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EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
PINNACLE FINANCIAL PARTNERS, INC.
AND
CAVALRY BANCORP, INC.
DATED AS OF SEPTEMBER 30, 2005
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TABLE OF CONTENTS
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ARTICLE I. THE
MERGER.................................................................................
1
1.1 The
Merger........................................................................
1
1.2 Effective
Time....................................................................
2
1.3 Effects of
the
Merger.............................................................
2
1.4 Conversion
of CAVB Common Stock
..................................................
2
1.5 PNFP
Capital
Stock................................................................
3
1.6 Options
and Other Stock-Based
Awards..............................................
3
1.7
Charter...........................................................................
4
1.8
Bylaws............................................................................
4
1.9 Tax
Consequences..................................................................
4
1.10
Certain Post-Closing
Matters......................................................
4
1.11
Headquarters of Surviving
Corporation.............................................
5
ARTICLE II. DELIVERY OF MERGER
CONSIDERATION...........................................................
5
2.1 Deposit of
Merger
Consideration...................................................
5
2.2 Delivery
of Merger
Consideration..................................................
5
ARTICLE III. REPRESENTATIONS AND
WARRANTIES OF
PNFP.....................................................
7
3.1 Corporate
Organization............................................................
7
3.2
Capitalization....................................................................
8
3.3 Authority;
No
Violation...........................................................
10
3.4 Consents
and
Approvals............................................................
10
3.5
Reports...........................................................................
11
3.6 Financial
Statements..............................................................
12
3.7 Broker's
Fees.....................................................................
12
3.8 Absence of
Certain Changes or
Events..............................................
12
3.9 Legal
Proceedings.................................................................
12
3.10
Taxes and Tax
Returns.............................................................
13
3.11
Employees.........................................................................
13
3.12
SEC
Reports.......................................................................
15
3.13
Compliance with Applicable
Law....................................................
15
3.14
Certain
Contracts.................................................................
15
3.15
Agreements with Regulatory
Agencies...............................................
16
3.16
Interest Rate Risk Management
Instruments.........................................
17
3.17
Undisclosed
Liabilities...........................................................
17
3.18
Insurance.........................................................................
17
3.19
Environmental
Liability...........................................................
17
3.20
State Takeover
Laws...............................................................
17
3.21
Reorganization....................................................................
18
3.22
Information
Supplied..............................................................
18
3.23
Internal
Controls.................................................................
18
3.24
Opinion of PNFP Financial
Advisor.................................................
19
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ARTICLE IV. REPRESENTATIONS AND
WARRANTIES OF
CAVB....................................................
19
4.1 Corporate
Organization............................................................
19
4.2
Capitalization....................................................................
20
4.3 Authority;
No
Violation...........................................................
21
4.4 Consents
and
Approvals............................................................
21
4.5
Reports...........................................................................
22
4.6 Financial
Statements..............................................................
22
4.7 Broker's
Fees.....................................................................
23
4.8
Absence of
Certain Changes or
Events..............................................
23
4.9 Legal
Proceedings.................................................................
23
4.10
Taxes and Tax
Returns.............................................................
23
4.11
Employees.........................................................................
24
4.12
SEC
Reports.......................................................................
25
4.13
Compliance with Applicable
Law....................................................
26
4.14
Certain
Contracts.................................................................
26
4.15
Agreements with Regulatory
Agencies...............................................
27
4.16
Interest Rate Risk Management
Instruments.........................................
27
4.17
Undisclosed
Liabilities...........................................................
27
4.18
Insurance.........................................................................
28
4.19
Environmental
Liability...........................................................
28
4.20
State Takeover
Laws...............................................................
28
4.21
Reorganization....................................................................
28
4.22
Information
Supplied..............................................................
28
4.23
Internal
Controls.................................................................
29
4.24
Opinion of CAVB Financial
Advisor.................................................
29
ARTICLE V. COVENANTS
RELATING TO CONDUCT OF
BUSINESS..................................................
29
5.1 Conduct of
Businesses Prior to the Effective
Time.................................
29
5.2 CAVB
Forbearances.................................................................
30
5.3 PNFP
Forbearances.................................................................
32
ARTICLE VI. ADDITIONAL
AGREEMENTS......................................................................
33
6.1 Regulatory
Matters................................................................
33
6.2 Access to
Information.............................................................
34
6.3
Shareholders'
Approvals...........................................................
35
6.4 Legal
Conditions to
Merger........................................................
36
6.5
Affiliates........................................................................
36
6.6 Stock
Quotation or
Listing........................................................
36
6.7 Employee
Benefit Plans; Existing
Agreements.......................................
36
6.8
Indemnification; Directors' and Officers'
Insurance...............................
37
6.9 Additional
Agreements.............................................................
38
6.10
Advice of
Changes.................................................................
38
6.11
Exemption from Liability Under Section 16(b).
....................................
39
6.12
Acquisition
Proposals.............................................................
39
6.13
Bank
Merger.......................................................................
41
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ARTICLE VII. CONDITIONS
PRECEDENT.......................................................................
42
7.1 Conditions
to Each Party's Obligation To Effect the
Merger........................
42
7.2 Conditions
to Obligations of
CAVB.................................................
43
7.3 Conditions
to Obligations of
PNFP.................................................
43
ARTICLE VIII. TERMINATION AND
AMENDMENT..................................................................
44
8.1
Termination.......................................................................
44
8.2 Effect of
Termination.............................................................
45
8.3
Termination
Fee...................................................................
45
8.4
Amendment.........................................................................
47
8.5 Extension;
Waiver.................................................................
47
ARTICLE IX. GENERAL
PROVISIONS.........................................................................
47
9.1
Closing...........................................................................
47
9.2
Standard..........................................................................
47
9.3
Nonsurvival of Representations, Warranties and
Agreements.........................
48
9.4
Expenses..........................................................................
48
9.5
Notices...........................................................................
48
9.6
Interpretation....................................................................
48
9.7
Counterparts......................................................................
49
9.8 Entire
Agreement..................................................................
49
9.9 Governing
Law.....................................................................
49
9.10
Publicity.........................................................................
49
9.11
Assignment; Third Party
Beneficiaries.............................................
49
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EXHIBIT 6.5 CAVALRY BANCORP AFFILIATE
AGREEMENT........................................
Exh. 6.5 - 1
PNFP DISCLOSURE
SCHEDULE...............................................................
Confidential - 1
CAVB DISCLOSURE
SCHEDULE...............................................................
Confidential - 3
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AGREEMENT AND PLAN OF MERGER
AGREEMENT
AND PLAN OF MERGER, dated as of September 30, 2005 (this
"Agreement"), by and between CAVALRY
BANCORP, INC, a Tennessee corporation
("CAVB"), and PINNACLE FINANCIAL PARTNERS,
INC., a Tennessee corporation
("PNFP").
RECITALS:
WHEREAS,
the Boards of Directors of PNFP and CAVB have approved, and
deem
it advisable and in the best interests of
their respective corporations and
shareholders to consummate the strategic
business combination transaction
provided for herein in which CAVB will,
subject to the terms and conditions set
forth herein, merge with and into PNFP (the
"Merger"), so that PNFP is the
surviving corporation (hereinafter
sometimes referred to in such capacity as the
"Surviving Corporation") in the Merger;
WHEREAS,
the Boards of Directors of PNFP and CAVB have each determined
that the Merger and the other transactions
contemplated hereby are consistent
with, and in furtherance of, their
respective business strategies and goals;
WHEREAS,
the parties desire to make certain representations, warranties,
covenants and agreements in connection with
the Merger and also to prescribe
certain conditions to the Merger; and
WHEREAS,
for Federal income tax purposes, it is intended that the Merger
will qualify as a reorganization under the
provisions of Section 368(a) of the
Internal Revenue Code of 1986, as amended
(the "Code"), and the parties intend,
by executing this Agreement, to adopt a
plan of reorganization within the
meaning of Treasury Regulation Section
1.368-2(g).
