AGREEMENT AND PLAN OF REORGANIZATIONAgreement and Plan of Merger |
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Exhibit 2.1 AGREEMENT AND PLAN OF REORGANIZATION BY AND AMONG ATLANTIC SOUTHERN FINANCIAL GROUP, INC. ATLANTIC SOUTHERN BANK AND FIRST COMMUNITY BANK OF GEORGIA Dated as of September 15, 2006
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AGREEMENT AND PLAN OF REORGANIZATION THIS AGREEMENT AND PLAN OF REORGANIZATION (this “Agreement”) is made and entered into as of August , 2006, by and among ATLANTIC SOUTHERN FINANCIAL GROUP, INC. a Georgia corporation, (“Atlantic Southern”), ATLANTIC SOUTHERN BANK, a Georgia chartered bank (“ASB”), and FIRST COMMUNITY BANK OF GEORGIA (“FCB”), a Georgia banking association. The respective Boards of Directors of FCB, Atlantic Southern and ASB are of the opinion that the transaction described herein is in the best interests of the parties to this Agreement and their respective shareholders. This Agreement provides for the merger of FCB with and into ASB, as a result of which the outstanding shares of the capital stock of FCB shall be converted into the right to receive shares of Atlantic Southern Common Stock, and the shareholders of FCB shall become shareholders of Atlantic Southern. The transaction described in this Agreement is subject to the approvals of the shareholders of FCB, the Board of Governors of the Federal Reserve System, the Georgia Department of Banking and Finance, the Federal Depository Insurance Corporation and the satisfaction of certain other conditions described in this Agreement. It is the intention of the parties of 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. Certain terms used in this Agreement are defined in Section 11.1 of this Agreement. NOW, THEREFORE, in consideration of the above and the mutual warranties, representations, covenants, and agreements set forth herein, the parties agree as follows: ARTICLE 1 TRANSACTION AND TERMS OF MERGER 1.1 Merger . Subject to the terms and conditions of this Agreement, FCB shall be merged with and into ASB with the effect provided in Section 7-1-536 of the Financial Institutions Code of Georgia (“FICG”). ASB shall be the Surviving Entity resulting from the Merger and shall continue to be governed by the Laws of the State of Georgia. 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 FCB, Atlantic Southern and ASB. 1.2 Time and Place of Closing . The closing of the transactions contemplated hereby (the “Closing”) will take place at 9:00 A.M. on the date that the Effective Time occurs (or the immediately preceding day if the Effective Time is earlier than 9:00 A.M.), or at such other time as the Parties, acting through their authorized officers, may mutually agree. The Closing shall be held at the office of Powell Goldstein LLP, 1201 West Peachtree St., Atlanta, GA 30309, or at such location as may be mutually agreed upon by the Parties. 1
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 Georgia (the “Effective Time”). At the Effective Time, the separate corporate existence of FCB shall cease, and ASB shall continue as the Surviving Entity. ARTICLE 2 2.1 Articles of Incorporation . The Articles of Incorporation of ASB in effect immediately prior to the Effective Time shall be the Articles of Incorporation of the Surviving Entity until otherwise duly amended or repealed. 2.2 Bylaws . The Bylaws of ASB in effect immediately prior to the Effective Time shall be the Bylaws of the Surviving Entity until duly amended or repealed. 2.3 Directors and Officers . The officers and directors of ASB in office immediately prior to the Effective Time shall serve as the officers and directors of the Surviving Entity from and after the Effective Time. ARTICLE 3 3.1 Conversion of FCB 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 ASB, FCB, or the shareholders of either of the foregoing, the shares of the constituent corporations shall be converted as follows: (a) Each share of capital stock of Atlantic Southern issued and outstanding immediately prior to the Effective Time shall remain issued and outstanding from and after the Effective Time. (b) Each share of ASB capital stock issued and outstanding immediately prior to the Effective Time, all of which are held by Atlantic Southern, shall remain outstanding from and after the Effective Time. (c) Each share of FCB Common Stock issued and outstanding immediately prior to the Effective Time, other than shares held by FCB or with respect to which the holders thereof have perfected dissenters’ rights under Article 13 of the GBCC (the “Dissenting Shares”), shall automatically be converted at the Effective Time into the right to receive its pro rata portion of the Merger Consideration (adjusted proportionately for any stock split, stock dividend, recapitalization, reclassification, or similar transaction that is effected by either Party, or for which a record date occurs). Such shares to be converted are sometimes referred to herein as the “Outstanding FCB Shares.” Each holder of an Outstanding FCB share will receive his or her portion of the Merger Consideration in the form of 0.742555 shares of Atlantic Southern Common Stock per one share of FCB Common Stock. 2
(d) Notwithstanding any other provision of this Agreement, each holder of Outstanding FCB Shares exchanged pursuant to the Merger who would otherwise have been entitled to receive a fraction of a share of Atlantic Southern 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 Atlantic Southern Common Stock multiplied by $30.00. No such holder will be entitled to dividends, voting rights, or any other rights as a shareholder in respect of any fractional shares. (e) Each share of FCB Common Stock that is not an Outstanding FCB Share as of the Effective Time, including any shares of FCB Common Stock held by FCB, shall be canceled without consideration therefor. (f) No Dissenting Shares shall be converted in the Merger. As of the Effective Time, all such shares shall be canceled, and the holders thereof shall thereafter have only such rights as are granted to dissenting shareholders under Article 13 of the GBCC; provided, however, that if any such shareholder fails to perfect his or her rights as a dissenting shareholder with respect to his or her Dissenting Shares in accordance with Article 13 of the GBCC or withdraws or loses such holder’s dissenter’s rights, such shares held by such shareholder shall be treated the same as all other holders of FCB Common Stock who at the Effective Time held Outstanding FCB Shares. ARTICLE 4 4.1 Exchange Procedures . Prior to the Effective Time, ASB shall select a transfer agent, bank or trust company to act as an exchange agent (the “Exchange Agent”) to effect the delivery of the Merger Consideration to holders of Outstanding FCB Shares. At the Effective Time, ASB shall deliver the Merger Consideration to the Exchange Agent. Promptly following the Effective Time, the Exchange Agent shall send to each holder of Outstanding FCB Shares as of immediately prior to the Effective Time, a letter of transmittal (the “Letter of Transmittal”) for use in exchanging certificates previously evidencing shares of FCB Common Stock (“Old Certificates”). The Letter of Transmittal will contain instructions with respect to the surrender of Old Certificates and the distribution of any certificates representing Atlantic Southern Common Stock, which certificates shall be deposited with the Exchange Agent by ASB as of the Effective Time. If any certificates for shares of Atlantic Southern Common Stock are to be issued in a name other than that for which an Old Certificate surrendered or exchanged is issued, the Old Certificate so surrendered shall be properly endorsed and otherwise in proper form for transfer and the person requesting such exchange shall affix any requisite stock transfer tax stamps to the Old Certificate surrendered or provide funds for their purchase or establish to the satisfaction of the Exchange Agent that such taxes are not payable. Subject to applicable law and to the extent that the same has not yet been paid to a public official pursuant to applicable abandoned property laws, upon surrender of his or her Old Certificates, the holder thereof shall be promptly paid the consideration to which he or she is entitled. All such property, if held by the Exchange Agent for payment or delivery to the holders of unsurrendered Old Certificates and unclaimed at the end of one (1) year from the Effective Time, shall at such time be paid or redelivered by the Exchange Agent to ASB, and after such time any holder of an Old Certificate who has not surrendered such certificate shall, 3
