AGREEMENT AND PLAN OF REORGANIZATION

Exhibit 2.1

AGREEMENT AND PLAN OF REORGANIZATION

BY AND BETWEEN

SECURITY BANK CORPORATION

AND

FIRST COMMERCE COMMUNITY BANKSHARES, INC.

Dated as of April 9, 2007

TABLE OF CONTENTS

 

AGREEMENT AND PLAN OF REORGANIZATION

THIS AGREEMENT AND PLAN OF REORGANIZATION (this “Agreement”) is made and entered into as of April 9, 2007, by and between SECURITY BANK CORPORATION (“SBKC”), a corporation organized under the laws of the State of Georgia, with its principal office located in Macon, Georgia, and FIRST COMMERCE COMMUNITY BANKSHARES, INC. (“First Commerce”), a corporation organized under the laws of the State of Georgia, with its principal office located in Douglasville, Georgia.

Preamble

The respective Boards of Directors of First Commerce and SBKC 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 merger of First Commerce with and into SBKC, with SBKC being the surviving corporation of the merger. As a result, the shareholders of First Commerce shall become shareholders of SBKC.

Certain terms used in this Agreement are defined in Section 11.1 of this Agreement.

Concurrently with the execution and delivery of this Agreement, as a condition and inducement to SBKC’s willingness to enter into this Agreement, certain of the directors and executive officers of First Commerce Common Stock have executed and delivered to SKBC an agreement in substantially the form of Exhibit A (the “Affiliate and Support Agreement”), pursuant to which they have agreed, among other things, subject to the terms of such Affiliate and Support Agreement, to vote the shares of First Commerce Common Stock held of record by such Persons or as to which they otherwise have sole voting power to approve and adopt this Agreement.

NOW, THEREFORE, in consideration of the above and the mutual warranties, representations, covenants, and agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged and intending to be legally bound hereby, the Parties agree as follows:

ARTICLE 1

TRANSACTIONS AND TERMS OF MERGER

1.1 Merger . Subject to the terms and conditions of this Agreement, First Commerce shall be merged with and into SBKC (the “Merger”) in accordance with the provisions of the Georgia Business Corporation Code (the “GBCC”). SBKC shall be the surviving corporation (the “Surviving Corporation”) resulting from the Merger and shall continue to be governed by the Laws of the State of Georgia, the SBKC Articles of Incorporation, and SBKC Bylaws. First Commerce owns 100% of the capital stock of First Commerce Community Bank (the “Bank”) which shall survive the Merger and become a wholly-owned subsidiary of SBKC immediately following the Merger. Subject to compliance with the various conditions and requirements of this Agreement, the Merger shall be effective by the filing of the Articles of Merger with the Georgia Secretary of State in accordance with the applicable provisions of the GBCC.

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 Alston & Bird LLP, 1201 W. Peachtree Street, Atlanta, Georgia 30309, or 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 Articles of Merger reflecting the Merger shall become effective with the Secretary of State of Georgia (the “Effective Time”).

ARTICLE 2

TERMS OF MERGER

2.1 Articles of Incorporation . The Articles of Incorporation of SBKC in effect immediately prior to the Effective Time shall be the Articles of Incorporation of the Surviving Corporation.

2.2 Bylaws . The Bylaws of SBKC in effect immediately prior to the Effective Time shall be the Bylaws of the Surviving Corporation until duly amended or repealed.

2.3 Directors and Officers .

(a) The officers and directors of SBKC in office immediately prior to the Effective Time shall serve as the officers and directors of SBKC from and after the Effective Time, until the earlier of their resignation or removal or otherwise ceasing to be a director or officer or until their respective successors are duly elected and qualified, as the case may be.

(b) The officers and directors of the Bank from and after the Effective Time shall consist of the officers and directors of the Bank immediately preceding the Effective Time, until the earlier of their resignation or removal or otherwise ceasing to be a director or officer or until their respective successors are duly elected and qualified, as the case may be.

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 SBKC and First Commerce or the shareholders of any of the foregoing, the shares and Equity Rights of the constituent corporations shall be converted as follows:

(a) Each share of capital stock of SBKC issued and outstanding immediately prior to the Effective Time shall remain issued and outstanding from and after the Effective Time.

(b) Subject to the conditions set forth herein, each First Commerce Stock Equivalent outstanding immediately prior to the Effective Time, other than shares held by First Commerce or Dissenting Shares, (collectively, the “Exchange Shares”) shall automatically be converted at the Effective Time into the right to receive a number of shares of SBKC Common Stock equal to a Pro Rata Share of the Stock Consideration. Such First Commerce Stock Equivalents to be converted are sometimes referred to herein as the “Outstanding First Commerce Shares.”

