EXHIBIT 99.2
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
FIRST COASTAL BANKSHARES, INC.
AND
CENTURA BANKS, INC.
Dated as of October 28, 1998
TABLE OF CONTENTS
Page
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Parties.......................................................................1
Preamble......................................................................1
ARTICLE 1-TRANSACTIONS AND TERMS OF MERGER....................................2
1.1 Merger..........................................................2
1.2 Time and Place of Closing.......................................2
1.3 Effective Time..................................................2
1.4 Execution of Stock Option Agreement.............................2
1.5 Restructure of Transaction......................................2
ARTICLE 2-TERMS OF MERGER.....................................................3
2.1 Articles of Incorporation.......................................3
2.2 Bylaws..........................................................3
2.3 Directors and Officers..........................................3
ARTICLE 3-MANNER OF CONVERTING SHARES.........................................3
3.1 Conversion of Shares............................................3
3.2 Anti-Dilution Provisions........................................4
3.3 Shares Held by First Coastal or Centura.........................4
3.4 Fractional Shares...............................................4
3.5 Conversion of Stock Rights......................................5
ARTICLE 4-EXCHANGE OF SHARES..................................................6
4.1 Exchange Procedures.............................................6
4.2 Rights of Former First Coastal Stockholders.....................7
ARTICLE 5-REPRESENTATIONS AND WARRANTIES OF FIRST COASTAL.....................8
5.1 Organization, Standing, and Power...............................8
5.2 Authority; No Breach By Agreement...............................8
5.3 Capital Stock...................................................9
5.4 First Coastal Subsidiaries......................................9
5.5 SEC Filings; Financial Statements...............................10
5.6 Absence of Undisclosed Liabilities..............................11
5.7 Absence of Certain Changes or Events............................11
5.8 Tax Matters.....................................................11
5.9 Assets..........................................................12
5.10 Environmental Matters...........................................13
5.11 Compliance with Laws............................................14
5.12 Labor Relations.................................................14
5.13 Employee Benefit Plans..........................................15
5.14 Material Contracts..............................................17
5.15 Legal Proceedings...............................................18
5.16 Reports.........................................................18
5.17 Statements True and Correct.....................................18
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5.18 Tax and Regulatory Matters......................................19
5.19 State Takeover Laws.............................................19
5.20 Charter Provisions..............................................19
5.21 Derivatives.....................................................19
5.22 Year 2000.......................................................19
ARTICLE 6-REPRESENTATIONS AND WARRANTIES OF CENTURA...........................20
6.1 Organization, Standing, and Power...............................20
6.2 Authority; No Breach By Agreement...............................20
6.3 Capital Stock...................................................21
6.4 Centura Subsidiaries............................................21
6.5 SEC Filings; Financial Statements...............................22
6.6 Absence of Undisclosed Liabilities..............................22
6.7 Absence of Certain Changes or Events............................23
6.8 Tax Matters.....................................................23
6.9 Assets..........................................................24
6.10 Environmental Matters...........................................24
6.11 Compliance with Laws............................................26
6.12 Labor Relations.................................................26
6.13 Legal Proceedings...............................................26
6.14 Reports.........................................................27
6.15 Statements True and Correct.....................................27
6.16 Tax and Regulatory Matters......................................27
6.17 Derivatives.....................................................27
6.18 Year 2000.......................................................28
ARTICLE 7-CONDUCT OF BUSINESS PENDING CONSUMMATION............................28
7.1 Affirmative Covenants of First Coastal..........................28
7.2 Negative Covenants of First Coastal.............................28
7.3 Covenants of Centura............................................30
7.4 Adverse Changes in Condition....................................31
7.5 Reports.........................................................31
ARTICLE 8-ADDITIONAL AGREEMENTS...............................................31
8.1 Registration Statement; Proxy Statement; Stockholder Approval...31
8.2 Exchange Listing................................................32
8.3 Applications....................................................32
8.4 Filings with State Offices......................................32
8.5 Agreement as to Efforts to Consummate...........................32
8.6 Investigation and Confidentiality...............................33
8.7 Press Releases..................................................33
8.8 Certain Actions.................................................34
8.9 Accounting and Tax Treatment....................................34
8.10 State Takeover Laws.............................................34
8.11 Charter Provisions..............................................34
8.12 Agreement of Affiliates.........................................35
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8.13 Employee Benefits and Contracts.................................35
8.14 Indemnification.................................................36
8.15 Assumption of Agreement.........................................37
ARTICLE 9-CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE...................37
9.1 Conditions to Obligations of Each Party.........................37
9.2 Conditions to Obligations of Centura............................39
9.3 Conditions to Obligations of First Coastal......................40
ARTICLE 10-TERMINATION........................................................41
10.1 Termination.....................................................41
10.2 Effect of Termination...........................................42
10.3 Non-Survival of Representations and Covenants...................42
ARTICLE 11-MISCELLANEOUS......................................................43
11.1 Definitions.....................................................43
11.2 Expenses........................................................51
11.3 Brokers and Finders.............................................51
11.4 Entire Agreement................................................52
11.5 Amendments......................................................52
11.6 Waivers.........................................................52
11.7 Assignment......................................................53
11.8 Notices.........................................................53
11.9 Governing Law...................................................54
11.10 Counterparts....................................................54
11.11 Captions........................................................54
11.12 Interpretations.................................................54
11.13 Enforcement of Agreement........................................54
11.14 Severability....................................................54
Signatures....................................................................55
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LIST OF EXHIBITS
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Exhibit Number Description
- -------------- -----------
1. Form of Stock Option Agreement.
2. Form of Affiliate Agreement.
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AGREEMENT AND PLAN OF MERGER
----------------------------
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and
entered into as of October 28, 1998, by and between FIRST COASTAL BANKSHARES,
INC. ("First Coastal"), a corporation organized and existing under the Laws of
the Commonwealth of Virginia, with its principal office located in Virginia
Beach, Virginia; and CENTURA BANKS, INC. ("Centura"), a corporation organized
and existing under the Laws of the State of North Carolina, with its principal
office located in Rocky Mount, North Carolina.
Preamble
--------
The Boards of Directors of First Coastal and Centura are of the
opinion that the transactions described herein are in the best interests of the
parties to this Agreement and their respective stockholders. This Agreement
provides for the acquisition of First Coastal by Centura pursuant to the merger
(the "Merger") of First Coastal with and into Centura. At the effective time of
the Merger, the outstanding shares of the capital stock of First Coastal shall
be converted into shares of the common stock of Centura (except as provided
herein). As a result, stockholders of First Coastal shall become stockholders of
Centura, and each of the subsidiaries of First Coastal shall continue to conduct
its business and operations as a subsidiary of Centura. The transactions
described in this Agreement are subject to the approvals of the stockholders of
First Coastal, the Board of Governors of the Federal Reserve System, and certain
state regulatory authorities, and the satisfaction of certain other conditions
described in this Agreement. It is the intention of the parties to this
Agreement that the Merger (i) for federal income tax purposes shall qualify as a
"reorganization" within the meaning of Section 368(a) of the Internal Revenue
Code, and (ii) for accounting purposes shall qualify for treatment as a pooling
of interests.
Immediately after the execution and delivery of this Agreement, as
a condition and inducement to Centura's willingness to enter into this
Agreement, First Coastal and Centura are entering into a stock option agreement
(the "Stock Option Agreement"), in substantially the form of Exhibit 1, pursuant
to which First Coastal is granting to Centura an option to purchase shares of
First Coastal Common Stock ".
Certain terms used in this Agreement are defined in Section 11.1
of this Agreement.
NOW, THEREFORE, in consideration of the above and the mutual
warranties, representations, covenants, and agreements set forth herein, the
Parties, intending to be legally bound, agree as follows:
ARTICLE 1
TRANSACTIONS AND TERMS OF MERGER
--------------------------------
1.1 Merger. Subject to the terms and conditions of this Agreement,
at the Effective Time, First Coastal shall be merged with and into Centura in
accordance with the provisions of Section 13.1-722 of the VSCA and with the
effect provided in Section 13.1-721 of the VSCA and Section 55-11-07 of the
NCBCA and with the effect provided in Section 55-11-06 of the NCBCA (the
"Merger"). Centura shall be the Surviving Corporation resulting from the Merger
and shall continue to be governed by the Laws of the State of North Carolina.
The Merger shall be consummated pursuant to the terms of this Agreement, which
has been approved and adopted by the respective Boards of Directors of First
Coastal and Centura.
1.2 Time and Place of Closing. The consummation of the Merger (the
"Closing") shall 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 duly
authorized officers, may mutually agree. The place of Closing shall be at such
location as may be mutually agreed upon by the Parties.
1.3 Effective Time. The Merger and the other transactions
contemplated by this Agreement shall become effective on the date and at the
time the Virginia Articles of Merger reflecting the Merger shall become
effective with the Secretary of State of the Commonwealth of Virginia and the
North Carolina Articles of Merger shall become effective with the Secretary of
State of the State of North Carolina (the "Effective Time"). Subject to the
terms and conditions hereof, unless otherwise mutually agreed upon in writing by
the duly authorized officers of each Party, the Parties shall use their
reasonable efforts to cause the Effective Time to occur on or before the 30th
day (as designated by Centura) following the last to occur of (i) the effective
date (including expiration of any applicable waiting period) of the last
required Consent of any Regulatory Authority having authority over and approving
or exempting the Merger, and (ii) the date on which the stockholders of First
Coastal approve the matters relating to this Agreement required to be approved
by such stockholders by applicable Law.
1.4 Execution of Stock Option Agreement. Simultaneously with
the execution of this Agreement by the Parties and as a condition thereto, First
Coastal is executing and delivering to Centura the Stock Option Agreement,
pursuant to which First Coastal is granting to Centura an option to purchase
shares of First Coastal Common Stock.
1.5 Restructure of Transaction. Centura shall, in its
reasonable discretion, have the unilateral right to revise the structure of the
Merger contemplated by this Agreement in order to achieve Tax benefits or for
any other reason which Centura may deem advisable; provided, however, that
Centura shall not have the right, without the approval of the Board of Directors
of First Coastal and, if required by applicable Law, the holders of First
Coastal Common Stock, to make any revision to the structure of the Merger which:
(i) changes the amount of the consideration which the holders of shares of First
Coastal Common Stock are entitled to receive (determined in the manner provided
in Section 4.1 of this Agreement); (ii) changes the intended tax-free effects of
the Merger to Centura, First Coastal, or the holders of shares of First Coastal
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Common Stock or changes the intended pooling-of-interests accounting treatment;
(iii) would permit Centura to pay the consideration other than by delivery of
Centura Common Stock registered with the SEC (in the manner described in Section
4.1 of this Agreement); (iv) would be Materially adverse to the interests of
First Coastal or adverse to the holders of shares of First Coastal Common Stock;
or (v) would Materially impede or delay consummation of the Merger. Centura may
exercise this right of revision by giving written notice to First Coastal in the
manner provided in Section 11.8 of this Agreement which notice shall be in the
form of an amendment to this Agreement or in the form of an Agreement and Plan
of Merger.
ARTICLE 2
TERMS OF MERGER
---------------
2.1 Articles of Incorporation. The Articles of Incorporation of
Centura in effect immediately prior to the Effective Time shall be the Articles
of Incorporation of the Surviving Corporation after the Effective Time until
otherwise amended or repealed.
2.2 Bylaws. The Bylaws of Centura in effect immediately prior to
the Effective Time shall be the Bylaws of the Surviving Corporation after the
Effective Time until otherwise amended or repealed.
2.3 Directors and Officers. The directors of Centura in office
immediately prior to the Effective Time, together with one current member of the
Board of Directors of First Coastal, to be jointly selected by First Coastal and
Centura, and such additional persons as thereafter elected, shall serve as the
directors of the Surviving Corporation from and after the Effective Time in
accordance with the Bylaws of the Surviving Corporation. The officers of Centura
in office immediately prior to the Effective Time, together with such additional
officers as thereafter elected, shall serve as the officers of the Surviving
Corporation from and after the Effective Time in accordance with the Bylaws of
the Surviving Corporation.
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 Centura or First Coastal, or the stockholders of either of the
foregoing, the shares of the constituent corporations shall be converted as
follows:
(a) Each share of Centura Common Stock issued and outstanding
immediately prior to the Effective Time shall remain issued and
outstanding from and after the Effective Time.
(b) Each share of First Coastal Common Stock (excluding shares
held by any First Coastal Company or any Centura Company, in each case
other than in a fiduciary capacity
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or as a result of debts previously contracted) issued and outstanding at
the Effective Time shall be converted into .34 of a share of Centura Common
Stock (subject to adjustment as described below, the "Exchange Ratio");
provided, however, that: (i) in the event the Average Closing Price is less
than $58.7563 and greater than or equal to $51.8438, then the Exchange
Ratio shall equal the quotient obtained by dividing (a) the product
obtained by multiplying (1) the Exchange Ratio (as then in effect) and (2)
$58.7563 by (b) the Average Closing Price; and (ii) in the event the
Average Closing Price is greater than $79.4938 and less than or equal to
$86.4063, then the Exchange Ratio shall equal the quotient obtained by
dividing (a) the product obtained by multiplying (1) the Exchange Ratio (as
then in effect) and (2) $79.4938 by (b) the Average Closing Price.
3.2 Anti-Dilution Provisions. In the event First Coastal changes
the number of shares of First Coastal Common Stock issued and outstanding prior
to the Effective Time as a result of a stock split, stock dividend,
recapitalization, or similar transaction with respect to such stock, the
Exchange Ratio shall be proportionately adjusted. In the event Centura changes
the number of shares of Centura Common Stock issued and outstanding prior to the
Effective Time as a result of a stock split, stock dividend, recapitalization,
or similar transaction with respect to such stock and the record date therefor
(in the case of a stock dividend) or the effective date thereof (in the case of
a stock split or similar recapitalization for which a record date is not
established) shall be prior to the Effective Time, the Exchange Ratio shall be
proportionately adjusted.
3.3 Shares Held by First Coastal or Centura. Each of the shares of
First Coastal Common Stock held by any First Coastal Company or by any Centura
Company, in each case other than in a fiduciary capacity or as a result of debts
previously contracted, shall be canceled and retired at the Effective Time and
no consideration shall be issued in exchange therefor.
3.4 Fractional Shares. Notwithstanding any other provision of this
Agreement, each holder of shares of First Coastal Common Stock exchanged
pursuant to the Merger who would otherwise have been entitled to receive a
fraction of a share of Centura 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
Centura Common Stock multiplied by the market value of one share of Centura
Common Stock at the Effective Time. The market value of one share of Centura
Common Stock at the Effective Time shall be the closing price of Centura Common
Stock on the NYSE - Composite Transaction List (as reported by The Wall Street
Journal or, if not reported thereby, any other authoritative source selected by
Centura) on the last trading day preceding the Effective Time. No such holder
will be entitled to dividends, voting rights, or any other rights as a
stockholder in respect of any fractional shares.
3.5 Conversion of Stock Rights.
(a) At the Effective Time, each award, option, or other
right to purchase or acquire shares of First Coastal Common Stock pursuant to
stock options, stock appreciation rights, or stock awards ("First Coastal
Rights") granted by First Coastal under the First Coastal
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Stock Plans, which are outstanding at the Effective Time, whether or not
exercisable, shall be converted into and become rights with respect to Centura
Common Stock, and Centura shall assume each First Coastal Right, in accordance
with the terms of the First Coastal Stock Plan and stock option agreement by
which it is evidenced, except that from and after the Effective Time, (i)
Centura and its Compensation Committee shall be substituted for First Coastal
and the Committee of First Coastal's Board of Directors (including, if
applicable, the entire Board of Directors of First Coastal) administering such
First Coastal Stock Plan, (ii) each First Coastal Right assumed by Centura may
be exercised solely for shares of Centura Common Stock (or cash in the case of
stock appreciation rights), (iii) the number of shares of Centura Common Stock
subject to such First Coastal Right shall be equal to the number of shares of
First Coastal Common Stock subject to such First Coastal Right immediately prior
to the Effective Time multiplied by the Exchange Ratio, and (iv) the per share
exercise price (or similar threshold price, in the case of stock awards) under
each such First Coastal Right shall be adjusted by dividing the per share
exercise (or threshold) price under each such First Coastal Right by the
Exchange Ratio and rounding up to the nearest cent. Notwithstanding the
provisions of clause (iii) of the preceding sentence, Centura shall not be
obligated to issue any fraction of a share of Centura Common Stock upon exercise
of First Coastal Rights and any fraction of a share of Centura Common Stock that
otherwise would be subject to a converted First Coastal Right shall represent
the right to receive a cash payment equal to the product of such fraction and
the difference between the market value of one share of Centura Common Stock and
the per share exercise price of such Right. The market value of one share of
Centura Common Stock shall be the closing price of Centura Common Stock on the
NYSE - Composite Transactions List (as reported by The Wall Street Journal or,
if not reported thereby, any other authoritative source selected by Centura) on
the last trading day preceding the date of exercise of the First Coastal Right.