NOW,
THEREFORE, in consideration of the mutual covenants,
representations,
warranties and agreements contained herein,
and intending to be legally bound
hereby, the parties agree as follows:
ARTICLE I.
THE MERGER
1.1 The
Merger.
(a) Subject to the terms and conditions of this Agreement, in
accordance with the Tennessee Business
Corporation Act (the "TBCA"), at the
Effective Time (as defined below), CAVB
shall merge with and into PNFP. PNFP
shall be the Surviving Corporation in the
Merger, and shall continue its
corporate existence under the laws of the
State of Tennessee. Upon consummation
of the Merger, the separate corporate
existence of CAVB shall terminate.
(b) The parties may by mutual agreement at any time change the
method of effecting the combination of CAVB
and PNFP including without
limitation the provisions of this Article
I, if and to the extent they deem such
change to be desirable, including without
limitation
1
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to provide for a merger of CAVB with and
into a wholly-owned subsidiary of PNFP;
provided, however, that no such change
shall (i) alter or change the amount of
Merger Consideration (as defined below) to
be provided to holders of CAVB Common
Stock (as defined below) as provided for in
this Agreement, (ii) adversely
affect the tax treatment of holders of CAVB
Common Stock as a result of
receiving the Merger Consideration or (iii)
materially impede or delay
consummation of the transactions
contemplated by this Agreement.
1.2
Effective Time. The Merger shall become effective as set forth in
the
articles of merger that shall be filed with
the Secretary of State of the State
of Tennessee (the "Tennessee Secretary") on
the Closing Date. The term
"Effective Time" shall be the date and time
when the Merger becomes effective,
as set forth in the Articles of Merger.
1.3
Effects of the Merger. At and after the Effective Time, the
Merger
shall have the effects set forth in Section
48-21-108 of the TBCA.
1.4
Conversion of CAVB Common Stock . At the Effective Time, by virtue
of
the Merger and without any action on the
part of CAVB, PNFP or the holder of any
of the following securities:
(a) Subject to Section 2.2(e), each share of the common stock,
no
par value per share, of CAVB (the "CAVB
Common Stock") issued and outstanding
immediately prior to the Effective Time,
except for shares of CAVB Common Stock
owned by CAVB or PNFP (other than shares of
CAVB Common Stock held in trust
accounts, managed accounts and the like, or
otherwise held in a fiduciary
capacity, that are beneficially owned by
third parties (any such shares held in
a fiduciary capacity by CAVB or PNFP, as
the case may be, being referred to
herein as "Trust Account Shares")) or
shares of CAVB Common Stock held on
account of a debt previously contracted
("DPC Shares"), shall be converted into
the right to receive 0.95 shares (the
"Exchange Ratio") of the common stock,
$1.00 par value per share, of PNFP (the
"PNFP Common Stock") (the "Merger
Consideration").
(b) All of the shares of CAVB Common Stock converted into the
right
to receive the Merger Consideration
pursuant to this Article I shall no longer
be outstanding and shall automatically be
cancelled and shall cease to exist as
of the Effective Time, and each certificate
previously representing any such
shares of CAVB Common Stock (each, a
"Certificate") shall thereafter represent
only the right to receive (i) a certificate
representing the number of whole
shares of PNFP Common Stock (defined
below), and (ii) cash in lieu of fractional
shares, into which the shares of CAVB
Common Stock represented by such
Certificate have been converted pursuant to
this Section 1.4 and Section 2.2(e).
Certificates previously representing shares
of CAVB Common Stock shall be
exchanged for certificates representing
whole shares of PNFP Common Stock and
cash in lieu of fractional shares issued in
consideration therefor upon the
surrender of such Certificates in
accordance with Section 2.2, without any
interest thereon. If, prior to the
Effective Time, the outstanding shares of
PNFP Common Stock or CAVB Common Stock
shall have been increased, decreased,
changed into or exchanged for a different
number or kind of shares or securities
as a result of a reorganization,
recapitalization, reclassification, stock
dividend, stock split, reverse stock split,
or other similar change in
capitalization, an appropriate and
proportionate adjustment shall be made to the
Exchange Ratio per share payable pursuant
to this Agreement.
2
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(c) Notwithstanding anything in this Agreement to the contrary,
at
the Effective Time, all shares of CAVB
Capital Stock (as defined below) that are
owned by CAVB or PNFP (other than Trust
Account Shares and DPC Shares) shall be
cancelled and shall cease to exist, and no
Merger Consideration shall be
delivered in exchange therefor.
1.5 PNFP
Capital Stock. At and after the Effective Time, each share of
PNFP Capital Stock (as defined below)
issued and outstanding immediately prior
to the Closing Date shall remain issued and
outstanding and shall not be
affected by the Merger.
1.6
Options and Other Stock-Based Awards.
(a) Effective as of the Effective Time, each then outstanding
option
to purchase shares of CAVB Common Stock
(each a "CAVB Stock Option") issued
pursuant to the equity-based compensation
plans identified in Section 4.11 of
the CAVB Disclosure Schedule (the "CAVB
Stock Plans") to any current or former
employee or director of, or consultant to,
CAVB or any of its Subsidiaries, as
defined below, shall be assumed by PNFP and
shall be converted automatically
into an option to purchase a number of
shares of PNFP Common Stock (rounded to
the nearest whole share) (an "Assumed Stock
Option") at an exercise price
determined as provided below (and otherwise
subject to the terms of the CAVB
Stock Plans and the agreements evidencing
the options thereunder):
(i) The number of shares of PNFP Common Stock to be subject to
the Assumed Stock Option shall be equal to
the product of the number of shares
of CAVB Common Stock subject to the CAVB
Stock Option and the Exchange Ratio,
provided that any fractional shares of PNFP
Common Stock resulting from such
multiplication shall be rounded to the
nearest whole share; and
(ii) The exercise price per share of PNFP Common Stock under
the Assumed Stock Option shall be equal to
the exercise price per share of CAVB
Common Stock under the CAVB Stock Option
divided by the Exchange Ratio, provided
that such exercise price shall be rounded
to the nearest whole cent.
In the case of any CAVB Stock Option to
which Section 421 of the Code applies by
reason of its qualification under Section
422 of the Code, the conversion
formula shall be adjusted, if necessary, to
comply with Section 424(a) of the
Code. Except as otherwise provided herein,
the Assumed Stock Options shall be
subject to the same terms and conditions
(including expiration date, vesting and
exercise provisions) as were applicable to
the corresponding CAVB Stock Options
immediately prior to the Effective Time
(but taking into account any changes
thereto, including the acceleration of
vesting thereof, provided for in the CAVB
Stock Plans or other CAVB Benefit Plan, as
defined below, or in any award
agreement thereunder by reason of this
Agreement or the transactions
contemplated hereby); provided, however,
that references to CAVB shall be deemed
to be references to PNFP.
(b) PNFP has taken all corporate action necessary to reserve
for
issuance a sufficient number of shares of
PNFP Common Stock upon the exercise of
the Assumed Stock Options. On or as soon as
practicable following the Closing
Date (and in no event more than five
business days after the Closing Date), PNFP
shall file a registration statement on an
appropriate
3
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form or a post-effective amendment to a
previously filed registration statement
under the Securities Act (defined below)
with respect to the issuance of the
shares of PNFP Common Stock subject to the
Assumed Stock Options and shall use
its reasonable efforts consistent with
customary industry standards to maintain
the effectiveness of such registration
statement or registration statements (and
maintain the current status of the
prospectus or prospectuses contained therein)
for so long as such equity awards remain
outstanding.
1.7
Charter. Subject to the terms and conditions of this Agreement, at
the
Effective Time, the Charter of PNFP, as
amended (the "PNFP Articles"), shall be
the Charter of the Surviving Corporation
until thereafter amended in accordance
with applicable law.