subject to applicable laws and to the extent that the same has not yet been paid to a public official pursuant to applicable abandoned property laws, look as a general creditor only to ASB for payment or delivery of such property. In no event will any holder of FCB Common Stock exchanged in the Merger be entitled to receive any interest on any amounts held by the Exchange Agent or ASB of the Merger Consideration. ASB shall pay all charges and expenses, including those of the Exchange Agent in connection with the distribution of the Merger Consideration. 4.2 Rights of Former FCB Shareholders . (a) The stock transfer books of FCB shall be closed as to holders of FCB Common Stock immediately prior to the Effective Time and no transfer of FCB 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 Old Certificate theretofore representing Outstanding FCB Shares 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. To the extent permitted by Law, former shareholders of record of FCB shall be entitled to vote after the Effective Time at any meeting of Atlantic Southern shareholders the number of whole shares of Atlantic Southern Common Stock into which their respective shares of FCB Common Stock are converted, regardless of whether such holders have exchanged their Old Certificates for certificates representing Atlantic Southern Common Stock in accordance with the provisions of this Agreement. (b) Whenever a dividend or other distribution is declared by Atlantic Southern on Atlantic Southern 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 Atlantic Southern Common Stock issuable pursuant to this Agreement, but no dividend or other distribution payable to the holders of record of Atlantic Southern Common Stock as of any time subsequent to the Effective Time shall be delivered to the holder of any Old Certificate until such holder surrenders such Old Certificate for exchange as provided in Section 4.1. However, upon surrender of such Old Certificate, both the Atlantic Southern Common Stock certificate and any undelivered dividends and cash payments payable hereunder (without interest) shall be promptly delivered and paid with respect to each share represented by such Old Certificate. 4.3 Bank Merger . Concurrently with or as soon as practicable after the execution and delivery of this Agreement, FCB and ASB shall enter into the Agreement and Plan of Merger, in the form attached hereto as Exhibit A, pursuant to which FCB will merge with and into ASB. The Parties intend that the Merger will become effective simultaneously with or immediately following the Effective Time. ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF FCB FCB hereby represents and warrants to Atlantic Southern and ASB as follows: 4
5.1 Organization, Standing, and Power . (a) FCB is a state bank duly organized, validly existing, and in good standing under the Laws of the State of Georgia, and has the corporate power and authority to carry on its business as now conducted and to own, lease and operate its Assets. FCB is duly qualified or licensed to transact business as a foreign corporation in good standing in the jurisdictions where the character of the Assets or the nature or conduct of its business requires it to be so qualified or licensed. The minute book and other organizational documents for FCB have been made available to ASB for its review and, except as disclosed in Section 5.1 of the FCB Disclosure Memorandum, are true and complete in all material respects as in effect as of the date of this Agreement and accurately reflect in all material respects all amendments thereto and all proceeding of the Board of Directors and shareholder thereof. 5.2 Authority of FCB; No Breach By Agreement . (a) FCB has 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 herein, including the Merger, have been duly and validly authorized by all necessary corporate action in respect thereof on the part of FCB. Subject to the requisite approval by FCB’s shareholders and any applicable Consents of Regulatory Authorities, this Agreement represents a legal, valid, and binding obligation of FCB and enforceable against FCB in accordance with its terms (except in all cases as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, receivership, conservatorship, 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 FCB, nor the consummation by FCB of the transactions contemplated hereby, nor compliance by FCB with any of the provisions hereof, will (i) conflict with or result in a breach of any provision of FCB’s Articles of Incorporation or Bylaws or any resolution adopted by the board of directors or the shareholders of FCB that is currently in effect, or (ii) except as disclosed in Section 5.2(b) of the FCB Disclosure Memorandum, constitute or result in a Default under, or require any Consent pursuant to, or result in the creation of any Lien on any material Asset of FCB under, any material Contract or material Permit of FCB, or, (iii) subject to receipt of the requisite Consents referred to in Section 9.1(b), constitute or result in a Default under, or require any Consent pursuant to, any material Law or Order applicable to FCB or any of its Assets. (c) Other than in connection or compliance with the provisions of the Securities Laws, applicable state corporate and securities Laws, 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, no notice to, filing with, or Consent of, any governmental authority is necessary for the consummation by FCB of the Merger and the other transactions contemplated in this Agreement. 5
(a) The authorized capital stock of FCB consists of 2,000,000 shares of FCB Common Stock at $4.00 par value per share, of which, as of the date of this Agreement, 713,846 shares are issued and outstanding, 25,000 shares of FCB Common Stock are reserved for issuance pursuant to outstanding options to purchase shares of common stock (the “Common Stock Options”) and no shares of preferred stock are issued and outstanding. All of the issued and outstanding shares of capital stock of FCB are duly and validly issued and outstanding and are fully paid and nonassessable under the GBCC. None of the outstanding shares of capital stock of FCB has been issued in violation of any preemptive rights of the current or past shareholders of FCB. (b) Except as set forth in this Section 5.3(a) or in Section 5.3(b) of the FCB Disclosure Memorandum, there are no (i) shares of capital stock, preferred stock or other equity securities of FCB outstanding or (ii) other than 25,000 Common Stock Options held by Douglas R. Harper (the “Harper Options”), there are no outstanding Equity Rights relating to the capital stock of FCB. The Harper Options will be exercised or canceled prior to the Closing. 5.4 FCB Subsidiaries . FCB has disclosed in Section 5.4 of the FCB Disclosure Memorandum all of the FCB Subsidiaries as of the date of this Agreement. No equity securities of a FCB Subsidiary is or may become required to be issued by reason of any options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into or exchangeable for, shares of the capital stock of a FCB Subsidiary, and there are no contracts by which a FCB Subsidiary is bound to issue (other than to FCB) additional shares of its capital stock or options, warrants or rights to purchase or acquire any additional shares of its capital stock (other than to FCB). There are no contracts relating to the rights of any FCB Entity to vote or to dispose of any shares of the capital stock of a FCB Subsidiary. 