AGREEMENT AND PLAN OF MERGER BY AND BETWEEN GREENE COUNTY BANCSHARES, INC. AND CIVITAS BANKGROUP, IN

Agreement and Plan of Merger

You are currently viewing:

This Agreement and Plan of Merger involves

CIVITAS BankGroup, Inc | Greene County Bancshares, Inc

. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here.

Title: AGREEMENT AND PLAN OF MERGER BY AND BETWEEN GREENE COUNTY BANCSHARES, INC. AND CIVITAS BANKGROUP, IN
Governing Law: Tennessee Date: 1/26/2007
Industry: Regional Banks Law Firm: Baker Donelson;Miller Martin Sector: Financial

AGREEMENT AND PLAN OF MERGER

by and between

GREENE COUNTY BANCSHARES, INC.

and

CIVITAS BANKGROUP, INC.

Dated as of January 25, 2007

TABLE OF CONTENTS

		Page
ARTICLE I.	THE MERGER	2
	1.1 The Merger	2
	1.2 Effective Time	2
	1.3 Effects of the Merger	2
	1.4 Conversion of CVBG Common Stock	2
	1.5 Election and Allocation Procedures	5
	1.6 No Fractional Shares	7
	1.7 Conversion of Stock Options	7
	1.8 GCBS Capital Stock	7
	1.9 Charter	7
	1.10 Bylaws	8
	1.11 Tax Consequences	8
	1.12 Certain Post-Closing Matters	8
	1.13 Headquarters of Surviving Corporation	8

ARTICLE II.	DELIVERY OF MERGER CONSIDERATION	8
	2.1 Deposit of Merger Consideration	8
	2.2 Delivery of Merger Consideration	9

ARTICLE III.	REPRESENTATIONS AND WARRANTIES OF GCBS	10
	3.1 Corporate Organization	10
	3.2 Capitalization	11
	3.3 Authority; No Violation	13
	3.4 Consents and Approvals	13
	3.5 Reports	14
	3.6 Financial Statements	14
	3.7 Broker’s Fees	15
	3.8 Absence of Certain Changes or Events	15
	3.9 Legal Proceedings	15
	3.10 Taxes and Tax Returns	16
	3.11 Employees	16
	3.12 SEC Reports	18
	3.13 Compliance with Applicable Law	18
	3.14 Certain Contracts	18
	3.15 Agreements with Regulatory Agencies	19
	3.16 Interest Rate Risk Management Instruments	19
	3.17 Undisclosed Liabilities	20
	3.18 Insurance	20
	3.19 Environmental Liability	20
	3.20 State Takeover Laws	20
	3.21 Reorganization	20
	3.22 Information Supplied	20

(i )

	3.23 Internal Controls	21
	3.24 Opinion of GCBS Financial Advisor	21

ARTICLE IV.	REPRESENTATIONS AND WARRANTIES OF CVBG	21
	4.1 Corporate Organization	22
	4.2 Capitalization	22
	4.3 Authority; No Violation	23
	4.4 Consents and Approvals	24
	4.5 Reports	25
	4.6 Financial Statements	25
	4.7 Broker’s Fees	25
	4.8 Absence of Certain Changes or Events	26
	4.9 Legal Proceedings	26
	4.10 Taxes and Tax Returns	26
	4.11 Employees	26
	4.12 SEC Reports	28
	4.13 Compliance with Applicable Law	28
	4.14 Certain Contracts	29
	4.15 Agreements with Regulatory Agencies	29
	4.16 Interest Rate Risk Management Instruments	30
	4.17 Undisclosed Liabilities	30
	4.18 Insurance	30
	4.19 Environmental Liability	30
	4.20 State Takeover Laws	31
	4.21 Reorganization	31
	4.22 Information Supplied	31
	4.23 Internal Controls	31
	4.24 Opinion of CVBG Financial Advisor	32

ARTICLE V.	COVENANTS RELATING TO CONDUCT OF BUSINESS	32
	5.1 Conduct of Businesses Prior to the Effective Time	32
	5.2 CVBG Forbearances	32

ARTICLE VI.	ADDITIONAL AGREEMENTS	34
	6.1 Regulatory Matters	34
	6.2 Access to Information	35
	6.3 Shareholders’ Approvals	36
	6.4 Legal Conditions to Merger	37
	6.5 Affiliates	37
	6.6 Stock Quotation or Listing	37
	6.7 Employee Benefit Plans; Existing Agreements	37
	6.8 Directors’ and Officers’ Insurance	38
	6.9 Advice of Changes	39
	6.10 Acquisition Proposals	39
	6.11 Bank Merger	41

(ii )

ARTICLE VII.	CONDITIONS PRECEDENT	41
	7.1 Conditions to Each Party’s Obligation To Effect the Merger	41
	7.2 Conditions to Obligations of CVBG	42
	7.3 Conditions to Obligations of GCBS	42

ARTICLE VIII.	TERMINATION AND AMENDMENT	43
	8.1 Termination	43
	8.2 Effect of Termination	45
	8.3 Termination Fee	45
	8.4 Amendment	46
	8.5 Extension; Waiver	46

ARTICLE IX.	GENERAL PROVISIONS	47
	9.1 Closing	47
	9.2 Standard	47
	9.3 Nonsurvival of Representations, Warranties and Agreements	47
	9.4 Expenses	47
	9.5 Notices	48
	9.6 Interpretation	48
	9.7 Counterparts	48
	9.8 Entire Agreement	48
	9.9 Governing Law	49
	9.10 Publicity	49
	9.11 Assignment; Third Party Beneficiaries	49

(iii )

AGREEMENT AND PLAN OF MERGER

AGREEMENT AND PLAN OF MERGER, dated as of January 25, 2007 (this “Agreement”), by and between Greene County Bancshares, Inc., a Tennessee corporation (“GCBS”) and CIVITAS BankGroup, Inc., a Tennessee corporation (“CVBG”), and.

RECITALS:

WHEREAS, the Boards of Directors of GCBS and CVBG have approved, and deem it advisable and in the best interests of their respective corporations and shareholders to consummate the strategic business combination transaction provided for herein in which CVBG will, subject to the terms and conditions set forth herein, merge with and into GCBS (the “Merger”), so that GCBS is the surviving corporation (hereinafter sometimes referred to in such capacity as the “Surviving Corporation”) in the Merger;

WHEREAS, the Boards of Directors of GCBS and CVBG have each determined that the Merger and the other transactions contemplated hereby are consistent with, and in furtherance of, their respective business strategies and goals;

WHEREAS, as a result of the Merger, in accordance with the terms of this Agreement, CVBG will cease to have a separate corporate existence, and shareholders of CVBG will receive from GCBS in exchange for each common share, par value $0.50 per share, of CVBS (the “CVBG Common Stock”), (a) $10.25 in cash, or (b) 0.2674 common shares, $2.00 par value, of GCBS (“GCBS Common Stock”), subject, in each case, to any adjustments pursuant to this Agreement;

WHEREAS, in connection with the Merger, each shareholder of CVBG will be entitled to elect to receive, in exchange for such shareholder’s shares of CVBG Common Stock, either (a) cash, (b) shares of GCBS Common Stock or (c) a combination of cash and shares of GCBS Common Stock, as determined in accordance with the terms of this Agreement;

WHEREAS, the parties desire to make certain representations, warranties, covenants and agreements in connection with the Merger and also to prescribe certain conditions to the Merger; and

WHEREAS, for Federal income tax purposes, it is intended that the Merger will qualify as a reorganization under the provisions of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”), and the parties intend, by executing this Agreement, to adopt a plan of reorganization within the meaning of Treasury Regulation Section 1.368-2(g) and 1.368-3(a).

NOW, THEREFORE, in consideration of the premises and the mutual covenants, representations, warranties, agreements, and conditions contained herein, and intending to be legally bound hereby, GCBS and CVBG agree as follows:

ARTICLE I.

