AGREEMENT AND PLAN OF MERGER BY AND BETWEEN FIRST BANK OF DOTHAN, INC. AND COMMUNITY CAPITAL BANCSHARES, INC.Agreement and Plan of Merger |
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EXHIBIT 99.1
AGREEMENT AND PLAN OF MERGER BY AND BETWEEN
FIRST BANK OF DOTHAN, INC.
AND
COMMUNITY CAPITAL BANCSHARES, INC.
DATED
JULY 2, 2003
<PAGE>
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
FIRST BANK OF DOTHAN, INC.
AND
COMMUNITY CAPITAL BANCSHARES, INC.
EXECUTION COPY DATED JULY 2, 2003
<PAGE>
TABLE OF CONTENTS
Page
LIST OF EXHIBITS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV
AGREEMENT AND PLAN OF MERGER. . . . . . . . . . . . . . . . . . . . . . . .1
ARTICLE 1. TRANSACTIONS AND TERMS OF THE MERGER . . . . . . . . . . .1
1.1 Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
1.2 Time and Place of Closing. . . . . . . . . . . . . . . . . . . . .2
1.3 Effective Time. . . . . . . . . . . . . . . . . . . . . . . . . . . .2
1.4 Execution of Support Agreement. . . . . . . . . . . . . . . . . . .2
ARTICLE 2. TERMS OF MERGER . . . . . . . . . . . . . . . . . . . . . . .2
2.1 Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
2.2 Articles of Incorporation. . . . . . . . . . . . . . . . . . . . . .2
2.3 Bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
2.4 Directors and Officers . . . . . . . . . . . . . . . . . . . . . . .3
2.5 Business of Surviving Bank. . . . . . . . . . . . . . . . . . . . .3
2.6 Assumption of Rights . . . . . . . . . . . . . . . . . . . . . . . .3
2.7 Assumption of Liabilities. . . . . . . . . . . . . . . . . . . . . .3
ARTICLE 3. MANNER OF CONVERTING SHARES. . . . . . . . . . . . . . . . .3
3.1 Conversion of Shares . . . . . . . . . . . . . . . . . . . . . . . .3
3.2 Allocation Procedures . . . . . . . . . . . . . . . . . . . . . . . .4
3.3 Anti-Dilution Provisions. . . . . . . . . . . . . . . . . . . . . . .5
3.4 Shares Held by First Bank or Community Capital. . . . . . . . .5
3.5 Dissenting Shareholders . . . . . . . . . . . . . . . . . . . . . . .5
3.6 Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . .6
3.7 Election of Consideration. . . . . . . . . . . . . . . . . . . . . .6
ARTICLE 4. EXCHANGE OF SHARES. . . . . . . . . . . . . . . . . . . . . .6
4.1 Exchange Procedures . . . . . . . . . . . . . . . . . . . . . . . . .6
4.2 Rights of Former Shareholders of First Bank. . . . . . . . . . .7
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF FIRST BANK . . . . . . .8
5.1 Organization, Standing, and Power . . . . . . . . . . . . . . . . .8
5.2 Authority; No Breach By Agreement. . . . . . . . . . . . . . . . .8
5.3 Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
5.4 First Bank Subsidiaries. . . . . . . . . . . . . . . . . . . . . . .9
5.5 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
5.6 Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . .9
5.7 Absence of Undisclosed Liabilities. . . . . . . . . . . . . . . . 10
5.8 Absence of Certain Changes or Events. . . . . . . . . . . . . . 10
5.9 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.10 Allowance for Possible Loan Losses . . . . . . . . . . . . . . . 11
5.11 Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.12 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . 12
5.13 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . 12
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5.14 Labor Relations . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.15 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . 13
5.16 Material Contracts. . . . . . . . . . . . . . . . . . . . . . . . . 15
5.17 Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.18 Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.19 Statements True and Correct . . . . . . . . . . . . . . . . . . . 16
5.20 Accounting, Tax and Regulatory Matters . . . . . . . . . . . . . 16
5.21 Charter Provisions. . . . . . . . . . . . . . . . . . . . . . . . . 17
5.22 Derivatives Contracts . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE 6. REPRESENTATIONS AND WARRANTIES OF COMMUNITY CAPITAL. . . 17
6.1 Organization, Standing, and Power . . . . . . . . . . . . . . . . 17
6.2 Authority; No Breach By Agreement. . . . . . . . . . . . . . . . 17
6.3 Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.4 Community Capital Subsidiaries . . . . . . . . . . . . . . . . . . 19
6.5 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.6 Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . 19
6.7 Absence of Undisclosed Liabilities. . . . . . . . . . . . . . . . 20
6.8 Absence of Certain Changes or Events. . . . . . . . . . . . . . 20
6.9 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.10 Allowance for Possible Loan Losses . . . . . . . . . . . . . . . 21
6.11 Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.12 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . 22
6.13 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . 22
6.14 Labor Relations . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.15 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . 23
6.16 Material Contracts. . . . . . . . . . . . . . . . . . . . . . . . . 24
6.17 Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.18 Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.19 Statements True and Correct . . . . . . . . . . . . . . . . . . . 25
6.20 Accounting, Tax and Regulatory Matters . . . . . . . . . . . . . 25
6.21 Charter Provisions. . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE 7. CONDUCT OF BUSINESS PENDING CONSUMMATION. . . . . . . . . 26
7.1 Affirmative Covenants of First Bank. . . . . . . . . . . . . . . 26
7.2 Negative Covenants of First Bank . . . . . . . . . . . . . . . . 26
7.3 Affirmative Covenants of Community Capital . . . . . . . . . . . 28
7.4 Adverse Changes in Condition. . . . . . . . . . . . . . . . . . . 28
7.5 Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE 8. ADDITIONAL AGREEMENTS. . . . . . . . . . . . . . . . . . . . 28
8.1 Shareholder Approval. . . . . . . . . . . . . . . . . . . . . . . . 28
8.2 Applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
8.3 Filings with State Offices. . . . . . . . . . . . . . . . . . . . 29
8.4 Agreement as to Efforts to Consummate . . . . . . . . . . . . . 29
8.5 Investigation and Confidentiality. . . . . . . . . . . . . . . . . 29
8.6 Press Releases . . . . . . . . . . . . . . . . . . . . . . . 30
8.7 Acquisition Proposals . . . . . . . . . . . . . . . . . . . . . . . 30
8.8 Tax Treatment . . . . . . . . . . . . . . . . . . . . . . . 31
8.9 Certain Modifications . . . . . . . . . . . . . . . . . . . . . . . 31
8.10 Employee Benefits and Contracts . . . . . . . . . . . . . . . . . 31
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8.11 Security Law Matters . . . . . . . . . . . . . . . . . . . . . . . 31
8.12 Registration Statement. . . . . . . . . . . . . . . . . . . . . . . 32
8.13 Nasdaq SmallCap Market Listing. . . . . . . . . . . . . . . . . . 32
ARTICLE 9. CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE. . . . 33
9.1 Conditions to Obligations of Each Party . . . . . . . . . . . . 33
9.2 Conditions to Obligations of Community Capital. . . . . . . . . 34
9.3 Conditions to Obligations of First Bank . . . . . . . . . . . . 35
ARTICLE 10. TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . . 36
10.1 Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
10.2 Effect of Termination. . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE 11. SURVIVAL; DIRECTORS' AND OFFICERS' PROTECTION. . . . . . 37
11.1 Survival of Representations and Warranties . . . . . . . . . . . 37
11.2 Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE 12. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . 38
12.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
12.2 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
12.3 Brokers and Finders. . . . . . . . . . . . . . . . . . . . . . . . 45
12.4 Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . 45
12.5 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
12.6 Waivers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
12.7 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
12.8 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
12.9 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
12.10 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
12.11 Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
12.12 Enforcement of Agreement . . . . . . . . . . . . . . . . . . . . . 47
12.13 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
iii
<PAGE>
LIST OF EXHIBITS
------------------
EXHIBIT NUMBER DESCRIPTION
--------------- -----------
1. Form of Support Agreement (Preamble)
2. Form of Claims/Indemnification Letter
(Section 9.2(d)).
