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EXHIBIT 2.1
================================================================================
AGREEMENT AND PLAN OF MERGER
BETWEEN
CB BANCORP, INC.
AND
HOME BANCSHARES, INC.
AND
COMMUNITY FINANCIAL GROUP, INC.
================================================================================
DATED AS OF JULY 30, 2003
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EXECUTION COPY
TABLE OF CONTENTS
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RECITALS.................................................................
1
DEFINITIONS..............................................................
2
ARTICLE I.
MERGER.....................................................
7
1.1 THE
MERGER.....................................................
7
(A) SURVIVING CORPORATION......................................
7
(B) ARTICLES, BYLAWS, DIRECTORS, OFFICERS......................
7
(C) EFFECT OF THE MERGER.......................................
7
1.2
CONTINUATION OF BANKS..........................................
8
1.3
DISSENTING SHARES..............................................
8
1.4
EFFECTIVE DATE.................................................
8
ARTICLE II.
CONSIDERATION.............................................
8
2.1 MERGER
CONSIDERATION...........................................
8
2.2
TRANSMITTAL AND ALLOCATION PROCEDURES..........................
10
2.3
FRACTIONAL SHARES..............................................
11
2.4
SHAREHOLDER RIGHTS; STOCK TRANSFERS............................
11
2.5
EXCEPTION SHARES...............................................
11
2.6
RESERVATION OF RIGHT TO REVISE TRANSACTION.....................
11
2.7
OPTIONS........................................................
11
ARTICLE III.
ACTIONS PENDING CONSUMMATION.............................
12
3.1
CAPITAL STOCK..................................................
12
3.2
DIVIDENDS, ETC.................................................
12
3.3
INDEBTEDNESS; LIABILITIES; ETC.................................
12
3.4 LINE
OF BUSINESS; OPERATING PROCEDURES; ETC....................
12
3.5 LIENS
AND ENCUMBRANCES.........................................
13
3.6
COMPENSATION; EMPLOYMENT AGREEMENTS; ETC.......................
13
3.7
BENEFIT PLANS..................................................
13
3.8
CONTINUANCE OF BUSINESS........................................
13
3.9
AMENDMENTS.....................................................
13
3.10
CLAIMS........................................................
13
3.11
CONTRACTS.....................................................
13
3.12
LOANS.........................................................
13
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES............................
14
4.1 CFG
REPRESENTATIONS AND WARRANTIES.............................
14
(A) RECITALS...................................................
14
4.2 CBI
AND HBI REPRESENTATIONS AND WARRANTIES.....................
23
(A) RECITALS...................................................
23
(B) ORGANIZATION, STANDING AND AUTHORITY.......................
23
(C) SHARES.....................................................
24
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(D) CBI AND HBI SUBSIDIARIES...................................
24
(E) CORPORATE POWER............................................
24
(F) CORPORATE AUTHORITY........................................
24
(G) NO DEFAULTS................................................
24
(H) HBI FINANCIAL REPORTS......................................
25
(J) NO EVENTS..................................................
25
(K) LITIGATION; REGULATORY ACTION..............................
25
ARTICLE V.
COVENANTS..................................................
25
5.1 BEST
EFFORTS...................................................
25
5.2
CORPORATE ACTIONS..............................................
26
(A) THE PROXY..................................................
26
(B) HBI AMENDMENT..............................................
26
(C) BEST EFFORTS...............................................
26
5.3
SECURITIES LAW COMPLIANCE......................................
26
5.4 PRESS
RELEASES.................................................
26
5.5
ACCESS; INFORMATION............................................
26
5.6 SOLE
AGREEMENT TO SELL.........................................
27
5.7 HBI
COMMON STOCK ADJUSTMENTS...................................
27
5.8 STATE
TAKEOVER LAW.............................................
28
5.9 NO
RIGHTS TRIGGERED............................................
28
5.10
REGULATORY APPLICATIONS.......................................
28
5.11
REGULATORY DIVESTITURES.......................................
28
5.12
CURRENT INFORMATION...........................................
28
5.13
DIRECTOR AND OFFICER LIABILITY INSURANCE......................
28
ARTICLE VI.
CONDITIONS TO CONSUMMATION OF THE MERGER..................
29
6.1
CONDITIONS TO EACH PARTY'S OBLIGATIONS.........................
29
6.2
CONDITIONS TO OBLIGATIONS OF CBI AND HBI.......................
30
6.3
CONDITIONS TO OBLIGATIONS OF CFG...............................
32
ARTICLE VII.
TERMINATION..............................................
32
7.1
TERMINATION UPON CERTAIN CONDITIONS............................
32
7.2
TERMINATION FOR BREACH.........................................
33
ARTICLE VIII.
OTHER MATTERS...........................................
33
8.1
SURVIVAL.......................................................
33
8.2
WAIVER; AMENDMENT..............................................
33
8.3
COUNTERPARTS...................................................
33
8.4
GOVERNING LAW..................................................
33
8.5
EXPENSES.......................................................
34
8.6
CONFIDENTIALITY................................................
34
8.7
NOTICES........................................................
34
8.8 TIME
IS OF THE ESSENCE.........................................
34
8.9
ASSIGNMENT.....................................................
35
8.10
BINDING EFFECT................................................
35
8.11
SEVERABILITY..................................................
35
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8.12
ENTIRE UNDERSTANDING; NO THIRD PARTY BENEFICIARIES............
35
8.13
ENFORCEMENT PROCEEDINGS.......................................
35
8.14
BENEFIT PLANS.................................................
35
8.15
HEADINGS......................................................
35
EXHIBITS.................................................................
1
APPENDIX
I...............................................................
1
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of the 30th day of July,
2003 (this
"Agreement" or "Plan"), is by and among CB BANCORP, INC. ("CBI"),
an Arkansas
corporation, HOME BANCSHARES, INC. ("HBI"), an Arkansas
corporation, and
COMMUNITY FINANCIAL GROUP, INC. ("CFG"), an Arkansas
corporation.
RECITALS
(A)
CFG. CFG is a corporation duly organized and existing in good
standing
under the laws of the State of Arkansas, with its principal
executive offices
located in Cabot, Arkansas. CFG is a registered bank holding
company under the
Bank Holding Company Act of 1956, as amended. As of the date of
this Plan, CFG
has 1,000,000 authorized shares of common stock, $.25 par value
("CFG Common
Stock"), of which 724,033 shares of CFG Common Stock are issued and
outstanding
(no other class of capital stock being authorized). As of June 30,
2003, CFG had
capital of $27,731,897, divided into common stock of $231,260,
comprehensive
income/surplus of $5,145,154, and retained earnings of $22,355,483.
As of the
date of this Plan, CFG has 70,000 shares of CFG Common Stock
reserved for
issuance under a Non-Qualified stock Option Plan pursuant to which
options
covering 9,359 shares of CFG Common Stock are issued and
outstanding as provided
in Section 2.7 herein.