THE MERGER

1.1 The Merger .

(a) Upon the terms and subject to conditions set forth in this Agreement, in accordance with the Tennessee Business Corporation Act (the “TBCA”), at the Effective Time (as defined in Section 1.2), CVBG shall merge with and into GCBS. GCBS shall be the Surviving Corporation in the Merger, and shall continue its corporate existence under the laws of the State of Tennessee. Upon consummation of the Merger, the separate corporate existence of CVBG shall terminate. As a result of the Merger, the outstanding shares of CVBG Common Stock and any shares of CVBG Common Stock held in treasury by CVBG shall be cancelled or converted in the manner provided in this Article.

(b) The parties may by mutual agreement at any time change the method of effecting the combination of GCBS and CVBG including without limitation the provisions of this Article I, if and to the extent they deem such change to be desirable, including without limitation to provide for a merger of CVBG with and into a wholly-owned subsidiary of GCBS; provided , however , that no such change shall (i) alter or change the amount of Merger Consideration (as defined below) to be provided to holders of CVBG Common Stock (as defined below) as provided for in this Agreement, (ii) adversely affect the tax treatment of holders of CVBG Common Stock as a result of receiving the Merger Consideration or (iii) materially impede or delay consummation of the transactions contemplated by this Agreement.

1.2 Effective Time . The Merger shall become effective as set forth in the articles of merger that shall be filed with the Secretary of State of the State of Tennessee (the “Tennessee Secretary”), or such time thereafter as is agreed to in writing by GCBS and CVBG and so provided in the certificate of merger filed with the Tennessee Secretary. The term “Effective Time” shall be the date and time when the Merger becomes effective, as set forth in the Articles of Merger.

1.3 Effects of the Merger . At and after the Effective Time, the Merger shall have the effects set forth in Section 48-21-108 of the TBCA and further as set forth in this Article below.

1.4 Conversion of CVBG Common Stock. At the Effective Time, by virtue of the Merger and without any action on the part of the holder thereof:

(a) Subject to this Section 1.4 and Sections 1.5 and 1.6, each share of CVBG Common Stock issued and outstanding immediately prior to the Effective Time (other than shares of CVBG Common Stock to be cancelled or converted to treasury shares of the Surviving Corporation in accordance with Section 1.4(d)) shall be converted into the right to receive, at the election of the holder thereof:

(i) the number of shares of GCBS Common Stock that is equal to the Exchange Ratio, as defined in Section 1.4(b) (the “Per Share Stock Consideration”); or

(ii) a cash amount equal to $10.25 (the Per Share Cash Consideration);

provided however, that any shares of CVBG Common Stock with respect to which the holder owns two hundred (200) or fewer shares of record as of the Election Deadline, as defined in Section 1.5(a)(ii), shall be converted into the right to receive Per Share Cash Consideration, and no such shares of CVBG Common Stock shall be converted into the right to receive the Per Share Stock Consideration. Any such shares of CVBG Common Stock are hereinafter referred to as “Mandatory Cash Shares.” The foregoing consideration, collectively and in the aggregate, along with the Per Option Consideration defined below, shall be referred to herein as the “Merger Consideration.” All of the shares of CVBG Common Stock converted into the right to receive the Merger Consideration shall no longer be outstanding and shall automatically be canceled and shall cease to exist as of the Effective Time, and each certificate previously representing any such shares of CVBG Common Stock (each, a “Certificate”) shall thereafter represent only the right to receive the Merger Consideration.

(b) Unless adjusted pursuant to the terms of this Agreement, the “Exchange Ratio” shall be 0.2674. The Exchange Ratio shall be subject to adjustment pursuant to Section 1.4(e) or Section 1.4(f).

(c) Subject to the allocation provisions of Section 1.5 below, each holder of a share of CVBG Common Stock may elect to receive the Per Share Stock Consideration or the Per Share Cash Consideration for each such share of CVBG Common Stock; provided, however, that the aggregate amount of cash consideration with respect to which the Per Share Cash Consideration shall be paid as the Merger Consideration, including payments to holders of fractional shares under Section 1.6, option holders under Section 1.7, and holders of Mandatory Cash Shares, shall be:

30% times ((the number of shares of CVBG Common Stock outstanding at the Effective Time times the Per Share Cash Consideration) plus (the Total Option Consideration defined in Section 1.7))

Such amount of cash paid as Merger Consideration shall be referred to as the “Total Cash Merger Consideration.” The remaining Merger Consideration paid in the form of shares of GCBS Common Stock shall be referred to in this Agreement as the “Total Stock Merger Consideration.”

(d) All shares of CVBG Common Stock held by CVBG as treasury shares shall be cancelled and retired and shall cease to exist, and no shares of GCBS Common Stock or other consideration shall be delivered in exchange thereof. All shares of CVBG Common Stock, if any, that are beneficially owned by GCBS (excluding shares in trust accounts, managed accounts and the like or shares held in satisfaction of a debt previously contracted), upon conversion into shares of GCBS Common Stock, shall become treasury shares of the Surviving Corporation.

(e) Revision of Exchange Ratio.

(i) For the purposes of this Section 1.4(e), the following terms shall have the meanings indicated:

1. “Average Closing Price” shall mean average closing price of the GCBS Common Stock as reported on the NASDAQ Global Select Market for the 20 Business Days immediately preceding, and inclusive of, the Measurement Date.

2. “Relative Change Percentage” shall mean the GCBS Price Change Percentage less the Index Change Percentage.

3. “GCBS Price Change Percentage” shall mean the percentage change between the Starting Share Price and the Average Closing Price.

4. “Index” shall mean the NASDAQ Bank Index.

5. “Index Change Percentage” shall mean the percentage change in the Index from November 14, 2006, to the Measurement Date.

6. “Measurement Date” shall mean the date that is ten trading days prior to the Closing.

7. “Starting Share Price” shall mean $38.33

(ii) If the Average Closing Price is more than $41.778 and the Relative Change Percentage is greater than +10%, then the Exchange Ratio

will be recalculated as follows:

10.25/(Starting Share Price times (1 plus (Relative Change Percentage minus 10%)))

However, in no event shall the Exchange Ratio be less than .2380.

Example: Average Closing Price is $45.42 (+18.5% GCBS Price Change Percentage)

Index Change Percentage is +3% (resulting in Relative Change Percentage of 15.5%)

New Exchange Ratio = 10.25/(38.33 times (1 plus .055)) = 0.2547

(iii) If the Average Closing Price is less than $34.182 and the Relative Change Percentage is less than -10%, then the Exchange Ratio will be recalculated as follows:

10.25/(Starting Share Price times (1 plus (Relative Change Percentage plus 10%)))

However, in no event shall the Exchange Ratio be greater than .2968.

Example: Average Closing Price is $30.28 (-21% GCBS Price Change Percentage)

Index Change Percentage is -5% (resulting in Relative Change Percentage of -16%)

New Exchange Ratio = 10.25/(38.33 times (1 minus .06)) = 0.2845

(f) The Exchange Ratio set forth above shall be subject to appropriate adjustments in the event that, subsequent to the date of this Agreement but prior to the Effective Time, the outstanding GCBS Common Stock shall have been increased, decreased, changed into or exchanged for a different number or kind of shares or securities through reorganization,

recapitalization, reclassification, stock dividend, stock split, reverse stock split or other like changes in GCBS’s capitalization.

1.5 Election and Allocation Procedures.

(a) Election Procedures.