iv
<PAGE>
AGREEMENT AND PLAN OF MERGER
--------------------------------
THIS AGREEMENT AND PLAN OF MERGER (the "Agreement") is made and entered
into as of the 2nd day of July, 2003, by COMMUNITY CAPITAL BANCSHARES, INC.
("Community Capital"), a Georgia corporation and FIRST BANK OF DOTHAN, INC.
("First Bank"), an Alabama banking corporation.
PREAMBLE
--------
The respective Boards of Directors of First Bank and Community Capital are
of the opinion that the transactions described herein are in the best interests
of the Parties to this Agreement and their respective shareholders. This
Agreement provides for the acquisition of First Bank by Community Capital,
pursuant to the merger of First Bank with and into Interim. Interim will be an
Alabama Corporation and wholly owned subsidiary of Community Capital that
Community Capital will form prior to the Closing date for the purpose of
effecting the merger in accordance with this Agreement. Following the merger,
First Bank will become a wholly owned subsidiary of Community Capital. At the
effective time of the merger, the outstanding shares of the common stock of
First Bank shall be converted into the right to receive cash and shares of the
common stock of Community Capital (except as provided herein). As a result,
some shareholders of First Bank shall become shareholders of Community Capital.
The transactions described in this Agreement are subject to (a) approval of the
shareholders of First Bank, (b) approval of the Alabama State Banking
Department, (c) approval of the Georgia Department of Banking and Finance, (d)
approval of the Board of Governors of the Federal Reserve, and (e) satisfaction
of certain other conditions described in this Agreement. It is the intention of
the Parties to this Agreement that the merger, for federal income tax purposes,
shall qualify as a "reorganization" within the meaning of Section 368(a) of the
Internal Revenue Code.
As a condition and inducement to Community Capital's willingness to
consummate the transactions contemplated by this Agreement, each member of the
Board of Directors of First Bank will execute and deliver to Community Capital
an agreement (a "Support Agreement") within ten (10) calendar days of the date
of this Agreement, in substantially the form of Exhibit 1 to this Agreement.
---------
Certain terms used in this Agreement are defined in Section 12.1 hereof.
NOW, THEREFORE, in consideration of the above and the mutual warranties,
representations, covenants, and agreements set forth herein, the Parties agree
as follows:
ARTICLE 1.
TRANSACTIONS AND TERMS OF THE MERGER
------------------------------------
<PAGE>
1.1 MERGER. Subject to the terms and conditions of this Agreement, at
------
the Effective Time, First Bank will merge with and into Interim in accordance
with the provisions of Section 5-7A-1 of the ABC and in accordance with the
Alabama Interstate and International Banking Act of 1995. Interim shall be the
Surviving Bank resulting from the Merger and shall continue to be governed by
the Laws of the State of Alabama. The Merger shall be consummated pursuant to
the terms of this Agreement, which has been approved and adopted by the
respective Boards of Directors of First Bank and Community Capital, as set forth
herein.
1.2 TIME AND PLACE OF CLOSING. The closing of the transactions
-----------------------------
contemplated hereby (the "Closing") will take place at 10:00 a.m. Central Time
on the date that the Effective Time occurs (or the immediately preceding day if
the Effective Time is earlier than 10:00 a.m. Central Time), or at such other
time as the Parties, acting through their authorized officers, may mutually
agree. The Closing shall be held at such location as may be mutually agreed
upon by the Parties.
1.3 EFFECTIVE TIME. The Merger and other transactions contemplated by
---------------
this Agreement shall become effective on the date and at the time the
Certificate of Merger reflecting the Merger shall become effective with the
Secretary of State of the State of Alabama (the "Effective Time"). Subject to
the terms and conditions hereof, unless otherwise mutually agreed upon in
writing by the authorized officers of each Party, the Parties shall use their
reasonable efforts to cause the Effective Time to occur on or before the fifth
business day following the last to occur of (i) the effective date (including
expiration of any applicable waiting period) of the last required Consent of any
Regulatory Authority having authority over and approving or exempting the
Merger, and (ii) the earliest date on which the shareholders of First Bank have
approved this Agreement to the extent such approval is required by applicable
Law; provided, however, that the date of the Effective Time shall not extend
-------- -------
past the termination date set forth in Section 10.1(e) hereof.
1.4 EXECUTION OF SUPPORT AGREEMENT. Within ten (10) calendar days of
--------------------------------
the execution of this Agreement and as a condition hereto, each member of the
Board of Directors of First Bank will execute and deliver to Community Capital a
Support Agreement, in substantially the form of Exhibit 1 to this Agreement.
---------
ARTICLE 2.
TERMS OF MERGER
---------------
2.1 NAME. The name of the Surviving Bank shall be "First Bank of
----
Dothan, Inc." or any other legally permissible name as Community Capital may in
its sole discretion elect.
2.2 ARTICLES OF INCORPORATION. The Articles of Incorporation of First
--------------------------
Bank in effect immediately prior to the Effective Time shall be the Articles of
Incorporation of the Surviving Bank until duly amended or repealed.
2.3 BYLAWS. The Bylaws of First Bank in effect immediately prior to
------
the Effective Time shall be the Bylaws of the Surviving Bank until duly amended
or repealed.
2
<PAGE>
2.4 DIRECTORS AND OFFICERS.
------------------------
(a) The directors of the Surviving Bank shall be the directors of
First Bank immediately prior to the Effective Time. Such persons shall serve as
the directors of the Surviving Bank from and after the Effective Time in
accordance with the Bylaws of the Surviving Bank.
(b) The executive officers of the Surviving Bank shall be (i) the
executive officers of First Bank immediately prior to the Effective Time and
(ii) such additional persons as may thereafter be elected. Such persons shall
serve as the executive officers of the Surviving Bank from and after the
Effective Time in accordance with the Bylaws of the Surviving Bank.
2.5 BUSINESS OF SURVIVING BANK. The business of the Surviving Bank
-----------------------------
from and after the Effective Time shall continue to be that of a commercial bank
organized under the laws of the State of Alabama. The business of the Surviving
Bank shall be conducted from its main office located in Dothan, Alabama.