In addition, notwithstanding the provisions of clauses (iii) and (iv) of the
first sentence of this Section 3.5, each First Coastal Right which is an
"incentive stock option" shall be adjusted as required by Section 424 of the
Internal Revenue Code, so as not to constitute a modification, extension, or
renewal of the option, within the meaning of Section 424(h) of the Internal
Revenue Code. Centura agrees to take all necessary steps to effectuate the
foregoing provisions of this Section 3.5.
(b) As soon as reasonably practicable after the Effective
Time, Centura shall deliver to the participants in each First Coastal Stock Plan
an appropriate notice setting forth such participant's rights pursuant thereto
and the grants pursuant to such First Coastal Stock Plan shall continue in
effect on the same terms and conditions (subject to the adjustments required by
Section 3.5(a) after giving effect to the Merger), and Centura shall comply with
the terms of each First Coastal Stock Plan to ensure, to the extent required by,
and subject to the provisions of, such First Coastal Stock Plan, that First
Coastal Rights which qualified as incentive stock options prior to the Effective
Time continue to qualify as incentive stock options after the Effective Time. At
or prior to the Effective Time, Centura shall take all corporate action
necessary to reserve for issuance sufficient shares of Centura Common Stock for
delivery upon exercise of First Coastal Rights assumed by it in accordance with
this Section 3.5. As soon as reasonably practicable after the Effective Time,
Centura shall file a registration statement on Form S-3 or Form S-8, as the case
may be (or any successor or other appropriate forms), with respect to the shares
of Centura Common Stock subject to such options and shall use its reasonable
efforts to
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maintain the effectiveness of such registration statements (and maintain the
current status of the prospectus or prospectuses contained therein) for so long
as such options remain outstanding. With respect to those individuals who
subsequent to the Merger will be subject to the reporting requirements under
Section 16(a) of the 1934 Act, where applicable, Centura shall administer the
First Coastal Stock Plan assumed pursuant to this Section 3.5 in a manner that
complies with Rule 16b-3 promulgated under the 1934 Act.
(c) All restrictions or limitations on transfer with respect
to First Coastal Common Stock awarded under the First Coastal Stock Plans or any
other plan, program, or arrangement of any First Coastal Company, to the extent
that such restrictions or limitations shall not have already lapsed, and except
as otherwise expressly provided in such plan, program, or arrangement, shall
remain in full force and effect with respect to shares of Centura Common Stock
into which such restricted stock is converted pursuant to Section 3.1 of this
Agreement.
ARTICLE 4
EXCHANGE OF SHARES
------------------
4.1 Exchange Procedures. Promptly after the Effective Time,
Centura and First Coastal shall cause the exchange agent selected by Centura
(the "Exchange Agent") to mail to the former stockholders of First Coastal
appropriate transmittal materials (which shall specify that delivery shall be
effected, and risk of loss and title to the certificates theretofore
representing shares of First Coastal Common Stock shall pass, only upon proper
delivery of such certificates to the Exchange Agent). After the Effective Time,
each holder of shares of First Coastal Common Stock (other than shares to be
canceled pursuant to Section 3.3 of this Agreement) issued and outstanding at
the Effective Time shall surrender the certificate or certificates representing
such shares to the Exchange Agent and shall promptly upon surrender thereof
receive in exchange therefor the consideration provided in Section 3.1 of this
Agreement, together with all undelivered dividends or distributions in respect
of such shares (without interest thereon) pursuant to Section 4.2 of this
Agreement. To the extent required by Section 3.4 of this Agreement, each holder
of shares of First Coastal Common Stock issued and outstanding at the Effective
Time also shall receive, upon surrender of the certificate or certificates
representing such shares, cash in lieu of any fractional share of Centura Common
Stock to which such holder may be otherwise entitled (without interest). Centura
shall not be obligated to deliver the consideration to which any former holder
of First Coastal Common Stock is entitled as a result of the Merger until such
holder surrenders such holder's certificate or certificates representing the
shares of First Coastal Common Stock for exchange as provided in this Section
4.1. The certificate or certificates of First Coastal Common Stock so
surrendered shall be duly endorsed as the Exchange Agent may require. Any other
provision of this Agreement notwithstanding, neither the Surviving Corporation
nor the Exchange Agent shall be liable to a holder of First Coastal Common Stock
for any amounts paid or property delivered in good faith to a public official
pursuant to any applicable abandoned property Law.
4.2 Rights of Former First Coastal Stockholders. At the Effective
Time, the stock transfer books of First Coastal shall be closed as to holders of
First Coastal Common Stock
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immediately prior to the Effective Time and no transfer of First Coastal 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 of
this Agreement, each certificate theretofore representing shares of First
Coastal Common Stock (other than shares to be canceled pursuant to Section 3.3
of this Agreement) shall from and after the Effective Time represent for all
purposes only the right to receive the consideration provided in Sections 3.1
and 3.4 of this Agreement in exchange therefor, subject, however, to the
Surviving Corporation's obligation to pay any dividends or make any other
distributions with a record date prior to the Effective Time which have been
declared or made by First Coastal in respect of such shares of First Coastal
Common Stock in accordance with the terms of this Agreement and which remain
unpaid at the Effective Time. To the extent permitted by Law, former
stockholders of record of First Coastal shall be entitled to vote after the
Effective Time at any meeting of Centura stockholders the number of whole shares
of Centura Common Stock into which their respective shares of First Coastal
Common Stock are converted, regardless of whether such holders have exchanged
their certificates representing First Coastal Common Stock for certificates
representing Centura Common Stock in accordance with the provisions of this
Agreement. Whenever a dividend or other distribution is declared by Centura on
the Centura 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 issuable pursuant to this Agreement, but beginning 30 days after the
Effective Time no dividend or other distribution payable to the holders of
record of Centura Common Stock as of any time subsequent to the Effective Time
shall be delivered to the holder of any certificate representing shares of First
Coastal Common Stock issued and outstanding at the Effective Time until such
holder surrenders such certificate for exchange as provided in Section 4.1 of
this Agreement. However, upon surrender of such First Coastal Common Stock
certificate, both the Centura Common Stock certificate (together with all such
undelivered dividends or other distributions without interest) and any
undelivered dividends and cash payments to be paid for fractional share
interests (without interest) shall be delivered and paid with respect to each
share represented by such certificate.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF FIRST COASTAL
-----------------------------------------------
First Coastal hereby represents and warrants to Centura as
follows:
5.1 Organization, Standing, and Power. First Coastal is a
corporation duly organized, validly existing, and in good standing under the
Laws of the Commonwealth of Virginia, and has the corporate power and authority
to carry on its business as now conducted and to own, lease, and operate its
Material Assets. First Coastal is duly qualified or licensed to transact
business as a foreign corporation in the States of the United States and foreign
jurisdictions where the character of its Assets or the nature or conduct of its
business requires it to be so qualified or licensed, except for such
jurisdictions in which the failure to be so qualified or licensed is not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on First Coastal.
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5.2 Authority; No Breach By Agreement.
(a) First Coastal 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
Coastal, subject to the approval of this Agreement by the holders of a majority
of the outstanding shares of First Coastal Common Stock entitled to be cast
thereon, which is the only stockholder vote required for approval of this
Agreement and consummation of the Merger by First Coastal. Subject to such
requisite stockholder approval, this Agreement represents a legal, valid, and
binding obligation of First Coastal, enforceable against First Coastal 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 Coastal, nor the consummation by First Coastal of the transactions
contemplated hereby, nor compliance by First Coastal with any of the provisions
hereof or thereof, will (i) conflict with or result in a breach of any provision
of First Coastal's Articles of Incorporation or Bylaws, 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 Coastal Company under, any
Contract or Permit of any First Coastal Company, where such Default or Lien, or
any failure to obtain such Consent, is reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on First Coastal, or (iii)
subject to receipt of the requisite Consents referred to in Section 9.1(b) of
this Agreement, violate any Law or Order applicable to any First Coastal Company
or any of their respective Material Assets.
(c) Other than in connection or compliance with the
provisions of the Securities Laws, applicable state corporate and securities
Laws, and rules of the NASD, and other than Consents required from Regulatory
Authorities, and other than notices to or filings with the Internal Revenue
Service or the Pension Benefit Guaranty Corporation with respect to any employee
benefit plans, or under the HSR Act, and other than Consents, filings, or
notifications which, if not obtained or made, are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on First Coastal, no
notice to, filing with, or Consent of, any public body or authority is necessary
for the consummation by First Coastal of the Merger and the other transactions
contemplated in this Agreement.
5.3 Capital Stock.
(a) The authorized capital stock of First Coastal consists,
as of the date of this Agreement, of (i) 10,000,000 shares of First Coastal
Common Stock, of which 4,986,541 shares are issued and outstanding as of the
date of this Agreement and, not more than 5,437,791 shares
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will be issued and outstanding at the Effective Time, and (ii) 5,000,000 shares
of First Coastal Preferred Stock, of which no shares are issued and outstanding
as of the date of this Agreement and no shares of First Coastal Preferred Stock
will be issued and outstanding as of the Effective Time. All of the issued and
outstanding shares of First Coastal Common Stock are duly and validly issued and
outstanding and are fully paid and nonassessable under the VSCA. None of the
outstanding shares of First Coastal Common Stock has been issued in violation of
any preemptive rights of the current or past stockholders of First Coastal.
(b) Except as set forth in Section 5.3(a) of this Agreement
or as provided pursuant to the First Coastal Stock Plans or the Stock Option
Agreement, there are no shares of capital stock or other equity securities of
First Coastal outstanding and no outstanding Rights relating to the capital
stock of First Coastal.
5.4 First Coastal Subsidiaries. First Coastal has disclosed in
Section 5.4 of the First Coastal Disclosure Memorandum all of the First Coastal
Subsidiaries as of the date of this Agreement. First Coastal or one of its
Subsidiaries owns all of the issued and outstanding shares of capital stock of
each First Coastal Subsidiary. No equity securities of any First Coastal
Subsidiary are or may become required to be issued (other than to another First
Coastal Company) by reason of any Rights, and there are no Contracts by which
any First Coastal Subsidiary is bound to issue (other than to another First
Coastal Company) additional shares of its capital stock or Rights or by which
any First Coastal Company is or may be bound to transfer any shares of the
capital stock of any First Coastal Subsidiary (other than to another First
Coastal Company). There are no Contracts relating to the rights of any First
Coastal Company to vote or to dispose of any shares of the capital stock of any
First Coastal Subsidiary. All of the shares of capital stock of each First
Coastal Subsidiary held by a First Coastal Company are duly authorized, validly
issued, and fully paid and, except as provided in statutes pursuant to which
depository institution Subsidiaries are organized, nonassessable under the
applicable corporation Law of the jurisdiction in which such Subsidiary is
incorporated or organized and are owned by the First Coastal Company free and
clear of any Lien. Each First Coastal Subsidiary is either a bank or a
corporation, and is duly organized, validly existing, and (as to corporations)
in good standing under the Laws of the jurisdiction in which it is incorporated
or organized, and has the corporate power and authority necessary for it to own,
lease, and operate its Assets and to carry on its business as now conducted.
Each First Coastal Subsidiary is duly qualified or licensed to transact business
as a foreign corporation in good standing in the States of the United States and
foreign jurisdictions where the character of its Assets or the nature or conduct
of its business requires it to be so qualified or licensed, except for such
jurisdictions in which the failure to be so qualified or licensed is not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on First Coastal. Each First Coastal Subsidiary that is a depository
institution is an "insured institution" as defined in the Federal Deposit
Insurance Act and applicable regulations thereunder, and the deposits in which
are insured by the Savings Association Insurance Fund.
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5.5 SEC Filings; Financial Statements.
(a) First Coastal has filed and made available to Centura
all forms, reports, and documents required to be filed by First Coastal with the
SEC since December 31, 1994 (collectively, the "First Coastal SEC Reports"). The
First Coastal SEC Reports (i) at the time filed, complied as to form in all
Material respects with the applicable requirements of the 1933 Act and the 1934
Act, as the case may be, 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 Coastal SEC Reports
or necessary in order to make the statements in such First Coastal SEC Reports,
in light of the circumstances under which they were made, not misleading. Except
for First Coastal Subsidiaries that are registered as a broker, dealer, or
investment advisor or filings required due to fiduciary holdings of the First
Coastal Subsidiaries, none of First Coastal's Subsidiaries is required to file
any forms, reports, or other documents with the SEC.
(b) Each of the First Coastal Financial Statements
(including, in each case, any related notes) contained in the First Coastal SEC
Reports, including any First Coastal SEC Reports filed after the date of this
Agreement until the Effective Time, complied or will comply as to form in all
Material respects with the applicable published rules and regulations of the SEC
with respect thereto, was prepared or will be prepared in accordance with GAAP
applied on a consistent basis throughout the periods involved (except as may be
indicated in the notes to such financial statements, or, in the case of
unaudited statements, as permitted by Form 10-Q of the SEC), and fairly
presented or will fairly present the consolidated financial position of First
Coastal and its Subsidiaries as at the respective dates and the consolidated
results of its operations and cash flows for the periods indicated, except that
the unaudited interim financial statements were or are subject to normal and
recurring year-end adjustments which were not or are not expected to be Material
in amount or effect.
5.6 Absence of Undisclosed Liabilities. No First Coastal Company
has any Liabilities that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on First Coastal, except Liabilities which
are accrued or reserved against in the consolidated balance sheets of First
Coastal as of June 30, 1998, included in the First Coastal Financial Statements
or reflected in the notes thereto and except for Liabilities incurred in the
ordinary course of business subsequent to June 30, 1998. No First Coastal
Company has incurred or paid any Liability since June 30, 1998, except for such
Liabilities incurred or paid in the ordinary course of business consistent with
past business practice and which are not reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on First Coastal.
5.7 Absence of Certain Changes or Events. Since June 30, 1998,
except as disclosed in the First Coastal Financial Statements or Section 5.7 of
the First Coastal Disclosure Memorandum, (i) there have been no events, changes,
or occurrences which have had, or are reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on First Coastal, and (ii) the First
Coastal Companies have conducted their respective businesses in the
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ordinary and usual course (excluding the incurrence of expenses in connection
with this Agreement and the transactions contemplated hereby).
5.8 Tax Matters.
(a) All Tax Returns required to be filed by or on behalf of
any of the First Coastal Companies have been timely filed, or requests for
extensions have been timely filed, granted, and have not expired for the three
tax years ended on or before December 31, 1997, and, to the Knowledge of First
Coastal, all Tax Returns filed are complete and accurate in all Material
respects. All Tax Returns for the three tax years ending on or before the date
of the most recent fiscal year end immediately preceding the Effective Time will
be timely filed or requests for extensions will be timely filed. All Taxes shown
on filed Tax Returns have been paid. There is no audit examination, deficiency,
or refund Litigation with respect to any Taxes, that is reasonably likely to
result in a determination that would have, individually or in the aggregate, a
Material Adverse Effect on First Coastal, except to the extent reserved against
in the First Coastal Financial Statements dated prior to the date of this
Agreement. All Taxes and other Liabilities due with respect to completed and
settled examinations or concluded Litigation have been paid.
(b) None of the First Coastal Companies has executed an
extension or waiver of any statute of limitations on the assessment or
collection of any Tax due (excluding such statutes that relate to years
currently under examination by the Internal Revenue Service or other applicable
taxing authorities) that is currently in effect.
(c) Adequate provision for any Taxes due or to become due
for any of the First Coastal Companies for the period or periods through and
including the date of the respective First Coastal Financial Statements has been
made and is reflected on such First Coastal Financial Statements.
(d) Each of the First Coastal Companies is in compliance
with, and its records contain all information and documents (including properly
completed IRS Forms W-9) necessary to comply with, all applicable information
reporting and Tax withholding requirements under federal, state, and local Tax
Laws, and such records identify with specificity all accounts subject to backup
withholding under Section 3406 of the Internal Revenue Code, except for such
instances of noncompliance and such omissions as are not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on First
Coastal.
(e) Except as set forth in Section 5.8(e) of the First
Coastal Disclosure Memorandum, none of the First Coastal Companies has made any
payments, is obligated to make any payments, or is a party to any contract,
agreement, or other arrangement that could obligate it to make any payments that
would be disallowed as a deduction under Section 280G or 162(m) of the Internal
Revenue Code.
(f) There are no Material Liens with respect to Taxes upon
any of the Assets of the First Coastal Companies.
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(g) There has not been an ownership change, as defined in
Internal Revenue Code Section 382(g), of the First Coastal Companies that
occurred during or after any Taxable Period in which the First Coastal Companies
incurred a net operating loss that carries over to any Taxable Period ending
after December 31, 1997.
(h) No First Coastal Company has filed any consent under
Section 341(f) of the Internal Revenue Code concerning collapsible corporations.
(i) After the date of this Agreement, no Material election
with respect to Taxes will be made without the prior consent of Centura, which
consent will not be unreasonably withheld.