(i) An election form (“Election Form”), together with the other transmittal materials described in Section 2.2(a), shall be mailed as soon as reasonably practicable after the Effective Time (provided that it need not be sent until the Requisite Regulatory Approvals (as defined in Section 7.1(c)) have been obtained) to each holder of CVBG Common Stock of record at the Effective Time. Such date of mailing shall be referred to hereinafter as the “Mailing Date.” Illinois Stock Transfer Company will act as agent (the “Exchange Agent”) for purposes of conducting the election procedure and the exchange and payment procedures as described in this Section 1.5. Each Election Form shall permit a holder (or the beneficial owner through appropriate and customary documentation and instruction) of CVBG Common Stock to elect to receive the Per Share Cash Consideration with respect to all or any of such holder’s CVBG Common Stock (shares as to which the election is made, “Cash Election Shares”). The “Cash Election Amount” shall be equal to the Per Share Cash Consideration multiplied by the total number of Cash Election Shares. All shares of CVBG Common Stock other than the Cash Election Shares and the No Election Shares (as defined below) shall be referred to herein as the “Stock Election Shares.”

(ii) Any share of CVBG Common Stock with respect to which the holder (or the beneficial owner, as the case may be) shall not have submitted to the Exchange Agent an effective, properly completed Election Form on or before a date after the Closing Date to be agreed upon by the parties hereto (which date will be set forth on the Election Form), but in any event not earlier than 15 days after the Mailing Date (such deadline, the “Election Deadline”), shall be converted either into the Per Share Stock Consideration or the Per Share Cash Consideration as set forth in Section 1.5(b).

(iii) Any such election shall have been properly made only if the Exchange Agent shall have actually received a properly completed Election Form by the Election Deadline. An Election Form shall be deemed properly completed only if accompanied by one or more certificates (or customary affidavits and indemnification regarding the loss or destruction of such certificates or the guaranteed delivery of such certificates) representing all CVBG Common Stock covered by such Election Form, together with duly executed transmittal materials included with the Election Form. Any Election Form may be revoked or changed by the person submitting such Election Form (or the beneficial owner of the shares covered by such Election Form through appropriate and customary documentation and instruction) at or prior to the Election Deadline. In the event an Election Form is revoked prior to the Election Deadline and no other valid election is made, the shares of CVBG Common Stock represented by such Election Form shall be No Election Shares. Subject to the terms of this Agreement and of the Election Form, the Exchange Agent shall have reasonable discretion to determine whether any election, revocation or change has been properly or timely made and to disregard immaterial defects in the Election Forms, and any good faith decisions of the Exchange Agent regarding

such matters shall be binding and conclusive. Neither GCBS nor the Exchange Agent shall be under any obligation to notify any person of any defect in an Election Form.

(b) Allocation Procedures. As soon as reasonably practicable after the Effective Time, GCBS shall cause the Exchange Agent to allocate the Total Cash Merger Consideration and Total Stock Merger Consideration among the holders of CVBG Common Stock and CVBG Stock Options, which shall be effected by the Exchange Agent as follows:

(i) Mandatory Cash Shares and CVBG Stock Options shall be paid their appropriate portion of the Total Cash Merger Consideration.

(ii) If the remaining Total Cash Merger Consideration is greater than the Cash Election Amount, then:

1. each Cash Election Share shall be converted into the right to receive an amount of cash equal to the Per Share Cash Consideration;

2. the Exchange Agent will select, on a pro rata basis, first from among the holders of No Election Shares and then, if necessary, from among the holders of Stock Election Shares, a sufficient number of such shares (“Cash Designee Shares”) such that the sum of Cash Designee Shares and Cash Election Shares multiplied by the Per Share Cash Consideration equals as closely as practicable the Total Cash Merger Consideration. Each Cash Designee Share shall be converted into the right to receive the Per Share Cash Consideration; and

3. each remaining unconverted share of CVBG Common Stock (after application of subsections (1) and (2) above) shall be converted into the right to receive the Per Share Stock Consideration.

(iii) If the remaining Total Cash Merger Consideration is less than the Cash Election Amount then:

1. each Stock Election Share and each No Election Share shall be converted into the right to receive the Per Share Stock Consideration;

2. the Exchange Agent will select, on a pro rata basis from among the holders of Cash Election Shares, a sufficient number of such shares (“Stock Designee Shares”) such that the number of such Stock Designee Shares multiplied by the Per Share Cash Consideration equals as closely as practicable the difference between the Cash Election Amount and the Total Cash Merger Consideration. The Stock Designee Shares shall be converted into the right to receive the Per Share Stock Consideration; and

3. each remaining unconverted share of CVBG Common Stock (after application of subsections (1) and (2) above) shall be converted into the right to receive an amount of cash equal to the Per Share Cash Consideration.

(iv) In the event the Exchange Agent is required pursuant to this Section 1.5 to designate from among all holders of Cash Election Shares the Stock Designee Shares to receive the Per Share Stock Consideration, each holder of Cash Election Shares shall

be allocated a pro rata portion of the total Stock Designee Shares. Such pro ration shall reflect the proportion that the number of Cash Election Shares of each holder of Cash Election Shares bears to the total number of Cash Election Shares. Adjustments may be made for rounding purposes.

1.6 No Fractional Shares. Notwithstanding any other provision of this Agreement, neither certificates nor scrip for fractional shares of GCBS Common Stock shall be issued in the Merger. Each holder who otherwise would have been entitled to a fraction of a share of GCBS Common Stock shall receive in lieu thereof cash (without interest) in an amount determined by multiplying the fractional share interest to which such holder would otherwise be entitled (after taking into account all shares of CVBG Common Stock owned by such holder at the Effective Time) by $10.25. No such holder shall be entitled to dividends, voting rights or any other rights in respect of any fractional share.

1.7 Conversion of Stock Options.

(a) At the Effective Time, each stock option granted or heretofore assumed by CVBG to purchase shares of CVBG Common Stock (each a “CVBG Stock Option”) as disclosed in Schedule 4.2(a) of the CVBG Disclosure Schedule, which is outstanding, unexercised, and vested as of the Effective Time (even to the extent such vesting is caused by change of control provisions triggered by the consummation of the Merger) shall cease to represent a right to acquire shares of CVBG Common Stock and shall be exchanged for an amount of cash consideration equal to the “in the money” amount of such CVBG Stock Option; provided that, the “in the money” amount of an CVBG Stock Option shall be the excess of the Per Share Cash Consideration over the exercise price of such option (referred to per CVBG Stock Option as the “Per Option Consideration” or in the aggregate as the “Total Option Consideration,” which for purposes of this Agreement shall be included in the definition of “Merger Consideration”).

(b) Except as provided herein or as otherwise agreed to by the parties, the 1998 Stock Option Plan and any other plan, program or arrangement providing for the issuance or grant of any other interest in respect of the capital stock of CVBG or any Subsidiary thereof shall have been suspended as of December 12, 2006, and CVBG shall ensure that following the aforementioned Date that no additional CVBG Stock Options have been granted and that other than the options disclosed in Schedule 4.2(a) of the CVBG Disclosure Schedule no other options have been granted and that no other persons shall have any right to acquire equity securities of CVBG or the Surviving Corporation.

1.8 GCBS Capital Stock . At and after the Effective Time, each share of GCBS Capital Stock (as defined below) issued and outstanding immediately prior to the Closing Date shall remain issued and outstanding and shall not be affected by the Merger.

1.9 Charter . Subject to the terms and conditions of this Agreement, at the Effective Time, the Charter of GCBS, as amended (the “GCBS Articles”), shall be the Charter of the Surviving Corporation until thereafter amended in accordance with applicable law.

1.10 Bylaws . Subject to the terms and conditions of this Agreement, at the Effective Time, the Bylaws of GCBS shall be the Bylaws of the Surviving Corporation until thereafter amended in accordance with applicable law.

1.11 Tax Consequences . It is intended that the Merger shall constitute a “reorganization” within the meaning of Section 368(a) of the Code, that this Agreement shall constitute a “plan of reorganization” for the purposes of Sections 354 and 361 of the Code.