2.6 ASSUMPTION OF RIGHTS. At the Effective Time, the separate
----------------------
existence and corporate organization of First Bank shall be merged into and
continued in the Surviving Bank. All rights, franchises, and interests of both
Interim and First Bank in and to every type of property (real, personal, and
mixed), and all choses in action of both Interim and First Bank shall be
transferred to and vested in the Surviving Bank without any deed or other
transfer. The Surviving Bank, upon consummation of the Merger and without any
order or other action on the part of any court or otherwise, shall hold and
enjoy all rights of property, franchises, and interests, including appointments,
designations, and nominations, and all other rights and interests as trustee,
executor, administrator, registrar of stocks and bonds, guardian of estates,
assignee, receiver, and committee of estates of competent persons, and in every
other fiduciary capacity, in the same manner and to the same extent as such
rights, franchises, and interests were held or enjoyed by either Interim or
First Bank.
2.7 ASSUMPTION OF LIABILITIES. All liabilities and obligations of both
-------------------------
Interim and First Bank of every kind and description shall be assumed by the
Surviving Bank, and the Surviving Bank shall be bound thereby in the same manner
and to the same extent that Interim and First Bank were so bound at the
Effective Time.
ARTICLE 3.
MANNER OF CONVERTING SHARES
---------------------------
3.1 CONVERSION OF SHARES. Subject to the provisions of this Article 3,
--------------------
at the Effective Time, by virtue of the Merger and without any action on the
part of the holders thereof, the shares of each of the Parties shall be
converted as follows:
(a) Each share of Community Capital Common Stock issued and
outstanding immediately prior to the Effective Time shall remain issued and
outstanding from and after the Effective Time.
3
<PAGE>
(b) Each share of Interim Common Stock issued and outstanding
immediately prior to the Effective Time shall remain issued and outstanding from
and after the Effective Time.
(c) Subject to the allocation provisions of Section 3.2, each share of
First Bank Common Stock (excluding shares held by either First Bank or any
Community Capital Company, in each case other than in a fiduciary capacity or as
a result of debts previously contracted, and excluding shares held by
shareholders who perfect their statutory dissenters' rights as provided in
Section 3.5) issued and outstanding immediately prior to the Effective Time
shall cease to be outstanding and shall be converted into and exchanged for the
right to receive either $18.72 in cash (the "Cash Consideration") or 1.44 shares
(the "Stock Consideration") of Community Capital Common Stock (the "Exchange
Ratio"), subject to adjustment as provided in Section 3.1(d); provided that the
total Cash Consideration (the "Allocable Cash") shall be $1,872,000 less $18.72
times the number of shares held by shareholders who have perfected their
statutory dissenters' rights as provided in Section 3.5 (subject to a maximum
reduction of $234,000).
(d) If the Market Value (as defined below) of Community Capital
Common Stock is below $13.00, then the Exchange Ratio for the Stock
Consideration shall be equal to $18.72 divided by the Market Value, rounded to
the fourth decimal place, and if the Market Value of Community Capital Common
Stock is above $14.50, then the Exchange Ratio for the Stock Consideration shall
equal $20.88 divided by the Market Value, rounded to the fourth decimal place.
For purposes of this Section 3.1(d). "Market Value" shall be the average of the
closing prices of the Community Capital Common Stock as quoted on the automatic
quotation system of National Securities Dealers Association, Inc. on each of the
twenty trading days ending on the trading day five trading days immediately
preceding the Closing date.
(e) Notwithstanding the above, it is understood and agreed by the
Parties that the aggregate Cash Consideration of $1,872,000 shall be deemed to
be consideration for 100,000 shares of First Bank Common Stock and that such
consideration shall not be changed by any fluctuation in the Market Value or
Exchange Ratio.
3.2 ALLOCATION PROCEDURES. The Allocable Cash shall be allocated to
----------------------
the holders of shares of First Bank Common Stock as follows:
(a) SMALL SHAREHOLDERS. Each share of First Bank Common Stock
-------------------
held of record by a shareholder who is the record owner of less than 300 shares
of First Bank Common Stock ("Small Shareholders") shall be converted into the
right to receive the Cash Consideration; provided, however, if the amount of
------------------
Cash Consideration payable pursuant to this Section 3.2(a) exceeds the amount of
Allocable Cash, the Allocable Cash shall first be allocated to the Small
Shareholders who hold the fewest number of shares of First Bank Common Stock.
Any shares of First Bank Common Stock held by a Small Shareholder, which are not
converted into the Cash Consideration, shall be converted into the Stock
Consideration. Any Allocable Cash remaining after the payment of Cash
Consideration to Small Shareholders pursuant to this Section 3.2(a) shall be the
"Remaining Allocable Cash."
4
<PAGE>
(b) ELECTION TO RECEIVE CASH CONSIDERATION. Each holder of First
---------------------------------------
Bank Common Stock, other than Small Shareholders and shareholders who perfect
their statutory dissenters' rights as provided in Section 3.5 (the "Electing
Shareholders"), may elect to Cash Consideration (the "Cash Elections") in
exchange for all or a portion of the shares of First Bank Common Stock that the
shareholder holds; provided:
---------
(1) if the total amount of the Cash Elections exceeds the Remaining
Allocable Cash, the Remaining Allocable Cash shall be allocated in a manner
whereby all Electing Shareholders who elect to exchange any percentage of their
First Bank Common Stock for Cash Consideration will be paid no less of a
percentage of their First Bank Common Stock in Cash Consideration than any other
Electing Shareholder who elects to receive Cash Consideration, unless such
Electing Shareholder specifically elects to exchange a smaller percentage of his
or her First Bank Common Stock in Cash Consideration than such Electing
Shareholder might have otherwise been entitled to receive under this Section
3.2(b)(1).
(2) if the total amount of the Cash Elections is less than the
Remaining Allocable Cash, the Remaining Allocable Cash shall first be allocated
to those Electing Shareholders who made a Cash Election, and the amount of
Remaining Allocable Cash in excess of the total amount of Cash Elections shall
be allocated to each of the Electing Shareholders pro rata, based on the number
of shares held by each Electing Shareholder less the number of shares for which
a Cash Election was made.
(c) STOCK CONSIDERATION. Each share of First Bank Common Stock
--------------------
which is not converted into the right to receive Cash Consideration pursuant to
Sections 3.2(a) or (b) shall be converted into the right to receive Stock
Consideration.
3.3 ANTI-DILUTION PROVISIONS. In the event Community Capital changes
-------------------------
the number of shares of Community Capital Common Stock issued and outstanding
prior to the Effective Time as a result of a stock split, stock dividend, or
similar recapitalization with respect to such stock and the record date therefor
(in the case of a stock dividend) or the effective date thereof (in the case of
a stock split or similar recapitalization for which a record date is not
established) is prior to the Effective Time, the Exchange Ratio shall be
proportionately adjusted.
3.4 SHARES HELD BY FIRST BANK OR COMMUNITY CAPITAL. Each of the shares
----------------------------------------------
of First Bank Common Stock held by any First Bank Company or by any Community
Capital Company, in each case other than in a fiduciary capacity or as a result
of debts previously contracted, shall be canceled and retired at the Effective
Time and no consideration shall be issued in exchange therefor.
