease in the loan loss reserve reflected
in such financial statements. Each loan reflected as an asset on
the financial statements of Acquired Corporation is the legal,
valid and binding obligation of the obligor or each loan,
enforceable in accordance with its terms subject to the effect of
bankruptcy, insolvency, reorganization, moratorium, or other
similar laws relating to creditors' rights generally and to
general equitable principles. Acquired Corporation does not have
in its portfolio any loan exceeding its legal lending limit, and,
Acquired Corporation has no known significant delinquent,
substandard, doubtful, loss, non performing or problem loans
which have not been disclosed to SSFC.
4.23 Environmental Matters.
To the knowledge of Acquired Corporation, Acquired
Corporation and the bank each is in material compliance with all
Laws and other governmental requirements relating to the
generation, management, handling, transportation, treatment,
disposal, storage, delivery, discharge, release or emission of
any waste, pollution, or toxic, hazardous or other substance (the
"Environmental Laws") and Acquired Corporation has no knowledge
that Acquired Corporation or the Bank have not complied with all
regulations and requirements promulgated by the Occupational
Safety and Health Administration that are applicable to any
Acquired Corporation Company. To the knowledge of Acquired
Corporation, there is no Litigation pending or threatened with
respect to any violation or alleged violation of the
Environmental Laws. To the knowledge of Acquired Corporation,
with respect to assets of or owned by Acquired Corporation or the
Bank, including any Loan Property, (i) there has been no
spillage, leakage, contamination or release of any substances for
which the appropriate remedial action has not been completed;
(ii) no owned or leased property is contaminated with or contains
any hazardous substance or waste; and (iii) there are no
underground storage tanks on any premises owned or leased by
Acquired Corporation or the Bank. Acquired Corporation has no
knowledge of any facts which might suggest that either Acquired
Corporation or the Bank has engaged in any management practice
with respect to any of its past or existing borrowers which could
reasonably be expected to subject Acquired Corporation or the
Bank to any liability.
4.24 Transfer of Shares.
Acquired Corporation has no knowledge of any plan or
intention on the part of Acquired Corporation's shareholders to
sell or otherwise dispose of any of the SSFC Common Stock to be
received by them in the Merger that would reduce such
shareholders' ownership to a number of shares having, in the
aggregate, a fair market value of less than fifty (50%) percent
of the total fair market value of Acquired Corporation common
stock outstanding immediately before the Merger.
4.25 Collective Bargaining.
There are no labor contracts, collective bargaining
agreements, letters of undertakings or other arrangements, formal
or informal, between Acquired Corporation and the Bank and any
union or labor organization covering any employees of Acquired
Corporation or the Bank and none of said employees are
represented by any union or labor organization.
4.26 Labor Disputes.
To the knowledge of Acquired Corporation, Acquired
Corporation and the Bank are in material compliance with all
federal and state laws respecting employment and employment
practices, terms and conditions of employment, wages and hours.
Neither Acquired Corporation nor the Bank is or has been engaged
in any unfair labor practice, and to the knowledge of Acquired
Corporation, no unfair labor practice complaint against Acquired
Corporation or the Bank is pending before the National Labor
Relations Board. Relations between management of Acquired
Corporation and the Bank and their employees are amicable and
there have not been, nor to the knowledge of Acquired
Corporation, are there presently, any attempts to organize
employees, nor to the knowledge of Acquired Corporation, are
there plans for any such attempts.
ARTICLE 5
ADDITIONAL COVENANTS
5.1 Additional Covenants of SSFC.
SSFC covenants to and with Acquired Corporation as follows:
(a) Registration Statement and Other Filings. SSFC has
prepared and filed with the SEC the Registration Statement and
all amendments and supplements thereto, in form reasonably
satisfactory to Acquired Corporation and its counsel, with
respect to the Common Stock to be issued pursuant to this
Agreement. SSFC shall use reasonable good faith efforts to
prepare all necessary filings with any Agencies which may be
necessary for approval to consummate the transactions
contemplated by this Agreement. SSFC shall provide to counsel
for Acquired Corporation for review and comment (i) copies of
drafts of all filings made pursuant to this section 5.1(a) in
advance of filing, (ii) copies of documents as filed, and (iii)
copies of any correspondence between SSFC and any Agencies,
including the SEC, respecting the filings made pursuant to this
section 5.1(a).