1.8
Bylaws. Subject to the terms and conditions of this Agreement, at
the
Effective Time, the Bylaws of PNFP shall be
the Bylaws of the Surviving
Corporation until thereafter amended in
accordance with applicable law.
1.9 Tax
Consequences. It is intended that the Merger shall constitute a
"reorganization" within the meaning of
Section 368(a) of the Code, that this
Agreement shall constitute a "plan of
reorganization" for the purposes of
Sections 354 and 361 of the Code.
1.10
Certain Post-Closing Matters.
(a) Board Composition. As of the Effective Time, and continuing
for
a period consistent with the 3 year
staggered terms of directors of PNFP to
which they will be added following the
Effective Time, Ed C. Loughry, Jr. and
two other Current CAVB Directors, as
defined below, shall be appointed to and
shall serve on the Board of Directors of
the Surviving Corporation. For purposes
of this Section 1.10, the term "Current
CAVB Directors" shall mean those members
of the CAVB Board of Directors immediately
prior to the public announcement of
the transactions contemplated by this
Agreement.
(b) Procedure for Appointing Current CAVB Directors to
Surviving
Corporation's Board of Directors. Within
thirty (30) days after the date of this
Agreement, the nominating and corporate
governance committee of the Board of
Directors of CAVB shall submit the names of
Ed C. Loughry, Jr. and two other
Current CAVB Directors to the nominating
and corporate governance committee of
PNFP for consideration of nomination to
fill three vacancies on the Board of
Directors of the Surviving Corporation as
of the Effective Time. The nominating
and corporate governance committee of
PNFP's Board of Directors shall nominate
such persons to fill such vacancies. The
Board of Directors of PNFP shall
promptly meet to consider the appointment
of such persons to fill such vacancies
and shall appoint such persons at such
meeting if such persons, other than Ed C.
Loughry, Jr., are reasonably acceptable
candidates to serve on the Board of
Directors of the Surviving Corporation. In
the event the nominating and
corporate governance committee or the Board
of Directors of PNFP objects to a
nominee, other than Ed C. Loughry, Jr., the
nominating and corporate governance
committee of CAVB's Board of Directors
shall propose additional nominees for
consideration until a reasonably acceptable
member is found.
(c) Officers of Surviving Corporation. The current officers of
PNFP
shall continue as the officers of the
Surviving Corporation.
4
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(d) Survival/Adoption of Commitments. The commitments set forth
in
this Section 1.10 shall survive the
Effective Time as reflected in a formal
resolution of the Board of Directors of the
Surviving Corporation to be
reflected in the minutes of the Surviving
Corporation following the Effective
Time of the Merger.
1.11
Headquarters of Surviving Corporation. From and after the
Effective
Time, the location of the headquarters and
principal executive offices of the
Surviving Corporation shall be that of the
headquarters and principal executive
offices of PNFP as of the date of this
Agreement.
ARTICLE II.
DELIVERY OF MERGER CONSIDERATION
2.1
Deposit of Merger Consideration. Prior to the Effective Time,
PNFP
shall deposit, or shall cause to be
deposited, with a bank or trust company
reasonably acceptable to each of CAVB and
PNFP (the "Exchange Agent"), for the
benefit of the holders of Certificates, for
exchange in accordance with this
Article II, certificates representing the
shares of PNFP Common Stock and cash
in lieu of any fractional shares (such cash
and certificates for shares of PNFP
Common Stock, together with any dividends
or distributions with respect thereto,
being hereinafter referred to as the
"Exchange Fund"), to be issued pursuant to
Section 1.4 and paid pursuant to Section
1.4 and Section 2.2(e) in exchange for
outstanding shares of CAVB Common
Stock.
2.2
Delivery of Merger Consideration.
(a) As soon as practicable, but in no event later than five
business
days, after the Effective Time, the
Exchange Agent shall mail to each holder of
record of one or more Certificates a letter
of transmittal in customary form as
reasonably agreed by the parties (which
shall specify that delivery shall be
effected, and risk of loss and title to the
Certificates shall pass, only upon
delivery of the Certificates to the
Exchange Agent) and instructions for use in
effecting the surrender of the Certificates
in exchange for certificates
representing the shares of PNFP Common
Stock and any cash in lieu of fractional
shares into which the shares of CAVB Common
Stock represented by such
Certificate or Certificates shall have been
converted pursuant to this
Agreement. Upon proper surrender to the
Exchange Agent of a Certificate or
Certificates for exchange and cancellation,
together with such properly
completed and duly executed letter of
transmittal as the Exchange Agent may
reasonable require, the holder of such
Certificate or Certificates shall be
entitled to receive in exchange therefor,
as applicable, (i) a certificate
representing that number of whole shares of
PNFP Common Stock to which such
holder of CAVB Common Stock shall have
become entitled pursuant to the
provisions of Article I and (ii) a check
representing the amount of any cash in
lieu of fractional shares which such holder
has the right to receive in respect
of the Certificate or Certificates
surrendered pursuant to the provisions of
this Article II, and the Certificate or
Certificates so surrendered shall
forthwith be cancelled. No interest will be
paid or accrued on any cash or on
any unpaid dividends and distributions
payable to holders of Certificates.
(b) No dividends or other distributions declared with respect
to
PNFP Common Stock shall be paid to the
holder of any unsurrendered Certificate
until the holder thereof shall surrender
such Certificate in accordance with
this Article II. After the surrender of
a
5
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Certificate in accordance with this Article
II, the record holder thereof shall
be entitled to receive any such dividends
or other distributions, without any
interest thereon, which theretofore had
become payable with respect to shares of
PNFP Common Stock represented by such
Certificate.
(c) If any certificate representing shares of PNFP Common Stock
is
to be issued in a name other than that in
which the Certificate or Certificates
surrendered in exchange therefor is or are
registered, it shall be a condition
of the issuance thereof that the
Certificate or Certificates so surrendered
shall be properly endorsed (or accompanied
by an appropriate instrument of
transfer) and otherwise in proper form for
transfer, and that the person
requesting such exchange shall pay to the
Exchange Agent in advance any transfer
or other taxes required by reason of the
issuance of a certificate representing
shares of PNFP Common Stock in any name
other than that of the registered holder
of the Certificate or Certificates
surrendered, or required for any other
reason, or shall establish to the
satisfaction of the Exchange Agent that such
tax has been paid or is not payable.
(d) After the Effective Time, there shall be no transfers on
the
stock transfer books of CAVB of the shares
of CAVB Common Stock that were issued
and outstanding immediately prior to the
Effective Time. If, after the Effective
Time, certificates representing such shares
are presented for transfer to the
Exchange Agent, they shall be cancelled and
exchanged for certificates
representing shares of PNFP Common Stock
and cash for fractional shares as
provided in this Article II.
(e) Notwithstanding anything to the contrary contained herein,
no
certificates or scrip representing
fractional shares of PNFP Common Stock shall
be issued upon the surrender for exchange
of Certificates, no dividend or
distribution with respect to PNFP Common
Stock shall be payable on or with
respect to any fractional share, and such
fractional share interests shall not
entitle the owner thereof to vote or to any
other rights of a shareholder of
PNFP. In lieu of the issuance of any such
fractional share, PNFP shall pay to
each former shareholder of CAVB who
otherwise would be entitled to receive such
fractional share an amount in cash
determined by multiplying (i) the average of
the closing-sale prices of PNFP Common
Stock on the securities market or stock
exchange in which the PNFP Common Stock
principally trades, as reported by The
Wall Street Journal for the five trading
days immediately preceding the date of
the Effective Time by (ii) the fraction of
a share (rounded to the nearest
thousandth when expressed in decimal form)
of PNFP Common Stock to which such
holder would otherwise be entitled to
receive pursuant to Section 1.4.