(j) No First Coastal Company has or has had a permanent
establishment in any foreign country, as defined in any applicable tax treaty or
convention between the United States and such foreign country.
5.9 Assets. The First Coastal Companies have marketable title
insurable at standard rates, free and clear of all Liens, to all of their
respective Assets. All tangible properties used in the businesses of the First
Coastal Companies are in good condition, reasonable wear and tear excepted, and
are usable in the ordinary course of business consistent with First Coastal's
past practices. All Assets which are Material to First Coastal's business on a
consolidated basis, held under leases or subleases by any of the First Coastal
Companies, are held under valid Contracts enforceable in accordance with their
respective terms (except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, or other Laws affecting the
enforcement of creditors' rights generally and except that the availability of
the equitable remedy of specific performance or injunctive relief is subject to
the discretion of the court before which any proceedings may be brought), and
each such Contract is in full force and effect. The First Coastal Companies
currently maintain insurance in amounts, scope, and coverage reasonably
necessary for their operations. None of the First Coastal Companies has received
notice from any insurance carrier that (i) such 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. The
Assets of the First Coastal Companies include all Assets required to operate the
business of the First Coastal Companies as presently conducted.
5.10 Environmental Matters.
(a) To the Knowledge of First Coastal, each First Coastal
Company, its Participation Facilities, and its Loan Properties are, and have
been, in compliance with all Environmental Laws, except those violations which
are not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on First Coastal.
(b) There is no Litigation pending or, to the Knowledge of
First Coastal, threatened before any court, governmental agency, or authority,
or other forum in which any First
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Coastal Company or any of its Participation Facilities has been or, with respect
to threatened Litigation, may reasonably be expected to 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 environment of any
Hazardous Material, whether or not occurring at, on, under, or involving a site
owned, leased, or operated by any First Coastal Company or any of its
Participation Facilities, except for such Litigation pending or threatened that
is not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on First Coastal.
(c) There is no Litigation pending, or to the Knowledge of
First Coastal, threatened before any court, governmental agency, or board, or
other forum in which any of its Loan Properties (or First Coastal in respect of
such Loan Property) has been or, with respect to threatened Litigation, may
reasonably be expected to be named as a defendant or potentially responsible
party (i) for alleged noncompliance (including by any predecessor) with any
Environmental Law or (ii) relating to the release into the environment of any
Hazardous Material, whether or not occurring at, on, under, or involving a Loan
Property, except for such Litigation pending or threatened that is not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on First Coastal.
(d) To the Knowledge of First Coastal, there is no
reasonable basis for any Litigation of a type described in subsections (b) or
(c), except such as is not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on First Coastal.
(e) To the Knowledge of First Coastal and except as
disclosed in Section 5.10(e) of the First Coastal Disclosure Memorandum, during
the period of (i) any First Coastal Company's ownership or operation of any of
their respective current properties, (ii) any First Coastal Company's
participation in the management of any Participation Facility, or (iii) any
First Coastal Company's holding of a security interest in a Loan Property, there
have been no releases of Hazardous Material in, on, under, or affecting (or
potentially affecting) such properties, except such as are not reasonably likely
to have, individually or in the aggregate, a Material Adverse Effect on First
Coastal. Prior to the period of (i) any First Coastal Company's ownership or
operation of any of their respective current properties, (ii) any First Coastal
Company's participation in the management of any Participation Facility, or
(iii) any First Coastal Company's holding of a security interest in a Loan
Property, to the Knowledge of First Coastal, except as disclosed in Section
5.10(e) of the First Coastal Disclosure Memorandum, there were no releases of
Hazardous Material in, on, under, or affecting any such property, Participation
Facility, or Loan Property, except such as are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on First Coastal.
5.11 Compliance with Laws. First Coastal is duly registered as a
savings and loan holding company under the HOLA. Each First Coastal Company has
in effect all Permits necessary for it to own, lease, or operate its Material
Assets and to carry on its business as now conducted, except for those Permits
the absence of which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on First Coastal, and there has occurred no
Default under any such Permit, other than Defaults which are not reasonably
likely
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to have, individually or in the aggregate, a Material Adverse Effect on First
Coastal. None of the First Coastal Companies:
(a) is in violation of any Laws, Orders, or Permits applicable
to its business or employees conducting its business, except for
violations which are not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on First Coastal; and
(b) has received 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
Coastal Company is not in compliance with any of the Laws or Orders which
such governmental authority or Regulatory Authority enforces, where such
noncompliance is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on First Coastal, (ii) threatening
to revoke any Permits, the revocation of which is reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on
First Coastal, or (iii) requiring any First Coastal Company (x) to enter
into or consent to the issuance of a cease and desist order, formal
agreement, directive, commitment, or memorandum of understanding, or (y)
to adopt any Board resolution or similar undertaking, which restricts
materially the conduct of its business, or in any manner relates to its
capital adequacy, its credit or reserve policies, its management, or the
payment of dividends.
5.12 Labor Relations. No First Coastal Company is the subject of
any Litigation asserting that it or any other First Coastal Company has
committed an unfair labor practice (within the meaning of the National Labor
Relations Act or comparable state Law) or seeking to compel it or any other
First Coastal Company to bargain with any labor organization as to wages or
conditions of employment, nor is any First Coastal Company a party to or bound
by any collective bargaining agreement, Contract, or other agreement or
understanding with a labor union or labor organization, nor is there any strike
or other labor dispute involving any First Coastal Company, pending, or to the
Knowledge of First Coastal, is there any activity involving any First Coastal
Company's employees seeking to certify a collective bargaining unit or engaging
in any other organization activity.
5.13 Employee Benefit Plans.
(a) First Coastal has disclosed to Centura in writing prior
to the execution of the Agreement and in Section 5.13 of the First Coastal
Disclosure Memorandum, and has delivered or made available to Centura prior to
the execution of this Agreement correct and complete copies in each case of, all
First Coastal Benefits Plans. For purposes of this Agreement, "First Coastal
Benefit Plans" means all pension, retirement, profit-sharing, deferred
compensation, stock option, employee stock ownership, severance pay, vacation,
bonus, or other incentive plan, all other written employee programs or
agreements, all medical, vision, dental, or other health plans, all life
insurance plans, and all other employee benefit plans or fringe benefit plans,
including, without limitation, "employee benefit plans" as that term is defined
in Section 3(3) of ERISA maintained by, sponsored in whole or in part by, or
contributed to by, any First Coastal Company for the benefit of employees,
retirees, dependents, spouses, directors,
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independent contractors, or other beneficiaries and under which employees,
retirees, dependents, spouses, directors, independent contractors, or other
beneficiaries are eligible to participate. Any of the First Coastal Benefit
Plans which is an "employee welfare benefit plan," as that term is defined in
Section 3(l) of ERISA, or an "employee pension benefit plan," as that term is
defined in Section 3(2) of ERISA, is referred to herein as a "First Coastal
ERISA Plan." Any First Coastal ERISA Plan which is also a "defined benefit plan"
(as defined in Section 414(j) of the Internal Revenue Code or Section 3(35) of
ERISA) is referred to herein as a "First Coastal Pension Plan." Neither First
Coastal nor any First Coastal Company has an "obligation to contribute" (as
defined in ERISA Section 4212) to a "multiemployer plan" (as defined in ERISA
Sections 4001(a)(3) and 3(37)(A)). Each "employee pension benefit plan," as
defined in Section 3(2) of ERISA, ever maintained by any First Coastal Company
that was intended to qualify under Section 401(a) of the Internal Revenue Code
and with respect to which any First Coastal Company has any Liability, is
disclosed as such in Section 5.13 of the First Coastal Disclosure Memorandum.
(b) First Coastal has delivered or made available to Centura
prior to the execution of this Agreement correct and complete copies of the
following documents: (i) all trust agreements or other funding arrangements for
such First Coastal Benefit Plans (including insurance contracts), and all
amendments thereto; (ii) with respect to any such First Coastal Benefit Plans or
amendments, all determination letters, rulings, opinion letters, information
letters, or Material advisory opinions issued by the Internal Revenue Service,
the United States Department of Labor, or the Pension Benefit Guaranty
Corporation after December 31, 1994; (iii) annual reports or returns, audited or
unaudited financial statements, actuarial valuations and reports, and summary
annual reports prepared for any First Coastal Benefit Plan with respect to the
most recent plan year; and (iv) the most recent summary plan descriptions and
any Material modifications thereto.
(c) All First Coastal Benefit Plans are in material
compliance with the applicable terms of ERISA, the Internal Revenue Code, and
any other applicable Laws, the breach or violation of which is reasonably likely
to have, individually or in the aggregate, a Material Adverse Effect on First
Coastal. Each First Coastal ERISA Plan currently maintained by First Coastal
which is intended to be qualified under Section 401(a) of the Internal Revenue
Code has received a favorable determination letter from the Internal Revenue
Service, and First Coastal is not aware of any circumstances which will or could
reasonably result in revocation of any such favorable determination letter. Each
trust created under any First Coastal ERISA Plan has been determined to be
exempt from Tax under Section 501(a) of the Internal Revenue Code and First
Coastal is not aware of any circumstance which will or could reasonably result
in revocation of such exemption. With respect to each First Coastal Benefit Plan
to the Knowledge of First Coastal, no event has occurred which will or could
reasonably give rise to a loss of any intended Tax consequences under the
Internal Revenue Code or to any Tax under Section 511 of the Internal Revenue
Code that is reasonably likely, individually or in the aggregate, to have a
Material Adverse Effect on First Coastal. There is no Material pending or, to
the Knowledge of First Coastal, threatened Litigation relating to any First
Coastal ERISA Plan.
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(d) No First Coastal Company has engaged in a transaction
with respect to any First Coastal Benefit Plan that, assuming the Taxable Period
of such transaction expired as of the date of this Agreement, would subject any
First Coastal Company to a Material Tax or penalty imposed by either Section
4975 of the Internal Revenue Code or Section 502(i) of ERISA in amounts which
are reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on First Coastal. Neither First Coastal nor any administrator or
fiduciary of any First Coastal Benefit Plan (or any agent of any of the
foregoing) has engaged in any transaction, or acted or failed to act in any
manner which could subject First Coastal to any direct or indirect Liability (by
indemnity or otherwise) for breach of any fiduciary, co-fiduciary, or other duty
under ERISA, where such Liability, individually or in the aggregate, is
reasonably likely to have a Material Adverse Effect on First Coastal. To its
Knowledge, no oral or written representation or communication with respect to
any aspect of the First Coastal Benefit Plans has been made to employees of any
First Coastal Company which is not in accordance with the written or otherwise
preexisting terms and provisions of such plans, where any Liability with respect
to such representation or disclosure is reasonably likely to have a Material
Adverse Effect on First Coastal.
(e) Since the date of the most recent actuarial valuation,
there has been (i) no Material change in the financial position or funded status
of any First Coastal Pension Plan, (ii) no change in the actuarial assumptions
with respect to any First Coastal Pension Plan, and (iii) no increase in
benefits under any First Coastal Pension Plan as a result of plan amendments or
changes in applicable Law, any of which is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on First Coastal.
Neither any First Coastal Pension Plan nor any "single-employer plan," within
the meaning of Section 4001(a)(15) of ERISA, currently or formerly maintained by
any First Coastal Company, or the single-employer plan of any entity which is
considered one employer with First Coastal under Section 4001 of ERISA or
Section 414 of the Internal Revenue Code or Section 302 of ERISA (whether or not
waived) (a "First Coastal ERISA Affiliate") has an "accumulated funding
deficiency" within the meaning of Section 412 of the Internal Revenue Code or
Section 302 of ERISA. All contributions with respect to a First Coastal Pension
Plan or any single-employer plan of a First Coastal ERISA Affiliate have or will
be timely made and there is no lien or expected to be a lien under Internal
Revenue Code Section 412(n) or ERISA Section 302(f) or Tax under Internal
Revenue Code Section 4971. No First Coastal Company has provided, or is required
to provide, security to a First Coastal Pension Plan or to any single-employer
plan of a First Coastal ERISA Affiliate pursuant to Section 401(a)(29) of the
Internal Revenue Code. All premiums required to be paid under ERISA Section 4006
have been timely paid by First Coastal, except to the extent any failure would
not have a Material Adverse Effect on First Coastal.
(f) No Liability under Title IV of ERISA has been or is
expected to be incurred by any First Coastal Company with respect to any defined
benefit plan currently or formerly maintained by any of them or by any First
Coastal ERISA Affiliate that has not been satisfied in full (other than
Liability for Pension Benefit Guaranty Corporation premiums, which have been
paid when due, except to the extent any failure would not have a Material
Adverse Effect on First Coastal).
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(g) No First Coastal Company has any obligations for retiree
health and retiree life benefits under any of the First Coastal Benefit Plans
other than with respect to benefit coverage mandated by applicable Law.
(h) Except as disclosed in Section 5.13(h) of the First
Coastal Disclosure Memorandum, neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will, by
themselves, (i) result in any payment (including, without limitation, severance,
unemployment compensation, golden parachute, or otherwise) becoming due to any
director or any employee of any First Coastal Company from any First Coastal
Company under any First Coastal Benefit Plan or otherwise, (ii) increase any
benefits otherwise payable under any First Coastal Benefit Plan, or (iii) result
in any acceleration of the time of payment or vesting of any such benefit.
5.14 Material Contracts. Except as disclosed in Section 5.14 of
the First Coastal Disclosure Memorandum, none of the First Coastal Companies,
nor any of their respective Assets, businesses, or operations, is a party to, or
is bound or affected by, or receives benefits under, (i) any employment,
severance, termination, consulting, or retirement Contract providing for
aggregate payments to any Person in any calendar year in excess of $50,000, (ii)
any Contract relating to the borrowing of money by any First Coastal Company or
the guarantee by any First Coastal Company of any such obligation (other than
Contracts evidencing deposit liabilities, purchases of federal funds,
fully-secured repurchase agreements, and Federal Home Loan Bank advances of
depository institution Subsidiaries, trade payables, and Contracts relating to
borrowings or guarantees made in the ordinary course of business), and (iii) any
other Contract or amendment thereto that would be required to be filed as an
exhibit to a Form 10-K filed by First Coastal with the SEC as of the date of
this Agreement that has not been filed as an exhibit to First Coastal's Form
10-K filed for the fiscal year ended December 31, 1997, or in another SEC
Document and identified to Centura (together with all Contracts referred to in
Sections 5.8 and 5.13 (a) of this Agreement, the "First Coastal Contracts").
With respect to each First Coastal Contract: (i) the Contract is in full force
and effect; (ii) no First Coastal Company is in Default thereunder, other than
Defaults which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on First Coastal; (iii) no First Coastal
Company has repudiated or waived any Material provision of any such Contract;
and (iv) no other party to any such Contract is, to the Knowledge of First
Coastal, in Default in any respect, other than Defaults which are not reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
First Coastal, or has repudiated or waived any Material provision thereunder.
Except for Federal Home Loan Bank advances, all of the indebtedness of any First
Coastal Company for money borrowed is prepayable at any time by such First
Coastal Company without penalty or premium.
5.15 Legal Proceedings.
(a) There is no Litigation instituted or pending, or, to the
Knowledge of First Coastal, threatened against any First Coastal Company, or
against any Asset, employee benefit plan, interest, or right of any of them,
that is reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on First Coastal, nor are there any Orders of any Regulatory
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Authorities, other governmental authorities, or arbitrators outstanding against
any First Coastal Company, that are reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on First Coastal.
(b) Section 5.15 (b) of the First Coastal Disclosure
Memorandum includes a summary report of all Litigation as of the date of this
Agreement to which any First Coastal Company is a party and which names a First
Coastal Company as a defendant or cross-defendant and where the maximum exposure
is estimated to be $50,000 or more.
5.16 Reports. Since January 1, 1995, or the date of organization
if later, to its Knowledge, each First Coastal Company has timely filed all
reports and statements, together with any amendments required to be made with
respect thereto, that it was required to file with any Regulatory Authorities,
except failures to file which are not reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on First Coastal. 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.
5.17 Statements True and Correct. None of the information supplied
or to be supplied by any First Coastal Company or any Affiliate thereof
regarding First Coastal or such Affiliate for inclusion in the Registration
Statement to be filed by Centura with the SEC will, when the Registration
Statement becomes effective, be false or misleading with respect to any Material
fact, or contain any untrue statement of a Material fact, or omit to state any
Material fact required to be stated thereunder or necessary to make the
statements therein not misleading. None of the information supplied or to be
supplied by any First Coastal Company or any Affiliate thereof for inclusion in
the Proxy Statement to be mailed to First Coastal's stockholders in connection
with the Stockholders' Meeting will, when first mailed to the stockholders of
First Coastal, be false or misleading with respect to any Material fact, or
contain any misstatement of Material fact, or omit to state any Material fact
required to be stated thereunder or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, or, in
the case of the Proxy Statement or any amendment thereof or supplement thereto,
at the time of the Stockholders' Meeting, be false or misleading with respect to
any Material fact, or omit to state any Material fact required to be stated
thereunder or necessary to correct any Material statement in any earlier
communication with respect to the solicitation of any proxy for the
Stockholders' Meeting. All documents that any First Coastal Company or any
Affiliate thereof is responsible for filing with any Regulatory Authority in
connection with the transactions contemplated hereby will comply as to form in
all Material respects with the provisions of applicable Law.