1.12 Certain Post-Closing Matters .

(a) Board Composition. The current members of the Board of Directors of GCBS shall continue as the directors of the Surviving Corporation at the Effective Time. After the Effective Time, the GCBS Nominating Committee of its Board of Directors will review individuals from the Middle Tennessee area as director candidates for GCBS.

(b) Officers of Surviving Corporation. The current officers of GCBS shall continue as the officers of the Surviving Corporation. Executive management positions of CVBG will be evaluated separately for redundancy and/or a re-allocation of resources. Severance and outplacement assistance will be provided in accordance with GCBS’s Human Resource Policies for dislocated employees remaining through the Effective Time. Retention bonuses will be negotiated on a facts and circumstances basis with certain key employees to assure an effective transition and assimilation.

(c) Operations. The regulations and policies of GCBS in effect immediately prior to the effective time shall be the regulations and policies of the Surviving Corporation. Management of both parties would work to achieve appropriate operating efficiencies and to conform CVBG’s accounting policies with GCBS’s accounting policies and to make appropriate accruals for loan loss reserves and expenses and, when indicated, charge-offs prior to consummation of the Acquisition.

1.13 Headquarters of Surviving Corporation. From and after the Effective Time, the location of the headquarters and principal executive offices of the Surviving Corporation shall be that of the headquarters and principal executive offices of GCBS as of the date of this Agreement.

ARTICLE II.

DELIVERY OF MERGER CONSIDERATION

2.1 Deposit of Merger Consideration. Prior to the Effective Time, GCBS shall deposit, or shall cause to be deposited, with the Exchange Agent, for the benefit of the holders of Certificates and Civitas Stock Options, for exchange in accordance with this Article II, certificates representing the shares of GCBS Common Stock and cash (such cash and certificates for shares of GCBS Common Stock, together with any dividends or distributions with respect thereto, being hereinafter referred to as the “Exchange Fund”), to be issued pursuant to Section 1.4 and paid pursuant to Section 1.4, Section 1.6, and Section 1.7 in exchange for outstanding shares of CVBG Common Stock.

2.2 Delivery of Merger Consideration .

(a) As soon as practicable after the Effective Time, the Exchange Agent shall mail to each holder of record of one or more Certificates a letter of transmittal in customary form as reasonably agreed by the parties (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon delivery of the Certificates to the Exchange Agent) and instructions for use in effecting the surrender of the Certificates in exchange for certificates representing the shares of GCBS Common Stock and any cash into which the shares of CVBG Common Stock represented by such Certificate or Certificates shall have been converted pursuant to this Agreement. Upon proper surrender to the Exchange Agent of a Certificate or Certificates for exchange and cancellation, together with such properly completed and duly executed letter of transmittal as the Exchange Agent may reasonable require, the holder of such Certificate or Certificates shall be entitled to receive in exchange therefore, as applicable, (i) a certificate representing that number of whole shares of GCBS Common Stock to which such holder of CVBG Common Stock shall have become entitled pursuant to the provisions of Article I and (ii) a check representing the amount of any cash which such holder has the right to receive in respect of the Certificate or Certificates surrendered pursuant to the provisions of Article I, and the Certificate or Certificates so surrendered shall forthwith be canceled. No interest will be paid or accrued on any cash or on any unpaid dividends and distributions payable to holders of Certificates.

(b) No dividends or other distributions declared with respect to GCBS Common Stock shall be paid to the holder of any unsurrendered Certificate until the holder thereof shall surrender such Certificate in accordance with this Article II. After the surrender of a Certificate in accordance with this Article II, the record holder thereof shall be entitled to receive any such dividends or other distributions, without any interest thereon, which theretofore had become payable with respect to shares of GCBS Common Stock represented by such Certificate.

(c) If any certificate representing shares of GCBS Common Stock is to be issued in a name other than that in which the Certificate or Certificates surrendered in exchange therefor is or are registered, it shall be a condition of the issuance thereof that the Certificate or Certificates so surrendered shall be properly endorsed (or accompanied by an appropriate instrument of transfer) and otherwise in proper form for transfer, and that the person requesting such exchange shall pay to the Exchange Agent in advance any transfer or other taxes required by reason of the issuance of a certificate representing shares of GCBS Common Stock in any name other than that of the registered holder of the Certificate or Certificates surrendered, or required for any other reason, or shall establish to the satisfaction of the Exchange Agent that such tax has been paid or is not payable.

(d) After the Effective Time, there shall be no transfers on the stock transfer books of CVBG of the shares of CVBG Common Stock that were issued and outstanding immediately prior to the Effective Time. If, after the Effective Time, certificates representing such shares are presented for transfer to the Exchange Agent, they shall be canceled and exchanged for certificates representing shares of GCBS Common Stock and cash as provided in Article I.

(e) Any portion of the Exchange Fund that remains unclaimed by the shareholders of CVBG as of the first anniversary of the Effective Time shall be paid to GCBS. Any former shareholders of CVBG who have not theretofore complied with this Article II shall thereafter look only to GCBS for payment of the shares of GCBS Common Stock and cash and any unpaid dividends and distributions on the GCBS Common Stock deliverable in respect of each share of CVBG Common Stock such shareholder holds as determined pursuant to this Agreement, in each case, without any interest thereon. Notwithstanding the foregoing, none of CVBG, GCBS, the Exchange Agent or any other person shall be liable to any former holder of shares of CVBG Common Stock for any amount delivered in good faith to a public official pursuant to applicable abandoned property, escheat or similar laws.

(f) In the event any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such Certificate to be lost, stolen or destroyed and, if reasonably required by GCBS, the posting by such person of a bond in such amount as GCBS may determine is reasonably necessary as indemnity against any claim that may be made against it with respect to such Certificate, the Exchange Agent will issue in exchange for such lost, stolen or destroyed Certificate the shares of GCBS Common Stock, and any cash deliverable in respect thereof pursuant to this Agreement.

ARTICLE III.

REPRESENTATIONS AND WARRANTIES OF GCBS

Except as disclosed in (a) the GCBS Reports (defined below) filed prior to the date hereof or (b) the disclosure schedule (the “GCBS Disclosure Schedule") delivered by GCBS to CVBG prior to the execution of this Agreement (which schedule sets forth, among other things, items the disclosure of which is necessary or appropriate either in response to an express disclosure requirement contained in a provision hereof or as an exception to one or more representations or warranties contained in this Article III or to one or more of GCBS’s covenants contained in Article V, provided, however, that, notwithstanding anything in this Agreement to the contrary, (i) no such item is required to be set forth in such schedule as an exception to a representation or warranty if its absence would not result in the related representation or warranty being deemed untrue or incorrect under the standard established by Section 9.2, and (ii) the mere inclusion of an item in such schedule as an exception to a representation or warranty shall not be deemed an admission that such item represents a material exception or material fact, event or circumstance or that such item has had or would be reasonably likely to have a Material Adverse Effect (as defined below) on GCBS), GCBS hereby represents and warrants to CVBG as follows:

3.1 Corporate Organization .

(a) GCBS is a corporation duly organized, validly existing and in good standing under the laws of the State of Tennessee. GCBS has the corporate power and authority to own or lease all of its properties and assets and to carry on its business as it is now being conducted, and is duly licensed or qualified to do business in each jurisdiction in which the nature of the business conducted by it or the character or location of the properties and assets owned or leased by it makes such licensing or qualification necessary, except where the failure to

be so licensed or qualified would not, either individually or in the aggregate, have a Material Adverse Effect on GCBS. As used in this Agreement, the term “Material Adverse Effect” means, with respect to CVBG, GCBS or the Surviving Corporation, as the case may be, a material adverse impact on (i) the business, operations, results of operations or financial condition of such party and its Subsidiaries taken as a whole, or (ii) the ability of such party to timely consummate the transactions contemplated hereby; provided, however, that with respect to clause (i), the following shall not be deemed to have a Material Adverse Effect: any change or event caused by or resulting from (A) changes in prevailing interest rates, currency exchange rates or other economic or monetary conditions in the United States or elsewhere, (B) changes in United States or foreign securities markets, including changes in price levels or trading volumes, (C) changes or events, after the date hereof, affecting the financial services industry generally and not specifically relating to GCBS or CVBG or their respective Subsidiaries, as the case may be, (D) changes, after the date hereof, in generally accepted accounting principles or regulatory accounting requirements applicable to banks or savings associations and their holding companies generally, (E) changes, after the date hereof, in laws, rules or regulations of general applicability or interpretations thereof by any Governmental Entity (as defined below), (F) actions or omissions of GCBS or CVBG taken with the prior written consent of the other or required hereunder, (G) the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby or the announcement thereof, (H) any outbreak of major hostilities in which the United States is involved or any act of terrorism within the United States or directed against its facilities or citizens wherever located, or (I) the termination of employment of key employees of CVBG or failure of key employees of CVBG to execute employment agreements with GCBS to become effective after the Effective Time; and provided, further, that in no event shall a change in the trading prices of a party's capital stock, by itself, be considered material or constitute a Material Adverse Effect.

(b) GCBS is a bank holding company registered under the Bank Holding Company Act of 1956, as amended (the “BHC Act”). True and complete copies of the GCBS Charter and Bylaws, as in effect as of the date of this Agreement, have previously been made available by GCBS to CVBG.

(c) Each GCBS Subsidiary (i) is duly organized and validly existing under the laws of its jurisdiction of organization, (ii) is duly qualified to do business and in good standing in all jurisdictions (whether federal, state, local or foreign) where its ownership or leasing of property or the conduct of its business requires it to be so qualified and in which the failure to be so qualified would have a Material Adverse Effect on GCBS and (iii) has all requisite corporate or other power and authority to own or lease its properties and assets and to carry on its business as now conducted, except to the extent that the failure to have such power or authority will not result in a Material Adverse Effect on GCBS. As used in this Agreement, the word “Subsidiary” when used with respect to any party means any bank, savings bank, corporation, partnership, limited liability company, or other organization, whether incorporated or unincorporated, which is consolidated with such party for financial reporting purposes under GAAP.

3.2 Capitalization .

(a) The authorized capital stock of GCBS consists of fifteen million (15,000,000) shares of GCBS Common Stock, of which, as of December 31, 2006, 9,796,349

shares were issued and outstanding, and one hundred thirty (130) shares of Organizational Common Stock, $10.00 par value per share (together with the GCBS Common Stock, the “GCBS Capital Stock”), of which, as of December 31, 2006, no shares were issued and outstanding. As of the date hereof, no shares of GCBS Capital Stock were reserved for issuance except for 500,000 shares of GCBS Common Stock reserved for issuance upon the exercise of options to purchase shares of GCBS Common Stock (each a “GCBS Stock Option”) pursuant to the equity-based compensation plans of GCBS (the “GCBS Stock Plans”) as identified in Section 3.2(a) of the GCBS Disclosure Schedule. All of the issued and outstanding shares of GCBS Capital Stock have been duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights, with no personal liability attaching to the ownership thereof.

(b) No bonds, debentures, notes or other indebtedness having the right to vote on any matters on which shareholders may vote (“Voting Debt”) of GCBS are issued or outstanding. Since September 30, 2006, GCBS has not issued any shares of GCBS Capital Stock or any securities convertible into or exercisable for any shares of GCBS Capital Stock, other than shares issued upon exercise of a GCBS Stock Option.

(c) Except for (i) this Agreement, (ii) the rights under the GCBS Stock Plans which represented, as of September 30, 2006, the right to acquire up to an aggregate of 255,525 shares of GCBS Common Stock, and (iii) agreements entered into and securities and other instruments issued after the date of this Agreement, there are no options, subscriptions, warrants, calls, rights, commitments or agreements of any character to which GCBS or any its Subsidiaries is a party or by which it or any its Subsidiaries is bound obligating GCBS or any its Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of GCBS Capital Stock or any Voting Debt or stock appreciation rights of GCBS or any its Subsidiaries or obligating GCBS or any its Subsidiaries to extend or enter into any such option, subscription, warrant, call, right, commitment or agreement. There are no outstanding contractual obligations of GCBS or any its Subsidiaries (A) to repurchase, redeem or otherwise acquire any shares of capital stock of GCBS or any its Subsidiaries or (B) pursuant to which GCBS or any of its Subsidiaries is or could be required to register shares of GCBS Capital Stock or other securities under the Securities Act of 1933, as amended (the “Securities Act”).

(d) GCBS owns, directly or indirectly, all of the issued and outstanding shares of capital stock or other equity ownership interests of each of its Subsidiaries, free and clear of any liens, pledges, charges, encumbrances and security interests whatsoever (“Liens”), and all of such shares or equity ownership interests are duly authorized and validly issued and are fully paid, nonassessable (subject to 12 U.S.C. § 55) and free of preemptive rights, with no personal liability attaching to the ownership thereof. No Subsidiary of GCBS has or is bound by any outstanding subscription, option, warrant, call, commitment or agreement of any character calling for the purchase or issuance of any shares of capital stock or any other equity security of such Subsidiary or any securities representing the right to purchase or otherwise receive any shares of capital stock or any other equity security of such Subsidiary. Section 3.2(d) of the GCBS Disclosure Schedule sets forth a list of the material investments of GCBS in Non-Subsidiary Affiliates. As used in this Agreement, the term “Non-Subsidiary Affiliate” when used with respect to any party means any corporation, partnership, limited liability company, joint venture or other entity other than such party’s Subsidiaries.

3.3 Authority; No Violation .

(a) GCBS has full corporate power and authority to execute and deliver this Agreement and, subject in the case of the consummation of the Merger to the adoption of this Agreement by the requisite vote of the holders of GCBS Common Stock, to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly approved by the Board of Directors of GCBS. The Board of Directors of GCBS determined that the Merger is advisable and in the best interest of GCBS and its shareholders and has directed that this Agreement and the transactions contemplated hereby be submitted to GCBS’s shareholders for adoption at a meeting of such shareholders and, except for the adoption of this Agreement by the affirmative vote of the holders of a majority of the outstanding shares of GCBS Common Stock, no other corporate proceedings on the part of GCBS are necessary to approve this Agreement and to consummate the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by GCBS and (assuming due authorization, execution and delivery by CVBG) constitutes valid and binding obligations of GCBS, enforceable against GCBS in accordance with its terms (except as may be limited by bankruptcy, insolvency, moratorium, reorganization or similar laws affecting the rights of creditors generally and the availability of equitable remedies).

(b) Neither the execution and delivery by GCBS of this Agreement nor the consummation by GCBS of the transactions contemplated hereby, nor compliance by GCBS with any of the terms or provisions hereof, will (i) violate any provision of the GCBS Articles or Bylaws of GCBS or (ii) assuming that the consents and approvals referred to in Section 3.4 are duly obtained, (x) violate any statute, code, ordinance, rule, regulation, judgment, order, writ, decree or injunction applicable to GCBS, any of its Subsidiaries or Non-Subsidiary Affiliates or any of their respective properties or assets or (y) violate, conflict with, result in a breach of any provision of or the loss of any benefit under, constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, result in the termination of or a right of termination or cancellation under, accelerate the performance required by, or result in the creation of any Lien upon any of the respective properties or assets of GCBS, any of its Subsidiaries or its Non-Subsidiary Affiliates under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation to which GCBS, any of its Subsidiaries or its Non-Subsidiary Affiliates is a party, or by which they or any of their respective properties or assets may be bound or affected, except (in the case of clause (ii) above) for such violations, conflicts, breaches or defaults which, either individually or in the aggregate, will not have a Material Adverse Effect on GCBS.