(f) Any portion of the Exchange Fund that remains unclaimed by
the
shareholders of CAVB as of the first
anniversary of the Effective Time shall be
paid to PNFP. Any former shareholders of
CAVB who have not theretofore complied
with this Article II shall thereafter look
only to PNFP for payment of the
shares of PNFP Common Stock and cash in
lieu of any fractional shares and any
unpaid dividends and distributions on the
PNFP Common Stock deliverable in
respect of each share of CAVB Common Stock
such shareholder holds as determined
pursuant to this Agreement, in each case,
without any interest thereon.
Notwithstanding the foregoing, none of
CAVB, PNFP, the Exchange Agent or any
other person shall be liable to any former
holder of shares of CAVB Common Stock
for any amount delivered in good faith to a
public official pursuant to
applicable abandoned property, escheat or
similar laws.
6
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(g) In the event any Certificate shall have been lost, stolen
or
destroyed, upon the making of an affidavit
of that fact by the person claiming
such Certificate to be lost, stolen or
destroyed and, if reasonably required by
PNFP, the posting by such person of a bond
in such amount as PNFP may determine
is reasonably necessary as indemnity
against any claim that may be made against
it with respect to such Certificate, the
Exchange Agent will issue in exchange
for such lost, stolen or destroyed
Certificate the shares of PNFP Common Stock,
and any cash in lieu of fractional shares
deliverable in respect thereof
pursuant to this Agreement.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF PNFP
Except as
disclosed in (a) the PNFP Reports (defined below) filed prior
to
the date hereof or (b) the disclosure
schedule (the "PNFP Disclosure Schedule")
delivered by PNFP to CAVB prior to the
execution of this Agreement (which
schedule sets forth, among other things,
items the disclosure of which is
necessary or appropriate either in response
to an express disclosure requirement
contained in a provision hereof or as an
exception to one or more
representations or warranties contained in
this Article III or to one or more of
PNFP's covenants contained in Article V,
provided, however, that,
notwithstanding anything in this Agreement
to the contrary, (i) no such item is
required to be set forth in such schedule
as an exception to a representation or
warranty if its absence would not result in
the related representation or
warranty being deemed untrue or incorrect
under the standard established by
Section 9.2, and (ii) the mere inclusion of
an item in such schedule as an
exception to a representation or warranty
shall not be deemed an admission that
such item represents a material exception
or material fact, event or
circumstance or that such item has had or
would be reasonably likely to have a
Material Adverse Effect (as defined below)
on PNFP), PNFP hereby represents and
warrants to CAVB as follows:
3.1
Corporate Organization.
(a) PNFP is a corporation duly organized, validly existing and
in
good standing under the laws of the State
of Tennessee. PNFP has the corporate
power and authority to own or lease all of
its properties and assets and to
carry on its business as it is now being
conducted, and is duly licensed or
qualified to do business in each
jurisdiction in which the nature of the
business conducted by it or the character
or location of the properties and
assets owned or leased by it makes such
licensing or qualification necessary,
except where the failure to be so licensed
or qualified would not, either
individually or in the aggregate, have a
Material Adverse Effect on PNFP. As
used in this Agreement, the term "Material
Adverse Effect" means, with respect
to CAVB, PNFP or the Surviving Corporation,
as the case may be, a material
adverse effect on (i) the business,
operations, results of operations or
financial condition of such party and its
Subsidiaries taken as a whole or which
might have a financial cost to PNFP after
the Merger of at least $500,000 taking
into account, for example with respect to
Regulatory Agreements, the aggregate
costs to PNFP of compliance, personnel
costs, appeals, fines, legal, accounting,
or consulting fees, or restrictions on
future expansion, or (ii) the ability of
such party to timely consummate the
transactions contemplated hereby; provided,
however, that with respect to clause (i),
the following shall not be deemed to
have a Material Adverse Effect: any change
or event caused by or resulting from
(A) changes in prevailing interest rates,
currency exchange rates or other
economic or monetary conditions in the
United States or elsewhere, (B) changes
in United States or foreign securities
markets, including changes in price
levels or
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trading volumes, (C) changes or events,
after the date hereof, affecting the
financial services industry generally and
not specifically relating to PNFP or
CAVB or their respective Subsidiaries, as
the case may be, (D) changes, after
the date hereof, in generally accepted
accounting principles or regulatory
accounting requirements applicable to banks
or savings associations and their
holding companies generally, (E) changes,
after the date hereof, in laws, rules
or regulations of general applicability or
interpretations thereof by any
Governmental Entity (as defined below), (F)
actions or omissions of PNFP or CAVB
taken with the prior written consent of the
other or required hereunder, (G) the
execution and delivery of this Agreement or
the consummation of the transactions
contemplated hereby or the announcement
thereof, or (H) any outbreak of major
hostilities in which the United States is
involved or any act of terrorism
within the United States or directed
against its facilities or citizens wherever
located; and provided, further, that in no
event shall a change in the trading
prices of a party's capital stock, by
itself, be considered material or
constitute a Material Adverse Effect.
(b) PNFP is a bank holding company registered under the Bank
Holding
Company Act of 1956, as amended (the "BHC
Act"). True and complete copies of the
PNFP Articles and Bylaws of PNFP, as in
effect as of the date of this Agreement,
have previously been made available by PNFP
to CAVB.
(c) Each PNFP Subsidiary (i) is duly organized and validly
existing
under the laws of its jurisdiction of
organization, (ii) is duly qualified to do
business and in good standing in all
jurisdictions (whether federal, state,
local or foreign) where its ownership or
leasing of property or the conduct of
its business requires it to be so qualified
and in which the failure to be so
qualified would have a Material Adverse
Effect on PNFP and (iii) has all
requisite corporate or other power and
authority to own or lease its properties
and assets and to carry on its business as
now conducted, except to the extent
that the failure to have such power or
authority will not result in a Material
Adverse Effect on PNFP. As used in this
Agreement, the word "Subsidiary" when
used with respect to any party means any
bank, savings bank, corporation,
partnership, limited liability company, or
other organization, whether
incorporated or unincorporated, which is
consolidated with such party for
financial reporting purposes under
GAAP.
3.2
Capitalization.
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(a) The authorized capital stock of PNFP consists of forty
million
(40,000,000) shares of PNFP Common Stock,
of which, as of September 30, 2005,
8,424,217 shares were issued and
outstanding, and ten million (10,000,000)
shares of preferred stock, no par value per
share (together with the PNFP Common
Stock, the "PNFP Capital Stock"), of which,
as of September 30, 2005, no shares
were issued and outstanding. As of the date
hereof, no shares of PNFP Capital
Stock were reserved for issuance except for
2,133,489 shares of PNFP Common
Stock reserved for issuance upon the
exercise of options to purchase shares of
PNFP Common Stock (each a "PNFP Stock
Option") pursuant to the equity-based
compensation plans of PNFP (the "PNFP Stock
Plans") as identified in Section
3.2(a) of the PNFP Disclosure Schedule. All
of the issued and outstanding shares
of PNFP Capital Stock have been duly
authorized and validly issued and are fully
paid, nonassessable and free of preemptive
rights, with no personal liability
attaching to the ownership thereof.
(b) No bonds, debentures, notes or other indebtedness having
the
right to vote on any matters on which
shareholders may vote ("Voting Debt") of
PNFP are issued or outstanding. Since June
30, 2005, PNFP has not issued any
shares of PNFP Capital Stock or any
securities convertible into or exercisable
for any shares of PNFP Capital Stock, other
than as would be permitted by
Section 5.3(a) hereof.