5.18 Tax and Regulatory Matters. No First Coastal Company or any
Affiliate thereof has taken or agreed to take any action, and First Coastal has
no Knowledge of any fact or circumstance that is reasonably likely to (i)
prevent the transactions contemplated hereby, including 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) of this
Agreement or result in the imposition of a condition or restriction of the type
referred to in the last sentence of such Section.
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5.19 State Takeover Laws. Each First Coastal Company has taken all
necessary action to exempt the transactions contemplated by this Agreement from
any applicable "moratorium," "control share," "fair price," "business
combination," or other anti-takeover laws and regulations of the Commonwealth of
Virginia (collectively, "Takeover Laws").
5.20 Charter Provisions. Each First Coastal Company has taken all
action so that the entering into of this Agreement and the consummation of the
Merger and the other transactions contemplated by this Agreement do not and will
not result in the grant of any rights to any Person under the Articles of
Incorporation, Bylaws, or other governing instruments of any First Coastal
Company or restrict or impair the ability of Centura or any of its Subsidiaries
to vote, or otherwise to exercise the rights of a stockholder with respect to,
shares of any First Coastal Company that may be directly or indirectly acquired
or controlled by it.
5.21 Derivatives. All interest rate swaps, caps, floors, option
agreements, futures and forward contracts, and other similar risk management
arrangements, whether entered into for First Coastal's own account, or for the
account of one or more the First Coastal Subsidiaries or their customers, were
entered into (i) in accordance with prudent business practices and all
applicable Laws, and (ii) with counterparties believed to be financially
responsible.
5.22 Year 2000. First Coastal has disclosed to Centura a complete
and accurate copy of First Coastal's plan, including an estimate of the
anticipated associated costs, for implementing modifications to First Coastal's
hardware, software, and computer systems, chips, and microprocessors, to ensure
proper execution and accurate processing of all date-related data, whether from
years in the same century or in different centuries. Between the date of this
Agreement and the Effective Time, First Coastal shall endeavor to continue its
efforts to implement such plan.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF CENTURA
-----------------------------------------
Centura hereby represents and warrants to First Coastal as
follows:
6.1 Organization, Standing, and Power. Centura is a corporation
duly organized, validly existing, and in good standing under the Laws of the
State of North Carolina, and has the corporate power and authority to carry on
its business as now conducted and to own, lease, and operate its Material
Assets. Centura is duly qualified or licensed to transact business as a foreign
corporation in good standing in the States of the United States and foreign
jurisdictions where the character of its Assets or the nature or conduct of its
business requires it to be so qualified or licensed, except for such
jurisdictions in which the failure to be so qualified or licensed is not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Centura.
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6.2 Authority; No Breach By Agreement.
(a) Centura 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 Centura.
This Agreement represents a legal, valid, and binding obligation of Centura,
enforceable against Centura 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
Centura, nor the consummation by Centura of the transactions contemplated
hereby, nor compliance by Centura with any of the provisions hereof, will (i)
conflict with or result in a breach of any provision of Centura's Articles of
Incorporation or Bylaws, (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 Centura Company under, any Contract or Permit of any Centura
Company, where such Default or Lien, or any failure to obtain such Consent, is
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Centura, (iii) subject to receipt of the requisite Consents referred
to in Section 9.1(b) of this Agreement, violate any Law or Order applicable to
any Centura Company or any of their respective Material Assets, or (iv) require
the approval of Centura stockholders.
(c) Other than in connection or compliance with the
provisions of the Securities Laws, applicable state corporate and securities
Laws, and rules of the NYSE, and other than Consents required from Regulatory
Authorities, and other than notices to or filings with the Internal Revenue
Service or the Pension Benefit Guaranty Corporation with respect to any employee
benefit plans, or under the HSR Act, and other than Consents, filings, or
notifications which, if not obtained or made, are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Centura, no
notice to, filing with, or Consent of, any public body or authority is necessary
for the consummation by Centura of the Merger and the other transactions
contemplated in this Agreement.
6.3 Capital Stock. The authorized capital stock of Centura
consists, as of the date of this Agreement, of (i) 50,000,000 shares of Centura
Common Stock, of which 26,536,602 shares were issued and outstanding as of June
30, 1998, and (ii) 25,000,000 shares of Centura Preferred Stock, none of which
are issued and outstanding. All of the issued and outstanding shares of Centura
Common Stock are, and all of the shares of Centura Common Stock to be issued in
exchange for shares of First Coastal Common Stock upon consummation of the
Merger, when issued in accordance with the terms of this Agreement, will be,
duly and validly issued and outstanding and fully paid and nonassessable under
the NCBCA. None of the outstanding shares of Centura Common Stock has been, and
none of the shares of Centura
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Common Stock to be issued in exchange for shares of First Coastal Common Stock
upon consummation of the Merger will be, issued in violation of any preemptive
rights of the current or past stockholders of Centura.
6.4 Centura Subsidiaries. Except as set forth in Section 6.4 of
the Centura Disclosure Memorandum, Centura or one of its Subsidiaries owns all
of the issued and outstanding shares of capital stock of each Centura
Subsidiary. No equity securities of any Centura Subsidiary are or may become
required to be issued (other than to another Centura Company) by reason of any
Rights, and there are no Contracts by which any Centura Subsidiary is bound to
issue (other than to another Centura Company) additional shares of its capital
stock or Rights or by which any Centura Company is or may be bound to transfer
any shares of the capital stock of any Centura Subsidiary (other than to another
Centura Company). There are no Contracts relating to the rights of any Centura
Company to vote or to dispose of any shares of the capital stock of any Centura
Subsidiary. All of the shares of capital stock of each Centura Subsidiary held
by a Centura Company are fully paid and, except as provided in statutes pursuant
to which depository institution Subsidiaries are organized, nonassessable under
the applicable corporation Law of the jurisdiction in which such Subsidiary is
incorporated or organized and are owned by the Centura Company free and clear of
any Lien. Each Centura Subsidiary is either a bank or a corporation, and is duly
organized, validly existing, and (as to corporations) in good standing under the
Laws of the jurisdiction in which it is incorporated or organized, and has the
corporate power and authority necessary for it to own, lease, and operate its
Assets and to carry on its business as now conducted. Each Centura Subsidiary is
duly qualified or licensed to transact business as a foreign corporation in good
standing in the States of the United States and foreign jurisdictions where the
character of its Assets or the nature or conduct of its business requires it to
be so qualified or licensed, except for such jurisdictions in which the failure
to be so qualified or licensed is not reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on Centura. Each Centura Subsidiary
that is a depository institution is an "insured institution" as defined in the
Federal Deposit Insurance Act and applicable regulations thereunder, and the
deposits in which are insured by the Bank Insurance Fund or Savings Association
Insurance Fund.
6.5 SEC Filings; Financial Statements.
(a) Centura has filed and made available to First Coastal
all forms, reports, and documents required to be filed by Centura with the SEC
since December 31, 1994 (collectively, the "Centura SEC Reports"). The Centura
SEC Reports (i) at the time filed, complied in all Material respects with the
applicable requirements of the 1933 Act and the 1934 Act, as the case may be,
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 Centura SEC Reports or necessary in order to make
the statements in such Centura SEC Reports, in light of the circumstances under
which they were made, not misleading. Except for Centura Subsidiaries that are
registered as a broker, dealer, or investment advisor or filings required due to
fiduciary holdings of the Centura Subsidiaries, none of Centura Subsidiaries is
required to file any forms, reports, or other documents with the SEC.
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(b) Each of the Centura Financial Statements (including, in
each case, any related notes) contained in the Centura SEC Reports, including
any Centura SEC Reports filed after the date of this Agreement until the
Effective Time, complied or will comply as to form in all Material respects with
the applicable published rules and regulations of the SEC with respect thereto,
was or will be prepared in accordance with GAAP applied on a consistent basis
throughout the periods involved (except as may be indicated in the notes to such
financial statements or, in the case of unaudited statements, as permitted by
Form 10-Q of the SEC), and fairly presented or will fairly present the
consolidated financial position of Centura and its Subsidiaries as at the
respective dates and the consolidated results of its operations and cash flows
for the periods indicated, except that the unaudited interim financial
statements were or are subject to normal and recurring year-end adjustments
which were not or are not expected to be Material in amount or effect.
6.6 Absence of Undisclosed Liabilities. No Centura Company has any
Liabilities that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Centura, except Liabilities which are
accrued or reserved against in the consolidated balance sheets of Centura as of
June 30, 1998, included in the Centura Financial Statements or reflected in the
notes thereto and except for Liabilities incurred in the ordinary course of
business subsequent to June 30, 1998. No Centura Company has incurred or paid
any Liability since June 30, 1998, except for such Liabilities incurred or paid
in the ordinary course of business consistent with past business practice and
which are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Centura.
6.7 Absence of Certain Changes or Events. Since June 30, 1998,
except as disclosed in the Centura Financial Statements delivered prior to the
date of this Agreement, (i) there have been no events, changes or occurrences
which have had, or are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Centura, and (ii) the Centura Companies
have conducted their respective businesses in the ordinary and usual course
(excluding the incurrence of expenses in connection with this Agreement and the
transactions contemplated hereby).
6.8 Tax Matters.
(a) All Tax Returns required to be filed by or on behalf of
any of the Centura Companies have been timely filed, or requests for extensions
have been timely filed, granted, and have not expired for the three tax years
ended on or before December 31, 1997, and, to the Knowledge of Centura, all Tax
Returns filed are complete and accurate in all Material respects. All Tax
Returns for the three tax years ending on or before the date of the most recent
fiscal year end immediately preceding the Effective Time will be timely filed or
requests for extensions will be timely filed. All Taxes shown on filed Tax
Returns have been paid. Except as set forth in Section 6.8 of the Centura
Disclosure Memorandum, there is no audit examination, deficiency, or refund
Litigation with respect to any Taxes, that is reasonably likely to result in a
determination that would have, individually or in the aggregate, a Material
Adverse Effect on Centura, except to the extent reserved against in the Centura
Financial Statements dated prior to the date of this
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Agreement. All Taxes and other Liabilities due with respect to completed and
settled examinations or concluded Litigation have been paid.
(b) Except as set forth in Section 6.8 of the Centura
Disclosure Memorandum, none of the Centura Companies has executed an extension
or waiver of any statute of limitations on the assessment or collection of any
Tax due (excluding such statutes that relate to years currently under
examination by the Internal Revenue Service or other applicable taxing
authorities) that is currently in effect.
(c) Adequate provision for any Taxes due or to become due
for any of the Centura Companies for the period or periods through and including
the date of the respective Centura Financial Statements has been made and is
reflected on such Centura Financial Statements.
(d) Each of the Centura Companies is in compliance with, and
its records contain all information and documents (including properly completed
IRS Forms W-9) necessary to comply with, all applicable information reporting
and Tax withholding requirements under federal, state, and local Tax Laws, and
such records identify with specificity all accounts subject to backup
withholding under Section 3406 of the Internal Revenue Code, except for such
instances of noncompliance and such omissions as are not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on Centura.
(e) None of the Centura Companies has made any payments, is
obligated to make any payments, or is a party to any contract, agreement, or
other arrangement that could obligate it to make any payments that would be
disallowed as a deduction under Section 280G or 162(m) of the Internal Revenue
Code.
(f) There are no Material Liens with respect to Taxes upon
any of the Assets of the Centura Companies.
(g) There has not been an ownership change, as defined in
Internal Revenue Code Section 382(g), of the Centura Companies that occurred
during or after any Taxable Period in which the Centura Companies incurred a net
operating loss that carries over to any Taxable Period ending after December 31,
1997.
(h) No Centura Company has filed any consent under
Section 341(f) of the Internal Revenue Code concerning collapsible
corporations.
(i) After the date of this Agreement, no Material election
with respect to Taxes will be made without the prior consent of First Coastal,
which consent will not be unreasonably withheld.
(j) Except as set forth in Section 6.8(j) of the Centura
Disclosure Memorandum, no Centura Company has or has had a permanent
establishment in any foreign
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country, as defined in any applicable tax treaty or convention between the
United States and such foreign country.
6.9 Assets. The Centura Companies have good and marketable title,
free and clear of all Liens, to all of their respective Assets. All tangible
properties used in the businesses of the Centura Companies are in good
condition, reasonable wear and tear excepted, and are usable in the ordinary
course of business consistent with Centura's past practices. All Assets which
are Material to Centura's business on a consolidated basis, held under leases or
subleases by any of the Centura Companies, are held under valid Contracts
enforceable in accordance with their respective terms (except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium,
or other Laws affecting the enforcement of creditors' rights generally and
except that the availability of the equitable remedy of specific performance or
injunctive relief is subject to the discretion of the court before which any
proceedings may be brought), and each such Contract is in full force and effect.
The Centura Companies currently maintain insurance similar in amounts, scope,
and coverage reasonably necessary for their operations. None of the Centura
Companies has received notice from any insurance carrier that (i) such 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. The Assets of the Centura Companies include all Assets
required to operate the business of the Centura Companies as presently
conducted.
6.10 Environmental Matters.
(a) To the Knowledge of Centura, each Centura Company, its
Participation Facilities, and its Loan Properties are, and have been, in
compliance with all Environmental Laws, except those violations which are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Centura.
(b) There is no Litigation pending or, to the Knowledge of
Centura, threatened before any court, governmental agency, or authority, or
other forum in which any Centura Company or any of its Participation Facilities
has been or, with respect to threatened Litigation, may reasonably be expected
to 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
environment of any Hazardous Material, whether or not occurring at, on, under,
or involving a site owned, leased, or operated by any Centura Company or any of
its Participation Facilities, except for such Litigation pending or threatened
that is not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Centura.
(c) There is no Litigation pending or, to the Knowledge of
Centura, threatened before any court, governmental agency, or board, or other
forum in which any of its Loan Properties (or Centura in respect of such Loan
Property) has been or, with respect to threatened Litigation, may reasonably be
expected to be named as a defendant or potentially responsible party (i) for
alleged noncompliance (including by any predecessor) with any Environmental Law
or (ii) relating to the release into the environment of any Hazardous Material,
whether or not occurring at, on, under, or involving a Loan Property, except for
such
-24-
Litigation pending or threatened that is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Centura.
(d) To the Knowledge of Centura, there is no reasonable
basis for any Litigation of a type described in subsections (b) or (c), except
such as is not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Centura.
(e) To the Knowledge of Centura, during the period of (i)
any Centura Company's ownership or operation of any of their respective current
properties, (ii) any Centura Company's participation in the management of any
Participation Facility, or (iii) any Centura Company's holding of a security
interest in a Loan Property, there have been no releases of Hazardous Material
in, on, under, or affecting (or potentially affecting) such properties, except
such as are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Centura. Prior to the period of (i) any Centura
Company's ownership or operation of any of their respective current properties,
(ii) any Centura Company's participation in the management of any Participation
Facility, or (iii) any Centura Company's holding of a security interest in a
Loan Property, to the Knowledge of Centura, there were no releases of Hazardous
Material in, on, under, or affecting any such property, Participation Facility,
or Loan Property, except such as are not reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on Centura.
6.11 Compliance with Laws. Centura is duly registered as a bank
holding company under the BHC Act. Each Centura Company has in effect all
Permits necessary for it to own, lease, or operate its Material Assets and to
carry on its business as now conducted, except for those Permits the absence of
which are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Centura, and there has occurred no Default under any
such Permit, other than Defaults which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Centura. None of
the Centura Companies:
(a) is in violation of any Laws, Orders, or Permits applicable
to its business or employees conducting its business, except for
violations which are not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on Centura; and
(b) has received 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 Centura
Company is not in compliance with any of the Laws or Orders which such
governmental authority or Regulatory Authority enforces, where such
noncompliance is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Centura, (ii) threatening to
revoke any Permits, the revocation of which is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Centura,
or (iii) requiring any Centura Company (x) to enter into or consent to
the issuance of a cease and desist order, formal agreement, directive,
commitment, or memorandum of understanding, or (y) to adopt any Board
resolution or similar undertaking, which restricts materially the conduct
of its business, or in any manner relates to its capital adequacy, its
credit or reserve policies, its management, or the payment of dividends.
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6.12 Labor Relations. No Centura Company is the subject of any
Litigation asserting that it or any other Centura Company has committed an
unfair labor practice (within the meaning of the National Labor Relations Act or
comparable state Law) or seeking to compel it or any other Centura Company to
bargain with any labor organization as to wages or conditions of employment, nor
is any Centura Company a party to or bound by any collective bargaining
agreement, Contract, or other agreement or understanding with a labor union or
labor organization, nor is there any strike or other labor dispute involving any
Centura Company, pending or threatened, or to the Knowledge of Centura, is there
any activity involving any Centura Company's employees seeking to certify a
collective bargaining unit or engaging in any other organization activity.