(c) Notwithstanding any other provision of this Agreement, each holder of Outstanding First Commerce Shares exchanged pursuant to the Merger who would otherwise have been entitled to receive a fraction of a share of SBKC 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 SBKC Common Stock multiplied by the Average Trading Price. No such holder will be entitled to dividends, voting rights, or any other rights as a shareholder in respect of any fractional shares.

(d) Each share of First Commerce Common Stock that is not an Outstanding First Commerce Share as of the Effective Time shall be canceled without consideration therefor.

(e) No Dissenting Shares shall be converted in the Merger. All Dissenting 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 dissenters’ rights, such shares held by such shareholder shall, upon the happening of any such event, be treated the same as all other holders of First Commerce Common Stock who at the Effective Time held Outstanding First Commerce Shares.

3.2 Transactions Prior to Merger .

(a) Immediately prior to the Effective Time, each organizer warrant listed in Section 3.2(a) of the First Commerce Disclosure Memorandum to purchase shares of First Commerce Common Stock (the “Warrants”) shall be exchanged for an amount of First Commerce Common Stock equal to (i) the Net Equivalent Value of the Warrant divided by (ii) the Merger Consideration per Share in a recapitalization of First Commerce qualifying for tax-free treatment under Section 368(a)(1)(E) of the Internal Revenue Code (the “Recapitalization”).

(b) At the Effective Time and subject to any Consent from applicable Regulatory Authorities, First Commerce may cause the Bank to issue a special dividend in an aggregate amount not to exceed $3,160,808 to First Commerce and First Commerce may then cause such dividend to be paid to the holders of First Commerce Stock Equivalents, as of the Effective Time, on a pro rata basis.

 

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ARTICLE 4

EXCHANGE OF SHARES

4.1 Exchange Procedures.

(a) Prior to the Effective Time, SBKC shall select a transfer agent, bank or trust company to act as exchange agent (the “Exchange Agent”) to effect the delivery of the Merger Consideration to holders of First Commerce Common Stock. At the Effective Time, SBKC shall deliver the Merger Consideration to the Exchange Agent. Promptly following the Effective Time, the Exchange Agent shall send to each holder of Outstanding First Commerce Shares immediately prior to the Effective Time a letter of transmittal (the “Letter of Transmittal”) for use in exchanging certificates previously evidencing shares of First Commerce Common Stock (“Old Certificates”). The Letter of Transmittal will contain instructions with respect to the surrender of Old Certificates and the distribution of the Merger Consideration, which shall be deposited with the Exchange Agent by SBKC as of the Effective Time. If any certificates for shares of SBKC 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 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 year from the Effective Time, shall at such time be paid or redelivered by the Exchange Agent to SBKC, and after such time any holder of an Old Certificate who has not surrendered such certificate shall, 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 SBKC for payment or delivery of such property. In no event will any holder of First Commerce Common Stock exchanged in the Merger be entitled to receive any interest on any amounts held by the Exchange Agent or SBKC of the Merger Consideration.

(b) As of the date hereof, First Commerce has provided a schedule to SBKC which sets forth the First Commerce stock options and warrants that are to be converted in the Merger as First Commerce Stock Equivalents pursuant to Section 3.1(b) above, which schedule, when verified by SBKC against copies of the agreements evidencing such stock options or warrants, shall be delivered by SBKC to the Exchange Agent. The Exchange Agent shall issue the consideration to such holder that is entitled under this Section 4.1(b) upon his or her compliance with the procedures set forth herein. First Commerce shall provide to SBKC prior to the Closing Date copies of all agreements evidencing all stock options and warrants listed on the schedule delivered to SBKC pursuant to this Section 4.1(b).

4.2 Payment of Taxes . The Exchange Agent (or, after the agreement with the Exchange Agent is terminated, SBKC) shall be entitled to deduct and withhold from any cash portion of the Merger Consideration (including cash in lieu of fractional shares of SBKC Common Stock) otherwise payable pursuant to this Agreement to any holder of First Commerce Common Stock such amounts as the Exchange Agent or SBKC, as the case may be, is required to deduct and withhold under the Internal Revenue Code, or any provision of state, local or foreign Tax law, with respect to the making of such payment; provided, however, that the Exchange Agent or SBKC shall be entitled to deduct and withhold from any portion of the Merger Consideration from any holder of First Commerce Common Stock for such Taxes if such holder fails to properly execute a Form W-8 or Form W-9. To the extent the amounts are so withheld by the Exchange Agent or SBKC, as the case may be, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the holder of shares of First Commerce Common Stock in respect of whom such deduction and withholding was made by the Exchange Agent or SBKC, as the case may be.