(c) Except for (i) this Agreement, (ii) the rights under the
PNFP
Stock Plans which represented, as of June
30, 2005, the right to acquire up to
an aggregate of 1,630,093 shares of PNFP
Common Stock, and (iii) agreements
entered into and securities and other
instruments issued after the date of this
Agreement as permitted by Section 5.3(a),
there are no options, subscriptions,
warrants, calls, rights, commitments or
agreements of any character to which
PNFP or any its Subsidiaries is a party or
by which it or any its Subsidiaries
is bound obligating PNFP or any its
Subsidiaries to issue, deliver or sell, or
cause to be issued, delivered or sold,
additional shares of PNFP Capital Stock
or any Voting Debt or stock appreciation
rights of PNFP any its Subsidiaries or
obligating PNFP or any its Subsidiaries,
extend or enter into any such option,
subscription, warrant, call, right,
commitment or agreement. There are no
outstanding contractual obligations of PNFP
or any its Subsidiaries (A) to
repurchase, redeem or otherwise acquire any
shares of capital stock of PNFP or
any its Subsidiaries or (B) pursuant to
which PNFP or any of its Subsidiaries is
or could be required to register shares of
PNFP Capital Stock or other
securities under the Securities Act of
1933, as amended (the "Securities Act"),
except any such contractual obligations
entered into after the date hereof as
permitted by Section 5.3(a).
(d) PNFP owns, directly or indirectly, all of the issued and
outstanding shares of capital stock or
other equity ownership interests of each
of its Subsidiaries, free and clear of any
liens, pledges, charges, encumbrances
and security interests whatsoever
("Liens"), and all of such shares or equity
ownership interests are duly authorized and
validly issued and are fully paid,
nonassessable (subject to 12 U.S.C. Section
55) and free of preemptive rights,
with no personal liability attaching to the
ownership thereof. No Subsidiary of
PNFP has or is bound by any outstanding
subscription, option, warrant, call,
commitment or agreement of any character
calling for the purchase or issuance of
any shares of capital stock or any other
equity security of such Subsidiary or
any securities representing the right to
purchase or otherwise receive any
shares of capital stock or any other equity
security of such Subsidiary. Section
3.2(d) of the PNFP Disclosure Schedule sets
forth a list of the material
investments of PNFP in Non-
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<PAGE>
Subsidiary Affiliates. As used in this
Agreement, the term "Non-Subsidiary
Affiliate" when used with respect to any
party means any corporation,
partnership, limited liability company,
joint venture or other entity other than
such party's Subsidiaries.
3.3
Authority; No Violation.
(a) PNFP has full corporate power and authority to execute and
deliver this Agreement and, subject in the
case of the consummation of the
Merger to the adoption of this Agreement by
the requisite vote of the holders of
PNFP Common Stock, to consummate the
transactions contemplated hereby. The
execution and delivery of this Agreement
and the consummation of the
transactions contemplated hereby have been
duly and validly approved by the
Board of Directors of PNFP. The Board of
Directors of PNFP determined that the
Merger is advisable and in the best
interest of PNFP and its shareholders and
has directed that this Agreement and the
transactions contemplated hereby be
submitted to PNFP's shareholders for
adoption at a meeting of such shareholders
and, except for the adoption of this
Agreement by the affirmative vote of the
holders of a majority of the outstanding
shares of PNFP Common Stock, no other
corporate proceedings on the part of PNFP
are necessary to approve this
Agreement and to consummate the
transactions contemplated hereby. This Agreement
has been duly and validly executed and
delivered by PNFP and (assuming due
authorization, execution and delivery by
CAVB) constitutes valid and binding
obligations of PNFP, enforceable against
PNFP in accordance with its terms
(except as may be limited by bankruptcy,
insolvency, moratorium, reorganization
or similar laws affecting the rights of
creditors generally and the availability
of equitable remedies).
(b) Neither the execution and delivery by PNFP of this Agreement
nor
the consummation by PNFP of the
transactions contemplated hereby, nor compliance
by PNFP with any of the terms or provisions
hereof, will (i) violate any
provision of the PNFP Articles or Bylaws of
PNFP or (ii) assuming that the
consents and approvals referred to in
Section 3.4 are duly obtained, (x) violate
any statute, code, ordinance, rule,
regulation, judgment, order, writ, decree or
injunction applicable to PNFP, any of its
Subsidiaries or Non-Subsidiary
Affiliates or any of their respective
properties or assets or (y) violate,
conflict with, result in a breach of any
provision of or the loss of any benefit
under, constitute a default (or an event
which, with notice or lapse of time, or
both, would constitute a default) under,
result in the termination of or a right
of termination or cancellation under,
accelerate the performance required by, or
result in the creation of any Lien upon any
of the respective properties or
assets of PNFP, any of its Subsidiaries or
its Non-Subsidiary Affiliates under,
any of the terms, conditions or provisions
of any note, bond, mortgage,
indenture, deed of trust, license, lease,
agreement or other instrument or
obligation to which PNFP, any of its
Subsidiaries or its Non-Subsidiary
Affiliates is a party, or by which they or
any of their respective properties or
assets may be bound or affected, except (in
the case of clause (ii) above) for
such violations, conflicts, breaches or
defaults which, either individually or
in the aggregate, will not have a Material
Adverse Effect on PNFP.
3.4
Consents and Approvals. Except for (i) the filing of applications
and
notices, as applicable, with the Board of
Governors of the Federal Reserve
System (the "Federal Reserve Board") under
the BHC Act and the Federal Reserve
Act, as amended, and approval of such
applications and notices, (ii) the filing
of any required applications or notices
with any other federal, state or foreign
agencies or regulatory authorities and
approval of such applications and
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<PAGE>
notices (the "Other Regulatory Approvals"),
(iii) the filing with the Securities
and Exchange Commission (the "SEC") of a
Joint Proxy Statement/Prospectus in
definitive form relating to the meeting of
CAVB's and PNFP's shareholders to be
held in connection with this Agreement and
the transactions contemplated hereby
(the "Joint Proxy Statement"), and of the
registration statement on Form S-4
(the "Form S-4") in which the Joint Proxy
Statement will be included as a
prospectus, and declaration of
effectiveness of the Form S-4, (iv) the filing of
the Articles of Merger with the Tennessee
Secretary pursuant to the TBCA, (v)
any notice or filings under the
Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended (the "HSR Act"), (vi) any
consents, authorizations, approvals,
filings or exemptions in connection with
compliance with the applicable
provisions of federal and state securities
laws relating to the regulation of
broker-dealers, investment advisers or
transfer agents, and the rules of NASDAQ,
or which are required under insurance,
mortgage banking and other similar laws,
(vii) such filings and approvals as are
required to be made or obtained under
the securities or "Blue Sky" laws of
various states in connection with the
issuance of the shares of PNFP Common Stock
pursuant to this Agreement and
(viii) the approval of this Agreement by
the requisite vote of the shareholders
of PNFP and CAVB, no consents or approvals
of or filings or registrations with
any court, administrative agency or
commission or other governmental authority
or instrumentality (each a "Governmental
Entity") are necessary in connection
with (A) the execution and delivery by PNFP
of this Agreement and (B) the
consummation by PNFP of the Merger and the
other transactions contemplated
hereby. Except for any consents,
authorizations, or approvals of any other
material contracts to which PNFP is a party
and which are listed in Section 3.4
of the PNFP Disclosure Schedule, no
consents, authorizations, or approvals of
any other person are necessary in
connection with (A) the execution and delivery
by PNFP of this Agreement and (B) the
consummation by PNFP of the Merger and the
other transactions contemplated hereby.