6.13 Legal Proceedings. There is no Litigation instituted or
pending, or, to the Knowledge of Centura, threatened against any Centura
Company, or against any Asset, employee benefit plan, interest, or right of any
of them, that is reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Centura, nor are there any Orders of any Regulatory
Authorities, other governmental authorities, or arbitrators outstanding against
any Centura Company, that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Centura.
6.14 Reports. Since January 1, 1995, or the date of organization
if later, each Centura Company has timely filed all reports and statements,
together with any amendments required to be made with respect thereto, that it
was required to file with any Regulatory Authorities, except failures to file
which are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Centura. 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.
6.15 Statements True and Correct. None of the information supplied
or to be supplied by any Centura Company or any Affiliate thereof regarding
Centura or such Affiliate for inclusion in the Registration Statement to be
filed by Centura with the SEC will, when the Registration Statement becomes
effective, be false or misleading with respect to any Material fact, or contain
any untrue statement of a Material fact, or omit to state any Material fact
required to be stated thereunder or necessary to make the statements therein not
misleading. None of the information supplied or to be supplied by any Centura
Company or any Affiliate thereof for inclusion in the Proxy Statement to be
mailed to First Coastal's stockholders in connection with the Stockholders'
Meeting, will, when first mailed to the stockholders of First Coastal, be false
or misleading with respect to any Material fact, or contain any misstatement of
Material fact, or omit to state any Material fact required to be stated
thereunder or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, or, in the case of the
Proxy Statement or any amendment thereof or supplement thereto, at the time of
the Stockholders' Meeting, be false or misleading with respect to any Material
fact, or omit to state any Material fact required to be stated thereunder or
necessary to correct any Material statement in any earlier communication with
respect to the solicitation of any proxy for the Stockholders' Meetings. All
documents that any Centura Company or any Affiliate thereof is
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responsible for filing with any Regulatory Authority in connection with the
transactions contemplated hereby will comply as to form in all Material respects
with the provisions of applicable Law.
6.16 Tax and Regulatory Matters. No Centura Company or any
Affiliate thereof has taken or agreed to take any action, and Centura has no
Knowledge of any fact or circumstance that is reasonably likely to (i) prevent
the transactions contemplated hereby, including the Merger, from qualifyingr 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) of this Agreement or result in the
imposition of a condition or restriction of the type referred to in the last
sentence of such Section.
6.17 Derivatives. All interest rate swaps, caps, floors, option
agreements, futures and forward contracts, and other similar risk management
arrangements, whether entered into for Centura's own account, or for the account
of one or more the Centura Subsidiaries or their customers, were entered into
(i) in accordance with prudent business practices and all applicable Laws, and
(ii) with counterparties believed to be financially responsible.
6.18 Year 2000. Centura has disclosed to First Coastal a complete
and accurate copy of Centura's plan, including an estimate of the anticipated
associated costs, for implementing modifications to Centura's hardware,
software, and computer systems, chips, and microprocessors, to ensure proper
execution and accurate processing of all date-related data, whether from years
in the same century or in different centuries. Between the date of this
Agreement and the Effective Time, Centura shall endeavor to continue its efforts
to implement such plan.
ARTICLE 7
CONDUCT OF BUSINESS PENDING CONSUMMATION
----------------------------------------
7.1 Affirmative Covenants of First Coastal. Unless the prior
written consent of the duly authorized officer of Centura shall have been
obtained, and except as otherwise expressly contemplated herein, First Coastal
shall and shall cause each of its Subsidiaries to, from the date of this
Agreement until the Effective Time or termination of this Agreement, (i) operate
its business only in the usual, regular, and ordinary course, (ii) preserve
intact in all Material respects its business organization and Assets and
maintain its rights and franchises, and (iii) take no action which would (x)
materially adversely affect the ability of any Party to obtain any Consents
required for the transactions contemplated hereby without imposition of a
condition or restriction of the type referred to in the last sentences of
Section 9.1(b) and (c) of this Agreement, or (y) materially adversely affect the
ability of any Party to perform its covenants and agreements under this
Agreement.
7.2 Negative Covenants of First Coastal. Except as contemplated by
this Agreement or the Supplemental Letter, from the date of this Agreement until
the earlier of the Effective Time or the termination of this Agreement, First
Coastal covenants and agrees that it
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will not do or agree or commit to do, or permit any of its Subsidiaries to do or
agree or commit to do, any of the following without the prior written consent of
the chief executive officer or chief financial officer of Centura, which consent
shall not be unreasonably withheld:
(a) amend the Articles of Incorporation, Bylaws, or other
governing instruments of any First Coastal Company or, except as
expressly contemplated by this Agreement, the First Coastal Rights
Agreement, or
(b) incur, guarantee, or otherwise become responsible for, any
additional debt obligation or other obligation for borrowed money (other
than indebtedness of a First Coastal Company to another First Coastal
Company) in excess of an aggregate of $350,000 (for the First Coastal
Companies on a consolidated basis), except in the ordinary course of
business and consistent with past practices (which shall include, for
First Coastal Subsidiaries that are depository institutions, creation of
deposit liabilities, purchases of federal funds, advances from the
Federal Reserve Bank or Federal Home Loan Bank, and entry into repurchase
agreements fully secured by U.S. government or agency securities), or
impose, or suffer the imposition, on any Asset of any First Coastal
Company of any Lien or permit any such Lien to exist (other than in
connection with deposits, repurchase agreements, bankers acceptances,
"treasury tax and loan" accounts established in the ordinary course of
business, the satisfaction of legal requirements in the exercise of trust
powers, and Liens in effect as of the date hereof that are disclosed in
the First Coastal Disclosure Memorandum); or
(c) repurchase, redeem, or otherwise acquire or exchange
(other than exchanges in the ordinary course under employee benefit
plans), directly or indirectly, any shares, or any securities convertible
into any shares, of the capital stock of any First Coastal Company, or
declare or pay any dividend or make any other distribution in respect of
First Coastal's capital stock, provided that First Coastal may (to the
extent legally and contractually permitted to do so), but shall not be
obligated to, declare and pay regular quarterly cash dividends on the
shares of First Coastal Common Stock at a rate of $0.06 per share with
usual and regular record and payment dates in accordance with past
practice as disclosed in Section 7.2(c) of the First Coastal Disclosure
Memorandum and such dates may not be changed without the prior written
consent of Centura; provided, that, notwithstanding the provisions of
Section 1.3 of this Agreement, the Parties shall cooperate in selecting
the Effective Time to ensure that, with respect to the quarterly period
in which the Effective Time occurs, the holders of First Coastal Common
Stock do not receive both a dividend in respect of their First Coastal
Common Stock and a dividend in respect of Centura Common Stock or fail to
receive any dividend; or
(d) except for this Agreement, or pursuant to the Stock Option
Agreement or pursuant to the exercise of Rights outstanding as of the
date of this Agreement and pursuant to the terms thereof in existence on
the date of this Agreement, issue, sell, pledge, encumber, authorize the
issuance of, enter into any Contract to issue, sell, pledge, encumber, or
authorize the issuance of, or otherwise permit to become outstanding, any
additional shares of First Coastal Common Stock or any other capital
stock of any First
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Coastal Company, or any stock appreciation rights, or any option,
warrant, conversion, or other right to acquire any such stock, or any
security convertible into any such stock; or
(e) adjust, split, combine, or reclassify any capital stock of
any First Coastal Company or issue or authorize the issuance of any other
securities in respect of or in substitution for shares of First Coastal
Common Stock, or sell, lease, mortgage, or otherwise dispose of or
otherwise encumber (i) any shares of capital stock of any First Coastal
Subsidiary (unless any such shares of stock are sold or otherwise
transferred to another First Coastal Company) or (ii) any Asset other
than in the ordinary course of business for reasonable and adequate
consideration; or
(f) except for purchases of U.S. Treasury securities or U.S.
Government agency securities, which in either case have maturities of
three years or less, purchase any securities or make any Material
investment, either by purchase of stock or securities, contributions to
capital, Asset transfers, or purchase of any Assets, in any Person other
than a wholly-owned First Coastal Subsidiary, or otherwise acquire direct
or indirect control over any Person, other than in connection with (i)
foreclosures in the ordinary course of business, (ii) acquisitions of
control by a depository institution Subsidiary in its fiduciary capacity,
or (iii) the creation of new wholly-owned Subsidiaries organized to
conduct or continue activities otherwise permitted by this Agreement; or
(g) grant any increase in compensation or benefits to the
employees or officers of any First Coastal Company, except in accordance
with past practice and consistent with budget data previously provided to
Centura or as required by Law; pay any severance or termination pay or
any bonus other than pursuant to written policies or written Contracts in
effect on the date of this Agreement; enter into or amend any severance
agreements with officers of any First Coastal Company; grant any Material
increase in fees or other increases in compensation or other benefits to
directors of any First Coastal Company except in accordance with past
practice disclosed in Section 7.2(g) of the First Coastal Disclosure
Memorandum; or voluntarily accelerate the vesting of any stock options or
other stock-based compensation or employee benefits; or
(h) enter into or amend any employment Contract between any
First Coastal Company and any Person (unless such amendment is required
by Law) that the First Coastal Company does not have the unconditional
right to terminate without Liability (other than Liability for services
already rendered), at any time on or after the Effective Time; or
(i) adopt any new employee benefit plan of any First Coastal
Company or make any Material change in or to any existing employee
benefit plans of any First Coastal Company other than any such change
that is required by Law or that, in the opinion of counsel, is necessary
or advisable to maintain the tax qualified status of any such plan; or
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(j) make any significant change in any Tax or accounting
methods or systems of internal accounting controls, except as may be
appropriate to conform to changes in Tax Laws or regulatory accounting
requirements or GAAP; or
(k) commence any Litigation other than as necessary for the
prudent operation of its business or settle any Litigation involving any
Liability of any First Coastal Company for Material money damages or
restrictions upon the operations of any First Coastal Company; or
(l) except in the ordinary course of business, modify, amend,
or terminate any Material Contract or waive, release, compromise, or
assign any Material rights or claims.
7.3 Covenants of Centura. From the date of this Agreement until
the earlier of the Effective Time or the termination of this Agreement, Centura
covenants and agrees that it shall and shall cause each of its Subsidiaries to
(i) continue to conduct its business and the business of its Subsidiaries in a
manner designed in its reasonable judgment to enhance the long-term value of the
Centura Common Stock and the business prospects of the Centura Companies, (ii)
take no action which would (x) materially adversely affect the ability of any
Party to obtain any Consents required for the transactions contemplated hereby
without imposition of a condition or restriction of the type referred to in the
last sentences of Section 9.1(b) and (c) of this Agreement, or (y) materially
adversely affect the ability of any Party to perform its covenants and
agreements under this Agreement; provided, that the foregoing shall not prevent
any Centura Company from discontinuing or disposing of any of its Assets or
business if such action is, in the judgment of Centura, desirable in the conduct
of the business of Centura and its Subsidiaries, and (z) not amend the Articles
of Incorporation or Bylaws of Centura, in each case, in any manner which is
adverse to, and discriminates against, the holders of First Coastal Common
Stock.
7.4 Adverse Changes in Condition. Each Party agrees to give
written notice promptly to the other Party upon becoming aware of the occurrence
or impending occurrence of any event or circumstance relating to it or any of
its Subsidiaries which (i) is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on it or (ii) would cause or constitute a
Material breach of any of its representations, warranties, or covenants
contained herein, and to use its reasonable efforts to prevent or promptly to
remedy the same.
7.5 Reports. Each Party and its Subsidiaries shall file all
reports required to be filed by it with Regulatory Authorities between the date
of this Agreement and the Effective Time and shall deliver to the other Party
copies of all such reports promptly after the same are filed. If financial
statements are contained in any such reports filed with the SEC, such financial
statements will fairly present the consolidated financial position of the entity
filing such statements as of the dates indicated and the consolidated results of
operations, changes in stockholders' equity, and cash flows for the periods then
ended in accordance with GAAP (subject in the case of interim financial
statements to normal recurring year-end adjustments that are not Material). As
of their respective dates, such reports filed with the SEC will comply in all
Material respects with the Securities Laws and will not contain any untrue
statement of a Material fact or omit to state a Material fact required to be
stated therein or necessary in order to
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make the statements therein, in light of the circumstances under which they were
made, not misleading. Any financial statements contained in any other reports to
another Regulatory Authority shall be prepared in accordance with Laws
applicable to such reports.
ARTICLE 8
ADDITIONAL AGREEMENTS
---------------------
8.1 Registration Statement; Proxy Statement; Stockholder Approval.
As soon as reasonably practicable after execution of this Agreement, Centura
shall file the Registration Statement with the SEC, and shall use its reasonable
efforts to cause the Registration Statement to become effective under the 1933
Act and take any action required to be taken under the applicable state Blue Sky
or securities Laws in connection with the issuance of the shares of Centura
Common Stock upon consummation of the Merger. First Coastal shall furnish all
information concerning it and the holders of its capital stock as Centura may
reasonably request in connection with such action. First Coastal shall call a
Stockholders' Meeting, to be held as soon as reasonably practicable after the
Registration Statement is declared effective by the SEC, for the purpose of
voting upon approval of this Agreement and such other related matters as it
deems appropriate. In connection with the Stockholders' Meeting, (i) First
Coastal shall prepare and file with the SEC a Proxy Statement and mail such
Proxy Statement to its stockholders, (ii) the Parties shall furnish to each
other all information concerning them that they may reasonably request in
connection with such Proxy Statement, (iii) the Board of Directors of First
Coastal shall recommend to their respective stockholders the approval of the
matters submitted for approval, and (iv) the Board of Directors and officers of
First Coastal shall use their reasonable efforts to obtain such stockholders'
approval, provided that First Coastal may withdraw, modify, or change in an
adverse manner to Centura its recommendations if the Board of Directors of First
Coastal, after having consulted with and based upon the advice of outside
counsel, determines in good faith that the failure to so withdraw, modify, or
change its recommendation could constitute a breach of the fiduciary duties of
First Coastal's Board of Directors under applicable Law.
8.2 Exchange Listing. Centura shall use its reasonable efforts to
list, prior to the Effective Time, on the NYSE, subject to official notice of
issuance, the shares of Centura Common Stock to be issued to the holders of
First Coastal Common Stock pursuant to the Merger.
8.3 Applications. Centura shall promptly prepare and file, and
First Coastal shall cooperate in the preparation and, where appropriate, filing
of, applications with all Regulatory Authorities having jurisdiction over the
transactions contemplated by this Agreement seeking the requisite Consents
necessary to consummate the transactions contemplated by this Agreement.
8.4 Filings with State Offices. Upon the terms and subject to the
conditions of this Agreement, Centura shall execute and file the North Carolina
Articles of Merger with the Secretary of State of the State of North Carolina
and Centura shall execute and file the Virginia
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Articles of Merger with the Secretary of State of the Commonwealth of Virginia
in connection with the Closing.
8.5 Agreement as to Efforts to Consummate. Subject to the terms
and conditions of this Agreement, each Party agrees to use, and to cause its
Subsidiaries to use, its reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper, or
advisable under applicable Laws to consummate and make effective, as soon as
reasonably practicable after the date of this Agreement, the transactions
contemplated by this Agreement, including, without limitation, using its
reasonable efforts to lift or rescind any Order adversely affecting its ability
to consummate the transactions contemplated herein and to cause to be satisfied
the conditions referred to in Article 9 of this Agreement; provided, that
nothing herein shall preclude either Party from exercising its rights under this
Agreement. Each Party shall use, and shall cause each of its Subsidiaries to
use, its reasonable efforts to obtain all Consents necessary or desirable for
the consummation of the transactions contemplated by this Agreement.
8.6 Investigation and Confidentiality.
(a) Prior to the Effective Time, each Party shall keep the
other Party advised of all Material developments relevant to its business and to
consummation of the Merger and shall permit the other Party to make or cause to
be made such investigation of the business and properties of it and its
Subsidiaries and of their respective financial and legal conditions as the other
Party reasonably requests, provided that such investigation shall be reasonably
related to the transactions contemplated hereby and shall not interfere
unnecessarily with normal operations. No investigation by a Party shall affect
the representations and warranties of the other Party.
(b) Each Party shall, and shall cause its advisers and
agents to, maintain the confidentiality of all confidential information
furnished to it by the other Party concerning its and its Subsidiaries'
businesses, operations, and financial positions and shall not use such
information for any purpose except in furtherance of the transactions
contemplated by this Agreement. If this Agreement is terminated prior to the
Effective Time, each Party shall promptly return or certify the destruction of
all documents and copies thereof, and all work papers containing confidential
information received from the other Party.