(B)
COMMUNITY BANK. Community Bank ("CB") is an Arkansas state bank
duly
organized and existing in good standing under the laws of the State
of Arkansas.
As of the date of this Plan, CB has 25,000 authorized shares of
common stock,
$25.00 par value per share ("CB Common Stock") (no other class of
capital stock
being authorized), of which 25,000 shares of CB Common Stock are
issued and
outstanding. All of the issued and outstanding shares of CB Common
Stock are
owned by CFG, the sole shareholder of CB.
(C)
CBI. CBI is a newly formed corporation, duly organized and existing
in
good standing under the laws of the State of Arkansas, with its
principal
executive offices located in Conway, Arkansas. CBI is a subsidiary
of HBI, which
will own 80% of the issued and outstanding shares of CBI. The
remaining 20% of
the issued and outstanding shares of CBI will be owned by
TCBancorp, Inc. Upon
approval by the Federal Reserve Board (hereafter defined), CBI will
be a
registered bank holding company, under the Arkansas Banking Code of
1997, as
amended. As of the date of this Plan, CBI has 3,000,000 authorized
shares of
common stock, $.01 par value ("CBI Common Stock"), of which five
(5) shares of
CBI Common Stock are issued and outstanding (no other class of
capital stock
being authorized).
(D)
HBI. HBI is a corporation duly organized and existing in good
standing
under the laws of the State of Arkansas, with its principal
executive offices
located in Conway, Arkansas. HBI is a financial holding company
subject to
regulation by the Federal Reserve Board. As of June 20, 2003, HBI
had Capital of
$48,379,335, divided into common stock of $1,863,732,
comprehensive
income/surplus of $39,527,270, and retained earnings of $6,988,333.
As of the
date of this Plan, HBI has 3,000,000 authorized shares of common
stock, $1.00
par value per share ("HBI Common Stock"), of which 1,863,732 shares
of HBI
Common Stock are issued and outstanding (no other class of capital
stock being
authorized). This Agreement contemplates that HBI will amend its
Articles of
Incorporation to authorize preferred stock to be issued in the
Merger, as
defined herein.
1
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(E)
FIRST STATE BANK. First State Bank of Conway ("FSB"), a wholly
owned
subsidiary of HBI, is a banking corporation duly organized and
existing in good
standing under the laws of the State of Arkansas.
(F)
APPROVALS. At meetings of the respective Boards of Directors of
CFG,
CBI, and HBI, each such Board has approved and authorized the
execution of this
Plan in counterparts.
In
consideration of their mutual promises and obligations, the
Parties
further agree as follows:
DEFINITIONS
(A)
DEFINITIONS. Capitalized terms used in this Plan have the
following
meanings:
"ACA" means the Arkansas Code Annotated, as amended.
"Affiliate" means, with respect to any Person, any other Person
that,
directly or indirectly, through one or more intermediaries,
Controls, is
Controlled by, or is under common Control with such Person.
"Appraisal Laws" means ACA Section 4-26-1007.
"Arkansas Business Corporation Laws" means (1) as to CFG, ACA
Section
4-26-101, et seq., and (2) as to CBI and HBI, ACA Section 4-27-101,
et seq.
"Arkansas Resident" means:
(1) A corporation, partnership, trust or other form of business
organization which has a principal office within the State of
Arkansas on the
Effective Date of the Plan.
(2) An individual who principal residence is in the State of
Arkansas
on the Effective Date of the Plan.
(3) A corporation, partnership, trust or other form of business
organization which is organized for the specific purpose of
acquiring part of an
issue offered pursuant to this Plan, of which all of the beneficial
owners of
such organization are residents of the State of Arkansas on the
Effective Date
of the Plan.
"Asset Classification" has the meaning assigned to such term in
Section
4.1(U).
"Business Day" means any day other than a Saturday, Sunday, or a
day on
which FSB is not open for business.
"Capital" means capital stock, surplus and retained earnings
determined in
accordance with GAAP. Unrealized gains or losses in investment
securities will
be included when determining Capital.
"Cash Consideration" means the amount of cash the holders of
Eligible CFG
Common Stock will receive pursuant to Article II.
"CB
Common Stock" has the meaning assigned to such term in paragraph
(B) of
the Recitals.
2
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"CBI" means CB Bancorp, Inc., an Arkansas corporation.
"CFG" means Community Financial Group, Inc., an Arkansas
corporation and
registered bank holding company.
"CFG
Common Stock" has the meaning assigned to such term in paragraph
(A)
of the Recitals.
"CFG
Option" has the meaning assigned to such term in Section 2.7.
"Code" has the meaning assigned to such term in Section 4.1
(R)(2).
"Compensation and Benefit Plans" has the meaning assigned to such
term in
Section 4.1(R)(1).
"Control" with respect to any Person means the possession, directly
or
indirectly, of the power to direct or cause the direction of the
management and
policies of such Person, whether through the ownership of voting
interests, by
contract, or otherwise.
"Derivatives Contract" means an exchange-traded or over-the-counter
swap,
forward, future, option, cap, floor or collar financial contract or
any other
contract that (1) is not included on the balance sheet of the
Financial Reports
of CFG, and (2) is a derivative contract (including various
combinations
thereof).
"Dissenting Share" has the meaning assigned to such term in Section
1.3.
"Effective Date" has the meaning assigned to such term in Section
1.4.
"Eligible CFG Common Stock" means shares of CFG Common Stock other
than
Exception Shares and Dissenting Shares.
"Environmental Law" means (1) any federal, state, and/or local
law,
statute, ordinance, rule, regulation, code, license, permit,
authorization,
approval, consent, legal doctrine, order, judgment, decree,
injunction,
requirement or agreement with any governmental entity, relating to
(a) the
protection, preservation or restoration of the environment
(including air, water
vapor, surface water, groundwater, drinking water supply, surface
land,
subsurface land, plant and animal life or any other natural
resource) or to
human health or safety, or (b) the exposure to, or the use,
storage, recycling,
treatment, generation, transportation, processing, handling,
labeling,
production, release or disposal of Hazardous Material, in each case
as amended
and as now in effect, including the Federal Comprehensive
Environmental
Response, Compensation, and Liability Act of 1980, the Superfund
Amendments and
Reauthorization Act, the Federal Water Pollution Control Act of
1972, the
Federal Clean Air Act, the Federal Clean Water Act, the Federal
Resource
Conservation and Recovery Act of 1976 (including the Hazardous and
Solid Waste
Amendments thereto), the Federal Solid Waste Disposal and the
Federal Toxic
Substances Control Act, and the Federal Insecticide, Fungicide and
Rodenticide
Act, the Federal Occupational Safety and Health Act of 1970, and
(2) any common
law or equitable doctrine (including injunctive relief and tort
doctrines such
as negligence, nuisance, trespass and strict liability) that may
impose
liability or obligations for injuries or damages due to, or
threatened as a
result of, the presence of or exposure to any Hazardous
Material.