(b) Financial Statements. With reasonable promptness, SSFC
shall furnish Acquired Corporation with such additional financial
data as Acquired Corporation may reasonably request.
(c) No Control of Acquired Corporation by SSFC.
Notwithstanding any other provision hereof, until the Effective
Date, the authority to establish and implement the business
policies of Acquired Corporation shall continue to reside solely
in Acquired Corporation's officers and Board of Directors.
(d) Employee Benefit Matters. On the Effective Date, all
employees of Acquired Corporation shall either become employees
of SSFC or be entitled to severance benefits in accordance with
the severance policy of Acquired Corporation as of the date of
this Agreement.
(e) Indemnification.
(i) Subject to the conditions set forth in the
succeeding paragraph, for a period of six years
after the Effective Date SSFC shall indemnify,
defend and hold harmless each person entitled to
indemnification from the Acquired Corporation
(each being an "Indemnified Party") against all
liabilities arising out of actions or omissions
occurring upon or prior to the Effective Date
(including without limitation the transactions
contemplated by this Agreement) to the extent
authorized under the articles of incorporation and
bylaws of Acquired Corporation and Florida law.
(ii) Any Indemnified Party wishing to claim
indemnification under this subsection (g), upon
learning of any such liability or Litigation,
shall promptly notify SSFC thereof. In the event
of any such Litigation (whether arising before or
after the Effective Date) (i) SSFC shall have the
right to assume the defense thereof with counsel
reasonably acceptable to such Indemnified Party
and, upon assumption of such defense, SSFC shall
not be liable to such Indemnified Parties for any
legal expenses of other counsel or any other
expenses subsequently incurred by such Indemnified
Parties in connection with the defense thereof,
except that if SSFC elects not to assume such
defense or counsel for the Indemnified Parties
advises that there are substantive issues which
raise conflicts of interest between SSFC and the
Indemnified Parties, the Indemnified Parties may
retain counsel satisfactory to them, and SSFC
shall pay all reasonable fees and expenses of such
counsel for the Indemnified Parties promptly as
statements therefor are received; provided, that
SSFC shall be obligated pursuant to this
subsection to pay for only one firm of counsel for
all Indemnified Parties in any jurisdiction, (ii)
the Indemnified Parties will cooperate in the
defense of any such litigation; and (iii) SSFC
shall not be liable for any settlement effected
without its prior consent; and provided further
provided that SSFC shall not have any obligation
hereunder to any Indemnified Party when and if a
court of competent jurisdiction shall determine,
and such determination shall have become final,
that the indemnification of such Indemnified Party
in the manner contemplated hereby is prohibited by
applicable Law.
(iii)In consideration of and as a condition precedent
to the effectiveness of the indemnification
obligations provided by SSFC in this section to a
director or officer of the Acquired Corporation,
such director or officer of the Acquired
Corporation shall have delivered to SSFC on or
prior to the Effective Date a letter in form
reasonably satisfactory to SSFC concerning claims
such directors or officers may have against
Acquired Corporation. In the letter, the
directors or officers shall: (i) acknowledge the
assumption by SSFC as of the Effective Date of all
Liability (to the extent Acquired Corporation is
so liable) for claims for indemnification arising
under section 5.1(e) hereof; (ii) affirm that they
do not have nor are they aware of any claims they
might have (other than those referred to in the
following clause (iii)) against Acquired
Corporation; (iv) identify any claims or any facts
or circumstances of which they are aware that
could give rise to a claim for indemnification
under section 5.1(e) hereof; and (iv) release as
of the Effective Date any and all claims that they
may have against Acquired Corporation or the Bank
other than (A) those referred to in the foregoing
clause (iii) and disclosed in the letter of the
director or officer, (B) claims by third parties
which have not yet been asserted against such
director or officer (other than claims arising
from facts and circumstances of which such
director or officer is aware but which are not
disclosed in such director or executive officer's
letter), (C) claims by third parties arising from
any transaction contemplated by this Agreement and
(D) claims by third parties arising in the
ordinary course of business of Acquired
Corporation after the date of the letter.