5.5 Financial Statements . FCB has delivered to ASB copies of all FCB Financial Statements and will deliver to ASB copies of all similar quarterly and annual financial statements prepared subsequent to the date hereof. The FCB Financial Statements and any supplemental financial statements delivered under the foregoing sentence (as of the date 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 FCB, which are and will be, as the case may be, complete and correct in all material respects and which have been or will have been, as the case may be, maintained in accordance with good business practices, (b) present or will present, as the case may be and in all material respects, fairly the financial position of FCB as of the dates indicated and the results of operation, changes in shareholders’ equity, and cash flows of FCB 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 thereof or, in the case of interim financial statements, to the normal recurring year-end adjustments that are not material in any amount or effect), and (c) do not or will not, as the case may be, 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 therein, in light of the circumstances in which they were made, not misleading. 6
5.6 Absence of Undisclosed Liabilities . FCB has no Liabilities of a nature required to be reflected on the balance sheets included in the FCB Financial Statements prepared in accordance with GAAP, except Liabilities that are accrued or reserved against in the balance sheets of FCB as of June 30, 2006, included in the FCB Financial Statements or reflected in the notes thereto. FCB has not incurred or paid any Liability since December 31, 2005, except for such Liabilities incurred or paid (i) in the ordinary course of business consistent with past business practice and that are not reasonably likely to have, individually or in the aggregate, a FCB Material Adverse Effect, (ii) to legal, financial and other advisers in connection with the transactions contemplated by this Agreement, or (iii) otherwise reflected in the FCB Financial Statements for periods following such date. 5.7 Loan and Investment Portfolios . As of the date of this Agreement, all loans, discounts and financing leases reflected on the FCB Financial Statements were, and with respect to the FCB Financial Statements delivered as of the dates subsequent to the execution of this Agreement, will be as of the dates thereof, (a) at the time and under the circumstances in which made, made for good, valuable and adequate consideration in the ordinary course of business, (b) evidenced by genuine notes, agreements or other evidences of indebtedness and (c) to the extent secured, have been secured by valid liens and security interests that have been perfected except with respect to security interests in loans which have been filed, but not yet officially recorded, with any applicable recording authority. Except as specifically set forth in Section 5.7 of the FCB Disclosure Memorandum, no FCB Entity is a party to any written or oral loan agreement, note or borrowing arrangement, including any loan guaranty, that was, as of the most recent month-end (i) delinquent by more than 30 days in the payment of principal or interest, (ii) known by FCB to be otherwise in Default for more than 30 days, (iii) classified as “substandard,” “doubtful,” “loss,” “other assets especially mentioned” or any comparable classification by FCB, the FDIC or the Georgia Department of Banking and Finance, or (iv) an obligation of any director, executive officer or 10% shareholder of FCB who is subject to Regulation O of the Federal Reserve Board (12 C.F.R. Part 215), or any person, corporation or enterprise controlling, controlled by or under common control with any of the foregoing. 5.8 Absence of Certain Changes or Events . Since June 30, 2006, except as disclosed in the FCB Financial Statements delivered prior to the date of this Agreement or in Section 5.8 of the FCB Disclosure Memorandum, (i) there have been no events, changes, or occurrences which have had, or are reasonably likely to have, individually or in the aggregate, an FCB Material Adverse Effect, (ii) FCB has not declared, set aside for payment or paid any dividend to holders of, or declared or made any distribution on, any shares of FCB Common Stock and (iii) no FCB Entity has 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 FCB provided in Article 7. Except as may result from the transactions contemplated by this Agreement, FCB has not, since June 30, 2006: (a) except as set forth in Section 5.8(a) of the FCB Disclosure Memorandum, borrowed any money other than deposits or overnight fed funds or entered into any capital lease or leases; or, except in the ordinary course of business and consistent with past practices: (i) lent any money or pledged any of its credit in connection with any aspect of its business whether as a guarantor, surety, issuer of a letter of credit or otherwise, (ii) mortgaged or otherwise subjected to 7
any Lien any of its assets, sold, assigned or transferred any of its assets in excess of $50,000 in the aggregate or (iii) incurred any other Liability or loss representing, individually or in the aggregate, over $50,000; (b) suffered over $50,000 in damage, destruction or loss to immovable or movable property, whether or not covered by insurance; (c) experienced any material adverse change in Asset concentrations as to customers or industries or in the nature and source of its Liabilities or in the mix or interest-bearing versus noninterest-bearing deposits; (d) except as set forth in Section 5.8(d) of the FCB Disclosure Memorandum, had any customer with a loan or deposit balance of more than $50,000 terminate, or received notice of such customer’s intent to terminate, its relationship with FCB; (e) failed to operate its business in the ordinary course consistent with past practices, or failed to use reasonable efforts to preserve its business or to preserve the goodwill of its customers and others with whom it has business relations; (f) except as set forth in Section 5.8(f) of the FCB Disclosure Memorandum, forgiven any debt owed to it in excess of $50,000, or canceled any of its claims or paid any of its noncurrent obligations or Liabilities; (g) except as set forth in Section 5.8(g) of the FCB Disclosure Memorandum, made any capital expenditure or capital addition or betterment in excess of $50,000; (h) except as set forth in Section 5.8(h) of the FCB Disclosure Memorandum, entered into any agreement requiring the payment, conditionally or otherwise, of any salary, bonus, extra compensation (including payments for unused vacation or sick time), pension or severance payment to any of its present or former directors, officers or employees, except such agreements as are terminable at will without any penalty or other payment by it or increased (except for increases of not more than 5% consistent with past practices) the compensation (including salaries, fees, bonuses, profit sharing, incentive, pension, retirement or other similar payments) of any such person whose annual compensation would, following such increase, exceed $50,000; (i) except as required in accordance with GAAP, changed any accounting practice followed or employed in preparing the FCB Financial Statements; (j) authorized or issued any additional shares of FCB Common Stock, preferred stock, or Equity Rights; or (k) entered into any agreement, contract or commitment to do any of the foregoing. 8