4.3 Rights of Former First Commerce Shareholders . At the Effective Time, the stock transfer books of First Commerce shall be closed as to holders of First Commerce Common Stock immediately prior to the Effective Time and no transfer of First Commerce 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 First Commerce 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 record holders of shares of First Commerce Common Stock shall be entitled to vote after the Effective Time at any meeting of SBKC shareholders the number of whole shares of SBKC Common Stock into which their respective shares of First Commerce Common Stock are converted, regardless of whether such holders have exchanged their Old Certificates for certificates representing SBKC Common Stock in accordance with the provisions of this Agreement.

 

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Whenever a dividend or other distribution is declared by SBKC on the SBKC 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 SBKC Common Stock issuable pursuant to this Agreement, but no dividend or other distribution payable to the holders of record of SBKC Common Stock as of any time subsequent to the Effective Time shall be delivered to the holder of any Old Certificate representing First Commerce Common Stock until such holder surrenders such Old Certificate for exchange as provided in Section 4.1. However, upon surrender of such Old Certificate, the SBKC Common Stock certificate and any undelivered dividends and cash payment for fractional shares payable hereunder (without interest) shall be delivered and paid with respect to the shares represented by such Old Certificate.

ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF FIRST COMMERCE

First Commerce hereby represents and warrants to SBKC as follows:

5.1 Organization, Standing, and Power . First Commerce is a 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, and the Bank is a bank duly organized, validly existing and in good standing under the Laws of the State of Georgia. Each of the First Commerce Entities has the corporate power and authority to carry on its business as now conducted and to own, lease and operate its Assets. Each of the First Commerce Entities 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. The minute book and other organizational documents for each of the First Commerce Entities have been made available to SBKC for its review and, except as disclosed in Section 5.1 of the First Commerce Disclosure Memorandum, accurately reflect all amendments thereto and all proceedings of the Board of Directors and shareholders thereof.

5.2 Authority of First Commerce; No Breach by Agreement .

(a) First Commerce has the corporate power and authority necessary to execute, deliver, and perform its 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 First Commerce. Subject to the requisite approval by First Commerce’s shareholders and any applicable Consents of Regulatory Authorities, this Agreement represents a legal, valid, and binding obligation of First Commerce, enforceable against First Commerce 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 First Commerce, nor the consummation by First Commerce of the transactions contemplated hereby, nor compliance by First Commerce with any of the provisions hereof, will (i) conflict with or result in a breach of any provision of First Commerce’s Articles of Incorporation or Bylaws or any resolution adopted by the Board of Directors or the shareholders of First Commerce 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 Asset of any First Commerce Entity under, any Contract or Permit of the First Commerce Entities, or, (iii) subject to receipt of the requisite Consents referred to in Section 9.1(b) of this Agreement, constitute or result in a Default under, or require any Consent pursuant to, any Law or Order applicable to the First Commerce Entities (including any SBKC Entity or First Commerce Entity becoming subject to or liable for the payment of any Tax or any of the Assets owned by any SBKC Entity or First Commerce Entity being reassessed or revalued by any Taxing authority).

(c) Other than in connection or compliance with the provisions of the Securities Laws and applicable state, banking, corporate and securities Laws, and other than Consents required from Regulatory Authorities pursuant to Section 9.1(b) of this Agreement, no notice to, filing with, or Consent of, any public body or authority is necessary for the consummation by First Commerce of the Merger and the other transactions contemplated in this Agreement.

 

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5.3 Capital Stock .

(a) The authorized capital stock of First Commerce consists of (i) 100,000,000 shares of $1.00 par value per share First Commerce Common Stock, of which 1,588,260 shares are issued and outstanding and (ii) 10,000,000 shares of no par value per share preferred stock, of which there are no shares issued and outstanding. All of the issued and outstanding shares of capital stock of First Commerce 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 First Commerce has been issued in violation of any preemptive rights of the current or past shareholders of First Commerce.

(b) The authorized capital stock of the Bank consists of 1,000,000 shares of $5.00 par value per share common stock, of which 1,000,000 shares are issued and outstanding. All of the issued and outstanding shares of capital stock of the Bank are duly and validly issued and outstanding and are fully paid and nonassessable, and none of the outstanding shares of capital stock of the Bank has been issued in violation of any preemptive rights.

(c) Except as set forth in Section 5.3(a) and (b) of this Agreement or in Section 5.3(c) of the First Commerce Disclosure Memorandum, there are no shares of capital stock, preferred stock or other equity securities of First Commerce or the Bank outstanding and no outstanding Equity Rights relating to the capital stock of any First Commerce Entity. Any outstanding Equity Rights disclosed in Section 5.3(c) of the First Commerce Disclosure Memorandum will either be exercised or cancelled prior to the Closing.

5.4 First Commerce Subsidiaries . Except as described in Section 5.4 of the First Commerce Disclosure Memorandum: (i) First Commerce has no Subsidiaries other than the Bank and does not own, for its own account, any stocks, options, calls, warrants or rights to acquire stock or other equity in any partnership, limited liability company or corporation; (ii) First Commerce owns all of the issued and outstanding capital stock of the Bank; and (iii) all of such shares are held free and clear of any Lien.