(iv) Acquired Corporation hereby represents and
warrants to SSFC that it has no knowledge of any
claim, pending or threatened, or of any facts or
circumstances that could give rise to any
obligation by SSFC to provide the indemnification
required by this section 5.1(e) other than as
disclosed in the letters of the directors and
executive officers referred to in section
5.1(e)(iii) hereof and claims arising from any
transaction contemplated by this Agreement.
5.2 Additional Covenants of Acquired Corporation.
Acquired Corporation covenants to and with SSFC as follows:
(a) Operations. Acquired Corporation will conduct its
business and the business of the Bank in a proper and
prudent manner and will use its best efforts to
maintain its relationships with its depositors,
customers and employees. Neither Acquired Corporation
nor the Bank will engage in any material transaction
outside the ordinary course of business or make any
material change in its accounting policies or methods
of operation, nor will Acquired Corporation permit the
occurrence of any change or event which would render
any of the representations and warranties in Article 4
hereof untrue in any material respect at and as of the
Effective Date with the same effect as though such
representations and warranties had been made at and as
of such Effective Date.
(b) Stockholders Meeting; Best Efforts. Acquired
Corporation will cooperate with SSFC in the preparation
of the Registration Statement and any regulatory
filings and will cause the stockholders meeting to be
held for the purpose of approving the Merger as soon as
practicable after the effective date of the
Registration Statement, and will use its best efforts
to bring about the transactions contemplated by this
Agreement, including stockholder approval of this
Agreement, as soon as practicable unless this Agreement
is terminated as provided herein.
(c) Director Recommendation. The members of the Board of
Directors of Acquired Corporation agree to support
publicly the Merger.
(d) Financial Statements. Acquired Corporation shall
furnish to SSFC with reasonable promptness, such
additional financial data as SSFC may reasonably
request; and
(e) Fiduciary Duties. Prior to the Effective Date, (i) no
director or officer (each an "Executive") of Acquired
Corporation shall, directly or indirectly, own, manage,
operate, join, control, be employed by or participate
in the ownership, proposed ownership, management,
operation or control of or be connected in any manner
with, any business, corporation or partnership which is
competitive to the business of Acquired Corporation,
except that a director or officer may own stock in a
publicly traded competitive business, (ii) all
Executives, at all times, shall satisfy their fiduciary
duties to Acquired Corporation and the Bank, and (iii)
such Executives shall not (except as required in the
course of his or her employment with Acquired
Corporation or the Bank) communicate or divulge to, or
use for the benefit of himself or herself or any other
person, firm, association or corporation, without the
express written consent of Acquired Corporation, any
confidential information which is possessed, owned or
used by or licensed by or to Acquired Corporation or
the Bank or confidential information belonging to third
parties which Acquired Corporation or the Bank shall be
under obligation to keep secret or which may be
communicated to, acquired by or learned of by the
Executive in the course of or as a result of his or her
employment with Acquired Corporation or the Bank.
ARTICLE 6
MUTUAL COVENANTS AND AGREEMENTS
6.1 Best Efforts; Cooperation
Subject to the terms and conditions herein provided, SSFC
and Acquired Corporation each agrees to use its best efforts
promptly to take, or cause to be taken, all actions and do, or
cause to be done, all things necessary, proper or advisable under
applicable Laws or otherwise, including, without limitation,
promptly making required deliveries of stockholder lists and
stock transfer reports and attempting to obtain all necessary
Consents and waivers and regulatory approvals, including the
holding of any regular or special board meetings, to consummate
and make effective, as soon as practicable, the transactions
contemplated by this Agreement. The officers of each Party to
this Agreement shall fully cooperate with officers and employees,
accountants, counsel and other representatives of the other
Parties not only in fulfilling the duties hereunder of the Party
of which they are officers but also in assisting, directly or
through direction of employees and other persons under their
supervision or control, such as stock transfer agents for the
Party, the other Parties requiring information which is
reasonably available from such Party.