(c) Each Party agrees to give the other Party notice as soon
as practicable after any determination by it of any fact or occurrence relating
to the other Party which it has discovered through the course of its
investigation and which represents, or is reasonably likely to represent, either
a Material breach of any representation, warranty, covenant, or agreement of the
other Party or which has had or is reasonably likely to have a Material Adverse
Effect on the other Party.
(d) Neither Party nor any of their respective Subsidiaries
shall be required to provide access to or to disclose information where such
access or disclosure would violate or prejudice the rights of its customers,
jeopardize the attorney-client or similar privilege with
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respect to such information or contravene any Law, rule, regulation, Order,
judgment, decree, fiduciary duty, or agreement entered into prior to the date of
this Agreement. The Parties will use their reasonable efforts to make
appropriate substitute disclosure arrangements, to the extent practicable, in
circumstances in which the restrictions of the preceding sentence apply.
8.7 Press Releases. Prior to the Effective Time, Centura and First
Coastal shall consult with each other as to the form and substance of any press
release or other public disclosure materially related to this Agreement or any
other transaction contemplated hereby; provided, that nothing in this Section
8.7 shall be deemed to prohibit any Party from making any disclosure which its
counsel deems necessary or advisable in order to satisfy such Party's disclosure
obligations imposed by Law.
8.8 Certain Actions. Except with respect to this Agreement and the
transactions contemplated hereby, no First Coastal Company nor any Affiliate
thereof nor any Representatives thereof retained by any First Coastal Company
shall directly or indirectly solicit or engage in negotiations concerning any
Acquisition Proposal, or provide any confidential information or assistance to,
or have any discussions with, any Person with respect to an Acquisition
Proposal. Notwithstanding the foregoing, First Coastal may, and may authorize
and permit its Representatives to, provide Persons with confidential
information, have discussions or negotiations with, or otherwise facilitate an
effort or attempt by such Person to make or implement an Acquisition Proposal
not solicited in violation of this Agreement if First Coastal's Board of
Directors, after having consulted with, and based upon the advice of, outside
counsel, determines in good faith that the failure to take such actions could
constitute a breach of the fiduciary duties of First Coastal's Board of
Directors under applicable Law; provided, that First Coastal shall promptly
advise Centura following the receipt of any Acquisition Proposal and the
Material details thereof; and, provided further, that prior to delivery of
confidential information relating to First Coastal or access to First Coastal's
books, records, or properties in connection herewith, the other Person shall
have entered into a confidentiality agreement substantially similar to the
Confidentiality Agreement previously entered into between First Coastal and
Centura.. Nothing contained in this Section 8.8 shall prohibit the Board of
Directors of First Coastal from complying with Rule 14e-2, promulgated under the
1934 Act. First Coastal shall (i) immediately following the date of this
Agreement cease and cause to be terminated any existing activities, discussions,
or negotiations with any Persons conducted heretofore with respect to any of the
foregoing, and (ii) direct and use its reasonable efforts to cause of all its
Representatives not to engage in any of the foregoing.
8.9 Accounting and Tax Treatment. Each of the Parties undertakes
and agrees to use its reasonable efforts to cause the Merger, and to take no
action which would cause the Merger not, to qualify for treatment as a pooling
of interests for accounting purposes or as a "reorganization" within the meaning
of Section 368(a) of the Internal Revenue Code for federal income tax purposes.
8.10 State Takeover Laws. Each First Coastal Company shall take
all necessary steps to exempt the transactions contemplated by this Agreement
from, or if necessary challenge the validity or applicability of, any applicable
Takeover Laws.
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8.11 Charter Provisions. Each First Coastal Company shall take all
necessary action to ensure that the entering into of this Agreement and the
consummation of the Merger and the other transactions contemplated hereby do not
and will not result in the grant of any rights to any Person under the Articles
of Incorporation, Bylaws, or other governing instruments of any First Coastal
Company or restrict or impair the ability of Centura or any of its Subsidiaries
to vote, or otherwise to exercise the rights of a stockholder with respect to,
shares of any First Coastal Company that may be directly or indirectly acquired
or controlled by it.
8.12 Agreement of Affiliates. First Coastal has disclosed in
Section 8.12 of the First Coastal Disclosure Memorandum each Person whom it
reasonably believes may be deemed an "affiliate" of First Coastal for purposes
of Rule 145 under the 1933 Act. First Coastal shall use its reasonable efforts
to cause each such Person to deliver to Centura not later than 30 days prior to
the Effective Time, a written agreement, in substantially the form of Exhibit 2,
providing that such Person will not sell, pledge, transfer, or otherwise dispose
of the shares of First Coastal Common Stock held by such Person except as
contemplated by such agreement or by this Agreement and will not sell, pledge,
transfer, or otherwise dispose of the shares of Centura Common Stock to be
received by such Person upon consummation of the Merger except in compliance
with applicable provisions of the 1933 Act and the rules and regulations
thereunder and until such time as financial results covering at least 30 days of
combined operations of Centura and First Coastal have been published within the
meaning of Section 201.01 of the SEC's Codification of Financial Reporting
Policies. Shares of Centura Common Stock issued to such affiliates of First
Coastal in exchange for shares of First Coastal Common Stock shall not be
transferable until such time as financial results covering at least 30 days of
combined operations of Centura and First Coastal have been published within the
meaning of Section 201.01 of the SEC's Codification of Financial Reporting
Policies, regardless of whether each such affiliate has provided the written
agreement referred to in this Section 8.12 (and Centura shall be entitled to
place restrictive legends upon certificates for shares of Centura Common Stock
issued to affiliates of First Coastal pursuant to this Agreement to enforce the
provisions of this Section 8.12). Centura shall not be required to maintain the
effectiveness of the Registration Statement under the 1933 Act for the purposes
of resale of Centura Common Stock by such affiliates.
8.13 Employee Benefits and Contracts. Following the Effective
Time, Centura shall provide generally to officers and employees of the First
Coastal Companies, who at or after the Effective Time become employees of a
Centura Company (the "Continuing Employees"), employee benefits under employee
benefit plans on terms and conditions which when taken as a whole are
substantially similar to those currently provided by the Centura Companies to
their similarly situated officers and employees. For purposes of eligibility,
participation and vesting (but not accrual of benefits) under such employee
benefit plans, (i) service under any qualified defined benefit plans of First
Coastal shall be treated as service under Centura's qualified defined benefit
plans, (ii) service under any qualified defined contribution plans of First
Coastal shall be treated as service under Centura's qualified defined
contribution plans, and (iii) service under any other employee benefit plans of
First Coastal shall be treated as service under any similar employee benefit
plans maintained by Centura. Centura shall cause the Centura welfare benefit
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plans that cover the Continuing Employees and dependents of such employees after
the Effective Time to (i) waive any waiting period and restrictions and
limitations for preexisting conditions or insurability, and (ii) cause any
deductible, co-insurance, or maximum out-of-pocket payments made by the
Continuing Employees under First Coastal's welfare benefit plans for the plan
year in effect as of the Effective Time to be credited to such Continuing
Employees under the Centura welfare benefit plans, so as to reduce the amount of
any deductible, co-insurance, or maximum out-of-pocket payments payable by the
Continuing Employees under the Centura welfare benefit plans. The continued
coverage of the Continuing Employees under the employee benefits plans
maintained by First Coastal and/or any First Coastal Subsidiary immediately
prior to the Effective Time during a transition period shall be deemed to
provide the Continuing Employees with benefits that are no less favorable than
those offered to other employees of Centura and its Subsidiaries, provided that
after the Effective Time there is no Material reduction (determined on an
overall basis) in the benefits provided under the First Coastal employee benefit
plans. Centura shall, and shall cause First Coastal and its Subsidiaries to,
honor all employment, severance, consulting, and other compensation Contracts
disclosed in Section 8.13 of the First Coastal Disclosure Memorandum to Centura
between any First Coastal Company and any current or former director, officer,
or employee thereof, and all provisions of the First Coastal Benefit Plans.
8.14 Indemnification.
(a) Subject to the conditions set forth in paragraph (b)
below, for a period of six (6) years after the Effective Time, Centura shall,
and shall cause First Coastal to, indemnify, defend, and hold harmless each
Person entitled to indemnification from a First Coastal Company (each, an
"Indemnified Party") against all Liabilities arising out of actions or omissions
occurring at or prior to the Effective Time (including, without limitation, the
transactions contemplated by this Agreement) to the full extent permitted by
Virginia Law and First Coastal's Restated Articles of Incorporation and Bylaws,
in each case as in effect on the date hereof, including provisions relating to
advances of expenses incurred in the defense of any Litigation. Without limiting
the foregoing, in any case in which approval by First Coastal is required to
effectuate any indemnification, Centura shall cause First Coastal to direct, at
the election of the Indemnified Party, that the determination of any such
approval shall be made by independent counsel mutually agreed upon between
Centura and the Indemnified Party.
(b) Any Indemnified Party wishing to claim indemnification
under paragraph (a), upon learning of any such Liability or Litigation, shall
promptly notify Centura thereof, provided, however, that the failure of an
Indemnified Party to provide such notice shall not relieve Centura of any of its
obligations under this Section 8.14, except to the extent the lack of such
notice may materially prejudice Centura's position with respect to the
underlying Liability or Litigation. In the event of any such Litigation (whether
arising before or after the Effective Time), (i) Centura or First Coastal shall
have the right to assume the defense thereof and Centura shall not be liable to
such Indemnified Parties for any legal expenses of other counsel or any other
expenses subsequently incurred by such Indemnified Parties in connection with
the defense thereof, except that if Centura or First Coastal elects not to
assume such defense or counsel for the Indemnified Parties advises that there
are substantive issues which raise conflicts of interest
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between Centura or First Coastal and the Indemnified Parties, the Indemnified
Parties may retain counsel satisfactory to them, and Centura or First Coastal
shall pay all reasonable fees and expenses of such counsel for the Indemnified
Parties promptly as statements therefor are received; provided, however, that
Centura shall be obligated pursuant to this paragraph (b) to pay for only one
firm of counsel for all Indemnified Parties in any jurisdiction, (ii) the
Indemnified Parties will cooperate in the defense of any such Litigation, and
(iii) Centura shall not be liable for any settlement effected without its prior
written consent; and provided further that First Coastal shall not have any
obligation hereunder to any Indemnified Party when and if a court of competent
jurisdiction shall determine, and such determination shall have become final,
that the indemnification of such Indemnified Party in the manner contemplated
hereby is prohibited by applicable Law.
(c) Centura shall use its reasonable efforts (and First
Coastal shall cooperate prior to the Effective Time in these efforts) to
maintain in effect for a period of one year after the Effective Time, First
Coastal's existing directors' and officers' liability insurance policy (provided
that Centura may substitute therefor policies of at least the same coverage and
amounts containing terms and conditions which are substantially no less
advantageous) with respect to claims arising from facts or events which occurred
prior to the Effective Time and covering persons who are currently covered by
such insurance.
(d) If Centura or any of its successors or assigns shall
consolidate with or merge into any other Person and shall not be the continuing
or surviving Person of such consolidation or merger or shall transfer all or
substantially all of its Assets to any Person, then and in each case, proper
provision shall be made so that the successors and assigns of Centura shall
assume the obligations set forth in this Section 8.14.
(e) The provisions of this Section 8.14 are intended to be
for the benefit of and shall be enforceable by, each Indemnified Party, his or
her heirs and representatives.
8.15 Assumption of Agreement. In the event Centura or any of its
successors or assigns (i) shall consolidate with or merge into any other
corporation or entity and shall not be the continuing or surviving corporation
or entity of such consolidation or merger, or (ii) shall transfer all or
substantially all of its properties and assets to any individual, corporation,
or other entity, then, in each such case, Centura or such successor or assign
shall take such actions as shall be necessary for the successors or assigns of
Centura to assume the obligations of Centura under this Agreement.
ARTICLE 9
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
-------------------------------------------------
9.1 Conditions to Obligations of Each Party. The respective
obligations of each Party to perform this Agreement and to consummate the Merger
and the other transactions contemplated hereby are subject to the satisfaction
of the following conditions, unless waived by both Parties pursuant to Section
11.6 of this Agreement:
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(a) Stockholder Approval. The stockholders of First Coastal
shall have approved this Agreement, and the consummation of the
transactions contemplated hereby, including the Merger, as and to the
extent required by Law, by the provisions of any governing instruments,
and by the rules of the NASD.
(b) Regulatory Approvals. All Consents of, filings and
registrations with, and notifications to, all Regulatory Authorities
required for consummation of the Merger and the Bank Merger shall have
been obtained or made and shall be in full force and effect and all
waiting periods required by Law shall have expired. No Consent obtained
from any Regulatory Authority which is necessary to consummate the
transactions contemplated hereby shall be conditioned or restricted in a
manner (excluding requirements relating to the raising of additional
capital or the disposition of Assets or deposits) which in the reasonable
good faith judgment of the Board of Directors of Centura would so
materially adversely impact the economic or business benefits of the
transactions contemplated by this Agreement so as to render inadvisable
the consummation of the Merger.
(c) Consents and Approvals. Each Party shall have obtained any
and all Consents required for consummation of the Merger (other than
those referred to in Section 9.1(b) of this Agreement) or for the
preventing of any Default under any Contract or Permit of such Party
which, if not obtained or made, is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on such
Party. No Consent obtained which is necessary to consummate the
transactions contemplated hereby shall be conditioned or restricted in a
manner which in the reasonable good faith judgment of the Board of
Directors of Centura would so materially adversely impact the economic or
business benefits of the transactions contemplated by this Agreement so
as to render inadvisable the consummation of the Merger.
(d) Legal Proceedings. No court or governmental or Regulatory
Authority of competent jurisdiction shall have enacted, issued,
promulgated, enforced, or entered any Law or Order (whether temporary,
preliminary, or permanent) or taken any other action which prohibits,
restricts, or makes illegal consummation of the transactions contemplated
by this Agreement.
(e) Registration Statement. The Registration Statement shall
be effective under the 1933 Act, no stop orders suspending the
effectiveness of the Registration Statement shall have been issued, no
action, suit, proceeding, or investigation by the SEC to suspend the
effectiveness thereof shall have been initiated and be continuing, and
all necessary approvals under state securities Laws or the 1933 Act or
1934 Act relating to the issuance or trading of the shares of Centura
Common Stock issuable pursuant to the Merger shall have been received.
(f) Exchange Listing. The shares of Centura Common Stock
issuable pursuant to the Merger shall have been approved for listing on
the NYSE, subject to official notice of issuance.
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(g) Tax Matters. Each Party shall have received a written
opinion or opinions from Alston & Bird LLP, in a form reasonably
satisfactory to such Party (the "Tax Opinion"), to the effect that (i)
the Merger will constitute a reorganization within the meaning of Section
368(a) of the Internal Revenue Code, (ii) the exchange in the Merger of
First Coastal Common Stock for Centura Common Stock will not give rise to
gain or loss to the stockholders of First Coastal with respect to such
exchange (except to the extent of any cash received), (iii) the tax basis
of the Centura Common Stock received by holders of First Coastal Common
Stock in the Merger will be the same as the tax basis of the First
Coastal Common Stock surrendered in exchange for the Centura Common Stock
(reduced by an amount allocable to a fractional share for which cash is
received), and (iv) the holding period of the Centura Common Stock
received by holders who exchange their First Coastal Common Stock for
Centura Common Stock in the Merger will be the same as the holding period
of the First Coastal Common Stock surrendered in exchange therefor. In
rendering such Tax Opinion, such counsel shall be entitled to rely upon
representations of officers of First Coastal and Centura reasonably
satisfactory in form and substance to such counsel.
(h) Pooling Letter. Each Party shall have received a letter,
dated as of the Effective Time, in a form reasonably acceptable to such
Party, from KPMG Peat Marwick to the effect that the Merger will qualify
for pooling-of-interests accounting treatment.
9.2 Conditions to Obligations of Centura. The obligations of
Centura to perform this Agreement and consummate the Merger and the other
transactions contemplated hereby are subject to the satisfaction of the
following conditions, unless waived by Centura pursuant to Section 11.6(a) of
this Agreement:
(a) Representations and Warranties. For purposes of this
Section 9.2(a), the accuracy of the representations and warranties of
First Coastal set forth in this Agreement shall be assessed as of the
date of this Agreement and as of the Effective Time with the same effect
as though all such representations and warranties had been made on and as
of the Effective Time (provided that representations and warranties which
are confined to a specified date shall speak only as of such date). The
representations and warranties of First Coastal set forth in Section 5.3
of this Agreement shall be true and correct (except for inaccuracies
which are de minimis in amount). The representations and warranties of
First Coastal set forth in Sections 5.18, 5.19, and 5.20 of this
Agreement shall be true and correct in all Material respects. There shall
not exist inaccuracies in the representations and warranties of First
Coastal set forth in this Agreement (including the representations and
warranties set forth in Sections 5.3, 5.18, 5.19, and 5.20) such that the
aggregate effect of such inaccuracies has, or is reasonably likely to
have, a Material Adverse Effect on First Coastal; provided that, for
purposes of this sentence only, those representations and warranties
which are qualified by references to "material," "Material," "Material
Adverse Effect," or variations thereof, or to the "Knowledge" of First
Coastal or to a matter being "known" by First Coastal shall be deemed not
to include such qualifications.