"ERISA" has the meaning assigned to such term in Section
4.1(R)(2).
3
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"ERISA Affiliate" has the meaning assigned to such term in
Section
4.1(R)(3).
"ERISA Plans" has the meaning assigned to such term in Section
4.1(R)(2).
"Exception Shares" has the meaning ascribed to such term in Section
2.1(B).
"Exchange Agent" means Firstrust Financial Services, Inc., an
Arkansas
corporation whose principal address is 2716 Lakewood Village Place,
North Little
Rock, Arkansas, 72116.
"Expiration Date" has the meaning assigned to such term in
Section
2.2(A)(2).
"FDIC" means the Federal Deposit Insurance Corporation.
"Financial Reports" (1) as to CFG and HBI, means the audited
consolidated
balance sheets as of December 31, 2001 and December 31, 2002 and
the related
statements of income, changes in shareholders' equity and cash
flows for the
fiscal years ended December 31, 2001 and December 31, 2002, and the
unaudited
consolidated balance sheet as of June 30, 2003 and the related
statements of
income, changes in shareholders' equity and cash flows for the
period ended June
30, 2003; and (2) as to CB means its call reports for the fiscal
years ended
December 31, 2001 and December 31, 2002 and for the period ending
June 30, 2003,
and all other financial reports filed or to be filed subsequent to
June 30,
2003, in the form filed with the Federal Reserve Board, FDIC and
the Arkansas
State Bank Department
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve
System.
"GAAP" means generally accepted accounting principles consistently
applied.
"Hazardous Material' means any substance presently listed,
defined,
designated or classified as hazardous, toxic, radioactive or
dangerous, or
otherwise regulated, under any Environmental Law, whether by type
or quantity,
including any oil or other petroleum product, toxic waste,
pollutant,
contaminant, hazardous substance, toxic substance, hazardous waste,
special
waste or petroleum or any derivative or by-product thereof, radon,
radioactive
material, asbestos, asbestos containing material, urea formaldehyde
foam
insulation, lead and polychlorinated biphenyl.
"HBI" means Home Bancshares, Inc., an Arkansas corporation and
registered
financial holding company.
"HBI
Common Stock" has the meaning assigned to such term in paragraph
(D)
of the Recitals.
"HBI
Option" has the meaning assigned to such term in Section 2.7.
"HBI
Preferred Stock" means the convertible preferred stock to be issued
by
HBI and exchanged pursuant to Section 2.1(B) and as described in
Appendix I.
"HBI
Transaction" means: (1) a merger, consolidation or similar
transaction
involving HBI, where HBI is not the corporation surviving such
transaction or
where a change of Control of HBI is otherwise effected, (2) the
disposition, by
sale, lease, exchange or otherwise, of assets or deposits of HBI or
any of its
significant subsidiaries representing in either case 25 percent or
more of the
consolidated assets or deposits of HBI and its Subsidiaries, or (3)
the
issuance, sale or other disposition (including by way of merger,
consolidation,
share exchange or any similar transaction) of securities
representing 25 percent
or
4
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more of the voting power of HBI or any of its significant
subsidiaries other
than the issuance of HBI Common Stock upon the exercise of then
outstanding
options or the conversion of then outstanding convertible
securities of HBI.
"Insured Depository Institution" has the meaning given it in the
Federal
Deposit Insurance Act, as amended, and applicable regulations under
such
statute.
"Intellectual Property Rights" has the meaning given such term in
Section
4.1(L).
"Knowledge" (and "Know" or "Known") means the best knowledge of
the
Chairman, Chief Executive Officer, Chief Financial Officer, and
Chief Lending
Officer of the entity, after reasonable due diligence, inquiry,
or
investigation.
"Liability" means any debts, liabilities, obligations and contracts
of the
Party, whether the same shall be matured or un-matured; whether
accrued,
absolute, contingent or otherwise.
"Loan/Fiduciary Property" means any property owned or Controlled by
CFG or
any of its Subsidiaries or in which CFG or any of its Subsidiaries
holds a
security or other interest, and, where required by the context,
includes any
such property where CFG or any of its Subsidiaries constitutes the
owner or
operator of such property, but only with respect to such
property.
"Mailing Date" has the meaning assigned to such term in Section
2.2.
"Material means, with respect to any Party, an event, occurrence
or
circumstance (including (i) the making of any provisions for
possible loan and
lease losses, write-downs of other real estate owned and taxes, and
(ii) any
breach of a representation or warranty contained in this Plan by
such Party)
that (a) has or is reasonably likely to have a material adverse
effect on or
constitute a material adverse change in the financial condition,
results of
operations, business, future operations, or prospects of such Party
or, as
applicable, its Subsidiaries, or (b) would impair such Party's
ability to
perform its obligations under this Plan or the consummation of any
of the
transactions contemplated by this Plan. With respect to CFG, any
such event,
occurrence or circumstance that has been previously approved by CBI
and HBI
shall not be deemed material.
"Merger" means the merger of CFG with and into CBI, as described in
Section
1.1.
"Merger Consideration" means the HBI Preferred Stock and/or the
Cash
Consideration a holder of Eligible CFG Common Stock will receive
pursuant to
Article II.
"Mixed Consideration" has the meaning assigned to such term in
Section
2.1(B).
"Multiemployer Plans" has the meaning assigned to such term in
Section
4.1(R)(2).
"Participation Facility" means any facility in which CFG or any of
its
Subsidiaries participates in the management and, where required by
the context,
includes the owner or operator of such facility.
"Party" means a party to this Plan.
"Pension Plan" has the meaning assigned to such term in Section
4.1(R)(2).
5
<PAGE>
"Per
Share Cash Consideration" means the amount of Cash Consideration
paid
for each share of Eligible CFG Common Stock pursuant to Article
II.
"Person" means any individual, corporation (including any
non-profit
corporation), general or limited partnership, limited liability
company, joint
venture, estate, trust, association, organization, labor union,
governmental
body, or other entity.
"Plan" means this Agreement and Plan of Merger, together with all
Exhibits
and Schedules annexed to, and incorporated by specific reference,
as a part of
this Plan.
"Preliminary Calculation" has the meaning assigned to such term in
Section
2.2(B)(1).
"Proxy Statement" has the meaning assigned to such term in Section
5.2(A).
"Qualified Arkansas Resident" means an Arkansas Resident who
provides
evidence of that fact in the manner set forth in Section 2.2.
"Regulatory Authorities" means federal or state governmental
agencies,
authorities or departments (1) charged with the supervision or
regulation of
depository institutions or (2) engaged in the insurance of
deposits.