6.2 Press Release.
Each Party hereto agrees that, unless approved by the other
Parties in advance, such Party will not make any public
announcement, issue any press release or other publicity or
confirm any statements by any person not a party to this
Agreement concerning the transactions contemplated hereby.
Notwithstanding the foregoing, each Party hereto reserves the
right to make any disclosure if such Party, in its reasonable
discretion, deems such disclosure required by Law. In that
event, such Party shall provide to the other Party the text of
such disclosure sufficiently in advance to enable the other Party
to have a reasonable opportunity to comment thereon.
6.3 Access to Properties and Records.
Each Party hereto shall afford the officers and authorized
representatives of the other Party full access to the assets,
books and records of such Party in order that such other Parties
may have full opportunity to make such investigation as they
shall desire of the affairs of such Party and shall furnish to
such Parties such additional financial and operating data and
other information as to its businesses and assets as shall be
from time to time reasonably requested. All such information
that may be obtained by such Party will be held in confidence by
such party, will not be disclosed by such Party or any of its
representatives except in accordance with this Agreement, and
will not be used by such Party for any purpose other than the
accomplishment of the Merger as provided herein.
6.4 Notice of Adverse Changes.
Each Party agrees to give written notice promptly to the
other Party upon becoming aware of the occurrence or impending
occurrence of any event or circumstance relating to it or any of
its Subsidiaries which (i) is reasonably likely to have,
individually or in the aggregate, a material adverse effect on it
or (ii) would cause or constitute a 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.
ARTICLE 7
CONDITIONS TO OBLIGATIONS OF ALL PARTIES
The obligations of SSFC and Acquired Corporation to cause
the transactions contemplated by this Agreement to be consummated
shall be subject to the satisfaction, in the sole discretion of
the Party relying upon such conditions, on or before the
Effective Date of all the following conditions, except as such
Parties may waive such conditions in writing:
7.1 Approval by Shareholders.
At the Stockholders Meeting, this Agreement and the matters
contemplated by this Agreement shall have been duly approved by
the vote of the holders of not less than the requisite number of
the issued and outstanding voting securities of Acquired
Corporation as is required by applicable Law and Acquired
Corporation's articles of incorporation and bylaws.
7.2 Regulatory Authority Approval.
Orders, consents and approvals, in form and substance
reasonably satisfactory to SSFC and Acquired Corporation, shall
have been entered by the Board of Governors of the Federal
Reserve System and other appropriate bank regulatory Agencies (i)
granting the authority necessary for the consummation of the
transactions contemplated by this Agreement hereof and (ii)
satisfying all other requirements prescribed by Law. No order,
consent or approval so obtained which is necessary to consummate
the transactions as contemplated hereby shall be conditioned or
restricted in a manner which in the reasonable good faith
judgment of the Board of Directors of SSFC or Acquired
Corporation would so materially adversely impact the economic
benefits of the transaction as contemplated by this Agreement so
as to render inadvisable the consummation of the Merger.
7.3 Litigation.
There shall be no pending or threatened litigation in any
court or any pending or threatened proceeding by any governmental
commission, board or agency, with a view to seeking or in which
it is sought to restrain or prohibit consummation of the
transactions contemplated by this Agreement or in which it is
sought to obtain divestiture, rescission or damages in connection
with the transactions contemplated by this Agreement and no
investigation by any Agency shall be pending or threatened which
might result in any such suit, action or other proceeding.
7.4 Registration Statement
The registration statement on Form 10SB filed pursuant to
the Securities Exchange Act of 1934 shall have become effective
and no stop order suspending the effectiveness of the
Registration Statement shall be in effect; no proceedings for
such purpose, or under the proxy rules of the SEC or any bank
regulatory authority with respect to the transactions
contemplated hereby, shall be pending before or threatened by the
SEC or any bank regulatory authority; and all approvals or
authorizations for the offer of SSFC Common Stock shall have been
received or obtained pursuant to any applicable state securities
Laws, and no stop order or proceeding with respect to the
transactions contemplated hereby shall be pending or threatened
under any such state Law.