(a) All Tax Returns required to be filed by or on behalf of any FCB Entity have been timely filed or requests for extensions have been timely filed, granted, and have not expired for all periods ended on or before the date of the most recent fiscal year-end immediately preceding the Effective Time and all Tax Returns filed are complete and accurate in all material respects. All Taxes shown on filed Tax Returns have been paid. There is no audit examination, deficiency, or refund Litigation with respect to any Taxes, except as reserved against in the FCB Financial Statements delivered prior to the date of this Agreement or as disclosed in Section 5.9 of the FCB Disclosure Memorandum. FCB’s federal income Tax Returns have not been audited by the IRS. All Taxes and other Liabilities due with respect to completed and settled examinations or concluded Litigation have been paid. There are no Liens with respect to Taxes upon any of the Assets of FCB. (b) No FCB Entity has executed an extension or waiver of any statute of limitations on the assessment or collection of any Tax due that is currently in effect. (c) The provision for any Taxes due or to become due for any FCB Entity for the period or periods through and including the date of the respective FCB Financial Statements that has been made and is reflected on such FCB Financial Statements is sufficient to cover all such Taxes. (d) Deferred Taxes of FCB has been provided for in accordance with GAAP. (e) FCB is in compliance with, and its records contain all information and documents (including properly completed IRS Forms W-9) necessary to comply 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. (f) No FCB Entity has experienced a change in ownership with respect to its stock, within the meaning of Section 382 of the Internal Revenue Code, other than the ownership change that will occur as a result of the transactions contemplated by this Agreement. (g) To FCB’s Knowledge there is no pending claim by any taxing authority of a jurisdiction where the FCB has not filed Tax Returns that are subject to taxation in that jurisdiction. 5.10 Allowance for Possible Loan Losses . The allowance for possible loan or credit losses (the “Allowance”) shown on the consolidated balance sheets of FCB included in the FCB Financial Statements is, and the Allowance shown on the consolidated balance sheets of FCB as of dates subsequent to the execution of this Agreement and prior to the Effective Time will be, as of the dates thereof, adequate (within the meaning of GAAP and applicable regulatory requirements or guidelines) to provide for all known or reasonably anticipated losses relating to or inherent in the loan and lease portfolios (including accrued interest receivables) of FCB and other 9
extensions of credit (including letters of credit and commitments to make loans or extend credit) by FCB as of the dates thereof. (a) Except as disclosed in Section 5.11 of the FCB Disclosure Memorandum or as disclosed or reserved against in the FCB Financial Statements, FCB has good and marketable title, free and clear of all Liens, to its Assets, except for (i) mortgages and encumbrances that secure indebtedness that is properly reflected in the FCB Financial Statements or that secure deposits of public funds as required by law; (ii) Liens for Taxes accrued but not yet payable; (iii) Liens arising as a matter of law in the ordinary course of business, provided that the obligations secured by such Liens are not delinquent or are being contested in good faith; (iv) such imperfections of title and encumbrances, if any, as do not materially detract from the value or materially interfere with the present use of any of such properties or Assets or the potential sale of any of such owned properties or Assets; and (v) capital leases and leases, if any, to third parties for fair and adequate consideration. All tangible properties used in the business of FCB are in good condition, reasonable wear and tear excepted, and are usable in the ordinary course of business consistent with FCB’s past practices. All Assets which are material to FCB’s business on a consolidated basis, held under leases or subleases by a FCB Entity, are held under valid Contracts enforceable against such FCB Entity 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. (b) FCB has paid all amounts due and payable under any insurance policies and guarantees applicable to FCB and its respective Assets and operations; all such insurance policies and guarantees are in full force and effect, and all of FCB’s material properties are insured against fire, casualty, theft, loss, and such other events against which it is customary to insure, all such insurance policies being in amounts and with deductibles that are adequate and are consistent with past practice and experience. FCB has not received notice from any insurance carrier that (i) any policy of insurance will be canceled or that coverage thereunder will be reduced or eliminated, or (ii) premium costs with respect to such policies of insurance will be substantially increased. There are presently no claims for amounts exceeding in any individual case $10,000 pending under such policies of insurance, and no notices of claims in excess of such amounts have been given by FCB under such policies. (c) With respect to each lease of any real property or personal property to which FCB is a party (whether as lessee or lessor), except for financing leases in which FCB is lessor, (i) such lease is in full force and effect in accordance with its terms against the FCB Entity that is a party to the lease; (ii) all rents and other monetary amounts that have become due and payable thereunder have been paid by FCB; (iii) there exists no Default under such lease by FCB; and (iv) upon receipt of the consents described in Section 5.11(c) of the FCB Disclosure Memorandum, the Merger will not constitute a default or a cause for termination or modification of such lease. 10
(d) FCB has no legal obligation, absolute or contingent, to any other person to sell or otherwise dispose of any substantial part of its Assets except in the ordinary course of business consistent with past practices. (e) FCB’s Assets include all Assets required to operate the businesses of FCB as presently conducted. 5.12 Intellectual Property . FCB owns or has a license to use the Intellectual Property used by FCB in the course of its businesses. FCB owns or has a license to any Intellectual Property sold or licensed to a third party by FCB in connection with FCB’s business operations, and FCB has the right to convey by sale or license any Intellectual Property so conveyed. FCB has not received notice of Default under any of its respective Intellectual Property licenses. No proceedings have been instituted, or to FCB’s Knowledge are pending or overtly threatened, that challenge the rights of FCB with respect to Intellectual Property used, sold or licensed by FCB in the course of its businesses, nor has any person claimed or alleged any rights to such Intellectual Property. To FCB’s Knowledge the conduct of FCB’s businesses does not infringe any Intellectual Property of any other person. Except as disclosed in Section 5.12 of the FCB Disclosure Memorandum, (i) FCB is not obligated under any Contract to pay any recurring royalties to any Person with respect to any such Intellectual Property, and (ii) to FCB’s Knowledge, no officer, director or employee of FCB is a party to any Contract that restricts or prohibits such officer, director or employee from engaging in activities competitive with any Person, including FCB. (a) Except as disclosed in Section 5.13(a) of the FCB Disclosure Memorandum, FCB, its Participation Facilities, and its Operating Properties are, and have been, in compliance with all Environmental Laws. (b) Except as disclosed in Section 5.13(b) of the FCB Disclosure Memorandum, there is no Litigation pending or, to FCB’s Knowledge, overtly threatened before any court, governmental agency, or authority or other forum in which FCB or any of its Operating Properties or Participation Facilities (or FCB in respect of such Operating Property or Participation Facility) has been or, with respect to overtly threatened Litigation, may be named as a defendant (i) for alleged noncompliance (including by any predecessor) with any Environmental Law or (ii) relating to the Release into the indoor or outdoor Environment of any Hazardous Material, whether or not occurring in, at, on, under, about, adjacent to, or affecting (or potentially affecting) an Asset currently or formerly owned, leased, or operated by FCB or any of its Operating Properties or Participation Facilities, nor is there any reasonable basis for any Litigation of a type described in this sentence. (c) To FCB’s Knowledge, during the period of (i) FCB’s ownership or operation of any of its Assets, (ii) FCB’s participation in the management of any Participation Facility, or (iii) FCB’s holding of a security interest in an Operating Property, there has been no 11