3.4 Consents and Approvals . Except for (i) the filing of applications and notices, as applicable, with the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”) under the BHC Act and the Federal Reserve Act, as amended, and approval of such applications and notices, (ii) the filing of any required applications or notices with any other federal, state or foreign agencies or regulatory authorities and approval of such applications and notices (the “Other Regulatory Approvals”), (iii) the filing with the Securities and Exchange Commission (the “SEC”) of a Joint Proxy Statement/Prospectus in definitive form relating to the meeting of CVBG’s and GCBS’s shareholders to be held in connection with this Agreement and the transactions contemplated hereby (the “Joint Proxy Statement”), and of the registration

statement on Form S-4 (the “Form S-4”) in which the Joint Proxy Statement will be included as a prospectus, and declaration of effectiveness of the Form S-4, (iv) the filing of the Articles of Merger with the Tennessee Secretary pursuant to the TBCA, (v) any notice or filings under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), (vi) any consents, authorizations, approvals, filings or exemptions in connection with compliance with the applicable provisions of federal and state securities laws relating to the regulation of broker-dealers, investment advisers or transfer agents, and the rules of NASDAQ, or which are required under insurance, mortgage banking and other similar laws, (vii) such filings and approvals as are required to be made or obtained under the securities or “Blue Sky” laws of various states in connection with the issuance of the shares of GCBS Common Stock pursuant to this Agreement and (viii) the approval of this Agreement by the requisite vote of the shareholders of GCBS and CVBG, no consents or approvals of or filings or registrations with any court, administrative agency or commission or other governmental authority or instrumentality (each a “Governmental Entity”) are necessary in connection with (A) the execution and delivery by GCBS of this Agreement and (B) the consummation by GCBS of the Merger and the other transactions contemplated hereby. Except for any consents, authorizations, or approvals of any other material contracts to which GCBS is a party and which are listed in Section 3.4 of the GCBS Disclosure Schedule, no consents, authorizations, or approvals of any other person are necessary in connection with (A) the execution and delivery by GCBS of this Agreement and (B) the consummation by GCBS of the Merger and the other transactions contemplated hereby.

3.5 Reports . GCBS and each of its Subsidiaries have timely filed all reports, registrations and statements, together with any amendments required to be made with respect thereto with (i) the Federal Reserve Board, (ii) the Federal Deposit Insurance Corporation, (iii) any state regulatory authority (each a “State Regulator”), (iv) the SEC, (v) any State Regulator (collectively “Regulatory Agencies”), and all other reports and statements required to be filed by them, including, without limitation, any report or statement required to be filed pursuant to the laws, rules or regulations of the United States, any state, or any Regulatory Agency, and have paid all fees and assessments due and payable in connection therewith, except where the failure to file such report, registration or statement or to pay such fees and assessments, either individually or in the aggregate, will not have a Material Adverse Effect on GCBS. Except for normal examinations conducted by a Regulatory Agency in the ordinary course of the business of GCBS and its Subsidiaries, no Regulatory Agency has initiated any proceeding or, to the knowledge of GCBS, investigation into the business or operations of GCBS or any of its Subsidiaries, except where such proceedings or investigation will not, either individually or in the aggregate, have a Material Adverse Effect on GCBS. There is no unresolved violation, criticism, or exception by any Regulatory Agency with respect to any report or statement relating to any examinations of GCBS or any of its Subsidiaries which, in the reasonable judgment of GCBS, will, either individually or in the aggregate, have a Material Adverse Effect on GCBS.

3.6 Financial Statements . GCBS has previously made available to CVBG true and correct copies of (i) the consolidated balance sheets of GCBS and its Subsidiaries as of December 31, 2003, 2004 and 2005 and the related consolidated statements of income and changes in shareholders’ equity and cash flows for the fiscal years ended December 31, 2003 through 2005, inclusive as reported in GCBS’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005, filed with the SEC under the Exchange Act and accompanied by the audit report of Dixon Hughes, PLLC, independent public accountants with respect to GCBS, and

(ii) the unaudited consolidated balance sheet of GCBS and its Subsidiaries as of September 30, 2005 and 2006, and the related consolidated statements of income, changes in shareholders’ equity and cash flows for the nine-month period then ended, as reported in GCBS’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2006. The financial statements referred to in this Section 3.6 (including the related notes, where applicable) fairly present in all material respects the consolidated results of operations, changes in shareholders’ equity, cash flows and financial position of GCBS and its Subsidiaries for the respective fiscal periods or as of the respective dates therein set forth, subject to normal year-end audit adjustments in the case of unaudited statements; each of such statements (including the related notes, where applicable) complies in all material respects with applicable accounting requirements and with the published rules and regulations of the SEC with respect thereto; and each of such statements (including the related notes, where applicable) has been prepared in all material respects in accordance with accounting principles generally accepted in the United States (“GAAP”) consistently applied during the periods involved, except, in each case, as indicated in such statements or in the notes thereto. The books and records of GCBS and its Subsidiaries have been, and are being, maintained in all material respects in accordance with GAAP and any other applicable legal and accounting requirements and reflect only actual transactions.

3.7 Broker’s Fees . Except for Scott & Stringfellow, Inc., neither GCBS nor any GCBS Subsidiary nor any of their respective officers or directors has employed any broker or finder or incurred any liability for any broker’s fees, commissions or finder’s fees in connection with the Merger or related transactions contemplated by this Agreement.

3.8 Absence of Certain Changes or Events .

(a) Since September 30, 2006, no event or events have occurred that have had, either individually or in the aggregate, a Material Adverse Effect on GCBS.

(b) Since September 30, 2006, through and including the date of this Agreement, GCBS and its Subsidiaries have carried on their respective businesses in all material respects in the ordinary course.

3.9 Legal Proceedings .

(a) Except as disclosed in Section 3.9(a) of the GCBS Disclosure Schedule, neither GCBS nor any of its Subsidiaries is a party to any, and there are no pending or, to the best of GCBS’s knowledge, threatened, legal, administrative, arbitral or other proceedings, claims, actions or governmental or regulatory investigations of any nature against GCBS or any of its Subsidiaries or challenging the validity or propriety of the transactions contemplated by this Agreement as to which, in any such case, there is a reasonable probability of an adverse determination and which, if adversely determined, will be reasonably likely to, either individually or in the aggregate, have a Material Adverse Effect on GCBS.

(b) There is no injunction, order, judgment, decree, or regulatory restriction (other than those that apply to similarly situated bank holding companies or banks) imposed

upon GCBS, any of its Subsidiaries or the assets of GCBS or any of its Subsidiaries that has had, or will have, either individually or in the aggregate, a Material Adverse Effect on GCBS.

3.10 Taxes and Tax Returns .

(a) Each of GCBS and its Subsidiaries has duly filed all federal, state, foreign and local information returns and Tax returns required to be filed by it on or prior to the date of this Agreement (all such returns being accurate and complete in all material respects) and has duly paid or made provision for the payment of all Taxes that have been incurred or are due or claimed to be due from it by federal, state, foreign or local taxing authorities other than (i) Taxes or other governmental charges that are not yet delinquent or are being contested in good faith or have not been finally determined and have been adequately reserved against under GAAP, or (ii) information returns, Tax returns or Taxes as to which the failure to file, pay or make provision for is not reasonably likely to have, either individually or in the aggregate, a Material Adverse Effect on GCBS. The federal income Tax returns of GCBS and its Subsidiaries to the knowledge of GCBS have not been examined by the IRS. There are no material disputes pending, or to the knowledge of GCBS, claims asserted, for Taxes or assessments upon GCBS or any of its Subsidiaries for which GCBS does not have reserves that are adequate under GAAP. Neither GCBS nor any of its Subsidiaries is a party to or is bound by any Tax sharing, allocation or indemnification agreement or arrangement (other than such an agreement or arrangement exclusively between or among GCBS and its Subsidiaries). Within the past five years, neither GCBS nor any of its Subsidiaries has been a “distributing corporation” or a “controlled corporation” in a distribution intended to qualify under Section 355(a) of the Code.