3.5
Reports. PNFP and each of its Subsidiaries have timely filed
all
reports, registrations and statements,
together with any amendments required to
be made with respect thereto, that they
were required to file since January 1,
2000 with (i) the Federal Reserve Board,
(ii) the Federal Deposit Insurance
Corporation, (iii) any state regulatory
authority (each a "State Regulator"),
(iv) the Office of the Comptroller of the
Currency (the "OCC"), (v) the SEC,
(vi) any State Regulator (collectively
"Regulatory Agencies"), and all other
reports and statements required to be filed
by them since January 1, 2000,
including, without limitation, any report
or statement required to be filed
pursuant to the laws, rules or regulations
of the United States, any state, or
any Regulatory Agency, and have paid all
fees and assessments due and payable in
connection therewith, except where the
failure to file such report, registration
or statement or to pay such fees and
assessments, either individually or in the
aggregate, will not have a Material Adverse
Effect on PNFP. Except for normal
examinations conducted by a Regulatory
Agency in the ordinary course of the
business of PNFP and its Subsidiaries, no
Regulatory Agency has initiated any
proceeding or, to the knowledge of PNFP,
investigation into the business or
operations of PNFP or any of its
Subsidiaries since January 1, 2000, except
where such proceedings or investigation
will not, either individually or in the
aggregate, have a Material Adverse Effect
on PNFP. There is no unresolved
violation, criticism, or exception by any
Regulatory Agency with respect to any
report or statement relating to any
examinations of PNFP or any of its
Subsidiaries which, in the reasonable
judgment of PNFP, will, either
individually or in the aggregate, have a
Material Adverse Effect on PNFP.
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<PAGE>
3.6
Financial Statements. PNFP has previously made available to CAVB
true
and correct copies of (i) the consolidated
balance sheets of PNFP and its
Subsidiaries as of December 31, 2002, 2003
and 2004 and the related consolidated
statements of income and changes in
shareholders' equity and cash flows for the
fiscal years ended December 31, 2002
through 2004, inclusive as reported in
PNFP's Annual Report on Form 10-K for the
fiscal year ended December 31, 2004,
filed with the SEC under the Exchange Act
and accompanied by the audit report of
KPMG LLP, independent public accountants
with respect to PNFP, and (ii) the
unaudited consolidated balance sheet of
PNFP and its Subsidiaries as of June 30,
2004 and 2005, and the related consolidated
statements of income, changes in
shareholders' equity and cash flows for the
three-month period then ended, as
reported in PNFP's Quarterly Report on Form
10-Q for the quarterly period ended
June 30, 2005. The financial statements
referred to in this Section 3.6
(including the related notes, where
applicable) fairly present in all material
respects the consolidated results of
operations, changes in shareholders'
equity, cash flows and financial position
of PNFP and its Subsidiaries for the
respective fiscal periods or as of the
respective dates therein set forth,
subject to normal year-end audit
adjustments in the case of unaudited
statements; each of such statements
(including the related notes, where
applicable) complies in all material
respects with applicable accounting
requirements and with the published rules
and regulations of the SEC with
respect thereto; and each of such
statements (including the related notes, where
applicable) has been prepared in all
material respects in accordance with
accounting principles generally accepted in
the United States ("GAAP")
consistently applied during the periods
involved, except, in each case, as
indicated in such statements or in the
notes thereto. The books and records of
PNFP and its Subsidiaries have been, and
are being, maintained in all material
respects in accordance with GAAP and any
other applicable legal and accounting
requirements and reflect only actual
transactions.
3.7
Broker's Fees. Except for Raymond James & Associates, Inc.,
neither
PNFP nor any PNFP Subsidiary nor any of
their respective officers or directors
has employed any broker or finder or
incurred any liability for any broker's
fees, commissions or finder's fees in
connection with the Merger or related
transactions contemplated by this
Agreement.
3.8
Absence of Certain Changes or Events.
(a) Since June 30, 2005, no event or events have occurred that
have
had, either individually or in the
aggregate, a Material Adverse Effect on PNFP.
(b) Since June 30, 2005, through and including the date of this
Agreement, PNFP and its Subsidiaries have
carried on their respective businesses
in all material respects in the ordinary
course.
3.9 Legal
Proceedings.
(a) Except as disclosed in Section 3.9(a) of the PNFP
Disclosure
Schedule, neither PNFP nor any of its
Subsidiaries is a party to any, and there
are no pending or, to the best of PNFP's
knowledge, threatened, legal,
administrative, arbitral or other
proceedings, claims, actions or governmental
or regulatory investigations of any nature
against PNFP or any of its
Subsidiaries or challenging the validity or
propriety of the transactions
contemplated by this Agreement as to which,
in any such case, there is a
reasonable probability of an adverse
12
<PAGE>
determination and which, if adversely
determined, will be reasonably likely to,
either individually or in the aggregate,
have a Material Adverse Effect on PNFP.
(b) There is no injunction, order, judgment, decree, or
regulatory
restriction (other than those that apply to
similarly situated bank holding
companies or banks) imposed upon PNFP, any
of its Subsidiaries or the assets of
PNFP or any of its Subsidiaries that has
had, or will have, either individually
or in the aggregate, a Material Adverse
Effect on PNFP.
3.10 Taxes
and Tax Returns.
(a) Each of PNFP and its Subsidiaries has duly filed all
federal,
state, foreign and local information
returns and Tax returns required to be
filed by it on or prior to the date of this
Agreement (all such returns being
accurate and complete in all material
respects) and has duly paid or made
provision for the payment of all Taxes that
have been incurred or are due or
claimed to be due from it by federal,
state, foreign or local taxing authorities
other than (i) Taxes or other governmental
charges that are not yet delinquent
or are being contested in good faith or
have not been finally determined and
have been adequately reserved against under
GAAP, or (ii) information returns,
Tax returns or Taxes as to which the
failure to file, pay or make provision for
is not reasonably likely to have, either
individually or in the aggregate, a
Material Adverse Effect on PNFP. The
federal income Tax returns of PNFP and its
Subsidiaries to the knowledge of PNFP have
not been examined by the IRS. There
are no material disputes pending, or to the
knowledge of PNFP, claims asserted,
for Taxes or assessments upon PNFP or any
of its Subsidiaries for which PNFP
does not have reserves that are adequate
under GAAP. Neither PNFP nor any of its
Subsidiaries is a party to or is bound by
any Tax sharing, allocation or
indemnification agreement or arrangement
(other than such an agreement or
arrangement exclusively between or among
PNFP and its Subsidiaries). Within the
past five years, neither PNFP nor any of
its Subsidiaries has been a
"distributing corporation" or a "controlled
corporation" in a distribution
intended to qualify under Section 355(a) of
the Code.
(b) As used in this Agreement, the term "Tax" or "Taxes" means
(i)
all federal, state, local, and foreign
income, excise, gross receipts, gross
income, ad valorem, profits, gains,
property, capital, sales, transfer, use,
payroll, employment, severance,
withholding, duties, intangibles, franchise,
backup withholding, and other taxes,
charges, levies or like assessments
together with all penalties and additions
to tax and interest thereon and (ii)
any liability for Taxes described in clause
(i) under Treasury Regulation
Section 1.1502-6 (or any similar provision
of state, local or foreign law).
3.11
Employees.
(a) Section 3.11(a) of the PNFP Disclosure Schedule sets forth
a
true and complete list of each material
benefit or compensation plan,
arrangement or agreement, and any material
bonus, incentive, deferred
compensation, vacation, stock purchase,
stock option, severance, employment,
change of control or fringe benefit plan,
program or agreement that is
maintained, or contributed to, for the
benefit of current or former directors or
employees of PNFP and its Subsidiaries or
with respect to which PNFP or its
Subsidiaries may, directly or indirectly,
have any liability to such directors
or employees, as of the date of this
Agreement (the "PNFP Benefit Plans").
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<PAGE>
(b) PNFP has heretofore made available to CAVB true and
complete
copies of each of the PNFP Benefit Plans
and certain related documents,
including, but not limited to, (i) the
actuarial report for such PNFP Benefit
Plan (if applicable) for each of the last
two years, and (ii) the most recent
determination letter from the IRS (if
applicable) for such PNFP Benefit Plan..