3.5 DISSENTING SHAREHOLDERS. Any holder of shares of First Bank Common
-----------------------
Stock who perfects his or her dissenters' rights in accordance with and as
contemplated by Article 13 of the ABCA, shall be entitled to receive the value
of such shares in cash as determined pursuant to such provision of law;
provided, that no such payment shall be made to any dissenting shareholder
unless and until such dissenting shareholder has complied with the applicable
provisions of the ABCA and surrendered to Community Capital the certificates or
certificates representing the shares for which payment is being made. In the
event that after the Effective
5
<PAGE>
Time, a dissenting shareholder of First Bank fails to perfect, or effectively
withdraws or loses, his or her right to appraisal of and payment for his or her
shares, Community Capital shall issue and deliver the consideration to which
such holder of shares of First Bank Common Stock is entitled under this Article
3 (without interest) upon surrender by such holder of the certificate or
certificates representing shares of First Bank Common Stock held by him or her.
3.6 FRACTIONAL SHARES. Notwithstanding any other provision of this
------------------
Agreement, each holder of shares of First Bank Common Stock exchanged pursuant
to the Merger who would otherwise have been entitled to receive a fraction of a
share of Community Capital Common Stock (after taking into account all
certificates delivered by such holder) shall receive, in lieu thereof, cash
(without interest) in an amount equal to such fractional part of a share of
Community Capital Common Stock multiplied by $13.00. No such holder will be
entitled to dividends, voting rights, or any other rights as a shareholder in
respect of any fractional shares.
3.7 ELECTION OF CONSIDERATION. With its proxy materials, First Bank
---------------------------
shall mail or deliver to each holder of record of First Bank Common Stock
appropriate election materials. The election materials shall include an
Election Form (with instructions) which Electing Shareholders may use to elect
to receive Cash Consideration, Stock Consideration or a mixture of both.
Electing Shareholders may change their election with a written notice to First
Bank up and until five business days prior to the Closing Date, after which no
Electing Shareholder may change an election. Four days prior to the anticipated
Closing Date, First Bank shall deliver the election information to Community
Capital. An Electing Shareholder that does not deliver an election to First
Bank prior to five business days before the Closing Date will be deemed to have
elected 100% Stock Consideration and no Cash Consideration.
ARTICLE 4.
EXCHANGE OF SHARES
------------------
4.1 EXCHANGE PROCEDURES. Promptly after the Effective Time, Community
--------------------
Capital shall mail or deliver to each holder of record of a certificate or
certificates which represented shares of First Bank Common Stock immediately
prior to the Effective Time (the "Certificates") appropriate transmittal
materials and delivery instructions. The delivery instructions shall specify
that delivery shall be effected, and risk of loss and title to such Certificates
shall pass, only upon proper delivery of such Certificates to Community Capital.
The Certificate or Certificates of First Bank Common Stock so delivered shall be
duly endorsed as Community Capital may require. In the event of a transfer of
ownership of shares of First Bank Common Stock represented by Certificates that
are not registered in the transfer records of First Bank, the consideration
provided in Section 3.1 may be issued to a transferee if the Certificates
representing such shares are delivered to Community Capital, accompanied by all
documents required to evidence such transfer and by evidence satisfactory to
Community Capital that any applicable stock transfer taxes have been paid. If
any Certificate shall have been lost, stolen, mislaid or destroyed, upon receipt
of (a) an affidavit of that fact from the holder claiming such Certificate to be
lost, mislaid, stolen or destroyed, (b) such bond, security or indemnity as
Community Capital may reasonably require, and (c) any other documents necessary
To
6
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evidence and effect the bona fide exchange thereof, Community Capital shall
issue to such holder the consideration into which the shares represented by such
lost, stolen, mislaid or destroyed Certificate shall have been converted.
Community Capital may establish such other reasonable and customary rules and
procedures in connection with its duties as it may deem appropriate. After the
Effective Time, each holder of shares of First Bank Common Stock (other than
shares to be canceled pursuant to Section 3.4 or as to which statutory
dissenters' rights have been perfected as provided in Section 3.5) issued and
outstanding at the Effective Time shall surrender the Certificate or
Certificates representing such shares to Community Capital and shall promptly
upon surrender thereof receive in exchange therefor the consideration provided
in Section 3.1, together with all undelivered dividends or distributions in
respect of such shares (without interest thereon) pursuant to Section 4.2.
Community Capital shall not be obligated to deliver the consideration to which
any former holder of First Bank Common Stock is entitled as a result of the
Merger until such holder surrenders such holder's Certificate or Certificates
(or such evidence of such Certificate's loss or destruction as described above)
for exchange as provided in this Section 4.1. Any other provision of this
Agreement notwithstanding, Community Capital shall not be liable to a holder of
First Bank Common Stock for any amounts paid or property delivered in good faith
to a public official pursuant to any applicable abandoned property, escheat or
similar Law.
4.2 RIGHTS OF FORMER SHAREHOLDERS OF FIRST BANK. At the Effective
------------------------------------------------
Time, the stock transfer books of First Bank shall be closed as to holders of
First Bank Common Stock immediately prior to the Effective Time and no transfer
of First Bank Common Stock by any such holder shall thereafter be made or
recognized. Until surrendered for exchange in accordance with the provisions of
Section 4.1, each Certificate theretofore representing shares of First Bank
Common Stock (other than shares to be canceled pursuant to Sections 3.4 and 3.5)
shall from and after the Effective Time represent for all purposes only the
right to receive the consideration provided in Section 3.1 in exchange therefor,
subject, however, to the Surviving Bank's obligation to pay any dividends or
make any other distributions with a record date prior to the Effective Time
which have been declared or made by First Bank in respect of such shares of
First Bank Common Stock in accordance with the terms of this Agreement and which
remain unpaid at the Effective Time. To the extent permitted by Law, former
shareholders of record of First Bank shall be entitled to vote after the
Effective Time at any meeting of Community Capital shareholders the number of
whole shares of Community Capital Common Stock into which their respective
shares of First Bank Common Stock are converted, regardless of whether such
holders have exchanged their Certificates for certificates representing
Community Capital Common Stock in accordance with the provisions of this
Agreement. Whenever a dividend or other distribution is declared by Community
Capital on the Community Capital Common Stock, the record date for which is at
or after the Effective Time, the declaration shall include dividends or other
distributions on all shares of Community Capital Common Stock issuable pursuant
to this Agreement, but no dividend or other distribution payable to the holders
of record of Community Capital Common Stock as of any time subsequent to the
Effective Time shall be delivered to the holder of any Certificate until such
holder surrenders such Certificate for exchange as provided in Section 4.1.
However, upon surrender of such Certificate, both the Community Capital Common
Stock certificate (together with all such undelivered dividends or other
distributions without interest) and any undelivered dividends and cash payments
payable hereunder
7
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(without interest) shall be delivered and paid with respect to each share
represented by such Certificate.
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES OF FIRST BANK
-------------------------------------------------
First Bank hereby represents and warrants to Community Capital as follows:
5.1 ORGANIZATION, STANDING, AND POWER. First Bank is a commercial bank
---------------------------------
duly organized, validly existing, and in good standing under the Laws of the
State of Alabama. First Bank has the power and authority to carry on its
business as now conducted and to own, lease, and operate its Assets. First Bank
is duly qualified or licensed to transact business as a foreign corporation in
good standing in the states of the United States and foreign jurisdictions where
the character of its Assets or the nature or conduct of its business requires it
to be so qualified or licensed, except for such jurisdictions in which the
failure to be so qualified or licensed is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on First Bank.