(b) As used in this Agreement, the term “Tax” or “Taxes” means (i) all federal, state, local, and foreign income, excise, gross receipts, gross income, ad valorem, profits, gains, property, capital, sales, transfer, use, payroll, employment, severance, withholding, duties, intangibles, franchise, backup withholding, and other taxes, charges, levies or like assessments together with all penalties and additions to tax and interest thereon and (ii) any liability for Taxes described in clause (i) under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local or foreign law).

3.11 Employees .

(a) Section 3.11(a) of the GCBS Disclosure Schedule sets forth a true and complete list of each material benefit or compensation plan, arrangement or agreement, and any material bonus, incentive, deferred compensation, vacation, stock purchase, stock option, severance, employment, change of control or fringe benefit plan, program or agreement that is maintained, or contributed to, for the benefit of current or former directors or employees of GCBS and its Subsidiaries or with respect to which GCBS or its Subsidiaries may, directly or indirectly, have any liability to such directors or employees, as of the date of this Agreement (the “GCBS Benefit Plans”).

(b) GCBS has heretofore made available to CVBG true and complete copies of each of the GCBS Benefit Plans and certain related documents, including, but not limited to, (i) the actuarial report for such GCBS Benefit Plan (if applicable) for each of the last two years,

and (ii) the most recent determination letter from the IRS (if applicable) for such GCBS Benefit Plan.

(c) Except as would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on GCBS, (i) each of the GCBS Benefit Plans has been operated and administered in all material respects in compliance with the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and the Code, (ii) each of the GCBS Benefit Plans intended to be “qualified” within the meaning of Section 401(a) of the Code and has received a favorable determination from the IRS that such GCBS Benefit Plan is so qualified, and to the knowledge of GCBS, there are no existing circumstances or any events that have occurred that will adversely affect the qualified status of any such GCBS Benefit Plan, (iii) with respect to each GCBS Benefit Plan which is subject to Title IV of ERISA, the present value of accrued benefits under such GCBS Benefit Plan, based upon the actuarial assumptions used for funding purposes in the most recent actuarial report prepared by such GCBS Benefit Plan’s actuary with respect to such GCBS Benefit Plan, did not, as of its latest valuation date, exceed the then current value of the assets of such GCBS Benefit Plan allocable to such accrued benefits, (iv) no GCBS Benefit Plan provides benefits, including, without limitation, death or medical benefits (whether or not insured), with respect to current or former employees or directors of GCBS or its Subsidiaries beyond their retirement or other termination of service, other than (A) coverage mandated by applicable law, (B) death benefits or retirement benefits under any “employee pension plan” (as such term is defined in Section 3(2) of ERISA), (C) deferred compensation benefits accrued as liabilities on the books of GCBS or its Subsidiaries or (D) benefits the full cost of which is borne by the current or former employee or director (or his beneficiary), (v) no material liability under Title IV of ERISA has been incurred by GCBS, its Subsidiaries or any trade or business, whether or not incorporated, all of which together with GCBS, would be deemed a “single employer” under Section 4001 of ERISA (a “GCBS ERISA Affiliate”) that has not been satisfied in full, and no condition exists that presents a material risk to GCBS, its Subsidiaries or any GCBS ERISA Affiliate of incurring a material liability thereunder, (vi) no GCBS Benefit Plan is a “multiemployer pension plan” (as such term is defined in Section 3(37) of ERISA), (vii) all contributions payable by GCBS or its Subsidiaries as of the Effective Time with respect to each GCBS Benefit Plan in respect of current or prior plan years have been paid or accrued in accordance with GAAP, (viii) none of GCBS, its Subsidiaries or any other person, including any fiduciary, has engaged in a transaction in connection with which GCBS, its Subsidiaries or any GCBS Benefit Plan will be subject to either a material civil penalty assessed pursuant to Section 409 or 502(i) of ERISA or a material Tax imposed pursuant to Section 4975 or 4976 of the Code, and (ix) to the knowledge of GCBS there are no pending, threatened or anticipated claims (other than routine claims for benefits) by, on behalf of or against any of the GCBS Benefit Plans or any trusts related thereto.

(d) Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will (either alone or in conjunction with any other event) (i) result (either alone or upon the occurrence of any additional acts or events) in any payment (including, without limitation, severance, unemployment compensation, “excess parachute payment” (within the meaning of Section 280G of the Code), forgiveness of indebtedness or otherwise) becoming due to any director or any employee of GCBS or any of its affiliates from GCBS or any of its affiliates under any GCBS Benefit Plan or otherwise, (ii) increase any benefits otherwise payable under any GCBS Benefit Plan or (iii) result in any

acceleration of the time of payment or vesting of any such benefits that will, either individually or in the aggregate, have a Material Adverse Effect on GCBS.

3.12 SEC Reports . GCBS has previously made available to CVBG an accurate and complete copy of each (a) final registration statement, prospectus, report, schedule and definitive proxy statement filed since January 1, 2003, by GCBS with the SEC pursuant to the Securities Act or the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and prior to the date hereof and (b) communication mailed by GCBS to its shareholders since January 1, 2003. GCBS has filed all required reports, schedules, registration statements and other documents with the SEC since January 1, 2003 (the “GCBS Reports”). As of their respective dates of filing with the SEC (or, if amended or superseded by a filing prior to the date hereof, as of the date of such filing), the GCBS Reports complied in all material respects with the requirements of the Securities Act or the Exchange Act, as the case may be, and the rules and regulations of the SEC thereunder applicable to such GCBS Reports, and none of the GCBS Reports when filed contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

3.13 Compliance with Applicable Law .

(a) GCBS and each of its Subsidiaries hold all material licenses, franchises, permits, patents, trademarks and authorizations necessary for the lawful conduct of their respective businesses under and pursuant to each, and have complied in all material respects with and are not in default in any material respect under any, applicable law, statute, order, rule, regulation, policy, agreement and/or guideline of any Governmental Entity relating to GCBS or any of its Subsidiaries, except where the failure to hold such license, franchise, permit or authorization or such noncompliance or default will not, either individually or in the aggregate, have a Material Adverse Effect on GCBS.

(b) Except as will not have, either individually or in the aggregate, a Material Adverse Effect on GCBS, GCBS and each of its Subsidiaries have properly administered all accounts for which it acts as a fiduciary, including accounts for which it serves as a trustee, agent, custodian, personal representative, guardian, conservator or investment advisor, in accordance with the terms of the governing documents, applicable state and federal law and regulation and common law. None of GCBS, any of its Subsidiaries, or any director, officer or employee of GCBS or of any of its Subsidiaries, has committed any breach of trust with respect to any such fiduciary account that will have a Material Adverse Effect on GCBS, and the accountings for each such fiduciary account are true and correct in all material respects and accurately reflect the assets of such fiduciary account.