5.5 SEC Filings; Financial Statements .

(a) First Commerce complied with all Laws in effecting its going private and deregistration transaction, which is referred to herein as the “going private” transaction, in December, 2004. No shareholder exercised dissenters’ rights in connection with the transaction and there is no and was no Litigation pending or, to the Knowledge of First Commerce, threatened in connection with the transaction. Prior to the closing of the “going private” transaction, First Commerce had timely filed all SEC Documents required to be filed by First Commerce since December 31, 2002 (the “First Commerce SEC Reports”) until and through the closing of the “going private” transaction. The First Commerce SEC Reports (i) at the time filed, complied in all material respects with the applicable requirements of the Securities Laws 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 First Commerce SEC Reports or necessary in order to make the statements in such First Commerce SEC Reports, in light of the circumstances under which they were made, not misleading. The Bank is not required to file any SEC Documents.

(b) First Commerce has delivered to SBKC copies of all First Commerce Financial Statements and will deliver to SBKC copies of all similar financial statements prepared subsequent to the date hereof. The First Commerce Financial Statements and any supplemental financial statements (as of the date thereof and for the periods covered thereby) (a) are, or if dated after the date of this Agreement will be, prepared in accordance with GAAP and in accordance with the books and records of First Commerce, 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, and (b) present or will present, as the case may be, fairly the financial position of First Commerce as of the dates indicated and the results of operation, changes in shareholders’ equity, and cash flows of First Commerce 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. All call and other regulatory reports have been filed on the appropriate form, and prepared in all material respects in accordance with such form’s instructions and the applicable rules and regulations of the regulating federal and/or state agency. As of the date of the latest balance sheet forming part of the First Commerce Financial Statements (the “First Commerce Latest Balance Sheet”), none of the First Commerce Entities has had, nor are any of such entities’ assets subject to, any material liability, commitment, indebtedness or obligation (of any kind whatsoever, whether absolute, accrued, contingent, known or unknown, matured or unmatured) that is

 

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not reflected and adequately provided for in accordance with GAAP. No report, including any report filed with the SEC, the FDIC, the Georgia Department of Banking and Finance, the Federal Reserve Board or other banking regulatory agency, and no report, proxy statement, registration statement or offering materials made or given to shareholders of the First Commerce Entities since January 1, 2005, as of the respective dates thereof, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. No report, including any report filed with the SEC, the FDIC the Georgia Department of Banking and Finance, the Federal Reserve Board, or other banking regulatory agency, and no report, proxy statement, registration statement or offering materials made or given to shareholders of the First Commerce Entities to be filed or disseminated after the date of this Agreement will contain any untrue statement of a material fact or will omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they will be made, not misleading. The First Commerce Financial Statements are supported by and consistent with the general ledger and detailed trial balances of investment securities, loans and commitments, depositors’ accounts and cash balances on deposit with other institutions, copies of which have been made available to SBKC. The First Commerce Entities have timely filed all reports and other documents required to be filed by them with the SEC, the FDIC, the Georgia Department of Banking and Finance, and the Federal Reserve Board.

(c) Each of the First Commerce Entities maintains accurate books and records reflecting its assets and liabilities and maintains proper and adequate internal accounting controls, which provide assurance that (A) transactions are executed with management’s authorization; (B) transactions are recorded as necessary to permit preparation of the consolidated financial statements of First Commerce in accordance with GAAP and to maintain accountability for First Commerce’s consolidated assets; (C) access to First Commerce’s assets is permitted only in accordance with management’s authorization; (D) the reporting of First Commerce’s assets is compared with existing assets at regular intervals and (E) accounts, notes and other receivables and assets are recorded accurately, and proper and adequate procedures are implemented to effect the collection thereof on a current and timely basis.

(d) Since January 1, 2002, none of the First Commerce Entities nor any current director, officer, nor to First Commerce’s Knowledge, any former officer or director or current or former employee, auditor, accountant or representative of the First Commerce Entities has received or otherwise had or obtained Knowledge of any complaint, allegation, assertion or claim, whether written or oral, regarding a material weakness, significant deficiency or other defect or failure in the accounting or auditing practices, procedures, methodologies, or method of the First Commerce Entities or their respective internal accounting controls. No attorney representing the First Commerce Entities, whether or not employed by any of the First Commerce Entities, has reported evidence of a material violation (as such term is interpreted under Section 307 of the Sarbanes-Oxley Act and the SEC’s regulations thereunder) by the First Commerce Entities or any officers, directors, employees or agents of First Commerce’s Board of Directors or any committee thereof or to any director or officer of First Commerce.