First Bank is an "insured institution" as such term is defined in the Federal
Deposit Insurance Act and applicable regulations thereunder, and the deposits
therein are insured by the Bank Insurance Fund to the maximum extent permitted
by law.
5.2 AUTHORITY; NO BREACH BY AGREEMENT.
-------------------------------------
(a) First Bank has the power and authority necessary to execute,
deliver and perform its obligations under this Agreement and to consummate the
transactions contemplated herein, including the Merger. The execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized by all necessary
corporate action on the part of First Bank, subject to approval of this
Agreement by the holders of two-thirds of the outstanding voting stock of First
Bank. Subject to shareholder approval and approvals required of Regulatory
Authorities, this Agreement represents a legal, valid and binding obligation of
First Bank, enforceable against First Bank in accordance with its terms (except
in all cases as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or similar Laws affecting the
enforcement of creditors' rights generally and except that the availability of
the equitable remedy of specific performance or injunctive relief is subject to
the discretion of the court before which any proceeding may be brought).
(b) Neither the execution and delivery of this Agreement by First
Bank, nor the consummation by First Bank of the transactions contemplated
hereby, nor compliance by First Bank with any of the provisions hereof will (1)
conflict with or result in a breach of any provision of First Bank's Articles of
Incorporation or Bylaws, or (2) constitute or result in a Default under, or
require any Consent pursuant to, or result in the creation of any Lien on any
Asset of First Bank under, any Contract or Permit of First Bank, where such
Default or Lien, or any failure to obtain such Consent, is reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on First Bank,
or (3) subject to receipt of the requisite approvals referred to in Section
9.1(b) of this Agreement, violate any Law or Order applicable to First Bank or
any of its Assets.
8
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(c) Other than in connection or compliance with the provisions of
the Securities Laws, applicable state corporate and securities Laws, and rules
of the NASD, and other than Consents required from Regulatory Authorities, and
other than notices to or filings with the Internal Revenue Service or the
Pension Benefit Guaranty Corporation with respect to any employee benefit plans,
and other than Consents, filings or notifications which, if not obtained or
made, are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on First Bank, no notice to, filing with, or Consent of
any public body or authority is necessary for the consummation by First Bank of
the transactions contemplated in this Agreement.
5.3 CAPITAL STOCK.
--------------
(a) The authorized capital stock of First Bank consists of 500,000
shares of First Bank Common Stock, of which 250,000 shares are issued and
outstanding as of the date of this Agreement. All of the issued and outstanding
shares of capital stock of First Bank are duly and validly issued and
outstanding and are fully paid and nonassessable. None of the outstanding
shares of capital stock of First Bank has been issued in violation of any
preemptive rights of the current or past shareholders of First Bank.
(b) Other than as set forth in Section 5.3(a), there are no shares
of capital stock or other equity securities of First Bank outstanding and no
outstanding Rights relating to the capital stock of First Bank.
5.4 FIRST BANK SUBSIDIARIES. First Bank has no subsidiaries.
-------------------------
5.5 INSURANCE. First Bank has provided Community Capital a complete
---------
list and description (including the expiration date, premium amount and coverage
thereunder) of all policies of insurance and bonds presently maintained by, or
providing coverage for, First Bank or any of its respective officers, directors
and employees, all of which are and will be maintained through the Closing Date,
in full force and effect, together with a complete list of all pending claims
under any of such policies or bonds. All terms, obligations and provisions of
each of such policies and bonds have been complied with, all premiums due
thereon have been paid, and no notice of cancellation with respect thereto has
been received. Except as set forth in the First Bank Disclosure Memorandum,
--------------------------------
such policies and bonds provide adequate coverage to insure the properties and
businesses of First Bank and the activities of the officers, directors and
employees of First Bank against such risks and in such amounts as are prudent
and customary. First Bank will not, as of the Closing Date, have any liability
for premiums or for retrospective premium adjustments for any period prior to
the Closing Date. First Bank has heretofore made, or will hereinafter make,
available to Community Capital a true, correct and complete copy of each
insurance policy and bond currently in effect with respect to the business and
affairs of First Bank.
5.6 FINANCIAL STATEMENTS. First Bank has included in Section 5.6 of
---------------------
the First Bank Disclosure Memorandum or previously provided to Community Capital
--------------------------------
copies of all First Bank Financial Statements for the periods ended on or before
the date hereof and will deliver to Community
9
<PAGE>
Capital copies of all First Bank Financial Statements prepared subsequent to the
date hereof. First Bank Financial Statements (as of the dates thereof and for
the periods covered thereby) (a) are, or if dated after the date of this
Agreement, will be, in accordance with the books and records of First Bank,
which are or will be, as the case may be, complete and correct and which have
been or will have been, as the case may be, maintained in accordance with good
business practices, and (b) present or will present, as the case may be, fairly
the financial position of First Bank as of the dates indicated and the results
of operations, changes in shareholders' equity, and cash flows of First Bank for
the periods indicated, in accordance with GAAP (subject to any exceptions as to
consistency specified therein or as may be indicated in the notes thereto or, in
the case of interim financial statements, to normal recurring year-end
adjustments that are not material in amount or effect).
5.7 ABSENCE OF UNDISCLOSED LIABILITIES. First Bank does not have any
------------------------------------
Liabilities that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on First Bank except Liabilities which are
reflected or otherwise accrued or reserved against in the balance sheets of
First Bank as of December 31, 2002 and March 31, 2003, included in First Bank
Financial Statements or reflected in the notes thereto. First Bank has not
incurred or paid any Liability since March 31, 2003, except for such Liabilities
reflected or otherwise accrued or reserved against in First Bank Financial
Statements, or as may have been incurred or paid in the ordinary course of
business consistent with past business practice and which are not reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
First Bank.
5.8 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since March 31, 2003, except
------------------------------------
as disclosed in Section 5.8 of the First Bank Disclosure Memorandum, (a) there
--------------------------------
have been no events, changes or occurrences which have had, or are reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
First Bank, and (b) First Bank has not taken any action, or failed to take any
action, prior to the date of this Agreement, which action or failure, if taken
after the date of this Agreement, would represent or result in a material breach
or violation of any of the covenants and agreements of First Bank provided in
Article 7 of this Agreement.
5.9 TAX MATTERS.
------------
(a) All Tax returns required to be filed by or on behalf of First
Bank have been timely filed or requests for extensions have been timely filed,
granted, and have not expired for periods ended on or before March 31, 2003,
except to the extent that all such failures to file, taken together, are not
reasonably likely to have a Material Adverse Effect on First Bank and all
returns filed are complete and accurate in all material respects to the
Knowledge of First Bank. All Taxes shown as due on filed returns have been
paid. There is no audit examination, deficiency or refund Litigation with
respect to any Taxes that is reasonably likely to result in a determination that
would have, individually or in the aggregate, a Material Adverse Effect on First
Bank, except as reserved against in First Bank Financial Statements delivered
prior to the date of this Agreement or as disclosed in Section 5.9(a) of the
First Bank Disclosure Memorandum. All material Taxes and other Liabilities due
---------------------------------
with respect to completed and settled examinations or concluded Litigation have
been paid.