3.14 Certain Contracts .

(a) Except as disclosed in Section 3.11(a) or 3.14(a) of the GCBS Disclosure Schedule, neither GCBS nor any of its Subsidiaries is a party to or bound by any contract, arrangement, commitment or understanding (whether written or oral) (i) with respect to the employment of any directors, officers or employees other than in the ordinary course of business consistent with past practice, (ii) which, upon the consummation or shareholder approval of the

transactions contemplated by this Agreement will (either alone or upon the occurrence of any additional acts or events) result in any payment (whether of severance pay or otherwise) becoming due from GCBS, the Surviving Corporation, or any of their respective Subsidiaries to any officer or employee thereof, (iii) which is a “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K of the SEC) to be performed after the date of this Agreement that has not been filed or incorporated by reference in the GCBS Reports, (iv) which materially restricts the conduct of any line of business by GCBS or upon consummation of the Merger will materially restrict the ability of the Surviving Corporation to engage in any line of business in which a bank holding company may lawfully engage, (v) with or to a labor union or guild (including any collective bargaining agreement) or (vi) (including any stock option plan, stock appreciation rights plan, restricted stock plan or stock purchase plan) any of the benefits of which will be increased, or the vesting of the benefits of which will be accelerated, by the occurrence of any shareholder approval or the consummation of any of the transactions contemplated by this Agreement, or the value of any of the benefits of which will be calculated on the basis of any of the transactions contemplated by this Agreement. Each contract, arrangement, commitment or understanding of the type described in this Section 3.14(a), whether or not set forth in the GCBS Disclosure Schedule, is referred to herein as a “GCBS Contract”, and neither GCBS nor any of its Subsidiaries knows of, or has received notice of, any violation of the above by any of the other parties thereto which will have, individually or in the aggregate, a Material Adverse Effect on GCBS.

(b) (i) Each GCBS Contract is valid and binding on GCBS or any of its Subsidiaries, as applicable, and in full force and effect, (ii) GCBS and each of its Subsidiaries has in all material respects performed all obligations required to be performed by it to date under each GCBS Contract, except where such noncompliance, either individually or in the aggregate, will not have a Material Adverse Effect on GCBS, and (iii) no event or condition exists which constitutes or, after notice or lapse of time or both, will constitute, a material default on the part of GCBS or any of its Subsidiaries under any such GCBS Contract, except where such default which will, either individually or in the aggregate, have a Material Adverse Effect on GCBS.

3.15 Agreements with Regulatory Agencies . Neither GCBS nor any of its Subsidiaries is subject to any cease-and-desist or other order issued by, or is a party to any written agreement, consent agreement or memorandum of understanding with, or is a party to any commitment letter or similar undertaking to, or is subject to any order or directive by, or has been since January 1, 2003, a recipient of any supervisory letter from, or since January 1, 2003, has adopted any board resolutions at the request of, any Regulatory Agency or other Governmental Entity that currently restricts in any material respect the conduct of its business, would restrict the consummation of the transactions contemplated by this Agreement, or that in any material manner relates to its capital adequacy, its credit policies, its management or its business (each, whether or not set forth in the GCBS Disclosure Schedule, a “GCBS Regulatory Agreement”), nor to the knowledge of GCBS has GCBS or any of its Subsidiaries been advised since January 1, 2003, by any Regulatory Agency or other Governmental Entity that it is considering issuing or requesting any such GCBS Regulatory Agreement.

3.16 Interest Rate Risk Management Instruments . GCBS does not engage in interest rate swaps, caps, floors and option agreements and other interest rate risk management

arrangements, whether entered into for the account of GCBS or for the account of a customer of GCBS or one of its Subsidiaries.

3.17 Undisclosed Liabilities . Except for those liabilities that are fully reflected or reserved against on the consolidated balance sheet of GCBS included in the GCBS Form 10-Q and for liabilities incurred in the ordinary course of business consistent with past practice since September 30, 2006, neither GCBS nor any of its Subsidiaries has incurred any liability of any nature whatsoever (whether absolute, accrued, contingent or otherwise and whether due or to become due) that, either individually or in the aggregate, has had or will have, a Material Adverse Effect on GCBS.

3.18 Insurance . GCBS and its Subsidiaries have in effect insurance coverage with reputable insurers or are self-insured, which in respect of amounts, premiums, types and risks insured, constitutes reasonably adequate coverage against all risks insured against by bank holding companies comparable in size and operations to GCBS and its Subsidiaries.

3.19 Environmental Liability . There are no legal, administrative, arbitral or other proceedings, claims, actions, causes of action, private environmental investigations or remediation activities or governmental investigations of any nature seeking to impose, or that could reasonably result in the imposition, on GCBS of any liability or obligation arising under common law or under any local, state or federal environmental statute, regulation or ordinance including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (“CERCLA”), pending or, to the knowledge of GCBS, threatened against GCBS, which liability or obligation will, either individually or in the aggregate, have a Material Adverse Effect on GCBS. To the knowledge of GCBS, there is no reasonable basis for any such proceeding, claim, action or governmental investigation that would impose any liability or obligation that will, individually or in the aggregate, have a Material Adverse Effect on GCBS. GCBS is not subject to any agreement, order, judgment, decree, letter or memorandum by or with any court, governmental authority, regulatory agency or third party imposing any liability or obligation with respect to the foregoing that will have, either individually or in the aggregate, a Material Adverse Effect on GCBS.

3.20 State Takeover Laws . The Board of Directors of GCBS has approved the transactions contemplated by this Agreement for purposes of Sections 48-103-101 through 48-103-505 of the TBCA, if applicable to GCBS, such that the provisions of such sections of the TBCA will not apply to this Agreement or any of the transactions contemplated hereby or thereby.

3.21 Reorganization . As of the date of this Agreement, GCBS is not aware of any fact or circumstance that would reasonably be expected to prevent the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code.

3.22 Information Supplied . None of the information supplied or to be supplied by GCBS for inclusion or incorporation by reference in (i) the Form S-4 will, at the time the Form S-4 is filed with the SEC and at the time it becomes effective under the Securities Act, contain 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, and (ii) the Joint Proxy

Statement will, at the date of mailing to shareholders and at the times of the meetings of shareholders to be held in connection with the Merger, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The Joint Proxy Statement will comply as to form in all material respects with the requirements of the Exchange Act and the rules and regulations of the SEC thereunder, except that no representation or warranty is made by GCBS with respect to statements made or incorporated by reference therein based on information supplied by CVBG for inclusion or incorporation by reference in the Joint Proxy Statement.

3.23 Internal Controls . The records, systems, controls, data and information of GCBS and its Subsidiaries are recorded, stored, maintained and operated under means (including any electronic, mechanical or photographic process, whether computerized or not) that are under the exclusive ownership and direct control of GCBS or its Subsidiaries or accountants (including all means of access thereto and therefrom), except for any non-exclusive ownership and non-direct control that would not reasonably be expected to have a Materially Adverse Effect on the system of internal accounting controls described in the following sentence. As and to the extent described in the GCBS Reports filed with the SEC prior to the date hereof, GCBS and its Subsidiaries have devised and maintain a system of internal accounting controls sufficient to provide reasonable assurances regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP. GCBS (i) has designed disclosure controls and procedures to ensure that material information relating to GCBS, including its consolidated Subsidiaries, is made known to the management of GCBS by others within those entities, and (ii) has disclosed, based on its most recent evaluation prior to the date hereof, to GCBS’s independent registered public accounting firm and the audit committee of GCBS’s Board of Directors (x) any significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect GCBS's ability to record, process, summarize and report financial information and (y) any fraud, whether or not material, that involves management or other employees who have a significant role in GCBS’s internal control over financial reporting. GCBS has made available to CVBG a summary of any such disclosure made by management to GCBS’s auditors and audit committee since January 1, 2002. GCBS is in full compliance with Section 404 of the Sarbanes-Oxley Act of 2002.

3.24 Opinion of GCBS Financial Advisor . GCBS has received the opinion of its financial advisor, Scott & Stringfellow, Inc., dated the date of this Agreement, to the effect that the Merger Consideration is fair, from a financial point of view, to GCBS and the holders of GCBS Common Stock.

ARTICLE IV.

REPRESENTATIONS AND WARRANTIES

OF CVBG

Except as disclosed in (a) the CVBG Reports (defined below) filed prior to the date hereof

SITE SEARCH

AGREEMENTS / CONTRACTS

CLAUSES

Search Contract Clauses >>

Browse Contract Clause Library>>

Get Email Updates