Release of any Hazardous Material in, at, on, under, about, adjacent to, or affecting (or potentially affecting) such properties. To FCB’s Knowledge, prior to the period of (i) FCB’s ownership or operation of any of its Operating Properties or Participation Facilities, (ii) FCB’s participation in the management of any Participation Facility, or (iii) FCB’s holding of a security interest in an Operating Property, there was no Release of any Hazardous Material in, at, on, under, about, or affecting any such Participation Facility or Operating Property. No lead-based paint or asbestos in any form is present in, at, on, under, about, or affecting (or potentially affecting) any Participation Facility or Operating Property. (d) FCB has delivered to ASB true and complete copies and results of any reports, studies, analyses, tests, or monitoring possessed or initiated by FCB pertaining to Hazardous Materials in, at, on, under, about, or affecting (or potentially affecting) any Participation Facility or Operating Property, or concerning compliance by FCB or to FCB’s Knowledge, any other Person for whose conduct it is or may be held responsible, with Environmental Laws. (e) There are no aboveground or underground storage tanks, whether in use or closed, in, at, on, or under any Participating Facility or Operating Property. Section 5.13(e) of the FCB Disclosure Memorandum contains a detailed description of all above-ground or underground storage tanks removed by or on behalf of FCB at or from any Asset. Any such tank removals were performed in accordance with Environmental Laws and no soil or groundwater contamination resulted from the operation or removal of such tanks. 5.14 Compliance with Laws . FCB is a Georgia state bank whose deposits are and will at the Effective Time be insured by the FDIC, and has in effect all material Permits necessary for it to own, lease, or operate its Assets and to carry on its business as now conducted, and since January 1, 2006, there has occurred no Default under any such Permit. Except as disclosed in Section 5.14 of the FCB Disclosure Memorandum, no FCB Entity is: (a) currently in Default under any of the provisions of its respective Articles of Incorporation or Bylaws (or other governing instruments); (b) currently in Default under any Laws, Orders, or material Permits applicable to its business or employees conducting its business; or (c) since January 1, 2004, in receipt of any notification or communication from any agency or department of federal, state, or local government or any Regulatory Authority or the staff thereof (i) asserting that any FCB Entity is not in compliance with any of the Laws or Orders which such governmental authority or Regulatory Authority enforces, (ii) threatening to revoke any Permits or (iii) requiring the FCB Entity 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 or its management. 12
Copies of all reports, correspondence, notices and other documents relating to any inspection, audit, monitoring or other form of review or enforcement action by a Regulatory Authority have been made available to ASB to the extent such reports have been requested by Atlantic Southern. 5.15 Labor Relations . No FCB Entity is a party to 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 or other employee representative to wages or conditions of employment, nor is any FCB Entity party to any collective bargaining agreement, nor is there any pending or, to FCB’s Knowledge, threatened strike, slowdown, picketing, work stoppage or other labor dispute involving FCB. There is no activity involving any employees of FCB seeking to certify a collective bargaining unit or engaging in any other organization activity. (a) FCB and any other entities which now or in the past constitute a single employer within the meaning of IRC Section 414 are hereinafter collectively referred to as the “Company Group.” (b) The following agreements, plans or arrangements, whether formal or informal and whether or not documented in writing, which are presently in effect and which cover current or former employees, directors and/or other service providers of any member of the Company Group (collectively “Participants”) are referred to as the “Company Plans”: (i) Any employee benefit plan as defined in Section 3(3) of the ERISA, and any trust or other funding agency created thereunder, or under which any member of the Company Group, with respect to employees, has any outstanding, present, or future obligation or liability, or under which any employee or former employee has any present or future right to benefits which are covered by ERISA; or (ii) Any other pension, profit sharing, retirement, deferred compensation, stock purchase, stock option, incentive, bonus, vacation, severance, disability, hospitalization, medical, life insurance, split dollar or other employee benefit plan, program, policy, or arrangement, whether written or unwritten, formal or informal, which any member of the Company Group maintains or to which any member of the Company Group has any outstanding, present or future obligations to contribute or make payments under, whether voluntary, contingent or otherwise. FCB has delivered to ASB true and complete copies, if any, of all written plan documents and contracts evidencing the Company Plans, as they may have been amended to the date hereof, together with the most recently filed IRS Form 5500 relating to each Company Plan, to the extent applicable, and any accompanying financial statements. (c) Except as to those plans identified in Section 5.16 of the FCB Disclosure Memorandum as Company Plans intended to be qualified under Section 401(a) of the Internal 13