(b) Except as disclosed in Section 5.9(b) of the First Bank
----------
Disclosure Memorandum, First Bank has not executed an extension or waiver of any
---------------------
statute of limitations on the
10
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assessment or collection of any Tax due that is currently in effect, and no
unpaid tax deficiency has been asserted in writing against or with respect to
First Bank, which deficiency is reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on First Bank.
(c) Adequate provisions for any Taxes due or to become due for
First Bank for the period or periods through and including the date of the
respective First Bank Financial Statements has been made and is reflected on
such First Bank Financial Statements.
(d) Deferred Taxes of First Bank have been provided for in
accordance with GAAP.
(e) First Bank is in compliance in all material respects with, and
its records contain all information and documents (including, without
limitation, properly completed IRS Forms W-9) necessary to comply in all
material respects with, all applicable information reporting and Tax withholding
requirements under federal, state and local Tax Laws, and such records identify
with specificity all accounts subject to backup withholding under Section 3406
of the Internal Revenue Code, except for such instances of noncompliance and
such omissions as are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on First Bank.
(f) Except as disclosed in Section 5.9(f) of the First Bank
----------
Disclosure Memorandum, First Bank does not have a pending application for, nor
-----------------------
has there been approved, a change in method of accounting and as a result of
which, if such application has been or is approved, there will be required to be
made an adjustment to the taxable income First Bank, or its successor(s) for tax
purposes, for any taxable period subsequent to consummation of the Merger
contemplated by this Agreement.
(g) There are no Liens with respect to Taxes upon any of the
Assets of First Bank.
5.10 ALLOWANCE FOR POSSIBLE LOAN LOSSES. Except as disclosed in
--------------------------------------
Section 5.10 of the First Bank Disclosure Memorandum, the allowance for possible
--------------------------------
loan or credit losses (the "Allowance") shown on the balance sheet of First Bank
included in the most recent First Bank Financial Statements dated prior to the
date of this Agreement was, and the Allowance shown on the balance sheets of
First Bank included in First Bank Financial Statements as of dates subsequent to
the execution of this Agreement will be, as of the dates thereof, adequate
(within the meaning of GAAP and applicable regulatory requirements or
guidelines) to provide for losses relating to or inherent in the loan and lease
portfolios (including accrued interest receivables) of First Bank and other
extensions of credit (including letters of credit and commitments to make loans
or extend credit) by First Bank as of the dates thereof except where the failure
of such Allowance to be so adequate is not reasonably likely to have a Material
Adverse Effect on First Bank.
5.11 ASSETS. Except as disclosed in Section 5.11 of the First Bank
------ ----------
Disclosure Memorandum or as disclosed or reserved against in First Bank
----------------------
Financial Statements, First Bank has good and marketable title, free and clear
of all Liens, to all of its Assets. All material tangible properties used in
the businesses of First Bank are in good condition, reasonable wear and tear
excepted, and are usable in
11
<PAGE>
the ordinary course of business consistent with First Bank's past practices. All
Assets which are material to First Bank's business, held under leases or
subleases by First Bank, are held under valid Contracts enforceable in
accordance with their respective terms (except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or other Laws
affecting the enforcement of creditors' rights generally and except that the
availability of the equitable remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any proceedings
may be brought), and each such Contract is in full force and effect. The
policies of fire, theft, liability and other insurance maintained with respect
to the Assets or businesses of First Bank provide adequate coverage under
current industry practices against loss or Liability, and the fidelity and
blanket bonds in effect as to which First Bank is a named insured are reasonably
sufficient. The Assets of First Bank include all assets required to operate the
business of First Bank as presently conducted.
5.12 ENVIRONMENTAL MATTERS.
----------------------
(a) Except as disclosed in Section 5.12(a) of the First Bank
----------
Disclosure Memorandum, to the Knowledge of First Bank, First Bank, its
----------------------
Participation Facilities and its Loan Properties are, and have been, in
compliance with all Environmental Laws, except for violations which are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on First Bank.
(b) To the Knowledge of First Bank, there is no Litigation pending
or threatened before any court, governmental agency or authority or other forum
in which First Bank or any of its Loan Properties or Participation Facilities
has been or, with respect to threatened Litigation, may be named as a defendant
or potentially responsible party (1) for alleged noncompliance (including by any
predecessor) with any Environmental Law or (2) relating to the release into the
environment of any Hazardous Material or oil, whether or not occurring at, on,
under or involving a site owned, leased or operated by First Bank or any of its
Loan Properties or Participation Facilities, except for such Litigation pending
or threatened that is not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on First Bank and to the Knowledge of First
Bank, there is no reasonable basis for any such Litigation.
(c) To the Knowledge of First Bank, there have been no releases of
Hazardous Material or oil in, on, under or affecting any Participation Facility
or Loan Property, except such as are not reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on First Bank.
5.13 COMPLIANCE WITH LAWS. First Bank has in effect all Permits
----------------------
necessary for it to own, lease or operate its Assets and to carry on its
business as now conducted, except for those Permits the absence of which are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on First Bank, and there has occurred no Default under any such Permit,
other than Defaults which are not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on First Bank. Except as disclosed in
Section 5.13 of the First Bank Disclosure Memorandum, First Bank:
-----------------------------------
12
<PAGE>
(a) is not in violation of any Laws, Orders or Permits applicable
to its business or employees conducting its business, except for violations
which are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on First Bank; and
(b) has not received any notification or communication from any
agency or department of federal, state, or local government or any Regulatory
Authority or the staff thereof (1) asserting that First Bank is not in
compliance with any of the Laws or Orders which such governmental authority or
Regulatory Authority enforces, where such noncompliance is reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on First Bank,
(2) threatening to revoke any Permits, the revocation of which is reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
First Bank, or (3) requiring First Bank to enter into or consent to the issuance
of a cease and desist order, formal agreement, directive, commitment or
memorandum of understanding, or to adopt any Board resolution or similar
undertaking, which restricts materially the conduct of its business, or in any
manner relates to its capital adequacy, its credit or reserve policies, its
management, or the payment of dividends.
5.14 LABOR RELATIONS. First Bank is not the subject of any Litigation
----------------
asserting that it has committed an unfair labor practice (within the meaning of
the National Labor Relations Act or comparable state law) or seeking to compel
it to bargain with any labor organization as to wages or conditions of
employment, nor is there any strike or other labor dispute involving First Bank,
pending or, to its Knowledge, threatened, nor, to its Knowledge, is there any
activity involving First Bank's employees seeking to certify a collective
bargaining unit or engaging in any other organization activity.