5.6 Absence of Undisclosed Liabilities . First Commerce has no Liabilities of a nature required to be reflected on a consolidated balance sheet prepared in accordance with GAAP, except Liabilities that are accrued or reserved against in the consolidated balance sheet of First Commerce as of December 31, 2006, included in the First Commerce Financial Statements or reflected in the notes thereto. First Commerce has not incurred or paid any Liability since December 31, 2006, 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 First Commerce Material Adverse Effect or (ii) in connection with the transactions contemplated by this Agreement.

5.7 Loan and Investment Portfolios . As of the date of this Agreement, all loans, discounts and financing leases reflected on the First Commerce Financial Statements were, and with respect to the First Commerce Financial Statements delivered as of the dates subsequent to the execution of this Agreement, will be as of the dates thereof, (i) at the time and under the circumstances in which made, made for good, valuable and adequate consideration in the ordinary course of business, (ii) evidenced by genuine notes, agreements or other evidences of indebtedness and (iii) to the extent secured, have been secured by valid liens and security interests that have been perfected. Accurate lists of all loans, discounts and financing leases as of January 31, 2007 and on a monthly basis thereafter, and of the investment portfolios of the First Commerce Entities as of such date, have been and will be delivered to SBKC concurrently with the First Commerce Disclosure Memorandum. Except as specifically set forth in Section 5.7 of the First Commerce Disclosure Memorandum, no First Commerce 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 the First Commerce Entities 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 First Commerce, the Bank, the FDIC or the Georgia Department of Banking and Finance, (iv) an obligation of any director, executive officer

 

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or 10% shareholder of any First Commerce Entity 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, or (v) in material violation of any Law.

5.8 Absence of Certain Changes or Events . Since December 31, 2006, except as disclosed in the First Commerce Financial Statements delivered prior to the date of this Agreement or in Section 5.8 of the First Commerce Disclosure Memorandum or as contemplated in this Agreement, including, but not limited to, Section 3.2 hereof (i) there have been no events, changes, or occurrences that have had, or are reasonably likely to have, individually or in the aggregate, a First Commerce Material Adverse Effect, (ii) First Commerce has not declared, set aside for payment or paid any dividend to holders of, or declared or made any distribution on, any shares of First Commerce Common Stock and (iii) the First Commerce Entities have 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 breach or violation of any of the covenants and agreements of the First Commerce Entities provided in Article 7 of this Agreement. Except as may result from the transactions contemplated by this Agreement, none of the First Commerce Entities have, since the date of the First Commerce Financial Statements delivered prior to the date of this Agreement:

(a) 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 any Lien any of its assets, sold, assigned or transferred any of its assets in excess of $100,000 in the aggregate or (iv) incurred any other Liability or loss representing, individually or in the aggregate, over $100,000;

(b) suffered over $100,000 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) had any customer with a loan or deposit balance of more than $500,000 terminate, or received notice of such customer’s intent to terminate, its relationship with a First Commerce Entity;

(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) forgiven any debt owed to it in excess of $100,000, or canceled any of its claims or paid any of its noncurrent obligations or Liabilities;

(g) made any capital expenditure or capital addition or betterment in excess of $100,000;

(h) 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 $100,000;

(i) except as required in accordance with GAAP, changed any accounting practice followed or employed in preparing the First Commerce Financial Statements;

(j) entered into any agreement, contract or commitment to do any of the foregoing; or

(k) authorized or issued any additional shares of First Commerce Common Stock, preferred stock, or Equity Rights.

 

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5.9 Tax Matters .

(a) All Tax Returns required to be filed by or on behalf of the First Commerce Entities have been timely filed or requests for extensions have been timely filed, granted, and have not expired for all periods ended on or prior to the date hereof. All Taxes payable with respect to tax periods ending on or prior to the date hereof (whether or not shown on filed Tax Returns) have been fully and timely paid. There is no audit examination, deficiency, or refund Litigation with respect to any Taxes. First Commerce’s income Tax Returns have never been audited by the IRS or state or local Taxing authority. None of the First Commerce Entities has had any of its other Tax Returns audited by a Taxing authority. All Taxes and other Liabilities due with respect to any and all completed and settled examinations or concluded Litigation have been paid. There are no Liens with respect to Taxes upon any of the Assets of the First Commerce Entities except for Liens for Taxes accrued but not yet payable. No Taxing authority has ever notified any First Commerce Entity of an obligation to file Tax Returns in any jurisdiction in which the applicable First Commerce Entity did not file Tax Returns of the type indicated prior to such time.

(b) The First Commerce Entities have not executed an extension or waiver of any statute of limitations on the assessment or collection of any Tax due that is currently in effect.

(c) The provision for any Taxes due or to become due for First Commerce for the period or periods through and including the date of the respective First Commerce Financial Statements that has been made and is reflected on such First Commerce Financial Statements is sufficient to cover all such Taxes.