(c) Except as would not reasonably be expected to have, either
individually or in the aggregate, a
Material Adverse Effect on PNFP, (i) each of
the PNFP Benefit Plans has been operated
and administered in all material
respects in compliance with the Employee
Retirement Income Security Act of 1974,
as amended ("ERISA") and the Code, (ii)
each of the PNFP Benefit Plans intended
to be "qualified" within the meaning of
Section 401(a) of the Code and has
received a favorable determination from the
IRS that such PNFP Benefit Plan is
so qualified, and to the knowledge of PNFP,
there are no existing circumstances
or any events that have occurred that will
adversely affect the qualified status
of any such PNFP Benefit Plan, (iii) with
respect to each PNFP Benefit Plan
which is subject to Title IV of ERISA, the
present value of accrued benefits
under such PNFP Benefit Plan, based upon
the actuarial assumptions used for
funding purposes in the most recent
actuarial report prepared by such PNFP
Benefit Plan's actuary with respect to such
PNFP Benefit Plan, did not, as of
its latest valuation date, exceed the then
current value of the assets of such
PNFP Benefit Plan allocable to such accrued
benefits, (iv) no PNFP Benefit Plan
provides benefits, including, without
limitation, death or medical benefits
(whether or not insured), with respect to
current or former employees or
directors of PNFP or its Subsidiaries
beyond their retirement or other
termination of service, other than (A)
coverage mandated by applicable law, (B)
death benefits or retirement benefits under
any "employee pension plan" (as such
term is defined in Section 3(2) of ERISA),
(C) deferred compensation benefits
accrued as liabilities on the books of PNFP
or its Subsidiaries or (D) benefits
the full cost of which is borne by the
current or former employee or director
(or his beneficiary), (v) no material
liability under Title IV of ERISA has been
incurred by PNFP, its Subsidiaries or any
trade or business, whether or not
incorporated, all of which together with
PNFP, would be deemed a "single
employer" under Section 4001 of ERISA (a
"PNFP ERISA Affiliate") that has not
been satisfied in full, and no condition
exists that presents a material risk to
PNFP, its Subsidiaries or any PNFP ERISA
Affiliate of incurring a material
liability thereunder, (vi) no PNFP Benefit
Plan is a "multiemployer pension
plan" (as such term is defined in Section
3(37) of ERISA), (vii) all
contributions payable by PNFP or its
Subsidiaries as of the Effective Time with
respect to each PNFP Benefit Plan in
respect of current or prior plan years have
been paid or accrued in accordance with
GAAP, (viii) none of PNFP, its
Subsidiaries or any other person, including
any fiduciary, has engaged in a
transaction in connection with which PNFP,
its Subsidiaries or any PNFP Benefit
Plan will be subject to either a material
civil penalty assessed pursuant to
Section 409 or 502(i) of ERISA or a
material Tax imposed pursuant to Section
4975 or 4976 of the Code, and (ix) to the
knowledge of PNFP there are no
pending, threatened or anticipated claims
(other than routine claims for
benefits) by, on behalf of or against any
of the PNFP Benefit Plans or any
trusts related thereto.
(d) Neither the execution and delivery of this Agreement nor
the
consummation of the transactions
contemplated hereby will (either alone or in
conjunction with any other event) (i)
result (either alone or upon the
occurrence of any additional acts or
events) in any payment (including, without
limitation, severance, unemployment
compensation, "excess parachute payment"
(within the meaning of Section 280G of the
Code), forgiveness of indebtedness or
otherwise) becoming due to any director or
any employee of PNFP or any of its
affiliates from PNFP or any of its
14
<PAGE>
affiliates under any PNFP Benefit Plan or
otherwise, (ii) increase any benefits
otherwise payable under any PNFP Benefit
Plan or (iii) result in any
acceleration of the time of payment or
vesting of any such benefits that will,
either individually or in the aggregate,
have a Material Adverse Effect on PNFP.
3.12 SEC
Reports. PNFP has previously made available to CAVB an accurate
and complete copy of each (a) final
registration statement, prospectus, report,
schedule and definitive proxy statement
filed since January 1, 2000 by PNFP with
the SEC pursuant to the Securities Act or
the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and prior
to the date hereof and (b)
communication mailed by PNFP to its
shareholders since January 1, 2000. PNFP has
filed all required reports, schedules,
registration statements and other
documents with the SEC since January 1,
2000 (the "PNFP Reports"). As of their
respective dates of filing with the SEC
(or, if amended or superseded by a
filing prior to the date hereof, as of the
date of such filing), the PNFP
Reports complied in all material respects
with the requirements of the
Securities Act or the Exchange Act, as the
case may be, and the rules and
regulations of the SEC thereunder
applicable to such PNFP Reports, and none of
the PNFP Reports when filed contained any
untrue statement of a material fact or
omitted to state a material fact required
to be stated therein or necessary to
make the statements therein, in light of
the circumstances under which they were
made, not misleading.
3.13
Compliance with Applicable Law.
(a) PNFP and each of its Subsidiaries hold all material
licenses,
franchises, permits, patents, trademarks
and authorizations necessary for the
lawful conduct of their respective
businesses under and pursuant to each, and
have complied in all material respects with
and are not in default in any
material respect under any, applicable law,
statute, order, rule, regulation,
policy, agreement and/or guideline of any
Governmental Entity relating to PNFP
or any of its Subsidiaries, except where
the failure to hold such license,
franchise, permit or authorization or such
noncompliance or default will not,
either individually or in the aggregate,
have a Material Adverse Effect on PNFP.
(b) Except as will not have, either individually or in the
aggregate, a Material Adverse Effect on
PNFP, PNFP and each of its Subsidiaries
have properly administered all accounts for
which it acts as a fiduciary,
including accounts for which it serves as a
trustee, agent, custodian, personal
representative, guardian, conservator or
investment advisor, in accordance with
the terms of the governing documents,
applicable state and federal law and
regulation and common law. None of PNFP,
any of its Subsidiaries, or any
director, officer or employee of PNFP or of
any of its Subsidiaries, has
committed any breach of trust with respect
to any such fiduciary account that
will have a Material Adverse Effect on
PNFP, and the accountings for each such
fiduciary account are true and correct in
all material respects and accurately
reflect the assets of such fiduciary
account.
3.14
Certain Contracts.
(a) Except as disclosed in Section 3.11(a) of the PNFP
Disclosure
Schedule, neither PNFP nor any of its
Subsidiaries is a party to or bound by any
contract, arrangement, commitment or
understanding (whether written or oral) (i)
with respect to the employment of any
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directors, officers or employees other than
in the ordinary course of business
consistent with past practice, (ii) which,
upon the consummation or shareholder
approval of the transactions contemplated
by this Agreement will (either alone
or upon the occurrence of any additional
acts or events) result in any payment
(whether of severance pay or otherwise)
becoming due from PNFP, CAVB, the
Surviving Corporation, or any of their
respective Subsidiaries to any officer or
employee thereof, (iii) which is a
"material contract" (as such term is defined
in Item 601(b)(10) of Regulation S-K of the
SEC) to be performed after the date
of this Agreement that has not been filed
or incorporated by reference in the
PNFP Reports, (iv) which materially
restricts the conduct of any line of
business by PNFP or upon consummation of
the Merger will materially restrict the
ability of the Surviving Corporation to
engage in any line of business in which
a bank holding company may lawfully engage,
(v) with or to a labor union or
guild (including any collective bargaining
agreement) or (vi) (including any
stock option plan, stock appreciation
rights plan, restricted stock plan or
stock purchase plan) any of the benefits of
which will be increased, or the
vesting of the benefits of which will be
accelerated, by the occurrence of any
shareholder approval or the consummation of
any of the transactions contemplated
by this Agreement, or the value of any of
the benefits of which will be
calculated on the basis of any of the
transactions contemplated by this
Agreement. Each contract, arrangement,
commitment or understanding of the type
described in this Section 3.14(a), whether
or not set forth in the PNFP
Disclosure Schedule, is referred to herein
as a "PNFP Contract", and neither
PNFP nor any of its Subsidiaries knows of,
or has received notice of, any
violation of the above by any of the other
parties thereto which will have,
individually or in the aggregate, a
Material Adverse Effect on PNFP.