5.15 EMPLOYEE BENEFIT PLANS.
------------------------
(a) First Bank has disclosed in Section 5.15(a) of the First Bank
----------
Disclosure Memorandum and delivered or made available to Community Capital prior
---------------------
to the execution of this Agreement copies in each case of all pension,
retirement, profit-sharing, deferred compensation, stock option, employee stock
ownership, severance pay, vacation, bonus, or other incentive plans, all other
written employee programs, arrangements, or agreements, all medical, vision,
dental, or other health plans, all life insurance plans, and all other employee
benefit plans or fringe benefit plans, including, without limitation, "employee
benefit plans" as that term is defined in Section 3(3) of ERISA, currently
adopted, maintained by, sponsored in whole or in part by, or contributed to by
First Bank or ERISA Affiliate thereof for the benefit of employees, former
employees, retirees, dependents, spouses, directors, independent contractors, or
other beneficiaries and under which employees, former employees, retirees,
dependents, spouses, directors, independent contractors, or other beneficiaries
are eligible to participate (collectively, the "First Bank Benefit Plans"). Any
of the First Bank Benefit Plans which is an "employee pension benefit plan," as
that term is defined in Section 3(2) of ERISA, is referred to herein as a "First
Bank ERISA Plan."
(b) Except as to those plans disclosed in Section 5.15(b) of the
First Bank Disclosure Memorandum as tax-qualified First Bank ERISA Plans (the
-----------------------------------
"First Bank Qualified Plans"), First Bank does not maintain and has not
previously maintained during the six years preceding the date of this Agreement
a First Bank Plan which meets or was intended to meet the requirements of Code
Section 401(a). The Internal Revenue Service has issued favorable determination
letters to the effect
13
<PAGE>
that each First Bank Qualified Plan qualifies under Code Section 401(a) and that
any related trust is exempt from taxation under Code Section 501(a), and such
determination letters remain in effect and have not been revoked. Copies of the
most recent determination letters and any outstanding requests for a
determination letter with respect to each First Bank Qualified Plan have been
delivered or made available to Community Capital. Except as disclosed in Section
5.15(b) of the First Bank Disclosure Memorandum, no First Bank Qualified Plan
--------------------------------
has been amended since the issuance of each respective determination letter.
First Bank Qualified Plans currently comply in form with the requirements under
Code Section 401(a), other than changes required by statutes, regulations and
rulings for which amendments are not yet required. No issue concerning
qualification of First Bank Qualified Plans is pending before or is threatened
by the Internal Revenue Service. First Bank Qualified Plans have been
administered according to their terms (except for those terms which are
inconsistent with the changes required by statutes, regulations, and rulings for
which changes are not yet required to be made, in which case First Bank
Qualified Plans have been administered in accordance with the provisions of
those statutes, regulations and rulings) and in accordance with the requirements
of Code Section 401(a). First Bank, nor any ERISA Affiliate, nor any fiduciary
of any First Bank Qualified Plan has done anything that would adversely affect
the qualified status of First Bank Qualified Plans or the related trusts. Any
First Bank Qualified Plan which is required to satisfy Code Section 401(k)(3)
and 401(m)(2) has been tested for compliance with, and has satisfied the
requirements of, Code Section 401(k)(3) and 401(m)(2) for each plan year ending
prior to the date of this Agreement.
(c) All First Bank Benefit Plans are in compliance in all material
respects with the applicable terms of ERISA, the Internal Revenue Code, and any
other applicable Laws the breach or violation of which are reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on First Bank.
To the Knowledge of First Bank, neither First Bank nor any other party has
engaged in a transaction with respect to any First Bank Benefit Plan that,
assuming the taxable period of such transaction expired as of the date hereof,
would subject First Bank to a tax or penalty imposed by either Section 4975 of
the Internal Revenue Code or Section 502(i) of ERISA in amounts which are
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on First Bank.
(d) Neither First Bank nor any ERISA Affiliate of First Bank
maintains or has during the six years preceding the date of this Agreement
maintained an "employee benefit pension plan," within the meaning of Section
3(2) of ERISA that is or was subject to Title IV of ERISA.
(e) Neither First Bank nor any ERISA Affiliate of First Bank has
any past, present or future obligation or liability to contribute to any
multi-employer plan, as defined in Section 3(37) of ERISA.
(f) Except as disclosed in Section 5.15(f) of the First Bank
----------
Disclosure Memorandum, (1) First Bank has no obligations for retiree health and
----------------------
life benefits under any First Bank Benefit Plans and (2) there are no
restrictions on the rights of First Bank to amend or terminate any such Plan
without incurring any Liability thereunder, which Liability is reasonably likely
to have a Material Adverse Effect on First Bank, other than for benefits accrued
before the date of such termination or amendment.
14
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(g) Except as disclosed in Section 5.15(g) of the First Bank
----------
Disclosure Memorandum, neither the execution and delivery of this Agreement nor
----------------------
the consummation of the transactions contemplated hereby will (1) result in any
payment (including, without limitation, severance, unemployment compensation,
golden parachute or otherwise) becoming due to any director or any employee of
First Bank from First Bank under any First Bank Benefit Plan or otherwise, (2)
increase any benefits otherwise payable under any First Bank Benefit Plan, or
(iii) result in any acceleration of the time of payment or vesting of any such
benefit.
(h) Except as disclosed in Section 5.15(h) of the First Bank
----------
Disclosure Memorandum, the actuarial present values of all accrued deferred
----------------------
compensation entitlements (including, without limitation, entitlements under any
executive compensation, supplemental retirement, or employment agreement) of
employees and former employees of First Bank and their respective beneficiaries,
other than entitlements accrued pursuant to funded retirement plans subject to
the provisions of Section 412 of the Internal Revenue Code or Section 302 of
ERISA, have been reflected on First Bank Financial Statements to the extent
required by and in accordance with GAAP.
(i) First Bank and each ERISA Affiliate of First Bank has complied
in all material respects with applicable continuation of coverage requirements
of Section 1001 of the Consolidated Omnibus Budget Reconciliation Act of 1985,
as amended, and ERISA Sections 601 through 608.
(j) Except as disclosed in Section 5.15(j) of the First Bank
----------
Disclosure Memorandum, neither First Bank nor any ERISA Affiliate of First Bank
----------------------
is obligated, contingently or otherwise, under any agreement to pay any amount
which would be treated as a "parachute payment," as defined in Section 280G(b)
of the Internal Revenue Code (determined without regard to Section
280G(b)(2)(A)(ii) of the Internal Revenue Code).
(k) Other than routine claims for benefits, there are no actions,
audits, investigations, suits or claims pending, or threatened against any First
Bank Benefit Plan, any trust or other funding agency created thereunder, or
against any fiduciary of any First Bank Benefit Plan or against the assets of
any First Bank Benefit Plan.
5.16 MATERIAL CONTRACTS. Except as disclosed in Section 5.16 of the
-------------------
First Bank Disclosure Memorandum or otherwise reflected in First Bank Financial
---------------------------------
Statements, neither First Bank nor any of its Assets, businesses or operations,
is a party to, or is bound or affected by, or receives benefits under, (a) any
employment, severance, termination, consulting or retirement Contract providing
for aggregate payments to any Person in any calendar year in excess of $25,000,
excluding "at will" employment arrangements, (b) any Contract relating to the
borrowing of money by First Bank or the guarantee by First Bank of any such
obligation (other than Contracts evidencing deposit liabilities, purchases of
federal funds, Federal Home Loan First Bank advances, fully secured repurchase
agreements, trade payables, and Contracts relating to borrowings or guarantees
made in the ordinary course of business), and (c) any other Contract (excluding
this Agreement) or amendment thereto that would be required to be filed as an
exhibit to a Form 10-K if First Bank were required to file such forms under the
1934 Act (together with all Contracts referred to in Sections 5.11 and 5.15(a)
of this Agreement, the "First Bank Contracts"). First Bank is not in Default
under any First Bank Contract, other than Defaults which are
15
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not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on First Bank. Except as to FHLB advances, all of the
indebtedness of First Bank for money borrowed is prepayable at any time by First
Bank without penalty or premium.