(d) All deferred Taxes of First Commerce have been provided for in the First Commerce Financial Statements in accordance with GAAP.

(e) The First Commerce Entities are in compliance with, and their respective 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) None of the First Commerce Entities have experienced a change in ownership with respect to their respective 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) None of the First Commerce Entities have made any payments, are obligated to make any payments, or are a party to any contract that could obligate it to make any payments that could be disallowed as a deduction under Section 280G or 162(m) of the Internal Revenue Code or any comparable provision of state Tax Law.

(h) None of the First Commerce Entities are nor have they ever been a United States real property holding corporation within the meaning of Internal Revenue Code Section 897(c) or any comparable provisions of state Tax Law. None of the First Commerce Entities have been nor will they be required to include any adjustment in taxable income for any Tax period (or portion thereof) pursuant to Section 481 of the Internal Revenue Code or any comparable provision under state or foreign Tax Laws as a result of transactions or events occurring prior to the Effective Time.

5.10 Allowance for Possible Loan Losses . The allowance for possible loan or credit losses (the “Allowance”) shown on the First Commerce Latest Balance Sheet and the Allowance shown on the consolidated balance sheets of First Commerce 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 all known or reasonably anticipated losses relating to or inherent in the loan and lease portfolios (including accrued interest receivables) of the First Commerce Entities and other extensions of credit (including letters of credit and commitments to make loans or extend credit) by the First Commerce Entities as of the dates thereof. First Commerce also does not have any reason to believe that there are any facts or circumstances that are likely to require in accordance with applicable regulatory guidelines or GAAP a future material increase in any such provisions for losses or a material decrease in any of the Allowances. Each of the Allowances reflected on the books of the First Commerce Entities at all time, from and after the date of the First Commerce Latest Balance Sheet is, and will be, adequate in accordance with applicable regulatory guidelines and GAAP in all material respects, and, to First Commerce’s Knowledge, there are no facts or circumstances that are likely to require, in accordance with applicable regulatory guidelines or GAAP, a future material increase in any of such provisions for losses or a material decrease in any of the Allowances.

 

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5.11 Assets; Insurance .

(a) Except as disclosed or reserved against in the First Commerce Financial Statements delivered prior to the date of this Agreement, the First Commerce Entities have good and marketable title, free and clear of all Liens, to their respective Assets, except for (i) mortgages and encumbrances that secure indebtedness that is properly reflected in the First Commerce 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 the First Commerce Entities are in good condition, reasonable wear and tear excepted, and are usable in the ordinary course of business consistent with such First Commerce Entities’ past practices. All Assets which are material to the First Commerce Entities’ business on a consolidated basis, held under leases or subleases by any of the First Commerce Entities, are held under valid Contracts enforceable against the First Commerce Entities 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) The First Commerce Entities have paid all amounts due and payable under any insurance policies and guarantees applicable to the First Commerce Entities and their Assets and operations; all such insurance policies and guarantees are in full force and effect, and all the First Commerce Entities’ 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. None of the First Commerce Entities has 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 any First Commerce Entity under such policies.

(c) With respect to each lease of any real property or personal property to which any First Commerce Entity is a party (whether as lessee or lessor), except for financing leases in which a First Commerce Entity is lessor, (i) such lease is in full force and effect in accordance with its terms by the First Commerce Entity; (ii) all rents and other monetary amounts that have become due and payable thereunder have been paid by the First Commerce Entity; (iii) there exists no Default under such lease by the First Commerce Entity; and (iv) the Merger will not constitute a Default or a cause for termination or modification of such lease.

(d) First Commerce has no legal obligation, absolute or contingent, to any other person to sell or otherwise dispose of any substantial part of its Assets or to sell or dispose of any of its Assets except in the ordinary course of business consistent with past practices.

(e) The First Commerce Entities’ Assets include all material Assets required to operate the business of the First Commerce Entities as presently conducted.

5.12 Intellectual Property . The First Commerce Entities own or have a license to use all of the Intellectual Property used by the First Commerce Entities in the course of their business. The First Commerce Entities are the owner of or have a license to any Intellectual Property sold or licensed to a third party by the First Commerce Entities in connection with the First Commerce Entities’ business operations, and the First Commerce Entities have the right to convey by sale or license any Intellectual Property so conveyed. The First Commerce Entities have not received notice of Default under any of their Intellectual Property licenses. No proceedings have been instituted, or are pending or, to the Knowledge of First Commerce, threatened, that challenge the rights of the First Commerce Entities with respect to Intellectual Property used, sold or licensed by the First Commerce Entities in the course of their business, nor has any person claimed or alleged in writing any rights to such Intellectual Property. The conduct of the First Commerce Entities’ business does not infringe any Intellectual Property of any other person. The First Commerce Entities are not obligated to pay any recurring royalties to any Person with respect to any such Intellectual Property. No officer, director or employee of the First Commerce Entities is a party to any Contract that restricts or prohibits such officer, director or employee from engaging in activities competitive with any Person, including any First Commerce Entity.