"Requesting CFG Shareholders" has the meaning assigned to such term
in
Section 2.1(B).
"Requested Consideration" has the meaning assigned to such term in
Section
2.2(A)(1).
"Required Percentage" has the meaning assigned to such term in
Section
2.1(B).
"Rights" means securities or obligations convertible into or
exchangeable
for, or giving any Person any right to subscribe for or acquire, or
any options,
calls or commitments relating to, shares of capital stock.
"Rule 147" means Rule 147 promulgated under the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended,
together
with the rules and regulations promulgated under such statute.
"Stock Conversion Ratio" has the meaning assigned to such term in
Section
2.1(B).
"Subsidiary" means, with respect to any entity, each partnership,
limited
liability company, or corporation the majority of the outstanding
partnership
interests, membership interests, capital stock or voting power of
which is (or
upon the exercise of all outstanding warrants, options and other
rights would
be) owned, directly or indirectly, at the time in question by such
entity.
"Surviving Corporation" has the meaning assigned to such term in
Section
1.1(A).
"Tax
Returns" has the meaning assigned to such term in Section
4.1(BB).
"Taxes" means federal, state, local or foreign income, gross
receipts,
windfall profits, severance, property, production, sales, use,
license, excise,
franchise, employment, withholding or similar taxes
6
<PAGE>
imposed on the income, properties or operations of the respective
Party or its
Subsidiaries, together with any interest, additions, or penalties
with respect
thereto and any interest in respect of such additions or
penalties.
"Termination Date" has the meaning assigned to such term in Section
5.1.
"Transmittal Form" has the meaning assigned to such term in Section
2.2.
(B)
GENERAL INTERPRETATION. Except as otherwise expressly provided in
this
Plan or unless the context clearly requires otherwise, the terms
defined in this
Plan include the plural as well as the singular; the words
"hereof," "herein,"
"hereunder," "in this Plan" and other words of similar import refer
to this Plan
as a whole and not to any particular Article, Section or other
subdivision; and
references in this Plan to Articles, Sections, Schedules, and
Exhibits refer to
Articles and Sections of and Schedules and Exhibits to this Plan.
Unless
otherwise stated, references to Subsections refer to the
Subsections of the
Section in which the reference appears. All pronouns used in this
Plan include
the masculine, feminine and neuter gender, as the context requires.
All
accounting terms used in this Plan that are not expressly defined
in this Plan
have the respective meanings given to them in accordance with
GAAP.
ARTICLE I. MERGER
1.1
THE MERGER. Subject to the provisions of this Plan, on the
Effective
Date:
(A) SURVIVING CORPORATION. In accordance with the applicable
provisions of the Arkansas Business Corporation Law, CFG shall be
merged with
and into CBI pursuant to the terms and conditions of this Plan and
pursuant to
the Articles of Merger substantially in the form of Exhibit A. Upon
consummation
of the Merger, the separate existence of CFG shall cease and CBI
shall continue
as the Surviving Corporation under the corporate name it possesses
immediately
prior to the Effective Date.
(B) ARTICLES, BYLAWS, DIRECTORS, OFFICERS. The Articles of
Incorporation and Bylaws of the Surviving Corporation shall be
those of CBI, as
in effect immediately prior to the Merger becoming effective. The
directors and
officers of CBI in office immediately prior to the Merger becoming
effective
shall be the directors and officers of the Surviving Corporation,
together with
such additional directors and officers as may thereafter be
elected, who shall
hold office until such time as their successors are elected and
qualified.
(C) EFFECT OF THE MERGER. On the Effective Date, the effect of
the
Merger shall be that (1) the Surviving Corporation shall possess
all of the
rights, privileges, immunities and franchises, of a public as well
as of a
private nature, of each of the corporations so merged; (2) all
property, real,
personal and mixed, and all debts due on whatever account, and all
and every
other interest, of or belonging to or due to each of the
corporations so merged,
shall be deemed to be transferred to and vested in the Surviving
Corporation
without further act or deed and the title to any real estate or any
interest
therein, vested in each of such institutions, shall not revert or
be in any way
impaired by reason of the Merger; and (3) the Surviving Corporation
shall be
liable for all Liabilities of CFG as well as those of CBI whether
or not
reflected or reserved against in the balance sheets, other
financial statements,
books of account or records of CFG or CBI, in the same manner as if
the
Surviving Corporation had itself incurred such Liabilities or
obligations; but
the Liabilities of CFG and CBI, or of their shareholders,
7
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directors, or officers, shall not be affected, nor shall the rights
of the
creditors thereof, or of any Persons dealing with such corporations
be impaired
by the Merger, and any claims existing, or action or proceeding
pending, by or
against either CFG or CBI may be prosecuted to judgment as if the
Merger had not
taken place, or the Surviving Corporation may be proceeded against,
or
substituted, in place of CFG or CBI.
1.2
CONTINUATION OF BANKS. FSB shall continue as a separate bank
immediately after the Merger as wholly-owned subsidiaries of HBI,
subject to
further determination by the Board of Directors of HBI. CB shall
continue as a
separate bank immediately after the Merger as a wholly-owned
subsidiary of CBI,
subject to further determination by the Board of Directors of
CBI.
1.3
DISSENTING SHARES. Notwithstanding anything to the contrary in
this
Plan, each Dissenting Share shall not be converted into a right to
receive the
Merger Consideration, but the holder of such Dissenting Share shall
be entitled
only to such rights as are granted by the Appraisal Laws, unless
and until such
holder shall have failed to perfect or shall have effectively
withdrawn or lost
the right to payment under the Appraisal Laws, in which case each
such share
shall be deemed to have been converted at the Effective Date into
the right to
receive the Merger Consideration. Each holder of Dissenting Shares
who becomes
entitled to payment for his CFG Common Stock pursuant to the
provisions of the
Appraisal Laws shall receive payment for such Dissenting Shares
from CBI (but
only after the amount thereof shall have been agreed upon or
finally determined
pursuant to the Appraisal Laws).
1.4
EFFECTIVE DATE. Unless the Parties agree upon another date, the
"Effective Date" will be the tenth Business Day after the
fulfillment or waiver
of each condition precedent set forth in, and the granting of each
approval (and
expiration of any waiting period) required by, ARTICLE VI. If the
Merger is not
consummated in accordance with this Plan on or prior to the
Termination Date,
CFG or HBI may terminate this Plan in accordance with ARTICLE VII.
On the
Effective Date, Articles of Merger will be filed with the Secretary
of State of
the State of Arkansas in accordance with applicable law.
ARTICLE II. CONSIDERATION
2.1
MERGER CONSIDERATION. At the Effective Date, without any action on
the
part of CBI, CFG, or the holder of any of the shares of common
stock of CFG, the
Merger shall be effected in accordance with the following
terms:
(A) All shares of CFG Common Stock owned directly by CFG
(including
treasury shares), CBI, HBI, or any of their subsidiaries (in each
case other
than shares in trust accounts or in an another fiduciary capacity,
managed
accounts and the like or shares held in satisfaction of a debt
previously
contracted) shall be cancelled and retired and shall not represent
capital stock
of the Surviving Company and shall not be exchanged for Merger
Consideration or
any other consideration.
(B) The total Merger Consideration to be paid to holders of
Eligible
CFG Common Stock is $43,000,000 (representing $58.51 per share for
each share of
CFG Common Stock Outstanding as of the date hereof), less an amount
equal to
$58.51 multiplied by the number of Exception Shares and Dissenting
Shares. Only
Cash Consideration shall be paid, and no shares of HBI Preferred
Stock shall be
issued, to any holders of CFG Common Stock who are not Qualified
Arkansas
Residents. For holders of Eligible CFG Common Stock who are
Qualifying Arkansas
Residents, the Merger Consideration payable to them shall be an
amount of HBI
Preferred Stock and Cash Consideration sufficient to make the
8
<PAGE>
percentage of HBI Preferred Stock issued as part of the Merger
Consideration to
Qualified Arkansas Residents equal to 51% of the total Merger
Consideration (the
"Required Percentage"). HBI agrees to issue sufficient shares of
HBI Preferred
Stock to equal the Required Percentage. The remainder of the
Merger
Consideration payable to Qualified Arkansas Residents shall be
Cash
Consideration. All cash paid by CBI pursuant to this Article II
shall be paid by
cashier's checks issued by FSB.
The Merger Consideration payable to the holders of Eligible CFG
Common Stock who are not Qualified Arkansas Residents shall be Per
Share Cash
Consideration of $58.51 per share of Eligible CFG Common Stock
owned by them.
Holders of Eligible CFG Common Stock who are Qualified Arkansas
Residents and who wish to have their Merger Consideration be either
all shares
of HBI Preferred Stock or all Cash Consideration or such
combination of HBI
Preferred Stock and Cash Consideration (the "Mixed Consideration)
as the holder
requests (the "Requesting CFG Shareholders") shall make such
written request
pursuant to and be subject to the allocation procedures set forth
in Section
2.2.
The HBI Preferred Stock shall have a value for Stock
Conversation
Ratio purposes of Ten Dollars ($10) per share. When HBI Preferred
Stock is to be
issued to a Qualified Arkansas Resident, they shall be entitled to
receive the
number of whole shares of HBI Preferred Stock equal to the product
of 5.851
times the number of shares of Eligible CFG Common Stock held by
such Person
times the percentage of HBI Preferred Stock allocated to that
Person as part of
the Merger Consideration pursuant to Section 2.2(B) (the "Stock
Conversion
Ratio").
The HBI Preferred Stock to be issued hereunder shall have the
characteristics and requirements as set forth in Appendix I.
Notwithstanding any other provision herein, in the event the
Effective Date is more than one hundred twenty (120) days after the
Effective
Date, interest at the rate of two percent (2%) per annum for the
period from
such 120th day until the Effective Date shall be added to the total
Merger
Consideration provided for herein with a pro rata adjustment of the
Merger
Consideration, the Per Share Cash Consideration and the Stock
Conversion Ratio.
(C) Each Dissenting Share shall not be converted into or represent
a
right to receive the Merger Consideration, and the holder thereof
shall be
entitled only to such rights as are granted by the Appraisal Laws.
CFG shall
give CBI prompt notice upon receipt by CFG of any such demands for
payment of
the fair value of such shares of CFG Common Stock and of
withdrawals of such
notice and any other instruments provided pursuant to applicable
law (any
shareholder duly making such demand being hereinafter called a
"Dissenting
Shareholder"). CFG shall not make any payment or offer to settle
any such demand
or waive any failure by a Dissenting Shareholder of a requirement
of the
Appraisal Laws. All actions taken in respect of Dissenting Shares
shall be taken
by the Surviving Company.
(D) If at or prior to the Effective Date any Dissenting
Shareholder
shall effectively withdraw or lose (through failure to perfect or
otherwise) his
right to such payment, such holder's shares of CFG Common Stock
shall be
converted into a right to receive Merger Consideration in
accordance with the
applicable provisions of this Agreement. If such holder shall
effectively
withdraw or lose (through failure to perfect or otherwise) his
right to such
payment after the Effective Date, each share of CFG Common Stock of
such holder
shall be converted on a share-by-share basis into the right to
receive the Per
Share Cash Consideration.
9
<PAGE>
2.2
TRANSMITTAL AND ALLOCATION PROCEDURES.
(A)
TRANSMITTAL PROCEDURES.
(1) A form (the 'Transmittal Form") shall be mailed (the
"Mailing
Date") as soon as reasonably practicable after the Effective Date
to each
holder of Eligible CFG
Common Stock of record as of the Effective Date. The
Transmittal Form shall request a holder of Eligible CFG Common
Stock to
evidence that they are or are not Arkansas Residents, that they are
aware
of
the requirements of Rule 147 concerning restrictions on
transferability
and
to agree to the restrictions contained in the Transmittal Form.
The
Transmittal Form shall contain applicable instructions on
transmittal of
the
holder's Eligible CFG Common Stock and shall contain a section in
which
a
Qualified Arkansas Resident, may request that such holder receive
only
HBI
Preferred Stock, or only Cash Consideration, or the Mixed
Consideration
(the
"Requested Consideration").
(2) Any holder of Eligible CFG Common Stock who does not submit
an
effective, properly completed Transmittal Form to the Exchange
Agent
evidencing they are a Qualified Arkansas Resident, accompanied by
one or
more
certificates (or such affidavits and indemnification satisfactory
to
the
Exchange Agent regarding the loss or destruction of such
certificates)
representing all CFG Common Stock covered by such Transmittal
Form,
together with all other applicable transmittal materials, within
thirty
(30)
days of the Mailing Date (the "Expiration Date") shall receive
only
the
Per Share Cash Consideration (without interest thereon) for
their
shares of Eligible CFG Common Stock upon surrender of the
certificates of
CFG
Common Stock in the manner required by the Exchange Agent. Any
Merger
Consideration into which shares of such shareholder's CFG Common
Stock are
converted on the Effective Date, any fractional share checks that
such
shareholder shall be entitled to receive and any dividends paid on
such
shares of HBI Preferred Stock for which the record date for
determination
of
shareholders entitled to such dividends is on or after the
Effective
Date, will be delivered to such shareholder only upon delivery to
the
Exchange Agent of the certificates representing all of such shares
of
Eligible CFG Common Stock (or indemnity satisfactory to the
Exchange Agent,
in
its judgment, if any of such certificates are lost, stolen or
destroyed). No interest will be paid on the Per Share Cash
Consideration or
any
such fractional shares checks or dividends to which the holder of
such
shares shall be entitled to receive upon such delivery. Once
submitted, the
Transmittal Form is irrevocable. Neither CBI, HBI nor the Exchange
Agent
shall be under any obligation to notify any person of any defect in
a
Transmittal Form.
(B) ALLOCATION PROCEDURES. As soon as reasonably practicable after
the
Expiration Date, the Exchange Agent shall determine the number of
shares of
Eligible CFG Common Stock owned by Qualified Arkansas Residents,
the number of
other shares of Eligible CFG Common Stock and the number of shares
of Qualified
Arkansas Residents who requested either all HBI Preferred Stock or
all Cash
Consideration or a Mixed Consideration for their Merger
Consideration. CBI and
HBI shall cause the Exchange Agent to allocate the Merger
Consideration among
the holders of Eligible CFG Common Stock, which shall be effected
by the
Exchange Agent as follows:
(1) If after giving effect to the shares of Eligible CFG Common
Stock owned by Qualified Arkansas Residents and the Requested
Consideration
(the
"Preliminary Calculation"), the amount of shares of HBI
Preferred
Stock to be issued as part of the Merger Consideration does not
equal or
exceed the Required Percentage, then the requests for all Per
10
<PAGE>
Share Cash Consideration and all requests for Mixed Consideration
shall be
disregarded by the Exchange Agent, the requests for all HBI
Preferred Stock
shall be given effect and the percentage of Merger Consideration
that is
Cash
Consideration given to each Qualified Arkansas Resident shall
be
reduced on a pro rata basis and the HBI Preferred Stock shall be
increased
on a
pro rata basis by such amount sufficient to cause the amount of
HBI
Preferred Stock issued as part of the Merger Consideration to equal
the
Required Percentage.
(2) If after the Preliminary Calculation, the amount of HBI
Preferred Stock to be issued as part of the Merger Consideration
equals the
Required Percentage, the Requested Consideration shall be given
effect.
(3) If after the Preliminary Calculation, the amount of HBI
Preferred Stock to be issued as part of the Merger Consideration
exceeds
the
Required Percentage, then the requests for all Cash Consideration
shall
be
given effect and the percentage of Merger Consideration that is
Cash
Consideration given to each Qualified Arkansas Resident shall be
increased
on a
pro rata basis and the requests for HBI Preferred Stock shall
be
reduced on a pro rata basis to equal the Required Percentage.
2.3
FRACTIONAL SHARES. Notwithstanding any other provision of this
Plan, no
fractional shares of HBI Preferred Stock and no certificates, scrip
or other
evidence of ownership of fractional shares will be issued in the
Merger. HBI
shall pay to each holder of CFG Common Stock who would otherwise be
entitled to
a fractional share of HBI Preferred Stock an amount in cash
determined by
multiplying such fraction by $58.51. No such holder shall be
entitled to
dividends, interest, or any other rights in respect to such
fractional shares.
2.4
SHAREHOLDER RIGHTS; STOCK TRANSFERS. On the Effective Date, holders
of
CFG Common Stock shall cease to be, and shall have no rights as,
shareholders of
CFG, other than to receive the consideration provided under this
ARTICLE II.
After the Effective Date, there shall be no transfers on the stock
transfer
books of CFG or the Surviving Corporation of the shares of CFG
Common Stock that
were issued and outstanding immediately prior to the Effective
Date.
2.5
EXCEPTION SHARES. Each of the Exception Shares of CFG Common
Stock
shall be canceled and retired upon consummation of the Merger, and
no Merger
Consideration shall be issued in exchange therefor.
2.6
RESERVATION OF RIGHT TO REVISE TRANSACTION. In its sole discretion,
and
notwithstanding any other provision in this Plan to the contrary,
HBI may at any
time change the method of effecting its acquisition of CFG;
provided, however,
that (A) no such change shall alter or change the amount or kind
of
consideration to be generally issued to holders of CFG Common Stock
as provided
for in this Plan, provided that the total Merger Consideration set
forth in
Section 2.1(B) is not reduced, (B) no such change shall adversely
affect the tax
treatment to CFG shareholders as a result of receiving such
consideration, and
(C) no delay caused by such a change shall be the basis upon which
CBI
terminates this Plan pursuant to Section 7.1(C). If CBI elects to
change the
method of acquisition, CFG will cooperate with and assist CBI with
any necessary
amendment to this Plan, and with the preparation and filing of
such
applications, documents, instruments and notices as may be
necessary or
desirable, in the opinion of counsel for CBI, to obtain all
necessary
shareholder approvals and approvals of any regulatory agency,
administrative
body or other governmental entity.
11
<PAGE>
2.7
OPTIONS. On the Effective Date, by virtue of the Merger and without
any
action on the part of any holder of an option, each outstanding
option granted
by CFG to purchase shares of CFG Common Stock ("CFG Option") that
is then
outstanding and unexercised shall immediately and automatically be
fully vested
and converted into and become an option to purchase HBI Preferred
Stock ("HBI
Option") on the same terms and conditions as are in effect with
respect to CFG
Option immediately prior to the Effective Date, except that (A)
each such HBI
Option may be exercised solely for shares of HBI Preferred Stock,
(B) the number
of shares of HBI Preferred Stock subject to such HBI Option shall
be equal to
the number of shares of CFG Common Stock subject to such CFG Option
immediately
prior to the Effective Date multiplied by 5.851, the product being
rounded, if
necessary, up or down to the nearest whole share, and (C) the per
share exercise
price under each such HBI Option shall be adjusted by dividing the
per share
exercise price of CFG Option by 5.851, and rounding up or down to
the nearest
cent. The number of shares of CFG Common Stock that are issuable
upon exercise
of CFG Options as of the date of this Plan and the names of the
holders of CFG
Options are disclosed in Schedule 2.7.
ARTICLE III. ACTIONS PENDING CONSUMMATION
Unless CBI otherwise agrees in writing, CFG and all of CFG's
Subsidiaries
shall conduct their respective business in the ordinary and usual
course
consistent with past practice and shall use its best efforts to
maintain and
preserve its, and as to CFG each of its Subsidiaries', business
organization,
employees and advantageous business relationships and retain the
services of
its, and as to CFG each of its Subsidiaries', officers and key
employees
identified by CBI, and neither CFG nor CB, without the prior
written consent of
CBI, will (or cause or allow any of it Subsidiaries to):
3.1
CAPITAL STOCK. Except for the exercise of outstanding CFG Options,
or
as disclosed in Schedule 4.1(C), issue, sell or otherwise permit to
become
outstanding any additional shares of capital stock of CFG, CB or
any of their
Subsidiaries, or any Rights with respect thereto, or enter into any
agreement
with respect to the foregoing, or permit any additional shares of
CFG Common
Stock to become subject to grants of employee stock options, stock
appreciation
rights or similar stock-based employee compensation rights.
3.2
DIVIDENDS,;ETC. Make, declare or pay any dividend on or in respect
of,
or declare or make any distribution on, or directly or indirectly
combine,
split, subdivide, redeem, reclassify, purchase or otherwise
acquire, any shares
of its capital stock or, other than as permitted in or contemplated
by this
Plan, authorize the creation or issuance of, or issue, any
additional shares of
its capital stock or any Rights with respect thereto.
3.3
INDEBTEDNESS; LIABILITIES; ETC. Other than in the ordinary course
of
business consistent with past practice, incur any indebtedness for
borrowed
money, assume, guarantee, endorse or otherwise as an accommodation
become
responsible or liable for the obligations of any other individual,
corporation
or other entity.
3.4
LINE OF BUSINESS; OPERATING PROCEDURES; ETC. Except as may be
directed
by any regulatory agency: (A) change its lending, investment,
liability
management or other Material banking policies in any Material
respect, or (B)
commit to incur any further capital expenditures beyond those
disclosed in
Schedule 3.4 or incurred in the ordinary course of business and not
exceeding
$15,000 individually or $25,000 in the aggregate.
12
<PAGE>
3.5
LIENS AND ENCUMBRANCES. Subject any of their assets to a lien,
charge,
or encumbrance (including mortgage, pledge or security interest),
or permit any
such lien, charge or encumbrance to exist.
3.6
COMPENSATION; EMPLOYMENT AGREEMENTS; ETC. Except as disclosed
in
Schedule 3.6, enter into or amend any employment, severance or
similar agreement
or arrangement with any of its directors, officers or employees, or
grant any
salary or wage increase, amend the terms of any CFG Option or
increase any
employee benefit (including incentive or bonus payments), except
normal
individual increases in regular compensation to employees in the
ordinary course
of business consistent with past practice; provided, however, that
no increase
of salary or compensation to an officer of CFG shall be made
without the
approval of CBI.
3.7
BENEFIT PLANS. Except as disclosed in Schedule 3.7, enter into
or
modify (except as may be required by applicable law) any pension,
retirement,
stock option, stock purchase, savings, profit sharing, deferred
compensation,
consulting, bonus, group insurance or other employee benefit,
incentive or
welfare contract, plan or arrangement, or any trust agreement
related thereto,
in respect of any of its directors, officers or other employees,
including
taking any action that accelerates the vesting or exercise of any
benefits
payable thereunder.
3.8
CONTINUANCE OF BUSINESS. Dispose of or discontinue any portion of
its
assets, business or properties, that is in excess of $25,000
individually or
$100,000 in the aggregate, or merge or consolidate with, or acquire
all or any
portion of, the business or property of any other entity (except
foreclosures or
acquisitions by CB in its fiduciary capacity, in each case in the
ordinary
course of business consistent with past practice).
3.9
AMENDMENTS. Amend its Articles of Incorporation or Bylaws.
3.10
CLAIMS. Settle any claim, litigation, action or proceeding
involving
any Liability for money damages in excess of $25,000 or Material
restrictions
upon the operations of CFG or any of its Subsidiaries.
3.11
CONTRACTS. Except as disclosed on Schedule 3.11, enter into,
renew,
terminate or make any change in any contract, agreement or lease
(excluding
agreements and loans permitted under Section 3.12) of a value or
requiring
payments during the life of the contract, agreement or lease,
including all
options, in excess of $25,000, except in the ordinary course of
business
consistent with past practice with respect to contracts, agreements
and leases
that are terminable by it without penalty on no more than 60 days
prior written
notice.
3.12
LOANS. Extend credit or account for loans and leases other than
in
accordance with existing written lending policies and accounting
practices,
except that CB shall not, without the prior notice and consultation
with FSB's
Chief Executive Officer or Chief Credit Administrator make any new
loan or renew
any existing loan in a principal amount in excess of $250,000.
13
<PAGE>
ARTICLE IV. REPRESENTATIONS AND WARRANTIES
4.1
CFG REPRESENTATIONS AND WARRANTIES. CFG and CFG on behalf of CB
hereby
represents and warrants to CBI, now and as of the Effective Date,
as follows:
(A) RECITALS. The facts set forth in the recitals of this plan
with
respect to CFG and its Subsidiaries are true and correct.
(B) ORGANIZATION, STANDING AND AUTHORITY. Each of CFG, CB, and
any
other Subsidiary of CFG is duly qualified to do business and is in
good standing
in the States of the United States and foreign jurisdictions where
the failure
to be duly qualified, individually or in the aggregate, is
reasonably likely to
have a Material effect on it. All of such jurisdictions are set
forth on
Schedule 4.1(B). Each of CFG and CB, and any other Subsidiary of
CFG has in
effect all federal state, local and foreign governmental
authorizations
necessary for it to own or lease its properties and assets and to
carry on its
business as it is now conducted. CB is the only Subsidiary of CFG
that is an
Insured Depository Institution, and its deposits are insured by the
Bank
Insurance Fund of the FDIC. Except as disclosed in Schedule 4.1(B),
CB is not
subject to any orders, resolutions, commitments, agreements,
undertakings,
understandings, or consents that affect its status as such Insured
Depository
Institution.
(C) SHARES. The outstanding shares of CFG and its Subsidiaries'
capital stock are validly issued and outstanding, fully paid and
non-assessable,
and subject to no preemptive rights. Except as disclosed in
Schedule 4.1(C),
there are no shares of capital stock or other equity securities of
CFG or its
Subsidiaries outstanding and no outstanding Rights with respect
thereto.
(D) CFG SUBSIDIARIES. CFG has disclosed in Schedule 4.1(D) a list
of
all of its Subsidiaries, and the number of authorized, issued, and
outstanding
shares of each class of stock and the percentages of ownership of
CFG or a CFG
Subsidiary. No equity securities of any of its Subsidiaries are or
may become
required to be issued (other than to CFG or one of its
Subsidiaries) by reason
of any Rights with respect thereto. There are no contracts,
commitments,
understandings or arrangements by which any of its Subsidiaries is
or may be
bound to sell or otherwise issue any shares of such Subsidiary's
capital stock,
and there are no contracts, commitments, understandings or
arrangements relating
to the rights of CFG or its Subsidiaries, as applicable, to vote or
to dispose
of such shares. All of the shares of capital stock of each of its
Subsidiaries
held by CFG or one of its Subsidiaries are fully paid and
non-assessable and are
owned by CFG or one of its Subsidiaries free and clear of any
charge, mortgage,
pledge, security interest, restriction, claim, lien or encumbrance.
Each of its
Subsidiaries is in good standing under the laws of the jurisdiction
in which it
is incorporated or organized, and is duly qualified to do business
and in good
standing in the jurisdictions where the failure to be duly
qualified is
reasonably likely, individually or in the aggregate, to have a
Material effect
on it. All of such jurisdictions are set forth on Schedule 4.1(D).
Except as
disclosed in Schedule 4.1(D). CFG does not own beneficially,
directly or
indirectly, any shares of any equity securities or similar
interests of any
corporation, bank, partnership, joint venture, business trust,
association or
other organization.
(E) CORPORATE
POWER. Each of CFG and its Subsidiaries has the
corporate power and authority to carry on its business as it is now
being
conducted and to own all its Material properties and assets.
14
<PAGE>
(F)
CORPORATE AUTHORITY. Subject to any necessary receipt of
approval
by its shareholders referred to in Section 6.1, this Plan has been
authorized by
all necessary corporate action of CFG and this Plan is a valid and
binding
agreement of CFG, enforceable against CFG in accordance with its
terms, subject
to bankruptcy, insolvency and other laws of general applicability
relating to or
affecting creditors' rights and to general equity principles.
(G) NO DEFAULTS. Subject to the approval by its shareholders
referred
to in Section 6.1, the required regulatory approvals referred to in
Section 6.1,
and the required filings under federal and state securities laws,
and except as
disclosed in Schedule 4.1(G), the execution, delivery and
performance of this
Plan and the consummation by CFG do not and will not Materially (1)
constitute a
breach of, or violation of, or a default under, any law, rule or
regulation or
any judgment, decree, order, governmental permit or license, or
agreement,
indenture or instrument of CFG or of any of its Subsidiaries or to
which CFG or
any of its Subsidiaries or its or their properties is subject or
bound, or (2)
constitute a breach of, or violation of, or a default under, the
Articles of
Incorporation, Charter or Bylaws of it or any of its Subsidiaries,
or (3)
require any consent or approval under any such law, rule,
regulation, judgment,
decree, order, governmental permit or license or the consent or
approval of any
other party to any such agreement, indenture or instrument.
(H) CFG FINANCIAL REPORTS. Except as disclosed in Schedule 4.1(H):
(a)
the Financial Reports of each of CFG and CB did not 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 to make the statements made therein,
and in light
of the circumstances under which they were made, were not
misleading; (b) each
of the balance sheets in or incorporated by reference into the
Financial Reports
(including the related notes and schedules thereto) are correct,
complete, and
in accordance with the books and records of and fairly presents and
will fairly
present the financial position of the entity or entities to which
it relates as
of its date; (c) each of the statements of income and changes in
shareholders'
equity and cash flows or equivalent statements in the Financial
Reports of CB
(including any related notes and schedules thereto) are correct,
complete, and
in accordance with the books and records of and fairly presents and
will fairly
present the results of operations, changes in shareholders' equity
and cash
flows, as the case may be, of the entity or entities to which it
relates for the
periods set forth therein; and (d) in each case in accordance with
GAAP during
the periods involved, except in each case as may be noted therein,
subject to
normal and recurring year-end audit adjustments in the case of
unaudited
statements.
(I) ABSENCE OF UNDISCLOSED LIABILITIES. Neither CFG nor any of
its
Subsidiaries has any Material Liability, except as disclosed on
Schedule 4.1(I).
or (1) as reflected in its Financial Reports prior to the date of
this Plan, and
(2) for commitments and obligations made, or Liabilities incurred,
in the
ordinary course of business consistent with past practice since
December 31,
2002, and which are fully reflected as liabilities on that entity's
books and
records. Except as disclosed on Schedule 4.1(I). since December
31,2002, neither
CFG nor any of its Subsidiaries has incurred or paid any Material
Liability
(including any Liability incurred in connection with any
acquisitions in which
any form of direct financial assistance of the federal government
or any agency
thereof has been provided to any Subsidiary).
(J) NO EVENTS. Except as disclosed on Schedule 4.1(J). since
December
31. 2002, no event has occurred that, individually or in the
aggregate, is
reasonably likely to have a Material effect on CFG or any of its
Subsidiaries.
15
<PAGE>
(K) PROPERTIES. Except as disclosed in Schedule 4.1(K), CFG and
each
of its Subsidiaries have good and marketable title, free and clear
of all liens,
encumbrances, charges, defaults, or equities of any character, to
all of the
properties and assets, tangible and intangible, reflected in the
Financial
Reports of CFG as being owned by CFG or its Subsidiaries as of the
dates
thereof. All buildings and all Material fixtures, equipment, and
other property
and assets that are held under leases or subleases by CFG or any of
its
Subsidiaries are held under valid leases or subleases enforceable
in accordance
with their respective terms, other than any such exceptions to
validity or
enforceability as are disclosed on Schedule 4.1(K). Other than
month-to-month
leases on operating equipment, all leases and subleases are
identified on
Schedule 4.1(K), and except as disclosed on such schedule, are
fully
transferable to CBI as the Surviving Corporation under this Plan.
CFG further
represents, covenants and warrants that, except as disclosed in
Schedule 4.1(K),
taking their age and ordinary wear and tear into account, the
assets and
properties of CFG or any of its Subsidiaries are in good operating
condition and
repair and have been operated and maintained in the ordinary course
of business,
consistent with past practice, other than those items of personal
property not
in use by CFG or its Subsidiaries as of the date hereof.
(L) INTELLECTUAL PROPERTY RIGHTS. Schedule 4.1(L) lists all
patents,
patent rights, licenses, trade secrets, trademarks, service marks,
trademark
rights, trade names or trade name rights, copyrights, inventions
and other
intellectual property rights (Intellectual Property Rights")
necessary for the
ownership and operation of the business of CFG or any of its
Subsidiaries in the
manner in which the business has been historically and currently
owned and
operated by CFG or its Subsidiaries. None of the Intellectual
Property Rights
interferes with, infringes upon, misappropriates, or violates any
intellectual
property rights of third parties, and neither CFG nor any of its
Subsidiaries
has received any written charge, complaint, claim, demand, or
notice alleging
any such interference, infringement, misappropriation, or
violation. No third
party has interfered with, infringed upon, misappropriated, or
violated any of
the Intellectual Property Rights. Neither CFG nor any of its
Subsidiaries has
received any written notice with respect to any outstanding
injunction,
judgment, order, decree, ruling, or charge relating to any item of
the
Intellectual Property Rights, and no action, suit, proceeding,
hearing,
investigation, charge, complaint, claim, or demand is pending or,
to the
Knowledge of CFG or any of its Subsidiaries, is threatened which
challenges the
legality, validity, enforceability, use, or ownership of any of the
Intellectual
Property Rights.
(M) LITIGATION: REGULATORY ACTION. Except as disclosed in S