Revenue Code (the “Company Qualified Plans”), no member of the Company Group maintains a Company Plan which meets or was intended to meet the requirements of Section 401(a). As to each Company Qualified Plan, the Internal Revenue Service has issued favorable determination letter(s) to the effect that such Company Qualified Plan is a tax-qualified plan in form and that any related trust is exempt from taxation, and such determination letter(s) remain in effect and have not been revoked or, in the alternative, the Internal Revenue Service has issued favorable determination letter(s) to the effect that the prototype plan under which such Company Qualified Plan has been adopted is a tax-qualified plan in form and that any related trust is exempt from taxation, and that FCB may rely upon such favorable determination letter(s) and, to FCB’s Knowledge, such favorable determination letter(s) remain in effect and have not been revoked. Copies of the most recent favorable determination letters and any outstanding requests for a favorable determination letter with respect to each Company Qualified Plan, if any, have been delivered to ASB. Except as set forth in Section 5.16 of the FCB Disclosure Memorandum, no Company Qualified Plan has been amended since the issuance of each respective most recent favorable determination letter, other than changes which are intended to meet requirements under Internal Revenue Code Section 401(a) or other Internal Revenue Code plan-related qualification provisions other than legally required changes. The Company Qualified Plans currently comply in form with the requirements under Internal Revenue 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 the Company Qualified Plans is pending before or is threatened by the Internal Revenue Service. The Company 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 the Company Qualified Plans have been administered in accordance with the provisions of those statutes, regulations and rulings) and in accordance with the requirements of Internal Revenue Code Section 401(a). To FCB’s Knowledge, no member of the Company Group or any fiduciary of any Company Qualified Plan has done anything that would adversely affect the qualified status of the Company Qualified Plans or the related trusts. Prior to the Closing Date, any Company Qualified Plan which is required to satisfy Internal Revenue Code Sections 401(k)(3) and 401(m)(2) has been, or will be, tested for compliance with, and has satisfied, or will satisfy, the requirements of, such Sections of the Internal Revenue Code for each plan year ending prior to the Closing Date. (d) Each member of the Company Group is in material compliance with the requirements prescribed by any and all statutes, orders, governmental rules and regulations applicable to the Company Plans and all reports and disclosures relating to the Company Plans required to be filed with or furnished to any governmental entity, Participants or beneficiaries prior to the Closing Date have been or will be filed or furnished in a timely manner and in accordance with applicable Law. (e) No termination or partial termination of any Company Qualified Plan has occurred nor has a notice of intent to terminate any Company Qualified Plan been issued by a member of the Company Group. 14
(f) No member of the Company Group maintains an “employee benefit pension plan” within the meaning of Section 3(2) of ERISA that is or was subject to Title IV of ERISA or Section 412 of the Internal Revenue Code. (g) To FCB’s Knowledge, no member of the Company Group has any remaining liability under any previously maintained Company Plan, whether maintained as a written or unwritten, formal or informal arrangement. (h) Each member of the Company Group has made full and timely payment of, or has accrued, pending full and timely payment, all amounts which are required under the terms of each of the Company Plans and in accordance with applicable Law and Contracts to be paid as a contribution to each Company Plan. (i) No member of the Company Group has any obligation or liability to contribute or has contributed to any “multiemployer plan” as defined in Section 3(37) of ERISA. (j) No member of the Company Group nor any other “disqualified person” or “party in interest” (as defined in Internal Revenue Code Section 4975 and ERISA Section 3(14), respectively) with respect to the Company Plans, has engaged in any “prohibited transaction” (as defined in Internal Revenue Code Section 4975 or ERISA Section 406), with respect to which no exemption is applicable. All members of the Company Group and all fiduciaries with respect to the Company Plans, including any members of the Company Group which are fiduciaries as to a Company Plan, have complied in all respects with the requirements of ERISA Section 404. No member of the Company Group and no party in interest or disqualified person with respect to the Company Plans has taken or omitted any action which could lead to the imposition of an excise tax under the Internal Revenue or a fine under ERISA. (k) No member of the Company Group has made or is obligated to make any nondeductible contributions to any Company Plan. (l) No member of the Company Group is obligated, contingently or otherwise, under any agreement to pay any amount which would be treated as a “parachute payment,” as defined in Internal Revenue Code Section 280G(b) (determined without regard to Internal Revenue Code Section 280G(b)(2)(A)(ii)). (m) Other than routine claims for benefits, there are no actions, audits, investigations, suits or claims pending, or to FCB’s Knowledge, threatened against any Company Plan, any trust or other funding agency created thereunder, or against any fiduciary of any Company Plan or against the assets of any Company Plan. (n) Except as disclosed in Section 5.16 of the FCB Disclosure Memorandum, neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will (i) result in any payment (including severance, parachute payments or otherwise) becoming due to any person, (ii) increase any benefits otherwise payable under any Company Plan, or (iii) result in the acceleration of the time of payment or vesting of any such benefit. 15
(o) Other than health continuation coverage required by COBRA, no member of the Company Group has any obligation to any retired or former employee, director or other service provider or any current employee, director or other service provider upon retirement or termination of employment under any Company Plan respecting health and/or death benefits. (p) The actuarial present values of all accrued deferred compensation entitlements (including entitlements under any executive compensation, supplemental retirement, or employment agreement) maintained by the Company Group for present or former directors, employees or other service providers have been fully and accurately reflected on the FCB Financial Statements to the extent required by and in accordance with GAAP. (q) Each nonqualified plan of deferred compensation, within the meaning of Section 409A of the Internal Revenue Code, maintained by one or more members of the Company Group has been operated in material compliance with the requirements of Section 409A (or an available exemption therefrom) such that amounts of compensation deferred thereunder will not be includible in gross income under Section 409A prior to the distribution of benefits thereunder in accordance with the terms of such plan and will not be subject to the additional tax under Section 409A(a)(1)(B)(ii). (r) The members of the Company Group, or any successor entity, may terminate any Company Plan prospectively at any time without further liability to any member of the Company Group or the successor entity, including, without limitation, any additional contributions, penalties, premiums, fees, surrender charges, market value adjustments or any other charges as a result of such termination, except to the extent of funds set aside for such purpose or reflected as reserved for such purpose on the FCB Financial Statements and except for any required reinstatement of nonvested amounts which cannot be considered a forfeiture under the applicable Company Plan or with respect to which the “rule of parity” or similar rule would be applied so as to require reinstatement of such nonvested amount as a result of plan termination. (s) Since June 30, 2006, except as disclosed in Section 5.16 of the FCB Disclosure Memorandum, no member of the Company Group has (i) increased the rate of compensation payable or to become payable to any director, employee or other service provider of the Company Group, other than in the ordinary course of business and consistent with past practice; (ii) amended or entered into any employment, severance, change in control or similar Contract with any such director, employee or other service provider; (iii) paid or agreed to pay any bonuses or other compensation, other than in the ordinary course of business and consistent with past practice, to any such director, employee or other service provider; (iv) amended any Company Plan, other than any amendment required by Law; (v) adopted any new plan, program, policy or arrangement, which if it existed as of the Closing Date, would constitute a Company Plan; or (vi) terminated any existing Company Plan. 5.17 Material Contracts . Except as disclosed in Section 5.17 of the FCB Disclosure Memorandum or otherwise reflected in the FCB Financial Statements, neither FCB nor any of its Assets, businesses, or operations is a party to, or is bound or affected by, or receives benefits under, (i) any employment, severance, termination, consulting, or retirement Contract, (ii) any 16