 

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5.13 Environmental Matters .

(a) The First Commerce Entities, their Participation Facilities, and their Operating Properties are, and have been, in compliance with all Environmental Laws.

(b) There is no Litigation pending or, to the Knowledge of First Commerce, threatened before any court, governmental agency, or authority or other forum in which the First Commerce Entities or any of their Operating Properties or Participation Facilities (or First Commerce 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 the First Commerce Entities or any of their Operating Properties or Participation Facilities, nor is there any reasonable basis for any Litigation of a type described in this sentence.

(c) During the period of (i) the First Commerce Entities’ ownership or operation of any of its Assets, (ii) the First Commerce Entities’ participation in the management of any Participation Facility, or (iii) the First Commerce Entities’ First Commerce of a security interest in a Operating Property, there has been no Release of any Hazardous Material in, at, on, under, about, adjacent to, or affecting (or potentially affecting) such properties. Prior to the period of (i) the First Commerce Entities’ ownership or operation of any of its Assets, (ii) the First Commerce Entities’ participation in the management of any Participation Facility, or (iii) the First Commerce Entities’ First Commerce 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 property, 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 Asset.

(d) The First Commerce Entities have delivered to SBKC true and complete copies and results of any reports, studies, analyses, tests, or monitoring possessed or initiated by the First Commerce Entities pertaining to Hazardous Materials in, at, on, under, about, or affecting (or potentially affecting) any Asset, or concerning compliance by the First Commerce Entities or any other Person for whose conduct they are 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, under any Asset. Section 5.13(e) of the First Commerce Disclosure Memorandum contains a detailed description of all above-ground or underground storage tanks removed by or on behalf of the First Commerce Entities 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 . The Bank is a state bank whose deposits are and will at the Effective Time be insured by the FDIC and has in effect all Permits necessary for it to own, lease, or operate its Assets and to carry on its business as now conducted, and there has occurred no Default under any such Permit. None of the First Commerce Entities are:

(a) in Default under any of the provisions of their respective Articles of Incorporation or Bylaws (or other governing instruments);

(b) in Default under any Laws, Orders, or Permits applicable to their business or employees conducting their respective businesses; or

(c) since January 1, 2005, 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 First Commerce 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 any First Commerce 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 respective business or in any manner relates to capital adequacy, credit or reserve policies or management.

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 SBKC.

5.15 Labor Relations . The First Commerce Entities are not 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

 

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seeking to compel it to bargain with any labor organization or other employee representative to wages or conditions of employment, nor are the First Commerce Entities party to any collective bargaining agreement, nor is there any pending or threatened strike, slowdown, picketing, work stoppage or other labor dispute involving any First Commerce Entity. To the Knowledge of First Commerce, there is no activity involving any of the First Commerce Entities’ employees seeking to certify a collective bargaining unit or engaging in any other organization activity.

5.16 Employee Benefit Plans .

(a) The First Commerce Entities have listed in Section 5.16 of the First Commerce Disclosure Memorandum, and have delivered or made available to SBKC prior to the execution of this Agreement copies in each case of, all pension, retirement, profit-sharing, employee stock ownership, deferred compensation, stock option, warrant, employee stock ownership, severance pay, vacation, cash or stock 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 “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 the First Commerce Entities 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 Commerce Benefit Plans”). Any of the First Commerce Benefit Plans that is an “employee pension benefit plan,” as that term is defined in Section 3(2) of ERISA, is referred to herein as a “First Commerce ERISA Plan.” No First Commerce ERISA Plan is intended to be qualified under Section 401(a) of the Internal Revenue Code.

(b) All First Commerce Benefit Plans are in compliance with the applicable terms of ERISA, the Internal Revenue Code, and any other applicable Laws. The First Commerce Entities have not engaged in a transaction with respect to any First Commerce Benefit Plan that, assuming the taxable period of such transaction expired as of the date hereof, would subject the First Commerce Entities to a Tax imposed by either Section 4975 of the Internal Revenue Code or Section 502(i) of ERISA.

(c) The First Commerce Entities have no Liability for retiree health and retiree life benefits under any of the First Commerce Benefit Plans and there are no restrictions on the rights of the First Commerce Entities to amend or terminate any such retiree health or retiree life benefit Plan without incurring any Liability thereunder.

(d) Except for shareholder approval of exempt payments to a certain executive officer, neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will (i) result in any payment (including severance, unemployment compensation, golden parachute, or otherwise) becoming due to any director or any employee of the First Commerce Entities from any of the First Commerce Entities under any First Commerce Benefit Plan or otherwise, (ii) increase any benefits otherwise payable under any First Commerce Benefit Plan, or (iii) result in any acceleration of the time of payment or vesting of any such benefit.