(b) (i) Each PNFP Contract is valid and binding on PNFP or any
of
its Subsidiaries, as applicable, and in
full force and effect, (ii) PNFP and
each of its Subsidiaries has in all
material respects performed all obligations
required to be performed by it to date
under each PNFP Contract, except where
such noncompliance, either individually or
in the aggregate, will not have a
Material Adverse Effect on PNFP, and (iii)
no event or condition exists which
constitutes or, after notice or lapse of
time or both, will constitute, a
material default on the part of PNFP or any
of its Subsidiaries under any such
PNFP Contract, except where such default
which will, either individually or in
the aggregate, have a Material Adverse
Effect on PNFP.
3.15
Agreements with Regulatory Agencies. Neither PNFP nor any of
its
Subsidiaries is subject to any
cease-and-desist or other order issued by, or is
a party to any written agreement, consent
agreement or memorandum of
understanding with, or is a party to any
commitment letter or similar
undertaking to, or is subject to any order
or directive by, or has been since
January 1, 2000, a recipient of any
supervisory letter from, or since January 1,
2000, has adopted any board resolutions at
the request of, any Regulatory Agency
or other Governmental Entity that currently
restricts in any material respect
the conduct of its business, would restrict
the consummation of the transactions
contemplated by this Agreement, or that in
any material manner relates to its
capital adequacy, its credit policies, its
management or its business (each,
whether or not set forth in the PNFP
Disclosure Schedule, a "PNFP Regulatory
Agreement"), nor to the knowledge of PNFP
has PNFP or any of its Subsidiaries
been advised since January 1, 2001, by any
Regulatory Agency or other
Governmental Entity that it is considering
issuing or requesting any such PNFP
Regulatory Agreement.
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3.16
Interest Rate Risk Management Instruments. Except as would not
be
reasonably likely to have, either
individually or in the aggregate, a Material
Adverse Effect on PNFP, (a) all interest
rate swaps, caps, floors and option
agreements and other interest rate risk
management arrangements, whether entered
into for the account of PNFP or for the
account of a customer of PNFP or one of
its Subsidiaries, were entered into in the
ordinary course of business and, to
PNFP's knowledge, in accordance with
prudent banking practice and applicable
rules, regulations and policies of any
Regulatory Authority and with
counterparties believed to be financially
responsible at the time, and are
legal, valid and binding obligations of
PNFP or one of its Subsidiaries
enforceable in accordance with their terms
(except as may be limited by
bankruptcy, insolvency, moratorium,
reorganization or similar laws affecting the
rights of creditors generally and the
availability of equitable remedies), and
are in full force and effect; (b) PNFP and
each of its Subsidiaries have duly
performed in all material respects all of
their material obligations thereunder
to the extent that such obligations to
perform have accrued; and (c) to PNFP's
knowledge, there are no material breaches,
violations or defaults or allegations
or assertions of such by any party
thereunder.
3.17
Undisclosed Liabilities. Except for those liabilities that are
fully
reflected or reserved against on the
consolidated balance sheet of PNFP included
in the PNFP Form 10-Q and for liabilities
incurred in the ordinary course of
business consistent with past practice
since June 30, 2005, neither PNFP nor any
of its Subsidiaries has incurred any
liability of any nature whatsoever (whether
absolute, accrued, contingent or otherwise
and whether due or to become due)
that, either individually or in the
aggregate, has had or will have, a Material
Adverse Effect on PNFP.
3.18
Insurance. PNFP and its Subsidiaries have in effect insurance
coverage with reputable insurers or are
self-insured, which in respect of
amounts, premiums, types and risks insured,
constitutes reasonably adequate
coverage against all risks insured against
by bank holding companies comparable
in size and operations to PNFP and its
Subsidiaries.
3.19
Environmental Liability. There are no legal, administrative,
arbitral
or other proceedings, claims, actions,
causes of action, private environmental
investigations or remediation activities or
governmental investigations of any
nature seeking to impose, or that could
reasonably result in the imposition, on
PNFP of any liability or obligation arising
under common law or under any local,
state or federal environmental statute,
regulation or ordinance including,
without limitation, the Comprehensive
Environmental Response, Compensation and
Liability Act of 1980, as amended
("CERCLA"), pending or, to the knowledge of
PNFP, threatened against PNFP, which
liability or obligation will, either
individually or in the aggregate, have a
Material Adverse Effect on PNFP. To the
knowledge of PNFP, there is no reasonable
basis for any such proceeding, claim,
action or governmental investigation that
would impose any liability or
obligation that will, individually or in
the aggregate, have a Material Adverse
Effect on PNFP. PNFP is not subject to any
agreement, order, judgment, decree,
letter or memorandum by or with any court,
governmental authority, regulatory
agency or third party imposing any
liability or obligation with respect to the
foregoing that will have, either
individually or in the aggregate, a Material
Adverse Effect on PNFP.
3.20 State
Takeover Laws. The Board of Directors of PNFP has approved the
transactions contemplated by this Agreement
for purposes of Sections 48-103-101
through 48-
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103-505 of the TBCA, if applicable to PNFP,
such that the provisions of such
sections of the TBCA will not apply to this
Agreement or any of the transactions
contemplated hereby or thereby.
3.21
Reorganization. As of the date of this Agreement, PNFP is not
aware
of any fact or circumstance that would
reasonably be expected to prevent the
Merger from qualifying as a
"reorganization" within the meaning of Section
368(a) of the Code.
3.22
Information Supplied. None of the information supplied or to be
supplied by PNFP for inclusion or
incorporation by reference in (i) the Form S-4
will, at the time the Form S-4 is filed
with the SEC and at the time it becomes
effective under the Securities Act, contain
any untrue statement of a material
fact or omit to state any material fact
required to be stated therein or
necessary to make the statements therein
not misleading, and (ii) the Joint
Proxy Statement will, at the date of
mailing to shareholders and at the times of
the meetings of shareholders to be held in
connection with the Merger, contain
any untrue statement of a material fact or
omit to state any material fact
required to be stated therein or necessary
in order to make the statements
therein, in light of the circumstances
under which they were made, not
misleading. The Joint Proxy Statement will
comply as to form in all material
respects with the requirements of the
Exchange Act and the rules and regulations
of the SEC thereunder, except that no
representation or warranty is made by PNFP
with respect to statements made or
incorporated by reference therein based on
information supplied by CAVB for inclusion
or incorporation by reference in the
Joint Proxy Statement.
3.23
Internal Controls. The records, systems, controls, data and
information of PNFP and its Subsidiaries
are recorded, stored, maintained and
operated under means (including any
electronic, mechanical or photographic
process, whether computerized or not) that
are under the exclusive ownership and
direct control of PNFP or its Subsidiaries
or accountants (including all means
of access thereto and therefrom), except
for any non-exclusive ownership and
non-direct control that would not
reasonably be expected to have a Materially
Adverse Effect on the system of internal
accounting controls described in the
following sentence. As and to the extent
described in the PNFP Reports filed
with the SEC prior to the date hereof, PNFP
and its Subsidiaries have devised
and maintain a system of internal
accounting controls sufficient to provide
reasonable assurances regarding the
reliability of financial reporting and the
preparation of financial statements in
accordance with GAAP. PNFP (i) has
designed disclosure controls and procedures
to ensure that material information
relating to PNFP, including its
consolidated Subsidiaries, is made known to the
management of PNFP by others within those
entities, and (ii) has disclosed,
based on its most recent evaluation prior
to