ARTICLE 8
CONDITIONS TO OBLIGATIONS OF ACQUIRED CORPORATION
The obligations of Acquired Corporation to cause the
transactions contemplated by this Agreement to be consummated
shall be subject to the satisfaction on or before the Effective
Date of all the following conditions except as Acquired
Corporation may waive such conditions in writing:
8.1 Representations, Warranties and Covenants.
Notwithstanding any investigation made by or on behalf of
Acquired Corporation, all representations and warranties of SSFC
contained in this Agreement shall be true in all material
respects on and as of the Effective Date as if such
representations and warranties were made on and as of such
Effective Date, and SSFC shall have performed in all material
respects all agreements and covenants required by this Agreement
to be performed by it on or prior to the Effective Date.
8.2 Adverse Changes.
Thereto shall have been no changes after the date of the
most recent balance sheet provided under section 4.4(a) hereof in
the results of operations (as compared with the corresponding
period of the prior fiscal year), assets, liabilities, financial
condition or affairs of SSFC which in their total effect
constitute a material adverse effect, nor shall there have been
any material changes in the Laws governing the business of SSFC
or which would impair the rights of Acquired Corporation or its
shareholders pursuant to this Agreement.
8.3 Certificate.
In addition to any other deliveries required to be delivered
hereunder, Acquired Corporation shall have received a certificate
from the President or a Vice President and from the Secretary or
Assistant Secretary of SSFC certifying that:
(a) the Board of Directors of SSFC has duly adopted
resolutions approving the substantive terms of this
Agreement and authorizing the consummation of the
transactions contemplated by this Agreement and such
resolutions have not been amended or modified and
remain in full force and effect;
(b) each person executing this Agreement on behalf of SSFC
is an officer of SSFC holding the office or offices
specified therein and the signature of each person set
forth on such certificate is his or her genuine
signature;
(c) the certificate of incorporation and bylaws of Acquired
Corporation and the Bank referenced in Section 4.8
hereof remain in full force and effect;
(d) such persons have no knowledge of a basis for any
material claims in any court or before any Agency or
arbitration or otherwise against, by or affecting SSFC
or the business, prospects, condition (financial or
otherwise), or assets of SSFC or which would prevent
the performance of this Agreement or the transactions
contemplated by this Agreement or declare the same
unlawful or cause the rescission thereof;
(e) to such persons' knowledge, the Proxy Statement
delivered to Acquired Corporation's shareholders, or
any amendments or revisions thereto so delivered, as of
the date thereof, did not contain or incorporate by
reference any untrue statement of a material fact or
omit to state any material fact required to be stated
therein or necessary to make the statements therein not
misleading in light of the circumstances under which
they were made (it being understood that such persons
need not express a statement as to information
concerning or provided by Acquired Corporation for
inclusion in such Proxy Statement); and
(f) the conditions set forth in this Article 8 insofar as
they relate to SSFC have been satisfied.
8.4 Other Matters.
There shall have been furnished to such counsel for Acquired
Corporation certified copies of such corporate records of SSFC
and copies of such other documents as such counsel may reasonably
have requested for such purpose.
8.5 Material Events.
There shall have been no determination by the Board of
Directors of Acquired Corporation that the transactions
contemplated by this Agreement have become impractical because of
any state of war, declaration of a banking moratorium in the
United States or a general suspension of trading on the exchange
on which SSFC Common Stock may be traded.
ARTICLE 9
CONDITIONS TO OBLIGATIONS OF SSFC
The obligations of SSFC to cause the transactions
contemplated by this Agreement to be consummated shall be subject
to the satisfaction on or before the Effective Date of all of the
following conditions except as SSFC may waive such conditions in
writing:
9.1 Representations, Warranties and Covenants
Notwithstanding any investigation made by or on behalf of
SSFC, all representations and warranties of Acquired Corporation
contained in this Agreement shall be true in all material
respects on and as of the Effective Date as if such
representations and warranties were made on and as of the
Effective Date, and Acquired Corporation shall have performed in
all material respects all agreements and covenants required by
this Agreement to be performed by it on or prior to the Effective
Date.