5.17 LEGAL PROCEEDINGS. Except as disclosed in Section 5.17 of the
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First Bank Disclosure Memorandum, there is no Litigation instituted or pending,
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or, to the Knowledge of First Bank, threatened (or unasserted but considered
probable of assertion) against First Bank, or against any Asset, interest, or
right of any of them, that is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on First Bank, nor are there any Orders of
any Regulatory Authorities, other governmental authorities, or arbitrators
outstanding against First Bank, that are reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on First Bank.
5.18 REPORTS. Since January 1, 2000, First Bank has timely filed all
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reports and statements, together with any amendments required to be made with
respect thereto, that it was required to file with (a) the Regulatory
Authorities, and (b) any applicable state securities or banking authorities. As
of their respective dates, each of such reports and documents, including the
financial statements, exhibits, and schedules thereto, complied in all material
respects with all applicable Laws. As of its respective date, each such report
and document to First Bank's Knowledge did not, in any material respect, contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements made therein,
in light of the circumstances under which they were made, not misleading.
5.19 STATEMENTS TRUE AND CORRECT. No statement, certificate,
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instrument or other writing furnished or to be furnished by First Bank to
Community Capital pursuant to this Agreement contains or will contain any untrue
statement of material fact or will omit to state a material fact necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. None of the information supplied or to be supplied by
First Bank for inclusion in the documents to be filed by First Bank or Community
Capital with any Regulatory Authority in connection with the transactions
contemplated hereby, will, at the respective times such documents are filed, be
false or misleading with respect to any material fact, or omit to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. All documents that
First Bank is responsible for filing with any Regulatory Authority in connection
with the transactions contemplated hereby will comply as to form in all material
respects with the provisions of applicable Law.
5.20 ACCOUNTING, TAX AND REGULATORY MATTERS. Neither First Bank nor,
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to the Knowledge of First Bank, any Affiliate thereof has taken any action, or
agreed to take any action, or has any Knowledge of any fact or circumstance that
is reasonably likely to materially impede or delay receipt of any Consents of
Regulatory Authorities referred to in Section 9.1(b) of this Agreement or result
in the imposition of a condition or restriction of the type referred to in the
second sentence of such Section. To the Knowledge of First Bank, there exists
no fact, circumstance, or reason attributable to First Bank why the requisite
Consents referred to in Section 9.1(b) of this Agreement cannot be received in a
timely manner without the imposition of any condition or restriction of the type
described in the second sentence of such Section 9.1(b).
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5.21 CHARTER PROVISIONS. First Bank has taken all action so that the
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entering into of this Agreement and the consummation of the transactions
contemplated by this Agreement do not and will not result in the grant of any
rights to any Person under the Articles of Incorporation, Bylaws or other
governing instruments of First Bank or restrict or impair the ability of
Community Capital to vote, or otherwise to exercise the rights of a shareholder
with respect to, shares of First Bank that may be acquired or controlled by it.
5.22 DERIVATIVES CONTRACTS. Except as set forth in Section 5.22 of the
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First Bank Disclosure Memorandum, First Bank is not a party to nor has it agreed
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to enter into an exchange-traded or over-the-counter swap, forward, future,
option, cap, floor or collar financial contract, or any other interest rate or
foreign currency protection contract not included on its balance sheet which is
a financial derivative contract (including various combinations thereof).
ARTICLE 6.
REPRESENTATIONS AND WARRANTIES OF
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COMMUNITY CAPITAL
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Community Capital hereby represents and warrants to First Bank as follows:
6.1 ORGANIZATION, STANDING, AND POWER. Community Capital is a
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corporation duly organized, validly existing, and in good standing under the
Laws of the State of Georgia, and is duly registered as a bank holding company
under the BHC Act. On the Closing date, Interim will be a corporation duly
organized, validly existing and in good standing under the Laws of the State of
Alabama. Community Capital has the corporate power and authority to carry on
its business as now conducted and to own, lease and operate its Assets.
Community Capital is duly qualified or licensed to transact business as a
foreign corporation in good standing in the states of the United States and
foreign jurisdictions where the character of its Assets or the nature or conduct
of its business requires it to be so qualified or licensed, except for such
jurisdictions in which the failure to be so qualified or licensed is not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Community Capital.
6.2 AUTHORITY; NO BREACH BY AGREEMENT.
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(a) Community Capital has, and on the Closing date Interim will
have, the corporate power and authority necessary to execute, deliver and
perform their respective obligations under this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby have
been duly and validly authorized by all necessary corporate action in respect
thereof on the part of Community Capital. Subject to any approvals required of
Regulatory Authorities, this Agreement represents a legal, valid and binding
obligation of Community Capital, enforceable against Community Capital in
accordance with its terms (except in all cases as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium, or
similar Laws affecting the
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enforcement of creditors' rights generally and except that the availability of
the equitable remedy of specific performance or injunctive relief is subject to
the discretion of the court before which any proceeding may be brought).
(b) Neither the execution and delivery of this Agreement by
Community Capital, nor the consummation by Community Capital of the transactions
contemplated hereby, nor compliance by Community Capital with any of the
provisions hereof will (i) conflict with or result in a breach of any provision
of Community Capital's Articles of Incorporation or Bylaws, or the Charter,
Articles of Incorporation or Bylaws of any Community Capital Company, or (ii)
constitute or result in a Default under, or require any Consent pursuant to, or
result in the creation of any Lien on any Asset of any Community Capital Company
under, any Contract or Permit of any Community Capital Company, where such
Default or Lien, or any failure to obtain such Consent, is reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on Community
Capital, or (iii) subject to receipt of the requisite approvals referred to in
Section 9.1(b) of this Agreement, violate any Law or Order applicable to any
Community Capital Company or any of their respective Assets.
(c) Other than in connection or compliance with the provisions of
the Securities Laws, applicable state corporate and securities Laws, and rules
of the NASD, and other than Consents required from Regulatory Authorities, and
other than notices to or filings with the Internal Revenue Service or the
Pension Benefit Guaranty Corporation with respect to any employee benefit plans,
and other than Consents, filings or notifications which, if not obtained or
made, are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Community Capital, no notice to, filing with, or
Consent of any public body or authority is necessary for the consummation by
Community Capital of the transactions contemplated in this Agreement.
6.3 CAPITAL STOCK.
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(a) The authorized capital stock of Community Capital consists of
(1) 10,000,000 shares of Community Capital Common Stock, of which 1,499,560
shares are issued and 1,433,122 shares are outstanding as of the date of this
Agreement, and (2) 2,000,000 shares of Community Capital preferred stock, of
which no shares are issued and outstanding as of the date of this Agreement.