(e) The actuarial present values of all accrued deferred compensation entitlements (including entitlements under any executive compensation, supplemental retirement, or employment agreement) of employees and former employees of the First Commerce Entities and their respective beneficiaries have been fully reflected on the First Commerce Financial Statements to the extent required by and in accordance with GAAP.

(f) Each nonqualified deferred compensation plan, within the meaning of Section 409A of the Internal Revenue Code, maintained by the First Commerce Entities on or after January 1, 2005, has been operated in 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 in accordance with the terms of the plan and will not be subject to the additional tax under Section 409A(a)(1)(B)(ii).

5.17 Material Contracts . Except as disclosed in Section 5.17 of the First Commerce Disclosure Memorandum or otherwise reflected in the First Commerce Financial Statements, neither the First Commerce Entities nor any of their respective Assets, businesses, or operations that they are a party to, or are bound or affected by, or receive benefits under, (i) any employment, severance, termination, consulting, or retirement Contract, (ii) any Contract relating to the borrowing of money by any First Commerce Entity or the guarantee by any First Commerce Entity 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

 

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made in the ordinary course of business), (iii) any Contract that prohibits or restricts the First Commerce Entities, its directors or employees from engaging in any 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 technical services to or by the First Commerce Entities, (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 $100,000), (vii) any indemnification or exculpatory Contract with any director, officer or employee, other than as provided in First Commerce’s articles of incorporation and bylaws, and (viii) 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 (the “First Commerce Contracts”). With respect to each First Commerce Contract and except as disclosed in Section 5.17 of the First Commerce Disclosure Memorandum: (i) the Contract is in full force and effect against the applicable First Commerce Entity; (ii) the First Commerce Entity is not in Default thereunder; (iii) the First Commerce Entity has not repudiated or waived any material provision of any such Contract; and (iv) 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 the First Commerce Entities for money borrowed is prepayable at any time by the First Commerce Entities without penalty or premium.

5.18 Legal Proceedings . There is no Litigation instituted, pending or 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 the First Commerce Entities, or against any employee benefit plan of the First Commerce Entities, 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 any First Commerce Entity. Section 5.18 of the First Commerce Disclosure Memorandum contains a summary of all Litigation as of the date of this Agreement to which any First Commerce Entity is a party and that names any First Commerce Entity as a defendant or cross-defendant or for which any First Commerce Entity has any potential Liability in excess of $50,000. There is no Litigation pending or to the Knowledge of First Commerce threatened against any officer, director, advisory director or employee of the First Commerce Entities in each case by reason of any person being or having been an officer, director, advisory director or employee of the First Commerce Entities.

5.19 Reports . Since December 31, 2005, the First Commerce Entities have timely filed all reports and statements, together with any amendments required to be made with respect thereto, that they were 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 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.

5.20 Accounting, Tax and Regulatory Matters . First Commerce 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 Community Reinvestment Act . the First Commerce Entities have 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.

5.22 Privacy of Customer Information .

(a) The Bank 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 customers, former customers and prospective customers that will be transferred to the SBKC Entities pursuant to this Agreement and the other transactions contemplated hereby. For purposes of this Section 5.22, “IIPI” shall include any information relating to an identified or identifiable natural person.

(b) The collection and use of such IIPI by the Bank, the transfer of such IIPI to the SBKC Entities, and the use of such IIPI by the SBKC Entities 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 Laws, and any contract or industry standard relating to privacy.

 

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5.23 Technology Systems .

(a) 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 the First Commerce Entities (collectively, the “Technology Systems”) to continue by the SBKC Entities to the same extent and in the same manner that it has been used by the First Commerce Entities.

(b) The Technology Systems (for a period of 18 months prior to the Effective Date) have not suffered unplanned disruption causing a First Commerce Material Adverse Effect. Except for ongoing payments due under relevant third party agreements, the Technology Systems are free from any Liens. Access to business critical parts of the Technology Systems is not shared with any third party.

(c) Schedule 5.23(c) of the First Commerce Disclosure Memorandum sets forth details of First Commerce’s disaster recovery and business continuity arrangements.

(d) The First Commerce Entities have not received notice of nor are they aware of any material circumstances including, without limitation, the execution of this Agreement, that would enable any third party to terminate any of the First Commerce Entities’ agreements or arrangements relating to the Technology Systems (including maintenance and support).

5.24 Bank Secrecy Act; Money Laundering . None of the First Commerce Entities have any reason to believe that any facts or circumstances exist, which would cause the First Commerce Entities to be deemed to be operating in violation in any material respect of the Bank Secrecy Act, the Patriot