9.2 Adverse Changes.
There shall have been no changes after the date of the most
recent balance sheet provided under section 4.4(a) hereof in the
results of operations (as compared with the corresponding period
of the prior fiscal year), assets, liabilities, financial
condition, or affairs of Acquired Corporation which constitute a
material adverse effect, nor shall there have been any material
changes in the Laws governing the business of Acquired
Corporation which would impair SSFC's rights pursuant to this
Agreement.
9.3 Certificate.
In addition to any other deliveries required to be delivered
hereunder, SSFC shall have received a certificate from Acquired
Corporation executed by the President or Vice President and from
the Secretary or Assistant Secretary of Acquired Corporation
certifying that:
(a) the Board of Directors of Acquired Corporation has duly
adopted resolutions approving the substantive terms of
this Agreement and authorizing the consummation of the
transactions contemplated by this Agreement and such
resolutions have not been amended or modified and
remain in full force and effect;
(b) the shareholders of Acquired Corporation have duly
adopted resolutions approving the substantive terms of
the Merger and the transactions contemplated thereby
and such resolutions have not been amended or modified
and remain in full force and effect;
(c) each person executing this Agreement on behalf of
Acquired Corporation is an officer of Acquired
Corporation holding the office or offices specified
therein and the signature of each person set forth on
such certificate is his or her genuine signature.
(d) the articles of incorporation and bylaws of Acquired
Corporation and the Bank referenced in section 4.8
hereof remain in full force and effect and have not
been amended or modified since the date hereof;
(e) to such persons' knowledge, the Proxy Statement
delivered to Acquired Corporation's shareholders, or
any amendments or revisions thereto so delivered, as of
the date thereof, did not contain or incorporate by
reference any untrue statement of a material fact or
omit to state any material fact required to be stated
therein or necessary to make the statements therein not
misleading in light of the circumstances under which
they were made (it being understood that such persons
need only express a statement as to information
concerning or provided by Acquired Corporation for
inclusion in such Proxy Statement); and
(f) the conditions set forth in this Article 9 insofar as
they related to Acquired Corporation have been
satisfied.
9.4 Other Matters.
There shall have been furnished to counsel for SSFC
certified copies of such corporate records of Acquired
Corporation and copies of such other documents as such counsel
may reasonably have requested.
9.5 Dissenters.
The number of shares as to which shareholders of Acquired
Corporation have exercised dissenters rights of appraisal under
section 2.6 does not exceed 10% of the outstanding shares of
common stock of Acquired Corporation.
9.6 Material Events.
There shall have been no determination by the Board of
Directors of SSFC that the transactions contemplated by this
Agreement have become impractical because of any state of war,
declaration of a banking moratorium in the United States or
general suspension of trading on the NYSE or on any market on
which SSFC Common Stock may be traded.
9.7 Employment Agreements.
The President and Chairman of the Board of the Acquired
Corporation, respectively ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. Modder,
are employed by the Acquired Corporation under long-term
employment agreements. At the consummation and Effective Date
and time of the Merger contemplated hereunder, the employment
agreements shall immediately become the liability of SSFC. Any
contractual obligations and liabilities of the Acquired
Corporation shall immediately become the contractual obligations
and liabilities of SSFC upon the consummation and Effective Date
and time of the Merger contemplated hereunder.
ARTICLE 10
TERMINATION OF REPRESENTATIONS AND WARRANTIES
All representations and warranties provided in Articles 3
and 4 of this Agreement or in any certificate pursuant to
Articles 8 and 9 shall terminate and be extinguished at and shall
not survive the Effective Date. All covenants, agreements and
undertakings required by this Agreement to be performed by any
Party hereto following the Effective Date shall survive such
Effective Date and be binding upon such Party. If the Merger is
not consummated, all representations, warranties, obligations,
covenants, or agreements hereunder or in any certificate
delivered hereunder relating to the transaction which is not
consummated shall be deemed to be terminated or extinguished,
except that
Sections 6.2, 6.4, 12.3 and 13.4, and Article 10 shall
survive. Items disclosed in the Exhibits and Schedules attached
hereto are incorporated into this Agreement and form a part of
the representations, warranties, covenants or agreements to which
they relate. Information provided in such Exhibits and Schedules
is provided only in response to the specific section of this
Agreement which calls for such information.