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(b) Performance of Agreements and Covenants. Each and all of
the agreements and covenants of First Coastal to be performed and
complied with pursuant to this Agreement and the other agreements
contemplated hereby prior to the Effective Time shall have been duly
performed and complied with in all Material respects.
(c) Certificates. First Coastal shall have delivered to
Centura (i) a certificate, dated as of the Effective Time and signed on
its behalf by its duly authorized officers, to the effect that the
conditions of its obligations set forth in Section 9.2(a) and 9.2(b) of
this Agreement have been satisfied, and (ii) certified copies of
resolutions duly adopted by First Coastal's Board of Directors and
stockholders evidencing the taking of all corporate action necessary to
authorize the execution, delivery, and performance of this Agreement, and
the consummation of the transactions contemplated hereby, all in such
reasonable detail as Centura and its counsel shall request.
(d) Affiliate Agreements. Centura shall have received from
each affiliate of First Coastal the affiliates agreement referred to in
Section 8.12 of this Agreement, to the extent necessary to assure in the
reasonable judgment of Centura that the transactions contemplated hereby
will qualify for pooling-of-interests accounting treatment.
9.3 Conditions to Obligations of First Coastal. The obligations of
First Coastal to perform this Agreement and consummate the Merger and the Bank
Merger and the other transactions contemplated hereby are subject to the
satisfaction of the following conditions, unless waived by First Coastal
pursuant to Section 11.6(b) of this Agreement:
(a) Representations and Warranties. For purposes of this
Section 9.3(a), the accuracy of the representations and warranties of
Centura set forth in this Agreement shall be assessed as of the date of
this Agreement and as of the Effective Time with the same effect as
though all such representations and warranties had been made on and as of
the Effective Time (provided that representations and warranties which
are confined to a specified date shall speak only as of such date). The
representations and warranties of Centura set forth in Section 6.3 of
this Agreement shall be true and correct (except for inaccuracies which
are de minimis in amount). The representations and warranties of Centura
set forth in Section 6.16 of this Agreement shall be true and correct in
all Material respects. There shall not exist inaccuracies in the
representations and warranties of Centura set forth in this Agreement
(including the representations and warranties set forth in Sections 6.3
and 6.16) such that the aggregate effect of such inaccuracies has, or is
reasonably likely to have, a Material Adverse Effect on Centura; provided
that, for purposes of this sentence only, those representations and
warranties which are qualified by references to "material," "Material,"
"Material Adverse Effect," or variations thereof, or to the "Knowledge"
of Centura or to a matter being "known" by Centura shall be deemed not to
include such qualifications.
(b) Performance of Agreements and Covenants. Each and all of
the agreements and covenants of Centura to be performed and complied with
pursuant to this Agreement
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and the other agreements contemplated hereby prior to the Effective Time
shall have been duly performed and complied with in all Material
respects.
(c) Certificates. Centura shall have delivered to First
Coastal (i) a certificate, dated as of the Effective Time and signed on
its behalf by its duly authorized officers, to the effect that the
conditions of its obligations set forth in Section 9.3(a) and 9.3(b) of
this Agreement have been satisfied, and (ii) certified copies of
resolutions duly adopted by Centura's Board of Directors and stockholders
evidencing the taking of all corporate action necessary to authorize the
execution, delivery, and performance of this Agreement, and the
consummation of the transactions contemplated hereby, all in such
reasonable detail as First Coastal and its counsel shall request.
(d) Fairness Opinion. First Coastal shall have received a
letter from Trident Financial Corp. dated not more than five (5) days
prior to the date of the Proxy Statement to the effect that in the
opinion of such firm, the Exchange Ratio is fair to the stockholders of
First Coastal from a financial point of view.
ARTICLE 10
TERMINATION
-----------
10.1 Termination. Notwithstanding any other provision of this
Agreement, and notwithstanding the approval of this Agreement by the
stockholders of First Coastal or Centura, this Agreement may be terminated and
the Merger abandoned at any time prior to the Effective Time:
(a) By mutual consent of the Board of Directors of Centura and
the Board of Directors of First Coastal; or
(b) By the Board of Directors of either Party (provided that
the terminating Party is not then in breach of any representation or
warranty contained in this Agreement under the applicable standard set
forth in Section 9.2(a) of this Agreement in the case of First Coastal
and Section 9.3(a) of this Agreement in the case of Centura or in
Material breach of any covenant or other agreement contained in this
Agreement) in the event of an inaccuracy of any representation or
warranty of the other Party contained in this Agreement which cannot be
or has not been cured within 30 days after the giving of written notice
to the breaching Party of such inaccuracy and which inaccuracy would
provide the terminating Party the ability to refuse to consummate the
Merger under the applicable standard set forth in Section 9.2(a) of this
Agreement in the case of First Coastal and Section 9.3(a) of this
Agreement in the case of Centura; or
(c) By the Board of Directors of either Party (provided that
the terminating Party is not then in breach of any representation or
warranty contained in this Agreement under the applicable standard set
forth in Section 9.2(a) of this Agreement in the case of First Coastal
and Section 9.3(a) in the case of Centura) in the event of a Material
breach by the other
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Party of any covenant or agreement contained in this Agreement which
cannot be or has not been cured within 30 days after the giving of
written notice to the breaching Party of such breach; or
(d) By the Board of Directors of either Party in the event (i)
any Consent of any Regulatory Authority required for consummation of the
Merger and the other transactions contemplated hereby shall have been
denied by final nonappealable action of such authority or if any action
taken by such authority is not appealed within the time limit for appeal,
or (ii) the stockholders of First Coastal fail to vote their approval of
the matters submitted for the approval by such stockholders at the
Stockholders' Meeting where the transactions were presented to such
stockholders for approval and voted upon; or
(e) By the Board of Directors of either Party in the event
that the Merger shall not have been consummated by April 30, 1999, if the
failure to consummate the transactions contemplated hereby on or before
such date is not caused by any breach of this Agreement by the Party
electing to terminate pursuant to this Section 10.1(e); or
(f) By the Board of Directors of either Party (provided that
the terminating Party is not then in breach of any representation or
warranty contained in this Agreement under the applicable standard set
forth in Section 9.2(a) of this Agreement in the case of First Coastal
and Section 9.3(a) of this Agreement in the case of Centura or in
Material breach of any covenant or other agreement contained in this
Agreement) in the event that any of the conditions precedent to the
obligations of such Party to consummate the Merger cannot be satisfied or
fulfilled by the date specified in Section 10.1(e) of this Agreement; or
(g) By the Board of Directors of First Coastal, if it
determines by a vote of a majority of the members of its entire Board, at
any time during the three-day period ending immediately prior to the
Effective Time, if the Average Closing Price is greater than $86.4063; or
(h) By the Board of Directors of Centura, if it determines by
a vote of a majority of its entire Board, at any time during the
three-day period ending immediately prior to the Effective Time, that
the Average Closing Price is less than $51.8438.
10.2 Effect of Termination. In the event of the termination and
abandonment of this Agreement pursuant to Section 10.1 of this Agreement, this
Agreement and the Supplemental Letter shall become void and have no effect,
except that (i) the provisions of this Section 10.2 and Article 11 and Section
8.6(b) of this Agreement shall survive any such termination and abandonment, and
(ii) a termination pursuant to Sections 10.1(b), 10.1(c), or 10.1(f) of this
Agreement shall not relieve the breaching Party from Liability for an uncured
willful breach of a representation, warranty, covenant, or agreement giving rise
to such termination. The Stock Option Agreement shall be governed by its own
terms.
10.3 Non-Survival of Representations and Covenants. The respective
representations, warranties, obligations, covenants, and agreements of the
Parties shall not
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survive the Effective Time except this Section 10.3 and Articles 2, 3, 4, and 11
and Sections 8.12 and 8.14 of this Agreement. The terms of the Supplemental
Letter shall survive the Effective Time.
ARTICLE 11
MISCELLANEOUS
-------------
11.1 Definitions.
(a) Except as otherwise provided herein, the capitalized
terms set forth below shall have the following meanings:
"Acquisition Proposal" with respect to a Party shall mean any
tender offer or exchange offer or any proposal for a merger, acquisition
of all of the stock or Assets of, or other business combination involving
such Party or any of its Subsidiaries or the acquisition of a substantial
equity interest in, or a substantial portion of the Assets of, such Party
or any of its Subsidiaries.
"Affiliate" of a Person shall mean: (i) any other Person
directly, or indirectly through one or more intermediaries, controlling,
controlled by or under common control with such Person; (ii) any officer,
director, partner, employer, or direct or indirect beneficial owner of
any 10% or greater equity or voting interest of such Person; or (iii) any
other Person for which a Person described in clause (ii) acts in any such
capacity.
"Agreement" shall mean this Agreement and Plan of Merger,
including the Exhibits (and excepting the Stock Option Agreement)
delivered pursuant hereto and incorporated herein by reference.
"Assets" of a Person shall mean all of the assets, properties,
businesses, and rights of such Person of every kind, nature, character,
and description, whether real, personal, or mixed, tangible or
intangible, accrued or contingent, or otherwise relating to or utilized
in such Person's business, directly or indirectly, in whole or in part,
whether or not carried on the books and records of such Person, and
whether or not owned in the name of such Person or any Affiliate of such
Person and wherever located.
"Average Closing Price" shall mean the average of the daily
last sales prices of Centura Common Stock as reported on the NYSE -
Composite Transactions List (as reported by The Wall Street Journal or,
if not reported thereby, another authoritative source as chosen by
Centura) for the ten consecutive full trading days in which such shares
are traded on the NYSE - Composite Transactions List ending at the close
of trading on the third full trading day preceding the Effective Time.
"BHC Act" shall mean the federal Bank Holding Company Act of
1956, as amended.
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"Centura Bank" shall mean the wholly-owned banking subsidiary
of Centura.
"Centura Common Stock" shall mean the no par value common stock
of Centura.
"Centura Companies" shall mean, collectively, Centura and all
Centura Subsidiaries.
"Centura Disclosure Memorandum" shall mean the written
information entitled "Centura Disclosure Memorandum" delivered prior to
the execution of this Agreement to First Coastal describing in reasonable
detail the matters contained therein and, with respect to each disclosure
made therein, specifically referencing each Section or subsection of this
Agreement under which such disclosure is being made. Information
disclosed with respect to one Section or subsection shall be deemed to be
disclosed for all purposes hereunder. The inclusion of any matter in this
document shall not be deemed an admission or otherwise to imply that any
such matter is Material for purposes of this Agreement.
"Centura Financial Statements" shall mean (i) the consolidated
statements of condition (including related notes and schedules, if any)
of Centura as of June 30, 1998, and as of December 31, 1997 and 1996, and
the related statements of income, changes in stockholders' equity, and
cash flows (including related notes and schedules, if any) for the six
months ended June 30, 1998, and for each of the three years ended
December 31, 1997, 1996, and 1995, as filed by Centura in SEC Documents,
and (ii) the consolidated statements of condition of Centura (including
related notes and schedules, if any) and related statements of income,
changes in stockholders' equity, and cash flows (including related notes
and schedules, if any) included in SEC Documents filed with respect to
periods ended subsequent to June 30, 1998.
"Centura Preferred Stock" shall mean the no par value preferred
stock of Centura.
"Centura Subsidiaries" shall mean the Subsidiaries of Centura
and any corporation, bank, savings association, or other organization
acquired as a Subsidiary of Centura in the future and owned by Centura at
the Effective Time.
"Confidentiality Agreements" shall mean those certain
Confidentiality Agreements, entered into prior to the date of this
Agreement, between First Coastal and Centura.
"Consent" shall mean any consent, approval, authorization,
clearance, exemption, waiver, or similar affirmation by any Person
pursuant to any Contract, Law, Order, or Permit.
"Contract" shall mean any written or oral agreement,
arrangement, authorization, commitment, contract, indenture, instrument,
lease, obligation, plan, practice, restriction, understanding, or
undertaking of any kind or character, or other document to which any
Person is a party or that is binding on any Person or its capital stock,
Assets, or business.
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"Default" shall mean (i) any breach or violation of or default
under any Contract, Order, or Permit, (ii) any occurrence of any event
that with the passage of time or the giving of notice or both would
constitute a breach or violation of or default under any Contract, Order,
or Permit, or (iii) any occurrence of any event that with or without the
passage of time or the giving of notice would give rise to a right to
terminate or revoke, change the current terms of, or renegotiate, or to
accelerate, increase, or impose any Liability under, any Contract, Order,
or Permit, where, in any such event, such Default is reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on a
Party.
"Environmental Laws" shall mean all Laws relating to pollution
or protection of human health or the environment (including ambient air,
surface water, ground water, land surface, or subsurface strata) and
which are administered, interpreted, or enforced by the United States
Environmental Protection Agency and state and local agencies with
jurisdiction over, and including common law in respect of, pollution or
protection of the environment, including the Comprehensive Environmental
Response Compensation and Liability Act, as amended, 42 U.S.C. 9601 et
seq. ("CERCLA"), the Resource Conservation and Recovery Act, as amended,
42 U.S.C. 6901 et seq. ("RCRA"), and other Laws relating to emissions,
discharges, releases, or threatened releases of any Hazardous Material,
or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport, or handling of any Hazardous
Material.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
"Exhibits" 1 through 3, inclusive, shall mean the Exhibits so
marked, copies of which are attached to this Agreement. Such Exhibits are
hereby incorporated by reference herein and made a part hereof, and may
be referred to in this Agreement and any other related instrument or
document without being attached hereto.
"First Coastal Bank" shall mean the wholly-owned banking
subsidiary of First Coastal.
"First Coastal Capital Stock" shall mean, collectively, First
Coastal Common Stock and First Coastal Preferred Stock.
"First Coastal Common Stock" shall mean the $.01 par value
common stock of First Coastal.
"First Coastal Companies" shall mean, collectively, First
Coastal and all First Coastal Subsidiaries.
"First Coastal Disclosure Memorandum" shall mean the written
information entitled "First Coastal Disclosure Memorandum" delivered
prior to the execution of this Agreement to Centura describing in
reasonable detail the matters contained therein and,
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with respect to each disclosure made therein, specifically referencing
each Section or subsection of this Agreement under which such disclosure
is being made. Information disclosed with respect to one Section or
subsection shall be deemed to be disclosed for all purposes hereunder.
The inclusion of any matter in this document shall not be deemed an
admission or otherwise to imply that any such matter is Material for
purposes of this Agreement.
"First Coastal Financial Statements" shall mean (i) the
consolidated statements of condition (including related notes and
schedules, if any) of First Coastal as of June 30, 1998, and as of
December 31, 1997 and 1996, and the related statements of income, changes
in stockholders' equity, and cash flows (including related notes and
schedules, if any) for the six months ended June 30, 1998, and for each
of the three years ended December 31, 1997, 1996, and 1995, as filed by
First Coastal in SEC Documents, and (ii) the consolidated statements of
condition of First Coastal (including related notes and schedules, if
any) and related statements of income, changes in stockholders' equity,
and cash flows (including related notes and schedules, if any) included
in SEC Documents filed with respect to periods ended subsequent to June
30, 1998.
"First Coastal Preferred Stock" shall mean the $.01 par value
preferred stock of First Coastal.
"First Coastal Stock Plans" shall mean the existing stock
option and other stock-based compensation plans of First Coastal.
"First Coastal Subsidiaries" shall mean the Subsidiaries of
First Coastal, which shall include the First Coastal Subsidiaries
described in Section 5.4 of this Agreement and any corporation, bank,
savings association, or other organization acquired as a Subsidiary of
First Coastal in the future and owned by First Coastal at the Effective
Time.
"GAAP" shall mean generally accepted accounting principles,
consistently applied during the periods involved.
"Hazardous Material" shall mean (i) any hazardous substance,
hazardous material, hazardous waste, regulated substance, or toxic
substance (as those terms are defined by any applicable Environmental
Laws) and (ii) any chemicals, pollutants, contaminants, petroleum,
petroleum products, or oil (and specifically shall include asbestos
requiring abatement, removal, or encapsulation pursuant to the
requirements of governmental authorities and any polychlorinated
biphenyls).
"HOLA" shall mean the Home Owners' Loan Act of 1933, as amended.
"HSR Act" shall mean Section 7A of the Clayton Act, as added
by Title II of the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended, and the rules and regulations promulgated thereunder.
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"Internal Revenue Code" shall mean the Internal Revenue Code
of 1986, as amended, and the rules and regulations promulgated
thereunder.
"Knowledge" as used with respect to a Person (including
references to such Person being aware of a particular matter) shall mean
the personal knowledge of the chairman, president, chief financial
officer, chief accounting officer, chief credit officer, general counsel,
or any executive vice president of such Person.