Contract relating to the borrowing of money by FCB or the guarantee by FCB of any such obligation (other than Contracts evidencing deposit liabilities, purchases of federal funds, fully-secured repurchase agreements, and Federal Home Loan Bank advances of depository institution Subsidiaries, trade payables and Contracts relating to borrowings or guarantees made in the ordinary course of business), (iii) any Contract that prohibits or restricts FCB or to FCB’s Knowledge, any employee of FCB from engaging in any banking related business activities in any geographic area, line of business or otherwise in competition with any other Person, (iv) any Contract involving Intellectual Property (other than Contracts entered into in the ordinary course of business with customers), (v) any Contract relating to the provision of data processing, network communication, or other material technical services to or by FCB, (vi) any Contract relating to the purchase or sale of any goods or services (other than Contracts entered into in the ordinary course of business and involving payments under any individual Contract not in excess of $50,000), or (vii) any 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 that is a financial derivative Contract (collectively, (i) through (vii) above are referred to as the “FCB Contracts”). With respect to each FCB Contract and except as disclosed in Section 5.17 of the FCB Disclosure Memorandum: (i) the Contract is in full force and effect against FCB; (ii) FCB is not in Default of any material provision thereunder; (iii) FCB has not repudiated or waived any material provision of any such Contract; and (iv) to FCB’s Knowledge, no other party to any such Contract is in Default in any respect, or has repudiated or waived any material provision thereunder. All of the indebtedness of FCB for money borrowed is prepayable at any time by FCB without penalty or premium. 5.18 Legal Proceedings . Except as disclosed in Section 5.18 of the FCB Disclosure Memorandum, there is no Litigation instituted, pending or, to FCB’s Knowledge, overtly threatened (or unasserted but considered probable of assertion and which if asserted would have at least a reasonable probability of a material unfavorable outcome) against FCB, or against any employee benefit plan of FCB, or against any Asset, interest, or right of any of them, nor are there any Orders of any Regulatory Authorities, other governmental authorities, or arbitrators outstanding against FCB. Section 5.18 of the FCB Disclosure Memorandum contains a summary of all Litigation instituted or pending as of the date of this Agreement to which FCB is a party and that names FCB as a defendant or cross-defendant or for which FCB has any potential Liability in excess of $50,000. (a) Since December 31, 2002, FCB has timely filed all reports and statements, together with any amendments required to be made with respect thereto, that it was required to file with Regulatory Authorities. As of their respective dates, each of such reports and documents, including the financial statements, exhibits, and schedules thereto, complied in all material respects with all applicable Laws. As of its respective date, each such report and document did not, in all material respects, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading. 17
(b) FCB has timely filed and made available to ASB all FDIC documents required to be filed by FCB since December 31, 1998 (the “FCB FDIC Reports”). The FCB FDIC Reports (i) at the time filed, complied in all material respects with the applicable requirements of the FDIC Rules and Regulations and other applicable Laws and (ii) did not, at the time they were filed (or, if amended or superseded by a filing prior to the date of this Agreement, then on the date of such filing) contain any untrue statement of a material fact or omit to state a material fact required to be stated in such FCB FDIC Reports or necessary in order to make the statements in such FCB FDIC Reports, in light of the circumstances under which they were made, not misleading. (c) Each of the FCB Financial Statements (including, in each case, any related notes) contained in the FCB Regulatory Reports complied as to form in all material respects with the applicable published rules and regulations of the Georgia Department of Banking and Finance with respect thereto, was prepared in accordance with GAAP applied on a consistent basis throughout the periods involved (except as may be indicated in the notes to such financial statements), and fairly presented in all material respects the consolidated financial position of FCB as at the respective dates and the consolidated results of operations and cash flows for the periods indicated. 5.20 Tax and Regulatory Matters . FCB has not taken or agreed to take any action, and has no Knowledge of any fact or circumstance that is reasonably likely, to (i) prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code, or (ii) materially impede or delay receipt of any Consents of Regulatory Authorities referred to in Section 9.1(b) or result in the imposition of a condition or restriction of the type referred to in the last sentence of such Section. 5.21 Internal Accounting . FCB maintains a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit the preparation of financial statements in conformity with GAAP and to maintain asset and liability accountability, (iii) access to assets or incurrence of liabilities is permitted only in accordance with management’s general or specific authorization and (iv) the recorded accountability for assets and liabilities is compared with the existing assets and liabilities at reasonable intervals and appropriate action is taken with respect to any difference. 5.22 Community Reinvestment Act . FCB has complied in all material respects with the provisions of the Community Reinvestment Act (“CRA”) and the rules and regulations thereunder, has a CRA rating of not less than “satisfactory,” has received no material criticism from regulators with respect to discriminatory lending practices, and has no Knowledge of any conditions or circumstances that are likely to result in a CRA rating of less than “satisfactory” or material criticism from regulators with respect to discriminatory lending practices. 5.23 Privacy of Customer Information . (a) FCB is the sole owner or, in the case of participated loans, a co-owner with the other participant(s), of all individually identifiable personal information (“IIPI”) relating to 18