ARTICLE 11
NOTICES
All notices, requests, demands and other communications
under this Agreement shall be in writing and shall be deemed to
have been duly given at the time given or mailed, first class
postage prepaid:
(a) If to Acquired Corporation, to:
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
with a courtesy copy to:
▇▇▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Goodyear, LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ - ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
may otherwise be specified by or as Acquired
Corporation in writing to SSFC
(B) If to SSFC, to:
▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
with a courtesy copy to:
▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
or as may otherwise be specified in writing by SSFC to
Acquired Corporation.
ARTICLE 12
AMENDMENT OR TERMINATION
12.1 Amendment.
This Agreement may be amended by the mutual consent of SSFC
and Acquired Corporation before or after approval of the
transactions contemplated herein by the shareholders of Acquired
Corporation.
12.2 Termination.
This Agreement may be terminated at any time prior to or on
the Effective Date whether before or after action thereon by the
shareholders of Acquired Corporation, as follows:
(a) by the mutual consent of the respective boards of
directors of Acquired Corporation and SSFC;
(b) by the Board of Directors of either Party (provided
that the terminating Party is not then in material
breach of any representation, warranty, covenant, or
other agreement contained in this Agreement) in the
event of a material breach by the other Party of any
representation or warranty contained in this Agreement
which cannot be or has not been cured within thirty
(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 Merger under the standard set forth
in section 9.1 of this Agreement in the case of SSFC
and section 8.1 of this Agreement in the case of
Acquired Corporation;
(c) by the Board of Directors of either Party (provided
that the terminating Party is not then in material
breach of any representation, warranty, covenant, or
other agreement contained in this Agreement) in the
event of a material breach by the other Party of any
covenant or agreement contained in this Agreement which
cannot be or has not been cured within thirty (30) days
after the giving of written notice to the breaching
Party of such breach, or if any of the conditions to
the obligations of such Party contained in this
Agreement in Article 8 as to Acquired Corporation or
Article 9 as to SSFC shall not have been satisfied in
full; or
(d) by the Board of Directors of either SSFC or Acquired
Corporation if all transactions contemplated by this
Agreement shall not have been consummated on or prior
to October 31, 1997, if the failure to consummate the
transactions provided for in this Agreement on or
before such date is not caused by any breach of this
Agreement by the Party electing to terminate pursuant
to this section 12.2(d).
12.3 Damages.
In the event of termination pursuant to section 12.2,
Acquired Corporation and SSFC shall not be liable for damages for
any breach of a covenant, warranty or representation contained in
this Agreement made in good faith, and, in that case, the
expenses incurred shall be borne as set forth in section 13.1
hereof.
ARTICLE 13
MISCELLANEOUS
13.1 Expenses.
Each Party hereto shall bear its own legal, auditing,
trustee, investment banking, regulatory and other expenses in
connection with this Agreement and the transactions contemplated
hereby.
13.2 Benefit.
This Agreement shall inure to the benefit of and be binding
upon Acquired Corporation and SSFC, and their respective
successors. This Agreement shall not be assignable by any Party
without the prior written consent of the other Party.
13.3 Federal Tax Attributes.
This Merger for tax and other purposes shall be construed as
a form of reorganization, and therefor the tax attributes of the
Acquired Corporation and the Bank shall carry over to and
consolidate with SSFC, from that of the Acquired Corporation and
the Bank which file consolidated Federal Income Tax returns. It
is anticipated that SSFC will file consolidated Federal Income
Tax returns involving those entities contemplated by this Merger
Agreement, thereby preserving the tax attributes in Acquired
Corporation and the Bank.