"Law" shall mean any code, law, ordinance, regulation,
reporting or licensing requirement, rule, or statute applicable to a
Person or its Assets, Liabilities, or business, including those
promulgated, interpreted, or enforced by any Regulatory Authority.
"Liability" shall mean any direct or indirect, primary or
secondary, liability, indebtedness, obligation, penalty, cost, or expense
(including costs of investigation, collection, and defense), claim,
deficiency, guaranty, or endorsement of or by any Person (other than
endorsements of notes, bills, checks, and drafts presented for collection
or deposit in the ordinary course of business) of any type, whether
accrued, absolute or contingent, liquidated or unliquidated, matured or
unmatured, or otherwise.
"Lien" shall mean any conditional sale agreement, default of
title, easement, encroachment, encumbrance, hypothecation, infringement,
lien, mortgage, pledge, reservation, restriction, security interest,
title retention, or other security arrangement, or any adverse right or
interest, charge, or claim of any nature whatsoever of, on, or with
respect to any property or property interest, other than (i) Liens for
property Taxes not yet due and payable, and (ii) for depository
institution Subsidiaries of a Party, pledges to secure deposits, and
other Liens incurred in the ordinary course of the banking business.
"Litigation" shall mean any action, arbitration, cause of
action, claim, complaint, criminal prosecution, demand letter,
governmental or other examination or investigation, hearing, inquiry,
administrative or other proceeding, or notice (written or oral) by any
Person alleging potential Liability or requesting information relating to
or affecting a Party, its business, its Assets (including Contracts
related to it), or the transactions contemplated by this Agreement, but
shall not include regular, periodic examinations of depository
institutions and their Affiliates by Regulatory Authorities.
"Loan Property" shall mean any property owned, leased, or
operated by the Party in question or by any of its Subsidiaries or in
which such Party or Subsidiary holds a security or other interest
(including an interest in a fiduciary capacity), and, where required by
the context, includes the owner or operator of such property, but only
with respect to such property.
"Material" for purposes of this Agreement shall be determined
in light of the facts and circumstances of the matter in question;
provided that any specific monetary amount stated in this Agreement shall
determine materiality in that instance.
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"Material Adverse Effect" on a Party shall mean an event,
change, or occurrence which, individually or together with any other
event, change, or occurrence, has a Material adverse impact on (i) the
financial condition, results of operations, or business of such Party and
its Subsidiaries, taken as a whole, or (ii) the ability of such Party to
perform its obligations under this Agreement or to consummate the Merger
or the other transactions contemplated by this Agreement, provided that
"Material Adverse Effect" shall not be deemed to include the impact of
(a) changes in banking and similar Laws of general applicability or
interpretations thereof by courts or governmental authorities, (b)
changes in GAAP or regulatory accounting principles generally applicable
to banks and their holding companies, (c) actions and omissions of a
Party (or any of its Subsidiaries) taken with the prior informed consent
of the other Party in contemplation of the transactions contemplated
hereby, including actions related to the increase of reserves, and (d)
the Merger and compliance with the provisions of this Agreement on the
operating performance of the Parties.
"NASD" shall mean the National Association of Securities
Dealers, Inc.
"NCBCA" shall mean the North Carolina Business Corporation Act.
"NYSE" shall mean the New York Stock Exchange, Inc.
"1933 Act" shall mean the Securities Act of 1933, as amended.
"1934 Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Order" shall mean any administrative decision or award,
decree, injunction, judgment, order, quasi-judicial decision or award,
ruling, or writ of any federal, state, local, or foreign or other court,
arbitrator, mediator, tribunal, administrative agency, or Regulatory
Authority.
"Participation Facility" shall mean any facility or property
in which the Party in question or any of its Subsidiaries participates in
the management (including, but not limited to, participating in a
fiduciary capacity) and, where required by the context, said term means
the owner or operator of such facility or property, but only with respect
to such facility or property.
"Party" shall mean either First Coastal or Centura, and
"Parties" shall mean both First Coastal and Centura.
"Permit" shall mean any federal, state, local, and foreign
governmental approval, authorization, certificate, easement, filing,
franchise, license, notice, permit, or right to which any Person is a
party or that is or may be binding upon or inure to the benefit of any
Person or its securities, Assets, or business.
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"Person" shall mean a natural person or any legal, commercial,
or governmental entity, such as, but not limited to, a corporation,
general partnership, joint venture, limited partnership, limited
liability company, trust, business association, group acting in concert,
or any person acting in a representative capacity.
"Proxy Statement" shall mean the proxy statement used by First
Coastal to solicit the approval of its stockholders of the transactions
contemplated by this Agreement, which shall include the prospectus of
Centura relating to the issuance of the Centura Common Stock to holders
of First Coastal Common Stock.
"Registration Statement" shall mean the Registration Statement
on Form S-4, or other appropriate form, including any pre-effective or
post-effective amendments or supplements thereto, filed with the SEC by
Centura under the 1933 Act with respect to the shares of Centura Common
Stock to be issued to the stockholders of First Coastal in connection
with the transactions contemplated by this Agreement.
"Regulatory Authorities" shall mean, collectively, the Federal
Trade Commission, the United States Department of Justice, the Board of
the Governors of the Federal Reserve System, the Office of the
Comptroller of the Currency, the Federal Deposit Insurance Corporation,
the Office of Thrift Supervision, all state regulatory agencies having
jurisdiction over the Parties and their respective Subsidiaries, the
NASD, the NYSE, and the SEC.
"Representative" shall mean any investment banker, financial
advisor, attorney, accountant, consultant, or other representative of a
Person.
"Rights" shall mean all arrangements, calls, commitments,
Contracts, options, rights to subscribe to, scrip, understandings,
warrants, or other binding obligations of any character whatsoever
relating to, or securities or rights convertible into or exchangeable
for, shares of the capital stock of a Person or by which a Person is or
may be bound to issue additional shares of its capital stock or other
Rights.
"SEC" shall mean the United States Securities and Exchange
Commission.
"SEC Documents" shall mean all forms, proxy statements,
registration statements, reports, schedules, and other documents filed,
or required to be filed, by a Party or any of its Subsidiaries with any
Regulatory Authority pursuant to the Securities Laws.
"Securities Laws" shall mean the 1933 Act, the 1934 Act, the
Investment Company Act of 1940, as amended, the Investment Advisors Act
of 1940, as amended, the Trust Indenture Act of 1939, as amended, and the
rules and regulations of any Regulatory Authority promulgated thereunder.
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"Stockholders' Meetings" shall mean the respective meetings of
the stockholders of Centura and First Coastal to be held pursuant to
Section 8.1 of this Agreement, including any adjournment or adjournments
thereof.
"Subsidiaries" shall mean all those corporations, banks,
associations, or other entities of which the entity in question owns or
controls 50% or more of the outstanding equity securities either directly
or through an unbroken chain of entities as to each of which 50% or more
of the outstanding equity securities is owned directly or indirectly by
its parent; provided, there shall not be included any such entity
acquired through foreclosure or any such entity the equity securities of
which are owned or controlled in a fiduciary capacity.
"Supplemental Letter" shall mean the supplemental letter of
even date herewith between the Parties relating to certain understandings
and agreements in addition to those included in this Agreement.
"Surviving Bank" shall mean Centura Bank as the surviving bank
resulting from the Merger.
"Surviving Corporation" shall mean Centura as the surviving
corporation resulting from the Merger.
"Tax" or "Taxes" shall mean all federal, state, local, and
foreign taxes, charges, fees, levies, imposts, duties, or other
assessments, including income, gross receipts, excise, employment, sales,
use, transfer, license, payroll, franchise, severance, stamp, occupation,
windfall profits, environmental, federal highway use, commercial rent,
customs duties, capital stock, paid-up capital, profits, withholding,
Social Security, single business and unemployment, disability, real
property, personal property, registration, ad valorem, value added,
alternative or add-on minimum, estimated, or other tax or governmental
fee of any kind whatsoever, imposed or required to be withheld by the
United States or any state, local, or foreign government or subdivision
or agency thereof, including any interest, penalties, or additions
thereto.
"Taxable Period" shall mean any period prescribed by any
governmental authority, including the United States or any state, local,
or foreign government or subdivision or agency thereof for which a Tax
Return is required to be filed or Tax is required to be paid.
"Tax Return" shall mean any report, return, information
return, or other information required to be supplied to a taxing
authority in connection with Taxes, including any return of an affiliated
or combined or unitary group that includes a Party or its Subsidiaries.
"Virginia Articles of Merger" shall mean the Articles of
Merger to be executed by Centura and filed with the Secretary of State of
the Commonwealth of Virginia relating to the Merger as contemplated by
Section 1.1 of this Agreement.
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"VSCA" shall mean the Virginia Stock Corporation Act.
(b) The terms set forth below shall have the meanings
ascribed thereto in the referenced sections:
Centura SEC Reports Section 6.5(a)
Closing Section 1.2
Effective Time Section 1.3
Exchange Agent Section 4.1
Exchange Ratio Section 3.1(b)
First Coastal Benefit Plans Section 5.13(a)
First Coastal Contracts Section 5.14
First Coastal ERISA Affiliate Section 5.13(e)
First Coastal ERISA Plan Section 5.13(a)
First Coastal Rights Section 3.6(a)
First Coastal Pension Plan Section 5.13(a)
First Coastal SEC Reports Section 5.5(a)
Indemnified Party Section 8.15
Merger Section 1.1
Takeover Laws Section 5.19
Tax Opinion Section 9.1(g)
(c) Any singular term in this Agreement shall be deemed to
include the plural, and any plural term the singular. Whenever the words
"include," "includes," or "including" are used in this Agreement, they shall be
deemed followed by the words "without limitation."
11.2 Expenses.
(a) Except as otherwise provided in this Section 11.2, each
of the Parties shall bear and pay all direct costs and expenses incurred by it
or on its behalf in connection with the transactions contemplated hereunder,
including filing, registration, and application fees, printing fees, and fees
and expenses of its own financial or other consultants, investment bankers,
accountants, and counsel, except that Centura shall bear and the printing and
mailing costs incurred in connection with the printing of the Registration
Statement and the mailing of the Proxy Statement.
(b) Nothing contained in this Section 11.2 shall constitute
or shall be deemed to constitute liquidated damages for the willful breach by a
Party of the terms of this Agreement or otherwise limit the rights of the
nonbreaching Party.
11.3 Brokers and Finders. Except for Trident Financial Corporation
as to First Coastal, each of the Parties represents and warrants that neither it
nor any of its officers, directors, employees, or Affiliates has employed any
broker or finder or incurred any Liability for any financial advisory fees,
investment bankers' fees, brokerage fees, commissions, or finders' fees in
connection with this Agreement or the transactions contemplated hereby. In the
event of
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a claim by any broker or finder based upon his, her, or its representing or
being retained by or allegedly representing or being retained by First Coastal
or Centura, each of First Coastal and Centura, as the case may be, agrees to
indemnify and hold the other Party harmless of and from any Liability in respect
of any such claim.
11.4 Entire Agreement. Except as otherwise expressly provided
herein, this Agreement (including the documents and instruments referred to
herein) constitutes the entire agreement between the Parties with respect to the
transactions contemplated hereunder and supersedes all prior arrangements or
understandings with respect thereto, written or oral (including the respective
Confidentiality Agreements, but excluding the Supplemental Letter). Nothing in
this Agreement expressed or implied, is intended to confer upon any Person,
other than the Parties or their respective successors, any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, other than as
provided in Sections 8.12 and 8.14 of this Agreement.
11.5 Amendments. To the extent permitted by Law, this Agreement
may be amended by a subsequent writing signed by each of the Parties upon the
approval of the Boards of Directors of each of the Parties, whether before or
after stockholder approval of this Agreement has been obtained; provided, that
the provisions of this Agreement relating to the manner or basis in which shares
of First Coastal Common Stock will be exchanged for Centura Common Stock shall
not be amended after the Stockholders' Meeting without the requisite approval of
the holders of the issued and outstanding shares of Centura Common Stock and
First Coastal Common Stock, as the case may be, entitled to vote thereon.
11.6 Waivers.
(a) Prior to or at the Effective Time, Centura, acting
through its Board of Directors, chief executive officer, chief financial
officer, or other authorized officer, shall have the right to waive any Default
in the performance of any term of this Agreement by First Coastal, to waive or
extend the time for the compliance or fulfillment by First Coastal of any and
all of its obligations under this Agreement, and to waive any or all of the
conditions precedent to the obligations of Centura under this Agreement, except
any condition which, if not satisfied, would result in the violation of any Law.
No such waiver shall be effective unless in writing signed by a duly authorized
officer of Centura.
(b) Prior to or at the Effective Time, First Coastal, acting
through its Board of Directors, chief executive officer, chief financial
officer, or other authorized officer, shall have the right to waive any Default
in the performance of any term of this Agreement by Centura, to waive or extend
the time for the compliance or fulfillment by Centura of any and all of its
obligations under this Agreement, and to waive any or all of the conditions
precedent to the obligations of First Coastal under this Agreement, except any
condition which, if not satisfied, would result in the violation of any Law. No
such waiver shall be effective unless in writing signed by a duly authorized
officer of First Coastal.
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(c) The failure of any Party at any time or times to require
performance of any provision hereof shall in no manner affect the right of such
Party at a later time to enforce the same or any other provision of this
Agreement. No waiver of any condition or of the breach of any term contained in
this Agreement in one or more instances shall be deemed to be or construed as a
further or continuing waiver of such condition or breach or a waiver of any
other condition or of the breach of any other term of this Agreement.
11.7 Assignment. Except as expressly contemplated hereby, neither
this Agreement nor any of the rights, interests, or obligations hereunder shall
be assigned by any Party hereto (whether by operation of Law or otherwise)
without the prior written consent of the other Party. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of, and be
enforceable by the Parties and their respective successors and assigns.
11.8 Notices. All notices or other communications which are
required or permitted hereunder shall be in writing and sufficient if delivered
by hand, by facsimile transmission, by registered or certified mail, postage
pre-paid, or by courier or overnight carrier, to the persons at the addresses
set forth below (or at such other address as may be provided hereunder), and
shall be deemed to have been delivered as of the date so delivered:
First Coastal: FIRST COASTAL BANKSHARES, INC.
2101 Parks Avenue
Virginia Beach, Virginia 23451
Telecopy Number: (757) 428-2452
Attention: John A. B. Davies, Jr.
President and Chief Executive Officer
Copy to Counsel: MALIZIA, SPIDI, SLOANE & FISCH, P.C.
One Franklin Square
1301 K Street, N.W.
Suite 700E
Washington, D.C. 20005
Telecopy Number: (202) 434-4661
Attention: John J. Spidi
Centura: CENTURA BANKS, INC.
134 North Church Street
Rocky Mount, North Carolina 27804
Telecopy Number: (252) 977-4800
Attention: Cecil W. Sewell, Jr.
Chairman of the Board and
Chief Executive Officer
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Copy to Counsel: CENTURA BANKS, INC.
134 North Church Street
Rocky Mount, North Carolina 27804
Telecopy Number: (252) 977-8283
Attention: Joseph A. Smith, Jr.
11.9 Governing Law. This Agreement shall be governed by and
construed in accordance with the Laws of the State of North Carolina, without
regard to any applicable conflicts of Laws, except to the extent that the Laws
of the Commonwealth of Virginia and federal Law relate to the consummation of
the Merger.
11.10 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
11.11 Captions. The captions contained in this Agreement are for
reference purposes only and are not part of this Agreement.
11.12 Interpretations. Neither this Agreement nor any uncertainty
or ambiguity herein shall be construed or resolved against any Party, whether
under any rule of construction or otherwise. No Party to this Agreement shall be
considered the draftsman. The Parties acknowledge and agree that this Agreement
has been reviewed, negotiated, and accepted by all Parties and their attorneys
and shall be construed and interpreted according to the ordinary meaning of the
words used so as fairly to accomplish the purposes and intentions of the
Parties.
11.13 Enforcement of Agreement. The Parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement was not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the Parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity.
11.14 Severability. Any term or provision of this Agreement which
is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
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IN WITNESS WHEREOF, each of the Parties has caused this Agreement
to be executed on its behalf and its corporate seal to be hereunto affixed and
attested by officers thereunto as of the day and year first above written.
ATTEST: FIRST COASTAL BANKSHARES, INC.
By: /s/Allene S. Cheatham By: /s/John A. B. Davies, Jr.
----------------------- --------------------------------------------
Allene S. Cheatham John A. B. Davies, Jr.
Secretary President and Chief Executive Officer
[CORPORATE SEAL]
ATTEST: CENTURA BANKS, INC.
By: /s/Joseph A. Smith, Jr. By: /s/Cecil W. Sewell, Jr.
----------------------- --------------------------------------------
Joseph A. Smith, Jr. Cecil W. Sewell, Jr.
Corporate Secretary Chairman of the Board and
Chief Executive Officer
[CORPORATE SEAL]
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