customers, former customers and prospective customers that will be transferred to ASB pursuant to this Agreement and the other transactions contemplated hereby. For purposes of this Section 5.23, “IIPI” shall include any information relating to an identified or identifiable natural person. (b) The collection and use of such IIPI by FCB, the transfer of such IIPI to ASB, and the use of such IIPI by ASB as contemplated by this Agreement complies with all applicable privacy policies, the Fair Credit Reporting Act, the Gramm-Leach-Bliley Act and all other applicable state, federal and foreign privacy law, and any contract or industry standard relating to privacy. (a) Except to the extent indicated in Schedule 5.24 of the FCB Disclosure Memorandum, to FCB’s Knowledge, no action will be necessary as a result of the transactions contemplated by this Agreement to enable use of the electronic data processing, information, record keeping, communications, telecommunications, hardware, third party software, networks, peripherals, portfolio trading and computer systems, including any outsourced systems and processes, and Intellectual Property that are used by FCB (collectively, the “Technology Systems”) to continue by ASB to the same extent and in the same manner that it has been used by FCB. (b) Since January 1, 2005, the Technology Systems have not suffered unplanned disruption causing a FCB Material Adverse Effect. Except for ongoing payments due under relevant third party agreements, FCB’s use of the Technology Systems is free from any Liens. Access to business critical parts of the Technology Systems is not shared with any third party. (c) Details of FCB’s disaster recovery and business continuity arrangements have been provided to ASB. (d) FCB has not received notice of or is aware of any material circumstances including, without limitation, the execution of this Agreement, that would enable any third party to terminate any of FCB’s agreements or arrangements relating to the Technology Systems (including maintenance and support). 5.25 Bank Secrecy Act Compliance . FCB is in compliance in all material respects with the provisions of the Bank Secrecy Act of 1970, as amended (the “Bank Secrecy Act”), and all regulations promulgated thereunder including, but not limited to, those provisions of the Bank Secrecy Act that address suspicious activity reports and compliance programs. FCB has implemented a Bank Secrecy Act compliance program that adequately covers all of the required program elements as required by 12 C.F.R. §21.21. 5.26 FCB Disclosure Memorandum . FCB has delivered to ASB the FCB Disclosure Memorandum containing certain information regarding FCB as indicated at various places in this Agreement. All information set forth in the FCB Disclosure Memorandum shall be deemed for all purposes of this Agreement to constitute part of the representations and warranties of FCB under this Article 5. The information contained in the FCB Disclosure Memorandum shall be deemed to 19
be part of and qualify all representations and warranties contained in this Article 5 and the covenants in Article 7 to the extent applicable. 5.27 Board Recommendation . The Board of Directors of FCB, at a meeting duly called and held, has by unanimous vote of the directors present (i) determined that this Agreement and the transactions contemplated hereby, including the Merger, the FCB Non-Compete Agreement and the FCB Affiliate Agreements and the transactions contemplated thereby, taken together, are fair to and in the best interests of the shareholders and (ii) resolved to recommend that the holders of the shares of FCB Common Stock approve this Agreement. 5.28 Opinion of Financial Advisor . FCB has received the opinion of Stevens & Company, dated the date of this Agreement, to the effect that the Merger Consideration to be received by the holders of FCB Common Stock is fair, from a financial point of view, to such holders, a signed copy of which has been delivered to ASB. 5.29 Statements True and Correct .. (a) No statement, certificate, instrument, or other writing furnished or to be furnished by FCB, or any Affiliate thereof, to Atlantic Southern or ASB pursuant to this Agreement or any other document, agreement, or instrument referred to herein, 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. (b) All documents that FCB or any Affiliate thereof 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. ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF ATLANTIC SOUTHERN AND ASB Atlantic Southern and ASB hereby represent and warrant to FCB as follows: 6.1 Organization, Standing and Power . Each of Atlantic Southern and ASB is a corporation in good standing under the laws of the State of Georgia, and Atlantic Southern is duly registered as a bank holding company under the BHC Act. Each of Atlantic Southern and ASB has the corporate power and authority to carry on its business as now conducted and to own, lease and operate its Assets. Each of Atlantic Southern and ASB is duly qualified or licensed to transact business as a foreign corporation in good standing in the 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 ASB. 6.2 Authority; No Breach By Agreement . (a) Each of Atlantic Southern and ASB has the corporate power and authority necessary to execute, deliver and perform its obligations under this Agreement and to consummate the transactions contemplated hereby and thereby. The execution, delivery and performance of 20
this Agreement and the consummation of the transactions contemplated herein, including the Merger, have been duly and validly authorized by all necessary corporate action in respect thereof on the part of Atlantic Southern and ASB. Subject to receipt of the requisite Consents of Regulatory Authorities, this Agreement represents legal, valid, and binding obligations of Atlantic Southern and ASB, is enforceable against Atlantic Southern and ASB in accordance with their respective terms (except in all cases as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, receivership, conservatorship, 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 ASB, nor the consummation by ASB of the transactions contemplated hereby, nor compliance by ASB with any of the provisions hereof, will (i) conflict with or result in a breach of any provision of ASB’s Articles of Incorporation or Bylaws or the certificate or articles of incorporation or bylaws of Atlantic Southern or any resolution adopted by the board of directors or the shareholders of Atlantic Southern or ASB that is currently in effect, 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 material Asset of ASB or Atlantic Southern under any material Contract or material Permit of ASB or Atlantic Southern or, (iii) subject to receipt of the requisite Consents referred to in Section 9.1(b), constitute or result in a Default under, or require any Consent pursuant to, any Law or Order applicable to ASB or Atlantic Southern or any of their respective material 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 OTC Bulletin Board, 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, no notice to, filing with, or Consent of any governmental authority is necessary for the consummation by Atlantic Southern and ASB of the Merger, and the other transactions contemplated in this Agreement. (a) The authorized capital stock of Atlantic Southern consists of 10,000,000 shares of Atlantic Southern Common Stock, of which 3,304,052 shares are issued and outstanding, 120,000 shares are reserved for issuance pursuant to outstanding options to purchase shares of Atlantic Southern Common Stock, 324,000 shares are reserved for issuance pursuant to outstanding directors’ warrants to purchase shares of Atlantic Southern Common Stock, and 305,695 shares which will be issued to shareholders of Sapelo Bancshares, Inc. (“Sapelo”), pursuant to the Agreement and Plan of Reorganization signed July 26, 2006, if such transaction is completed (the “Sapelo Shares”). All of the issued and outstanding shares of Atlantic Southern Common Stock are, or with respect to the Sapelo Shares, will be, and all of the shares of Atlantic Southern Common Stock to be issued in exchange for shares of FCB Common Stock upon consummation of the Merger, when issued in accordance with the terms of this Agreement, will be, duly and validly issued and outstanding and fully paid and nonassessable under the GBCC. None of the outstanding shares of Atlantic Southern Common Stock has been, and none of the 21
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