13.4 Governing Law.
Except to the extent that the laws of the State of Florida
apply to the Merger, this Agreement shall be governed by, and
construed in accordance with the Laws of the State of Delaware
without regard to any conflicts of law.
13.5 Counterparts.
This Agreement may be executed in counterparts, each of
which shall be deemed to constitute an original. Each such
counterpart shall become effective when one counterpart has been
signed by each Party thereto.
13.6 Headings.
The headings of the various articles and sections of this
Agreement are for convenience of reference only and shall not be
deemed a part of this Agreement or considered in construing the
provisions thereof.
13.7 Severability.
Any term or provision of this Agreement that is prohibited
or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining terms and
provisions thereof or affecting the validity or enforceability of
such provision in any other jurisdiction, and if any term or
provision of this Agreement is held by any court of competent
jurisdiction to be void, voidable, invalid or unenforceable in
any given circumstance or situation, then all other terms and
provisions, being severable, shall remain in full force and
effect in such circumstance or situation and the term or
provision shall remain valid and in effect in any other
circumstances or situation.
13.8 Construction.
Use of the masculine pronoun herein shall be deemed to refer
to the feminine and neuter genders and the use of singular
references shall be deemed to include the plural and vice versa,
as appropriate. No inference in favor of or against any Party
shall be drawn from the fact that such Party or such Party's
counsel has drafted any portion of this Agreement.
13.9 Return of Information.
In the event of termination of this Agreement prior to the
Effective Date, each Party shall return to the other, without
retaining copies thereof, all confidential or nonpublic
documents, work papers and other materials obtained from the
other Party in connection with the transactions contemplated in
this Agreement and shall keep such information confidential, not
disclose such information to any other person or entity, and not
use such information in connection with its business.
13.10 Equitable Remedies.
The Parties agree that, in the event of a breach of this
Agreement by either party, the other Party may be without an
adequate remedy at law owing to the unique nature of the
contemplated transactions. In recognition thereof, in addition
to (and not in lieu of) any remedies at law that may be available
to the non-breaching Party, the non-breaching Party shall be
entitled to obtain equitable relief, including the remedies of
specific performance and injunction, in the event of breach of
this Agreement by the other Party, and no attempt on the part of
the non-breaching Party to obtain such equitable relief shall be
deemed to constitute an election of remedies by the non-breaching
Party that would preclude the non-breaching Party from obtaining
any remedies at law to which it would otherwise be entitled.
13.11 Attorneys' Fees.
If any Party hereto shall bring an action at law or in
equity to enforce its rights under this Agreement (including an
action based upon a misrepresentation or the breach of any
warranty, covenant, agreement or obligation contained herein),
the prevailing Party in such action shall be entitled to recover
from the other Party its costs and expenses incurred in
connection with such action (including fees, disbursements and
expenses of attorneys and costs of investigation).
13.12 No Waiver.
No failure, delay or omission of or by any Party in
exercising any right, power or remedy upon any breach or default
of any other Party shall impair any such rights, powers or
remedies of the Party not in breach or default, nor shall it be
construed to be a waiver of any such right, power or remedy, or
an acquiescence in any similar breach or default; nor shall any
waiver of any single breach or default be deemed a waiver of any
other breach or default theretofore or thereafter occurring. Any
waiver, permit, consent or approval of any kind or character on
the part of any Party of any provisions of this Agreement must be
in writing and be executed by the Parties to this Agreement and
shall be effective only to the extent specifically set forth in
such writing.
13.13 Remedies Cumulative.
All remedies provided in this Agreement, by law or
otherwise, shall be cumulative and not alternative.
13.14 Entire Contract.
This Agreement and the documents and instruments referred to
herein constitute the entire contract between the parties to this
Agreement and supersede all other understandings with respect to
the matter of this Agreement.
IN WITNESS WHEREOF, Acquired Corporation and SSFC have
caused this Agreement to be signed by their respective duly
authorized officers as of the date first above written.
SOUTHERN SECURITY FINANCIAL CORPORATION
By: S/▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Its:
SOUTHERN SECURITY BANK CORPORATION
By: S/▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: