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Exhibit 2.1
Merger Agreement dated as of June 4, 1998 between
Carolina First BancShares, Inc. and Community Bank & Trust, Co.
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AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
CAROLINA FIRST BANCSHARES, INC.
AND
COMMUNITY BANK & TRUST COMPANY
Dated as of June 4, 1998
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made
and entered into as of June 4, 1998, by and between CAROLINA FIRST BANCSHARES,
INC. ("Carolina First"), a North Carolina corporation and COMMUNITY BANK & TRUST
COMPANY ("CB&T"), a North Carolina bank.
Preamble
The respective Boards of Directors of CB&T and Carolina First
are of the opinion that the transactions described herein are in the best
interests of the parties to this Agreement and their respective shareholders.
This Agreement provides for the acquisition of CB&T by Carolina First pursuant
to the merger of a North Carolina interim banking subsidiary to be formed by
Carolina First ("Sub") with and into CB&T. At the effective time of such merger,
the outstanding shares of the capital stock of CB&T shall be converted into the
right to receive shares of the common stock of Carolina First (except as
provided herein). As a result, shareholders of CB&T shall become shareholders of
Carolina First and CB&T shall conduct its business and operations as a wholly
owned subsidiary of Carolina First. The transactions described in this Agreement
are subject to the approvals of the shareholders of CB&T, the Board of Governors
of the Federal Reserve System, the Federal Deposit Insurance Corporation (the
"FDIC") and the North Carolina Office of the Commissioner of Banks, and the
satisfaction of certain other conditions described in this Agreement. It is the
intention of the parties to this Agreement that the Merger for federal income
tax purposes shall qualify as a "reorganization" within the meaning of Section
368(a) of the Internal Revenue Code, and for accounting purposes shall qualify
for treatment as a pooling of interests. Upon formation of Sub, the parties
agree that Sub, CB&T and Carolina First will enter into an Agreement and Plan of
Merger to effectuate the terms of this Agreement.
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, and
other good and valuable consideration, the sufficiency and receipt of which are
hereby acknowledged, 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, Sub shall be merged with and into CB&T in
accordance with the provisions of Section 53-12 of the General Statutes of North
Carolina and with the effect provided in Section
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53-13 thereof (the "Merger"). CB&T shall be the Surviving Corporation resulting
from the Merger and shall become a wholly-owned Subsidiary of Carolina First 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 CB&T, Sub and
Carolina First and by Carolina First, as the sole shareholder of Sub.
1.2 Time and Place of Closing. The closing of the transactions
contemplated hereby (the "Closing") will take place at 9:00 A.M. on the date
that the Effective Time occurs (or the immediately preceding day if the
Effective Time is earlier than 9:00 A.M.), or at such other time as the Parties,
acting through their authorized officers, may mutually agree. The Closing shall
be held at such location as may be mutually agreed upon by the Parties.
1.3 Effective Time. The Merger and other transactions
contemplated by this Agreement shall become effective on the date and at the
time the Articles of Merger reflecting the Merger shall become effective with
the Secretary of State of the State of North Carolina (the "Effective Time").
Subject to the terms and conditions hereof, unless otherwise mutually agreed
upon in writing by the authorized officers of each Party, the Parties shall use
their reasonable efforts to cause the Effective Time to occur on the first
business day following the last to occur of (i) the effective date (including
expiration of any applicable waiting period) of the last required Consent of any
Regulatory Authority having authority over and approving or exempting the
Merger, and (ii) the date on which the shareholders of CB&T and Sub approve this
Agreement to the extent such approval is required by applicable Law; or such
later date within 30 days thereof as may be specified by Carolina First.
ARTICLE 2
TERMS OF MERGER
2.1 Charter. The Certificate of Incorporation of CB&T shall be
the Certificate of Incorporation of the Surviving Corporation; provided that,
such Certificate of Incorporation shall be amended and restated, pursuant to the
Articles of Merger, to be identical to the Certificate of Incorporation of Sub
in effect immediately prior to the Effective Time (except that the name of CB&T
therein shall remain "Community Bank & Trust Company").
2.2 Bylaws. The Bylaws of Sub in effect immediately prior to
the Effective Time shall be the Bylaws of the Surviving Corporation until duly
amended or repealed, except that the name therein shall be changed to "Community
Bank & Trust Company."
2.3 Directors and Officers. The directors of CB&T in office
immediately prior to the Effective Time, together with two additional persons
nominated by Carolina First and such additional persons as may thereafter be
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 CB&T in office immediately prior to the Effective
Time (except for those whose resignation is contemplated), together with such
additional persons as may thereafter
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be 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. Three persons recommended by CB&T shall be elected to the Board of
Directors of Carolina First.
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 Carolina First, CB&T, Sub or the shareholders of any of the
foregoing, the shares of the constituent corporations shall be converted as
follows:
(a) Each share of capital stock of Carolina First issued and
outstanding immediately prior to the Effective Time shall remain issued and
outstanding from and after the Effective Time.
(b) Each share of Sub Common Stock issued and outstanding
immediately prior to the Effective Time shall be converted into one share of
Common Stock of the Surviving Corporation.
(c) Each share of CB&T Common Stock, excluding shares held by
any CB&T Entity or Carolina First Entity, in each case other than in a fiduciary
capacity or as a result of debts previously contracted, and excluding shares
held by shareholders to perfect their statutory dissenter's rights as provided
in Section 3.4, that are issued and outstanding immediately prior to the
Effective Time shall cease to be outstanding and shall represent the right to be
converted and exchanged for shares of Carolina First Common Stock as provided in
this Section 3.1(c). In no event shall Carolina First be required to issue
and/or reserve for issuance more than 1,021,202 shares of Carolina First Common
Stock in connection with the Merger for (i) all issued and outstanding shares of
CB&T Common Stock at the Effective Time and (ii) in connection with all options
(the "CB&T Options") granted under the CB&T Option Plan on shares of CB&T Common
Stock and outstanding as of the date of this Agreement. Carolina First shall
determine the preliminary exchange ratio (the "Preliminary Exchange Ratio") by
dividing 1,021,202 shares of Carolina First Common Stock by the sum of (x) all
issued shares of CB&T Common Stock immediately prior to the Effective Time, plus
the (y) aggregate number of shares of CB&T Common Stock issuable upon the
exercise of all outstanding CB&T Options as of the Effective Time (in no event
to exceed 61,429 shares of CB&T Common Stock (the "Option Shares")). The
Preliminary Exchange Ratio shall then be used to determine pursuant to Section
3.6, the number of shares of Carolina First Common Stock to be reserved as
provided in such Section 3.6 for issuance upon exercise of all such former CB&T
Options. After calculating the number of shares of Carolina First Common Stock
to be reserved in respect of the Option Shares, the final exchange ratio ("Final
Exchange Ratio") shall be determined by dividing the difference between
1,021,202 less the number of shares of Carolina First Common Stock to be
reserved pursuant to Section 3.6 in respect of the Option Shares, and dividing
such difference by the total number of shares of CB&T Common Stock issued and
outstanding as of the Effective Time.
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3.2 Anti-Dilution Provisions. In the event Carolina First
changes the number of shares of Carolina First Common Stock issued and
outstanding prior to the Effective Time as a result of a stock split, stock
dividend, or similar recapitalization with respect to such stock and the record
date therefor (in the case of a stock dividend) or the effective date thereof
(in the case of a stock split or similar recapitalization for which a record
date is not established) shall be prior to the Effective Time, the Exc hange
Ratio shall be proportionately adjusted.
3.3 Shares Held by CB&T or Carolina First. Each of the shares
of CB&T Common Stock held by any CB&T Entity or by any Carolina First Entity, 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 Dissenting Shareholders. Any holder of shares of CB&T
Common Stock who perfects his dissenters' rights in accordance with and as
contemplated by Section 55-13-01, et. seq., of the NCBCA shall be entitled to
receive the value of such shares in cash as determined pursuant to such
provision of Law; provided, that no such payment shall be made to any dissenting
shareholder unless and until such dissenting shareholder has complied with the
applicable provisions of the NCBCA and surrendered to CB&T the certificate or
certificates representing the shares for which payment is being made. In the
event that after the Effective Time a dissenting shareholder of CB&T fails to
perfect, or effectively withdraws or loses, his right to appraisal and of
payment for his shares, Carolina First shall issue and deliver the consideration
to which such holder of shares of CB&T Common Stock is entitled under this
Article 3 (without interest) upon surrender by such holder of the certificate or
certificates representing shares of CB&T Common Stock held by him. If and to the
extent required by applicable Law, CB&T will establish (or cause to be
established) an escrow account with an amount sufficient to satisfy the maximum
aggregate payment that may be required to be paid to dissenting shareholders.
Upon satisfaction of all claims of dissenting shareholders, the remaining
escrowed amount, reduced by payment of the fees and expenses of the escrow
agent, will be returned to the Surviving Corporation.
3.5 Fractional Shares. Notwithstanding any other provision of
this Agreement, each holder of shares of CB&T Common Stock exchanged pursuant to
the Merger who would otherwise have been entitled to receive a fraction of a
share of Carolina First 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 Carolina
First Common Stock multiplied by the market value of one share of Carolina First
Common Stock at the Effective Time. The market value of one share of Carolina
First Common Stock at the Effective Time shall be the last trading price of such
Common Stock, as reported by Interstate/Johnson Lane Corporation or J.C.
Bradford & Co., as the case may be. No such holder will be entitled to
dividends, voting rights, or any other rights as a shareholder in respect of any
fractional shares.
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3.6 Conversion of Stock Options; Restricted Stock.
(a) At the Effective Time, each CB&T Option which is
outstanding at the Effective Time, whether or not exercisable, shall be
converted into and become rights with respect to Carolina First Common Stock,
and Carolina First shall assume each CB&T Option, in accordance with the terms
of the CB&T Stock Plan and stock option agreement by which it is evidenced,
except that from and after the Effective Time, (i) Carolina First and its
Compensation Committee shall be substituted for CB&T and the Committee of CB&T's
Board of Directors (including, if applicable, the entire Board of Directors of
CB&T) administering such CB&T Stock Plan, (ii) each CB&T Option assumed by
Carolina First may be exercised solely for shares of Carolina First Common
Stock, (iii) the number of shares of Carolina First Common Stock subject to such
CB&T Option shall be equal to the number of shares of CB&T Common Stock subject
to such CB&T Option immediately prior to the Effective Time multiplied by the
Exchange Ratio, and (iv) the per share exercise price under each such CB&T
Option shall be adjusted by dividing the per share exercise price under each
such CB&T Option by the Exchange Ratio and rounding up to the nearest cent.
Notwithstanding the provisions of clause (iii) of the preceding sentence,
Carolina First shall not be obligated to issue any fraction of a share of
Carolina First Common Stock upon exercise of CB&T Options and any fraction of a
share of Carolina First Common Stock that otherwise would be subject to a
converted CB&T Option shall represent the right to receive a cash payment upon
exercise of such converted CB&T Option equal to the product of such fraction and
the difference between the market value of one share of Carolina First Common
Stock at the time of exercise of such Option and the per share exercise price of
such Option. The market value of one share of Carolina First Common Stock at the
time of exercise of an Option shall be the last trading price of such Common
Stock, as reported by Interstate/Johnson Lane Corporation or J.C. Bradford &
Co., as the case may be. In addition, notwithstanding the provisions of clauses
(iii) and (iv) of the first sentence of this Section 3.6, each CB&T Option which
is an "incentive stock option" shall be adjusted as required by Section 424 of
the Internal Revenue Code, and the regulations promulgated thereunder, 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. Each of CB&T and
Carolina First agrees to take all necessary steps to effectuate the foregoing
provisions of this Section 3.6, including using its reasonable efforts to obtain
from each holder of a CB&T Option any Consent or Contract (including amendments
to existing Employment Agreements and option award agreements) that may be
deemed necessary or advisable in order to effect the transactions contemplated
by this Section 3.6. Anything in this Agreement to the contrary notwithstanding,
Carolina First shall have the right, in its sole discretion, not to deliver the
consideration provided in this Section 3.6 to a former holder of a CB&T Option
who has not delivered such Consent or Contract.
(b) As soon as practicable after the Effective Time,
Carolina First shall deliver to the participants in each CB&T Stock Plan an
appropriate notice setting forth such participant's rights pursuant thereto and
the grants subject to such CB&T Stock Plan shall continue in effect on the same
terms and conditions (subject to the adjustments required by Section 3.6(a)
after giving effect to the Merger), and Carolina First shall comply with the
terms of each CB&T Stock Plan to ensure, to the extent required by, and subject
to the provisions of, such CB&T Stock Plan, that CB&T Options which qualified as
incentive stock options prior to the
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Effective Time continue to qualify as incentive stock options after the
Effective Time. At or prior to the Effective Time, Carolina First shall take all
corporate action necessary to reserve for issuance sufficient shares of Carolina
First Common Stock for delivery upon exercise of CB&T Options assumed by it in
accordance with this Section 3. . As soon as practicable after the Effective
Time, Carolina First 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 Carolina First Common Stock subject to such options and
shall use its reasonable efforts to 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 Exchange Act, where
applicable, Carolina First shall administer the CB&T Stock Plan assumed pursuant
to this Section 3.6 in a manner that complies with Rule 16b-3 promulgated under
the Exchange Act to the extent the CB&T Stock Plan complied with such rule prior
to the Effective Time.
(c) All contractual restrictions or limitations on
transfer with respect to CB&T Common Stock awarded under the CB&T Stock Plan or
any other plan, program, Contract or arrangement of any CB&T Entity, to the
extent that such restrictions or limitations shall not have already lapsed
(whether as a result of the Merger or otherwise), and except as otherwise
expressly provided in such plan, program, Contract or arrangement, shall remain
in full force and effect with respect to shares of Carolina First Common Stock
into which such restricted stock is converted pursuant to Section 3.1.
ARTICLE 4
EXCHANGE OF SHARES
4.1 Exchange Procedures. Promptly after the Effective Time,
Carolina First and CB&T shall cause the exchange agent selected by Carolina
First (the "Exchange Agent") to mail to each holder of record of a certificate
or certificates which represented shares of CB&T Common Stock immediately prior
to the Effective Time (the "Certificates") appropriate transmittal materials and
instructions (which shall specify that delivery shall be effected, and risk of
loss and title to such Certificates shall pass, only upon proper delivery of
such Certificates to the Exchange Agent). The Certificate or Certificates of
CB&T Common Stock so delivered shall be duly endorsed as the Exchange Agent may
require. In the event of a transfer of ownership of shares of CB&T Common Stock
represented by Certificates that are not registered in the transfer records of
CB&T, the consideration provided in Section 3.1 may be issued to a transferee if
the Certificates representing such shares are delivered to the Exchange Agent,
accompanied by all documents required to evidence such transfer and by evidence
satisfactory to the Exchange Agent that any applicable stock transfer taxes have
been paid. If any Certificate shall have been lost, stolen, mislaid or
destroyed, upon receipt of (i) an affidavit of that fact from the holder
claiming such Certificate to be lost, mislaid, stolen or destroyed, (ii) such
bond, security or indemnity as Carolina First and the Exchange Agent may
reasonably require and (iii) any other documents necessary to evidence and
effect the bona fide exchange thereof, the Exchange Agent shall issue to such
holder the consideration into which the shares represented by such lost, stolen,
mislaid or
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destroyed Certificate shall have been converted. The Exchange Agent may
establish such other reasonable and customary rules and procedures in connection
with its duties as it may deem appropriate. After the Effective Time, each
holder of shares of CB&T Common Stock (other than shares to be canceled pursuant
to Section 3.3 or as to which statutory dissenters' rights have been perfected
as provided in Section 3.4) 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, together with all
undelivered dividends or distributions in respect of such shares (without
interest thereon) pursuant to Section 4.2. To the extent required by Section
3.5, each holder of shares of CB&T Common Stock issued and outstanding at the
Effective Time also shall receive, upon surrender of the Certificate or
Certificates, cash in lieu of any fractional share of Carolina First Common
Stock to which such holder may be otherwise entitled (without interest).
Carolina First shall not be obligated to deliver the consideration to which any
former holder of CB&T Common Stock is entitled as a result of the Merger until
such holder surrenders such holder's Certificate or Certificates for exchange as
provided in this Section 4.1. Any other provision of this Agreement
notwithstanding, neither Carolina First, the Surviving Corporation nor the
Exchange Agent shall be liable to a holder of CB&T Common Stock for any amounts
paid or property delivered in good faith to a public official pursuant to any
applicable abandoned property, escheat or similar Law. Adoption of this
Agreement by the shareholders of CB&T shall constitute ratification of the
appointment of the Exchange Agent.
4.2 Rights of Former CB&T Shareholders. At the Effective Time,
the stock transfer books of CB&T shall be closed as to holders of CB&T Common
Stock immediately prior to the Effective Time and no transfer of CB&T Common
Stock by any such holder shall thereafter be made or recognized. Until
surrendered for exchange in accordance with the provisions of Section 4.1, each
Certificate theretofore representing shares of CB&T Common Stock (other than
shares to be canceled pursuant to Sections 3.3 and 3.4) shall from and after the
Effective Time represent for all purposes only the right to receive the
consideration provided in Sections 3.1 and 3.5 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 CB&T in respect of such shares of CB&T Common
Stock in accordance with the terms of this Agreement and which remain unpaid at
the Effective Time. To the extent permitted by Law, former shareholders of
record of CB&T shall be entitled to vote after the Effective Time at any meeting
of Carolina First shareholders the number of whole shares of Carolina First
Common Stock into which their respective shares of CB&T Common Stock are
converted, regardless of whether such holders have exchanged their Certificates
for certificates representing Carolina First Common Stock in accordance with the
provisions of this Agreement. Whenever a dividend or other distribution is
declared by Carolina First on the Carolina First Common Stock, the record date
for which is at or after the Effective Time, the declaration shall include
dividends or other distributions on all shares of Carolina First Common Stock
issuable pursuant to this Agreement, but no dividend or other distribution
payable to the holders of record of Carolina First Common Stock as of any time
subsequent to the Effective Time shall be delivered to the holder of any
Certificate until such holder surrenders such Certificate for exchange as
provided in Section 4.1. However, upon surrender of such Certificate, any
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undelivered dividends and cash payments payable hereunder (without interest)
shall be delivered and paid with respect to each share represented by such
Certificate.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF CB&T
CB&T hereby represents and warrants to Carolina First as
follows:
5.1 Organization, Standing, and Power. CB&T is a North
Carolina bank 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. CB&T is duly qualified or licensed to transact business 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 CB&T Material Adverse Effect. The minute book and other
organizational documents for CB&T have been made available to Carolina First for
its review and, except as disclosed in Section 5.1 of the CB&T Disclosure
Memorandum, are true and complete in all material respects as in effect as of
the date of this Agreement and accurately reflect in all material respects all
amendments thereto and all actions of the Board of Directors and shareholders
thereof.
5.2 Authority of CB&T; No Breach By Agreement.
(a) CB&T 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 CB&T,
subject to the approval of this Agreement by the holders of two-thirds of the
outstanding shares of CB&T Common Stock, which is the only shareholder vote
required for approval of this Agreement and consummation of the Merger by CB&T.
Subject to such requisite shareholder approval, this Agreement represents a
legal, valid, and binding obligation of CB&T, enforceable against CB&T 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 or any other equitable
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 CB&T, nor the consummation by CB&T of the transactions contemplated
hereby, nor compliance by CB&T with any of the provisions hereof, will (i)
conflict with or result in a breach of any provision of CB&T's Articles of
Incorporation or Bylaws or the certificate or articles of
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incorporation or bylaws of any CB&T Subsidiary or any currently effective
resolution adopted by the board of directors or the shareholders of any CB&T
Entity, or (ii) except as disclosed in Section 5.2 of the CB&T Disclosure
Memorandum, constitute or result in a Default under, or require any Consent
pursuant to, or result in the creation of any Lien on any Asset of any CB&T
Entity under, any Contract or Permit of any CB&T Entity, where such Default or
Lien, or any failure to obtain such Consent, is reasonably likely to have,
individually or in the aggregate, a CB&T Material Adverse Effect, or, (iii)
subject to receipt of the requisite Consents referred to in Section 9.1(b),
constitute or result in a Default under, or require any Consent pursuant to, any
Law or Order applicable to any CB&T Entity or any of their respective material
Assets (including any Carolina First Entity or any CB&T Entity becoming subject
to or liable for the payment of any Tax or any of the Assets owned by any
Carolina First Entity or any CB&T Entity being reassessed or revalued by any
Taxing authority).
(c) Other than in connection or compliance with the
provisions of the Securities Laws and applicable state corporate, banking and
securities Laws, and other than Consents required from Regulatory Authorities,
and other than notices to or filings with the Internal Revenue Service or the
Pension Benefit Guaranty Corporation with respect to any employee benefit plans,
or under the HSR Act, no notice to, filing with, or Consent of, any public body
or authority is necessary for the consummation by CB&T of the Merger and the
other transactions contemplated in this Agreement.
5.3 Capital Stock.
(a) The authorized capital stock of CB&T consists of
(i) 4,000,000 shares of CB&T Common Stock, of which 1,342,937 shares are issued
and outstanding as of the date of this Agreement and not more than 1,404,366
shares will be issued and outstanding at the Effective Time, and no shares of
preferred stock. All of the issued and outstanding shares of capital stock of
CB&T are duly and validly issued and outstanding and are fully paid and
nonassessable under North Carolina law, except as provided by Section 53-42 of
the North Carolina Banking Code with respect to North Carolina banks generally.
None of the outstanding shares of capital stock of CB&T has been issued in
violation of any preemptive rights of the current or past shareholders of CB&T.
(b) Except as set forth in Section 5.3(a), or as
disclosed in Section 5.3(b) of the CB&T Disclosure Memorandum, there are no
shares of capital stock or other equity securities of CB&T outstanding and no
outstanding Equity Rights relating to the capital stock of CB&T.
5.4 CB&T Subsidiaries. CB&T has no CB&T Subsidiaries.
5.5 SEC Filings; Financial Statements.
(a) CB&T has timely filed and made available to
Carolina First all SEC Documents required to be filed by CB&T since December 31,
1993 (the "CB&T SEC Reports"). The CB&T SEC Reports (i) at the time filed,
complied in all material respects with the applicable
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requirements of the Securities Laws and other applicable Laws and (ii) did not,
at the time they were filed (or, if amended or superseded by a filing prior to
the date of this Agreement, then on the date of such filing) contain any untrue
statement of a material fact or omit to state a material fact required to be
stated in such CB&T SEC Reports or necessary in order to make the statements in
such CB&T SEC Reports, in light of the circumstances under which they were made,
not misleading. No CB&T Subsidiary is required to file any SEC Documents.
(b) Each of the CB&T Financial Statements (including,
in each case, any related notes) contained in the CB&T SEC Reports, including
any CB&T SEC Reports filed after the date of this Agreement until the Effective
Time, complied as to form in all material respects with the applicable published
rules and regulations of the FDIC with respect thereto, was prepared in
accordance with GAAP applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes to such financial statements
or, in the case of unaudited interim statements, as permitted by the appropriate
forms for quarterly reporting promulgated by the FDIC under the 1934 Act), and
fairly presented in all material respects the consolidated financial position of
CB&T as at the respective dates and the consolidated results of 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 CB&T Entity has any
Liabilities that are reasonably likely to have, individually or in the
aggregate, a CB&T Material Adverse Effect, except Liabilities which are accrued
or reserved against in the consolidated balance sheets of CB&T as of December
31, 1997 included in the CB&T Financial Statements delivered prior to the date
of this Agreement or reflected in the notes thereto. No CB&T Entity has incurred
or paid any Liability since December 31, 1997, except for such Liabilities
incurred or paid (i) 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 CB&T Material Adverse Effect or (ii) in connection with the
transactions contemplated by this Agreement.
5.7 Absence of Certain Changes or Events. Since December 31,
1997, except as disclosed in the CB&T Financial Statements delivered prior to
the date of this Agreement or as disclosed in Section 5.7 of the CB&T 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 CB&T
Material Adverse Effect, and (ii) the CB&T Entities have not taken any action,
or failed to take any action, prior to the date of this Agreement, which action
or failure, if taken after the date of this Agreement, would represent or result
in a material breach or violation of any of the covenants and agreements of CB&T
provided in Article 7.
5.8 Tax Matters.
(a) All Tax Returns required to be filed by or on
behalf of any of the CB&T Entities have been timely filed or requests for
extensions have been timely filed, granted, and have not expired for periods
ended on or before December 31, 1997, and on or before the date of the most
recent fiscal year end immediately preceding the Effective Time, and all Tax
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Returns filed are complete and accurate in all material respects. All Taxes
shown on filed Tax Returns have been paid. As of the date of this Agreement,
there is no audit examination, deficiency, or refund Litigation with respect to
any Taxes, except as reserved against in the CB&T Financial Statements or as
disclosed in Section 5.8 of the CB&T Disclosure Memorandum. All Taxes and other
Liabilities due with respect to completed and settled examinations or concluded
Litigation have been paid. There are no Liens with respect to Taxes upon any of
the Assets of the CB&T Entities, except for any such Liens which are not
reasonably likely to have a CB&T Material Adverse Effect.
(b) None of the CB&T Entities 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) The provision for any Taxes due or to become due
for any of the CB&T Entities for the period or periods through and including the
date of the respective CB&T Financial Statements that has been made and is
reflected on such CB&T Financial Statements is sufficient, in the judgment of
CB&T's management after consultation with CB&T's independent public accountants,
to cover all such Taxes.
(d) Deferred Taxes of the CB&T Entities have been
provided for in accordance with GAAP.
(e) None of the CB&T Entities is a party to any Tax
allocation or sharing agreement, and none of the CB&T Entities has been a member
of an affiliated group filing a consolidated federal income Tax Return (other
than a group the common parent of which was CB&T) or has any Liability for Taxes
of any Person (other than CB&T ) under Treasury Regulation Section 1.1502-6 (or
any similar provision of state, local or foreign Law) as a transferee or
successor or by Contract or otherwise.
(f) Each of the CB&T Entities 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 CB&T Material Adverse Effect.
(g) Except as disclosed in Section 5.8 of the CB&T
Disclosure Memorandum, none of the CB&T Entities has made any payments, is
obligated to make any payments, or is a party to any Contract 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.
(h) There has not been an ownership change, as
defined in Internal Revenue Code Section 382(g), of the CB&T Entities that
occurred during or after any Taxable
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Period in which the CB&T Entities incurred a net operating loss that carries
over to any Taxable Period ending after December 31, 1997.
(i) No CB&T Entity has or has had in any foreign
country a permanent establishment, as defined in any applicable tax treaty or
convention between the United States and such foreign country.
5.9 Allowance for Possible Loan Losses. In the opinion of
management of CB&T, the allowance for possible loan or credit losses (the
"Allowance") shown on the consolidated balance sheets of CB&T included in the
most recent CB&T Financial Statements dated prior to the date of this Agreement
was, and the Allowance shown on the consolidated balance sheets of CB&T included
in the CB&T Financial Statements as of dates subsequent to the execution of this
Agreement will be, as of the dates thereof, adequate (within the meaning of GAAP
and applicable regulatory requirements or guidelines) to provide for all known
or reasonably anticipated losses relating to or inherent in the loan and lease
portfolios (including accrued interest receivables) of the CB&T Entities and
other extensions of credit (including letters of credit and commitments to make
loans or extend credit) by the CB&T Entities as of the dates thereof.
5.10 Assets.
(a) Except as disclosed in Section 5.10 of the CB&T
Disclosure Memorandum or as disclosed or reserved against in the CB&T Financial
Statements, the CB&T Entities have good and marketable title, free and clear of
all Liens, to all of their respective Assets, except for any such Liens or other
defects of title which are not reasonably likely to have a CB&T Material Adverse
Effect. All tangible properties used in the businesses of the CB&T Entities are
in good condition, reasonable wear and tear excepted, and are usable in the
ordinary course of business consistent with CB&T's past practices.
(b) All Assets which are material to CB&T's business
on a consolidated basis, held under leases or subleases by any of the CB&T
Entities, 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 or any other
equitable 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.
(c) The CB&T Entities currently maintain insurance
similar in amounts, scope, and coverage to that shown in Section 5.10(c) of the
CB&T Disclosure Memorandum. None of the CB&T Entities has received notice from
any insurance carrier that (i) any policy of insurance will be canceled or that
coverage thereunder will be reduced or eliminated, or (ii) premium costs with
respect to such policies of insurance will be substantially increased. There are
presently no claims for amounts exceeding in any individual case $35,000 pending
under such
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policies of insurance and no notices of claims in excess of such amounts have
been given by any CB&T Entity under such policies.
(d) The Assets of the CB&T Entities include all
Assets required to operate the business of the CB&T Entities as presently
conducted.
5.11 Intellectual Property. Each CB&T Entity owns or has a
license to use all of the Intellectual Property used by such CB&T Entity in the
course of its business. Each CB&T Entity is the owner of or has a license to any
Intellectual Property sold or licensed to a third party by such CB&T Entity in
connection with such CB&T Entity's business operations, and such CB&T Entity has
the right to convey by sale or license any Intellectual Property so conveyed. No
CB&T Entity is in Default under any of its Intellectual Property licenses. No
proceedings have been instituted, or are pending or to the Knowledge of CB&T
threatened, which challenge the rights of any CB&T Entity with respect to
Intellectual Property used, sold or licensed by such CB&T Entity in the course
of its business, nor has any person claimed or alleged any rights to such
Intellectual Property. The conduct of the business of the CB&T Entities does not
infringe any Intellectual Property of any other person. Except as disclosed in
Section 5.11 of the CB&T Disclosure Memorandum, no CB&T Entity is obligated to
pay any recurring royalties to any Person with respect to any such Intellectual
Property. Except as disclosed in Section 5.11 of the CB&T Disclosure Memorandum,
no officer, director or employee of any CB&T Entity is party to any Contract
which restricts or prohibits such officer, director or employee from engaging in
activities competitive with any CB&T Entity or any Carolina First Entity.
5.12 Environmental Matters.
(a) To the Knowledge of CB&T, each CB&T Entity, its
Participation Facilities, and its Operating Properties are, and have been, in
compliance with all Environmental Laws, except for violations which are not
reasonably likely to have, individually or in the aggregate, a CB&T Material
Adverse Effect.
(b) To the Knowledge of CB&T, there is no Litigation
pending or threatened before any court, governmental agency, or authority or
other forum in which any CB&T Entity or any of its Operating Properties or
Participation Facilities (or CB&T in respect of such Operating Property or
Participation Facility) has been or, with respect to threatened Litigation, may
be named as a defendant (i) for alleged noncompliance (including by any
predecessor) with any Environmental Law or (ii relating to the release,
discharge, spillage, or disposal into the environment of any Hazardous Material,
whether or not occurring at, on, under, adjacent to, or affecting (or
potentially affecting) a site owned, leased, or operated by any CB&T Entity or
any of its Operating Properties or Participation Facilities, except for such
Litigation, pending or threatened that is not reasonably likely to have,
individually or in the aggregate, a CB&T Material Adverse Effect, nor is there
any reasonable basis for any Litigation of a type described in this sentence,
except such as is not reasonably likely to have, individually or in the
aggregate, a CB&T Material Adverse Effect.
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(c) During the period of (i) any CB&T Entity's
ownership or operation of any of their respective current properties, (ii) any
CB&T Entity's participation in the management of any Participation Facility (to
the Knowledge of CB&T), or (iii) any CB&T Entity's holding of a security
interest in a Operating Property, there have been no releases, discharges,
spillages, or disposals of Hazardous Material in, on, under, adjacent to, or
affecting (or potentially affecting) such properties, except such as are not
reasonably likely to have, individually or in the aggregate, a CB&T Material
Adverse Effect. Prior to the period of (i) any CB&T Entity's ownership or
operation of any of their respective current properties, (ii) any CB&T Entity's
participation in the management of any Participation Facility, or (iii) any CB&T
Entity's holding of a security interest in a Operating Property, to the
Knowledge of CB&T, there were no releases, discharges, spillages, or disposals
of Hazardous Material in, on, under, or affecting any such property,
Participation Facility or Operating Property, except such as are not reasonably
likely to have, individually or in the aggregate, a CB&T Material Adverse
Effect.
5.13 Compliance with Laws. CB&T is duly organized as a North
Carolina bank. Each CB&T Entity 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, and there has occurred no Default under any such Permit. Except as
disclosed in Section 5.13 of the CB&T Disclosure Memorandum, none of the CB&T
Entities:
(a) is in Default under any of the provisions of its Articles
of Incorporation or Bylaws (or other governing instruments);
(b) is in Default under any Laws, Orders, or Permits
applicable to its business or employees conducting its business; or
(c) since January 1, 1993, 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 CB&T Entity is not in compliance with any of the Laws or Orders which such
governmental authority or Regulatory Authority enforces, (ii) threatening to
revoke any Permits, or (iii) requiring any CB&T Entity to enter into or consent
to the issuance of a cease and desist order, formal agreement, directive,
commitment, or memorandum of understanding, or to adopt any Board resolution or
similar undertaking, which restricts materially the conduct of its business or
in any manner relates to its capital adequacy, its credit or reserve policies,
its management, or the payment of dividends.
5.14 Labor Relations. No CB&T Entity is the subject of any
Litigation asserting that it or any other CB&T Entity 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 CB&T Entity to
bargain with any labor organization as to wages or conditions of employment, nor
is any CB&T Entity party to any collective bargaining agreement, nor is there
any strike or other labor dispute involving any CB&T Entity, pending or
threatened, or to the Knowledge of CB&T, is there any activity involving any
CB&T Entity's employees seeking to certify a collective bargaining unit or
engaging in any other organization activity.
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5.15 Employee Benefit Plans.
(a) CB&T has disclosed in Section 5.15 of the CB&T
Disclosure Memorandum, and has delivered or made available to Carolina First
prior to the execution of this Agreement copies in each case of, all pension,
retirement, profit-sharing, deferred compensation, stock option, employee stock
ownership, severance pay, vacation, bonus, or other incentive plan, all other
written employee programs, arrangements, or agreements, all medical, vision,
dental, or other health plans, all life insurance plans, and all other employee
benefit plans or fringe benefit plans, including "employee benefit plans" as
that term is defined in Section 3(3) of ERISA, currently adopted, maintained by,
sponsored in whole or in part by, or contributed to by any CB&T Entity or ERISA
Affiliate thereof for the benefit of employees, retirees, dependents, spouses,
directors, independent contractors, or other beneficiaries and under which
employees, retirees, dependents, spouses, directors, independent contractors, or
other beneficiaries are eligible to participate (collectively, the "CB&T Benefit
Plans"). Any of the CB&T Benefit Plans which is an "employee pension benefit
plan," as that term is defined in Section 3(2) of ERISA, is referred to herein
as a "CB&T ERISA Plan." Each CB&T ERISA Plan which is also a "defined benefit
plan" (as defined in Section 414(j) of the Internal Revenue Code) is referred to
herein as a "CB&T Pension Plan." No CB&T Pension Plan is or has been a
multiemployer plan within the meaning of Section 3(37) of ERISA.
(b) All CB&T Benefit Plans are in compliance with the
applicable terms of ERISA, the Internal Revenue Code, and any other applicable
Laws the breach or violation of which are reasonably likely to have,
individually or in the aggregate, a CB&T Material Adverse Effect. Each CB&T
ERISA Plan 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 CB&T is not aware of any circumstances likely to
result in revocation of any such favorable determination letter. No CB&T Entity
has engaged in a transaction with respect to any CB&T Benefit Plan that,
assuming the taxable period of such transaction expired as of the date hereof,
would subject any CB&T Entity to a Tax imposed by either Section 4975 of the
Internal Revenue Code or Section 502(i) of ERISA.
(c) No CB&T Pension Plan has any "unfunded current
liability," as that term is defined in Section 302(d)(8)(A) of ERISA, and the
fair market value of the assets of any such plan exceeds the plan's "benefit
liabilities," as that term is defined in Section 4001(a)(16) of ERISA. Since the
date of the most recent actuarial valuation, there has been (i) no material
change in the financial position of any CB&T Pension Plan, (ii) no change in the
actuarial assumptions with respect to any CB&T Pension Plan, and (iii) no
increase in benefits under any CB&T Pension Plan as a result of plan amendments
or changes in applicable Law which is reasonably likely to have, individually or
in the aggregate, a CB&T Material Adverse Effect or materially adversely affect
the funding status of any such plan. Neither any CB&T Pension Plan nor any
"single-employer plan," within the meaning of Section 4001(a)(15) of ERISA,
currently or formerly maintained by any CB&T Entity, or the single-employer plan
of any entity which is considered one employer with CB&T under Section 4001 of
ERISA or Section 414 of the Internal Revenue Code or Section 302 of ERISA
(whether or not waived) (an "ERISA Affiliate") has an "accumulated funding
deficiency" within the meaning of Section 412 of the Internal
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Revenue Code or Section 302 of ERISA. No CB&T Entity has provided, or is
required to provide, security to a CB&T Pension Plan or to any single-employer
plan of an ERISA Affiliate pursuant to Section 401(a)(29) of the Internal
Revenue Code.
(d) No Liability under Subtitle C or D of Title IV of
ERISA has been or is expected to be incurred by any CB&T Entity with respect to
any ongoing, frozen, or terminated single-employer plan or the single-employer
plan of any ERISA Affiliate. No CB&T Entity has incurred any withdrawal
Liability with respect to a multiemployer plan under Subtitle B of Title IV of
ERISA (regardless of whether based on contributions of an ERISA Affiliate). No
notice of a "reportable event," within the meaning of Section 4043 of ERISA for
which the 30-day reporting requirement has not been waived, has been required to
be filed for any CB&T Pension Plan or by any ERISA Affiliate within the 12-month
period ending on the date hereof.
(e) Except as disclosed in Section 5.15 of the CB&T
Disclosure Memorandum, no CB&T Entity has any Liability for retiree health and
life benefits under any of the CB&T Benefit Plans and there are no restrictions
on the rights of such CB&T Entity to amend or terminate any such retiree health
or benefit Plan without incurring any Liability thereunder.
(f) Except as disclosed in Section 5.15 of the CB&T
Disclosure Memorandum, neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby will (i) result in any
payment (including severance, unemployment compensation, golden parachute, or
otherwise) becoming due to any director or any employee of any CB&T Entity from
any CB&T Entity under any CB&T Benefit Plan or otherwise, (ii) increase any
benefits otherwise payable under any CB&T Benefit Plan, or (iii) result in any
acceleration of the time of payment or vesting of any such benefit.
(g) The actuarial present values of all accrued
deferred compensation entitlements (including entitlements under any executive
compensation, supplemental retirement, or employment agreement) of employees and
former employees of any CB&T Entity and their respective beneficiaries, other
than entitlements accrued pursuant to funded retirement plans subject to the
provisions of Section 412 of the Internal Revenue Code or Section 302 of ERISA,
have been fully reflected on the CB&T Financial Statements to the extent
required by and in accordance with GAAP.
5.16 Material Contracts. Except as disclosed in Section 5.16
of the CB&T Disclosure Memorandum or otherwise reflected in the CB&T Financial
Statements, none of the CB&T Entities, 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 CB&T Entity or the guarantee by any CB&T Entity of any such
obligation (other than Contracts evidencing deposit liabilities, purchases of
federal funds, fully-secured repurchase agreements, and Federal Home Loan Bank
advances of depository institution Subsidiaries, trade payables and Contracts
relating to borrowings or guarantees made in the ordinary course of business),
(iii) any Contract which prohibits or restricts any CB&T Entity from engaging in
any business activities in
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any geographic area, line of business or otherwise in competition with any other
Person, (iv) any Contract between or among CB&T Entities, (v) any Contract
involving Intellectual Property (other than Contracts entered into in the
ordinary course with customers and "shrink-wrap" software licenses), (vi) any
Contract relating to the provision of data processing, network communication, or
other technical services to or by any CB&T Entity, (vii) any Contract relating
to the purchase or sale of any goods or services (other than Contracts entered
into in the ordinary course of business and involving payments under any
individual Contract not in excess of $100,000), (viii) any exchange-traded or
over-the-counter swap, forward, future, option, cap, floor, or collar financial
Contract, or any other interest rate or foreign currency protection Contract not
included on its balance sheet which is a financial derivative Contract, and (ix)
any other Contract or amendment thereto that would be required to be filed as an
exhibit to the appropriate forms for annual reporting promulgated by the FDIC
under the 1934 Act filed by CB&T with the FDIC as of the date of this Agreement
(together with all Contracts referred to in Sections 5.10 and 5.15(a), the "CB&T
Contracts") but that has not been so filed. With respect to each CB&T Contract
and except as disclosed in Section 5.16 of the CB&T Disclosure Memorandum: (i)
the Contract is in full force and effect; (ii) no CB& Entity is in Default
thereunder; (iii) no CB&T Entity 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 CB&T, in Default in any respect or has repudiated or waived any
material provision thereunder. All of the indebtedness of any CB&T Entity for
money borrowed is prepayable at any time by such CB&T Entity without penalty or
premium.
5.17 Legal Proceedings. There is no Litigation instituted or
pending, or, to the Knowledge of CB&T, threatened (or unasserted but considered
probable of assertion and which if asserted would have at least a reasonable
probability of an unfavorable outcome) against any CB&T Entity, or against any
director or employee (in their capacity as such) or employee benefit plan of any
CB&T Entity, or against any Asset, interest, or right of any of them, nor are
there any Orders of any Regulatory Authorities, other governmental authorities,
or arbitrators outstanding against any CB&T Entity. Section 5.17 of the CB&T
Disclosure Memorandum contains a summary of all Litigation as of the date of
this Agreement to which any CB&T Entity is a party and which names a CB&T Entity
as a defendant or cross-defendant or for which any CB&T Entity has any potential
Liability.
5.18 Reports. Since January 1, 1993, or the date of
organization if later, each CB&T Entity has timely filed all reports and
statements, together with any amendments required to be made with respect
thereto, that it was required to file with Regulatory Authorities (except, in
the case of state securities authorities, failures to file which are not
reasonably likely to have, individually or in the aggregate, a CB&T Material
Adverse Effect). As of their respective dates, each of such reports and
documents, including the financial statements, exhibits, and schedules thereto,
complied in all material respects with all applicable Laws. As of its respective
date, each such report and document did not, in all material respects, contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements made therein,
in light of the circumstances under which they were made, not misleading.
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5.19 Statements True and Correct. No statement, certificate,
instrument, or other writing furnished or to be furnished by any CB&T Entity or
any Affiliate thereof to Carolina First pursuant to this Agreement or any other
document, agreement, or instrument referred to herein contains or will contain
any untrue statement of material fact or will omit to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. None of the information supplied or to be
supplied by any CB&T Entity or any Affiliate thereof for inclusion in the
Registration Statement to be filed by Carolina First with the SEC will, when the
Registration Statement becomes effective, be false or misleading with respect to
any material fact, or omit to state any material fact necessary to make the
statements therein not misleading. None of the information supplied or to be
supplied by any CB&T Entity or any Affiliate thereof for inclusion in the Proxy
Statement/Prospectus to be mailed to CB&T's shareholders in connection with the
Shareholders' Meeting, and any other documents to be filed by a CB&T Entity or
any Affiliate thereof with the SEC or any other Regulatory Authority in
connection with the transactions contemplated hereby, will, at the respective
time such documents are filed, and with respect to the Proxy
Statement/Prospectus, when first mailed to the shareholders of CB&T, be false or
misleading with respect to any material fact, or omit to state any material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, or, in the case of the Proxy
Statement/Prospectus or any amendment thereof or supplement thereto, at the time
of the Shareholders' Meeting, be false or misleading with respect to any
material fact, or omit to state any material fact necessary to correct any
statement in any earlier communication with respect to the solicitation of any
proxy for the Shareholders' Meeting. All documents that any CB&T Entity 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.
5.20 Accounting, Tax and Regulatory Matters. No CB&T Entity or
any Affiliate thereof has taken or agreed to take any action or has any
Knowledge of any fact or circumstance that is reasonably likely to (i) prevent
the Merger from qualifying for pooling-of-interests accounting treatment or as a
reorganization within the meaning of Section 368(a) of the Internal Revenue
Code, or (ii) materially impede or delay receipt of any Consents of Regulatory
Authorities referred to in Section 9.1(b) or result in the imposition of a
condition or restriction of the type referred to in the last sentence of such
Section.
5.21 State Takeover Laws. Each CB&T Entity has taken all
necessary action to exempt the transactions contemplated by this Agreement from,
or if necessary to challenge the validity or applicability of, any applicable
"moratorium," "fair price," "business combination," "control share," or other
anti-takeover Laws (collectively, "Takeover Laws"), including Articles 9 and 9A
of the NCBCA.
5.22 Charter Provisions. Each CB&T Entity 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 CB&T Entity or
restrict or impair the ability of Carolina First or any of its Subsidiaries to
vote, or otherwise to
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exercise the rights of a shareholder with respect to, shares of any CB&T Entity
that may be directly or indirectly acquired or controlled by them, except as may
be provided under Article 13 of the NCBCA.
5.23 [Reserved].
5.24 Directors' Agreements. Each of the directors of CB&T has
executed and delivered to Carolina First an agreement in substantially the form
of Exhibit 12 (the "Directors' Agreements").
5.25 Opinion of Financial Advisor. CB&T has received the
opinion of SCI, dated the date of this Agreement, to the effect that the
consideration to be received in the Merger by the holders of CB&T Common Stock
is fair, from a financial point of view, to such holders, a signed copy of which
has been delivered to Carolina First.
5.26 Board Recommendation. The Board of Directors of CB&T,
at a meeting duly called and held, has by vote of the directors present (who
constituted all of the directors then in office) (i) determined that this
Agreement and the transactions contemplated hereby, including the Merger, and
the Directors' Agreements and the transactions contemplated thereby, taken
together, are fair to and in the best interests of the shareholders and (ii)
resolved to recommend that the holders of the shares of CB&T Common Stock
approve this Agreement.
5.27 Millennium Compliance. CB&T has made and is making
inquiries of its software and data processing providers with respect to Year
2000 problem compliance, and is in compliance in all material respects with the
FFIEC Interagency Statement, "Guidance Concerning Institution Due Diligence in
Connection with Service Provider and Software Vendor Year 2000 Readiness" (March
17, 1998) (the "Interagency Statement").
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ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF CAROLINA FIRST
Carolina First hereby represents and warrants to CB&T as
follows:
6.1 Organization, Standing, and Power. Carolina First 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. Carolina First 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 Carolina
First Material Adverse Effect. The minute book and other organizational
documents for Carolina First have been made available to CB&T for its review
and, except as disclosed in Section 6.1 of the Carolina First Disclosure
Memorandum, are true and complete in all material respects as in effect as of
the date of this Agreement and accurately reflect in all material respects all
amendments thereto and all actions of the Board of Directors and shareholders
thereof.
6.2 Authority; No Breach By Agreement.
(a) Carolina First 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 Carolina First. This Agreement repre sents a legal, valid, and binding
obligation of Carolina First, subject to the Consent of all necessary Regulatory
Authorities, enforceable against Carolina First 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 or any other equitable 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 Carolina First, nor the consummation by Carolina First of the
transactions contemplated hereby, nor compliance by Carolina First with any of
the provisions hereof, will (i) conflict with or result in a breach of any
provision of a Carolina First Entity's Articles of Incorporation or Bylaws, or
any currently effective resolution adopted by the board of directors or the
shareholders of any Carolina First Entity, or (ii) except as disclosed in
Section 6.2 of the Carolina First Disclosure Memorandum, constitute or result in
a Default under, or require any Consent pursuant to, or result in the creation
of any Lien on any Asset of any Carolina First Entity under, any Contract or
Permit of any Carolina First Entity, where such Default or Lien, or any failure
to obtain such Consent, is reasonably likely to have, individually or in the
aggregate, a Carolina First Material Adverse Effect, or, (iii) subject to
receipt of the requisite Consents referred to in Section 9.1(b),
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constitute or result in a Default under, or require any Consent pursuant to, any
Law or Order applicable to any Carolina First Entity or any of their respective
material Assets (including any Carolina First Entity or any CB&T Entity becoming
subject to or liable for the payment of any Tax or any of the Assets owned by
any Carolina First Entity or any CB&T Entity being reassessed or revalued by any
Taxing authority).
(c) Other than in connection or compliance with the
provisions of the Securities Laws and applicable state corporate, banking and
securities Laws, and other than Consents required from Regulatory Authorities,
and other than notices to or filings with the Internal Revenue Service or the
Pension Benefit Guaranty Corporation with respect to any employee benefit plans,
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 Carolina First Material Adverse Effect, no notice to, filing
with, or Consent of, any public body or authority is necessary for the
consummation by Carolina First of the Merger and the other transactions
contemplated in this Agreement.
6.3 Capital Stock.
(a) The authorized capital stock of Carolina First
consists of (i) 20,000,000 shares of Carolina First Common Stock, of which
_______ shares are issued and outstanding as of the date of this Agreement, and
(ii) 5,000,000 shares of Carolina First Preferred Stock, none of which are
issued and outstanding. All of the issued and outstanding shares of Carolina
First Capital Stock are, and all of the shares of Carolina First Common Stock to
be issued in exchange for shares of CB&T 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 Carolina First Capital Stock has
been, and none of the shares of Carolina First Common Stock to be issued in
exchange for shares of CB&T Common Stock upon consummation of the Merger will
be, issued in violation of any preemptive rights of the current or past
shareholders of Carolina First.
(b) Except as set forth in Section 6.3(a), the
Carolina First stock option plan, or as provided pursuant to the Carolina First
Dividend Reinvestment and Stock Purchase Plan, or as disclosed in Section 6.3 of
the Carolina First Disclosure Memorandum, there are no shares of capital stock
or other equity securities of Carolina First outstanding and no outstanding
Equity Rights relating to the capital stock of Carolina First.
6.4 Carolina First Subsidiaries. Except as disclosed in
Section 6.4 of the Carolina First Disclosure Memorandum, Carolina First and/or
its Subsidiaries owns all of the issued and outstanding shares of capital stock
(or other equity interests) of each Carolina First Subsidiary. No capital stock
(or other equity interest) of any Carolina First Subsidiary is or may become
required to be issued (other than to another Carolina First Entity) by reason of
any Equity Rights, and there are no Contracts by which any Carolina First
Subsidiary is bound to issue (other than to another Carolina First Entity)
additional shares of its capital stock (or other equity interests) or Equity
Rights or by which any Carolina First Entity is or may be bound to transfer
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any shares of the capital stock (or other equity interests) of any Carolina
First Subsidiary (other than to another Carolina First Entity). There are no
Contracts relating to the rights of any Carolina First Entity to vote or to
dispose of any shares of the capital stock (or other equity interests) of any
Carolina First Subsidiary. All of the shares of capital stock (or other equity
interests) of each Carolina First Subsidiary held by a Carolina First Entity are
fully paid and (except pursuant to 12 USC Section 55 in the case of national
banks and comparable, applicable state Law, if any, in the case of state
depository institutions) nonassessable under the applicable corporation Law of
the jurisdiction in which such Subsidiary is incorporated or organized and are
owned by the Carolina First Entity free and clear of any Lien. Each Carolina
First Subsidiary 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 or entity power and authority necessary for
it to own, lease, and operate its Assets and to carry on its business as now
conducted. Each Carolina First 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
Carolina First Material Adverse Effect. Each Carolina First 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. The minute book and other
organizational documents for each Carolina First Subsidiary have been made
available to CB&T for its review, and, except as disclosed in Section 6.4 of the
Carolina First Disclosure Memorandum, are true and complete in all material
respects as in effect as of the date of this Agreement and accurately reflect in
all material respects all amendments thereto and all proceedings of the Board of
Directors and shareholders thereof.
6.5 SEC Filings; Financial Statements.
(a) Carolina First has timely filed and made
available to CB&T all SEC Documents required to be filed by Carolina First since
December 31, 1993 (the "Carolina First SEC Reports"). The Carolina First SEC
Reports (i) at the time filed, complied in all material respects with the
applicable requirements of the Securities Laws and other applicable Laws and
(ii) did not, at the time they were filed (or, if amended or superseded by a
filing prior to the date of this Agreement, then on the date of such filing)
contain any untrue statement of a material fact or omit to state a material fact
required to be stated in such Carolina First SEC Reports or necessary in order
to make the statements in such Carolina First SEC Reports, in light of the
circumstances under which they were made, not misleading. Except for Carolina
First Subsidiaries that are registered as a broker, dealer, or investment
advisor, no Carolina First Subsidiary is required to file any SEC Documents.
(b) Each of the Carolina First Financial Statements
(including, in each case, any related notes) contained in the Carolina First SEC
Reports, including any Carolina First SEC Reports filed after the date of this
Agreement until the Effective Time, complied as to form in all material respects
with the applicable published rules and regulations of the SEC with respect
thereto, was prepared in accordance with GAAP applied on a consistent basis
throughout the
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periods involved (except as may be indicated in the notes to such financial
statements or, in the case of unaudited interim statements, as permitted by Form
10-Q of the SEC), and fairly presented in all material respects the consolidated
financial position of Carolina First and its Subsidiaries as at the respective
dates and the consolidated results of 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 Carolina First
Entity has any Liabilities that are reasonably likely to have, individually or
in the aggregate, a Carolina First Material Adverse Effect, except Liabilities
which are accrued or reserved against in the consolidated balance sheets of
Carolina First as of December 31, 1997, included in the Carolina First Financial
Statements delivered prior to the date of this Agreement or reflected in the
notes thereto. No Carolina First Entity has incurred or paid any Liability since
December 31, 1997, except for such Liabilities incurred or paid (i) 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 Carolina
First Material Adverse Effect or (ii) in connection with the transactions
contemplated by this Agreement.
6.7 Absence of Certain Changes or Events. Since December 31,
1997, except as disclosed in the Carolina First Financial Statements delivered
prior to the date of this Agreement or as disclosed in Section 6.7 of the
Carolina First 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 Carolina First Material Adverse Effect, and (ii) the Carolina
First Entities have not taken any action, or failed to take any action, prior to
the date of this Agreement, which action or failure, if taken after the date of
this Agreement, would represent or result in a material breach or violation of
any of the covenants and agreements of Carolina First provided in Article 7.
6.8 Tax Matters.
(a) All Tax Returns required to be filed by or on
behalf of any of the Carolina First Entities have been timely filed or requests
for extensions have been timely filed, granted, and have not expired for periods
ended on or before December 31, 1997, and on or before the date of the most
recent fiscal year end immediately preceding the Effective Time, except to the
extent that all such failures to file, taken together, are not reasonably likely
to have a Carolina First Material Adverse Effect, and all Tax Returns filed are
complete and accurate in all material respects. All Taxes shown on filed Tax
Returns have been paid. As of the date of this Agreement, 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 Carolina First Material Adverse Effect, except as reserved
against in the Carolina First Financial Statements or as disclosed in Section
6.8 of the Carolina First Disclosure Memorandum. All Taxes and other Liabilities
due with respect to completed and settled examinations or concluded Litigation
have been paid. There are no Liens with respect to Taxes
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upon any of the Assets of the Carolina First Entities, except for any such Liens
which are not reasonably likely to have a Carolina First Material Adverse
Effect.
(b) None of the Carolina First Entities 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) The provision for any Taxes due or to become due
for any of the Carolina First Entities for the period or periods through and
including the date of the respective Carolina First Financial Statements that
has been made and is reflected on such Carolina First Financial Statements is
sufficient, in the judgment of CB&T's management after consultation with CB&T's
independent public accountants, to cover all such Taxes.
(d) Deferred Taxes of the Carolina First Entities
have been provided for in accordance with GAAP.
(e) None of the Carolina First Entities is a party to
any Tax allocation or sharing agreement, and none of the Carolina First Entities
has been a member of an affiliated group filing a consolidated federal income
Tax Return (other than a group the common parent of which was Carolina First) or
has any Liability for Taxes of any Person (other than Carolina First and its
Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any similar
provision of state, local or foreign Law) as a transferee or successor or by
Contract or otherwise.
(f) No Carolina First Entity has or has had in any
foreign country a permanent establishment, as defined in any applicable tax
treaty or convention between the United States and such foreign country.
6.9 Allowance for Possible Loan Losses. In the opinion of
management of Carolina First, the Allowance shown on the consolidated balance
sheets of Carolina First included in the most recent Carolina First Financial
Statements dated prior to the date of this Agreement was, and the Allowance
shown on the consolidated balance sheets of Carolina First included in the
Carolina First Financial Statements as of dates subsequent to the execution of
this Agreement will be, as of the dates thereof, adequate (within the meaning of
GAAP and applicable regulatory requirements or guidelines) to provide for all
known or reasonably anticipated losses relating to or inherent in the loan and
lease portfolios (including accrued interest receivables) of the Carolina First
Entities and other extensions of credit (including letters of credit and
commitments to make loans or extend credit) by the Carolina First Entities as of
the dates thereof, except where the failure of such Allowance to be so adequate
is not reasonably likely to have a Carolina First Material Adverse Effect.
6.10 Assets.
(a) Except as disclosed in Section 6.10 of the
Carolina First Disclosure Memorandum or as disclosed or reserved against in the
Carolina First Financial Statements, the
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Carolina First Entities have good and marketable title, free and clear of all
Liens, to all of their respective Assets, except for any such Liens or other
defects of title which are not reasonably likely to have a Carolina First
Material Adverse Effect. All tangible properties used in the businesses of the
Carolina First Entities are in good condition, reasonable wear and tear
excepted, and are usable in the ordinary course of business consistent with
Carolina First's past practices.
(b) All Assets which are material to Carolina First's
business on a consolidated basis, held under leases or subleases by any of the
Carolina First Entities, 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 or any other equitable 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.
(c) The Carolina First Entities currently maintain
insurance similar in amounts, scope and coverage to that maintained by other
peer banking organizations. None of the Carolina First Entities 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.
There are presently no claims pending under such policies of insurance and no
notices have been given by any Carolina First Entity under such policies.
(d) The Assets of the Carolina First Entities include
all assets required to operate the business of the Carolina First Entities as
presently conducted.
6.11 Intellectual Property. Each Carolina First Entity owns or
has a license to use all of the Intellectual Property used by such Carolina
First Entity in the course of its business. Each Carolina First Entity is the
owner of or has a license to any Intellectual Property sold or licensed to a
third party by such Carolina First Entity in connection with such Carolina First
Entity's business operations, and such Carolina First Entity has the right to
convey by sale or license any Intellectual Property so conveyed. No Carolina
First Entity is in Default under any of its Intellectual Property licenses. No
proceedings have been instituted, or are pending or to the Knowledge of Carolina
First threatened, which challenge the rights of any Carolina First Entity with
respect to Intellectual Property used, sold or licensed by such Carolina First
Entity in the course of its business, nor has any person claimed or alleged any
rights to such Intellectual Property. The conduct of the business of the
Carolina First Entities does not infringe any Intellectual Property of any other
person.
6.12 Environmental Matters.
(a) To the Knowledge of Carolina First, each Carolina
First Entity, its Participation Facilities, and its Operating Properties are,
and have been, in compliance with all Environmental Laws, except for violations
which are not reasonably likely to have, individually or in the aggregate, a
Carolina First Material Adverse Effect.
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(b) To the Knowledge of Carolina First, there is no
Litigation pending or threatened before any court, governmental agency, or
authority or other forum in which any Carolina First Entity or any of its
Operating Properties or Participation Facilities (or Carolina First in respect
of such Operating Property or Participation Facility) has been or, with respect
to threatened Litigation, may be named as a defendant (i) for alleged
noncompliance (including by any predecessor) with any Environmental Law or (ii)
relating to the release, discharge, spillage, or disposal into the environment
of any Hazardous Material, whether or not occurring at, on, under, adjacent to,
or affecting (or potentially affecting) a site owned, leased, or operated by any
Carolina First Entity or any of its Operating Properties or Participation
Facilities, except for such Litigation pending or threatened that is not
reasonably likely to have, individually or in the aggregate, a Carolina First
Material Adverse Effect, nor is there any reasonable basis for any Litigation of
a type described in this sentence, except such as is not reasonably likely to
have, individually or in the aggregate, a Carolina First Material Adverse
Effect.
(c) During the period of (i) any Carolina First
Entity's ownership or operation of any of their respective current properties,
(ii) any Carolina First Entity's participation in the management of any
Participation Facility (to the Knowledge of Carolina First), or (iii) any
Carolina First Entity's holding of a security interest in a Operating Property,
there have been no releases, discharges, spillages, or disposals of Hazardous
Material in, on, under, adjacent to, or affecting (or potentially affecting)
such properties, except such as are not reasonably likely to have, individually
or in the aggregate, a Carolina First Material Adverse Effect. Prior to the
period of (i) any Carolina First Entity's ownership or operation of any of their
respective current properties, (ii) any Carolina First Entity's participation in
the management of any Participation Facility, or (iii) any Carolina First
Entity's holding of a security interest in a Operating Property, to the
Knowledge of Carolina First, there were no releases, discharges, spillages, or
disposals of Hazardous Material in, on, under, or affecting any such property,
Participation Facility or Operating Property, except such as are not reasonably
likely to have, individually or in the aggregate, a CB&T Material Adverse
Effect.
6.13 Compliance with Laws. Carolina First is duly registered
as a bank holding company under the BHC Act. Each Carolina First Entity 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 Carolina First Material Adverse Effect, 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 Carolina First Material
Adverse Effect. Except as disclosed in Section 6.13 of the Carolina First
Disclosure Memorandum, none of the Carolina First Entities:
(a) is in Default under its Articles of Incorporation or
Bylaws (or other governing instruments); or
(b) is in Default under any Laws, Orders or Permits applicable
to its business or employees conducting its business, except for
Defaults which are not reasonably likely to have, individually or in
the aggregate, a Carolina First Material Adverse Effect; or
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(c) since January 1, 1993, 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 Carolina First Entity 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 Carolina First Material
Adverse Effect, (ii) threatening to revoke any Permits, the revocation
of which is reasonably likely to have, individually or in the
aggregate, a Carolina First Material Adverse Effect, or (iii) requiring
any Carolina First Entity to enter into or consent to the issuance of a
cease and desist order, formal agreement, directive, commitment or
memorandum of understanding, or to adopt any Board resolution or
similar undertaking, which restricts materially the conduct of its
business, or in any manner relates to its capital adequacy, its credit
or reserve policies, its management, or the payment of dividends.
6.14 Labor Relations. No Carolina First Entity is the subject
of any Litigation asserting that it or any other Carolina First Entity 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
Carolina First Entity to bargain with any labor organization as to wages or
conditions of employment, nor is any Carolina First Entity party to any
collective bargaining agreement, nor is there any strike or other labor dispute
involving any Carolina First Entity, pending or threatened, or to the Knowledge
of Carolina First, is there any activity involving any Carolina First Entity's
employees seeking to certify a collective bargaining unit or engaging in any
other organization activity.
6.15 Employee Benefit Plans.
(a) Carolina First has delivered or made available to
CB&T prior to the execution of this Agreement copies in each case of all
pension, retirement, profit-sharing, deferred compensation, stock option,
employee stock ownership, severance pay, vacation, bonus, or other incentive
plan, all other written employee programs, arrangements, or agreements, all
medical, vision, dental, or other health plans, all life insurance plans, and
all other employee benefit plans or fringe benefit plans, including "employee
benefit plans" as that term is defined in Section 3(3) of ERISA, currently
adopted, maintained by, sponsored in whole or in part by, or contributed to by
any Carolina First Entity or ERISA Affiliate thereof for the benefit of
employees, retirees, dependents, spouses, directors, independent contractors, or
other beneficiaries and under which employees, retirees, dependents, spouses,
directors, independent contractors, or other beneficiaries are eligible to
participate (collectively, the "Carolina First Benefit Plans"). Any of the
Carolina First Benefit Plans which is an "employee pension benefit plan," as
that term is defined in Section 3(2) of ERISA, is referred to herein as a
"Carolina First ERISA Plan." Each Carolina First ERISA Plan which is also a
"defined benefit plan" (as defined in Section 414(j) of the Internal Revenue
Code) is referred to herein as a "Carolina First Pension Plan." No Carolina
First Pension Plan is or has been a multiemployer plan within the meaning of
Section 3(37) of ERISA.
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(b) All Carolina First Benefit Plans are in
compliance with the applicable terms of ERISA, the Internal Revenue Code, and
any other applicable Laws the breach or violation of which are reasonably likely
to have, individually or in the aggregate, a Carolina First Material Adverse
Effect. Each Carolina First ERISA Plan 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 Carolina First is
not aware of any circumstances likely to result in revocation of any such
favorable determination letter. To the Knowledge of Carolina First, no Carolina
First Entity has engaged in a transaction with respect to any Carolina First
Benefit Plan that, assuming the taxable period of such transaction expired as of
the date hereof, would subject any Carolina First Entity to a Tax 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
Carolina First Material Adverse Effect.
(c) No Carolina First Pension Plan has any "unfunded
current liability," as that term is defined in Section 302(d)(8)(A) of ERISA,
based on actuarial assumptions set forth for such plan's most recent actuarial
valuation. Since the date of the most recent actuarial valuation, there has been
(i) no material change in the financial position of a Carolina First Pension
Plan, (ii) no change in the actuarial assumptions with respect to any Carolina
First Pension Plan, and (iii) no increase in benefits under any Carolina First
Pension Plan as a result of plan amendments or changes in applicable Law which
is reasonably likely to have, individually or in the aggregate, a Carolina First
Material Adverse Effect or materially adversely affect the funding status of any
such plan. Neither any Carolina First Pension Plan nor any "single-employer
plan," within the meaning of Section 4001(a)(15) of ERISA, currently or formerly
maintained by any Carolina First Entity, or the single-employe plan of any ERISA
Affiliate has an "accumulated funding deficiency" within the meaning of Section
412 of the Internal Revenue Code or Section 302 of ERISA, which is reasonably
likely to have a Carolina First Material Adverse Effect. No Carolina First
Entity has provided, or is required to provide, security to a Carolina First
Pension Plan or to any single-employer plan of an ERISA Affiliate pursuant to
Section 401(a)(29) of the Internal Revenue Code.
6.16 [Reserved].
6.17 Legal Proceedings. There is no Litigation instituted or
pending, or, to the Knowledge of Carolina First, threatened (or unasserted but
considered probable of assertion and which if asserted would have at least a
reasonable probability of an unfavorable outcome) against any Carolina First
Entity, or against any director, employee or employee benefit plan of any
Carolina First Entity, or against any Asset, interest, or right of any of them,
that is reasonably likely to have, individually or in the aggregate, a Carolina
First Material Adverse Effect, nor are there any Orders of any Regulatory
Authorities, other governmental authorities, or arbitrators outstanding against
any Carolina First Entity, that are reasonably likely to have, individually or
in the aggregate, a Carolina First Material Adverse Effect.
6.18 Reports. Since January 1, 1993, or the date of
organization if later, each Carolina First Entity has filed all reports and
statements, together with any amendments required to be made with respect
thereto, that it was required to file with Regulatory Authorities (except,
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in the case of state securities authorities, failures to file which are not
reasonably likely to have, individually or in the aggregate, a Carolina First
Material Adverse Effect). As of their respective dates, each of such reports and
documents, including the financial statements, exhibits, and schedules thereto,
complied in all material respects with all applicable Laws. As of its respective
date, each such report and document did not, in all material respects, contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements made therein,
in light of the circumstances under which they were made, not misleading.
6.19 Statements True and Correct. No statement, certificate,
instrument or other writing furnished or to be furnished by any Carolina First
Entity or any Affiliate thereof to CB&T pursuant to this Agreement or any other
document, agreement or instrument referred to herein contains or will contain
any untrue statement of material fact or will omit to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. None of the information supplied or to be
supplied by any Carolina First Entity or any Affiliate thereof for inclusion in
the Registration Statement to be filed by Carolina First with the SEC, will,
when the Registration Statement becomes effective, be false or misleading with
respect to any material fact, or omit to state any material fact necessary to
make the statements therein not misleading. None of the information supplied or
to be supplied by any Carolina First Entity or any Affiliate thereof for
inclusion in the Proxy Statement/Prospectus to be mailed to CB&T's shareholders
in connection with the Shareholders' Meeting, and any other documents to be
filed by any Carolina First Entity or any Affiliate thereof with the SEC or any
other Regulatory Authority in connection with the transactions contemplated
hereby, will, at the respective time such documents are filed, and with respect
to the Proxy Statement/Prospectus, when first mailed to the shareholders of
CB&T, be false or misleading with respect to any material fact, or omit to state
any material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, or, in the case of the
Proxy Statement/Prospectus or any amendment thereof or supplement thereto, at
the time of the Shareholders' Meeting, be false or misleading with respect to
any material fact, or omit to state any material fact necessary to correct any
statement in any earlier communication with respect to the solicitation of any
proxy for the Shareholders' Meeting. All documents that any Carolina First
Entity 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.
6.20 Authority of Sub. Sub will be at Closing a corporation
duly organized, validly existing and in good standing under the Laws of the
State of North Carolina as a wholly owned Subsidiary of Carolina First, with
corporate power and authority necessary to execute, deliver and perform its
obligations under this Agreement and to consummate the transactions contemplated
hereby. Carolina First, as the sole shareholder of Sub, will vote prior to the
Effective Time the shares of Sub Common Stock in favor of adoption of this
Agreement, as and to the extent required by applicable Law.
6.21 Accounting, Tax and Regulatory Matters. No Carolina First
Entity or any Affiliate thereof has taken or agreed to take any action or has
any Knowledge of any fact or
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circumstance that is reasonably likely to (i) prevent the Merger from qualifying
for pooling-of-interests accounting treatment or as a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code, or (ii) materially
impede or delay receipt of any Consents of Regulatory Authorities referred to in
Section 9.1(b) or result in the imposition of a condition or restriction of the
type referred to in the last sentence of such Section.
6.22 Opinion of Financial Advisor. Carolina First has received
the opinion of The Robinson-Humphrey Company dated the date of this Agreement,
to the effect that the consideration to be received in the Merger by the holders
of Carolina First Common Stock is fair, from a financial point of view, to such
holders, a signed copy of which has been delivered to CB&T
6.23 Millennium Compliance. Carolina First has made and is
making inquiries of its software and data processing providers with respect to
Year 2000 problem compliance, and is in compliance in all material respects with
the Interagency Statement.
ARTICLE 7
CONDUCT OF BUSINESS PENDING CONSUMMATION
7.1 Affirmative Covenants of CB&T. From the date of this
Agreement until the earlier of the Effective Time or the termination of this
Agreement, unless the prior written consent of Carolina First shall have been
obtained, and except as otherwise expressly contemplated herein, CB&T shall (a)
operate its business only in the usual, regular, and ordinary course, (b)
preserve intact its business organization and Assets and maintain its rights and
franchises, and (c) take no action which would (i) 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) or 9.1(c), or (ii)
materially adversely affect the ability of any Party to perform its covenants
and agreements under this Agreement. CB&T shall cooperate with Carolina First in
terminating the CB&T ESOP and otherwise changing its benefit plans effective as
of Closing.
7.2 Negative Covenants of CB&T. From the date of this
Agreement until the earlier of the Effective Time or the termination of this
Agreement, unless the prior written consent of Carolina First shall have been
obtained, and except as otherwise expressly contemplated herein, CB&T covenants
and agrees that it will not do or agree or commit to do any of the following:
(a) amend the Articles of Incorporation, Bylaws or other
governing instruments of any CB&T Entity, or
(b) incur any additional debt obligation or other obligation
for borrowed money in excess of an aggregate of $50,000 except as
reasonable and customary or in the ordinary course of the business of
CB&T consistent with past practices (which shall include 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
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U.S. government or agency securities), or impose, or suffer the
imposition, on any Asset of any CB&T Entity 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 CB&T 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 CB&T Entity,
or declare or pay any dividend or make any other distribution in
respect of CB&T's capital stock; or
(d) except for this Agreement, or pursuant to the exercise of
stock options outstanding as of the date hereof and pursuant to the
terms thereof in existence on the date hereof, or as disclosed in
Section 7.2(d) of the CB&T Disclosure Memorandum, 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 CB&T Common
Stock or any other capital stock of any CB&T Entity, or any stock
appreciation rights, or any option, warrant, or other Equity Right; or
(e) adjust, split, combine or reclassify any capital stock of
any CB&T Entity or issue or authorize the issuance of any other
securities in respect of or in substitution for shares of CB&T Common
Stock, or sell, lease, mortgage or otherwise dispose of or otherwise
encumber (x) any shares of capital stock of any CB&T Subsidiary (unless
any such shares of stock are sold or otherwise transferred to another
CB&T Entity) or (y) 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 of securities, contributions to
capital, Asset transfers, or purchase of any Assets, in any Person
other than a wholly owned CB&T 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 CB&T Entity, except in accordance with
past practice, as disclosed in Section 7.2(g) of the CB&T Disclosure
Memorandum 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 and disclosed in
Section 7.2(g) of the CB&T Disclosure Memorandum; and enter into or
amend any severance agreements with officers
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of any CB&T Entity; grant any material increase in fees or other
increases in compensation or other benefits to directors of any CB&T
Entity except in accordance with past practice disclosed in Section
7.2(g) of the CB&T Disclosure Memorandum; or voluntarily accelerate the
vesting of any stock options or other stock-based compensation or
employee benefits or other Equity Rights; or
(h) enter into or amend any employment Contract between any
CB&T Entity and any Person (unless such amendment is required by Law)
that the CB&T Entity 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 CB&T Entity or
terminate or withdraw from, or make any material change in or to, any
existing employee benefit plans of any CB&T Entity 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 make any distributions from such employee benefit plans,
except as required by Law, the terms of such plans or consistent with
past practice; or
(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 in accordance with past
practice, settle any Litigation involving any Liability of any CB&T
Entity for material money damages or restrictions upon the operations
of any CB&T Entity; or
(l) enter into, modify, amend or terminate any material
Contract (including any loan Contract with an unpaid balance exceeding
$250,000) or waive, release, compromise or assign any material rights
or claims; or
(m) incur or become obligated to incur any expenses exceeding
$50,000, whether capitalized, expensed or otherwise, other than in the
ordinary course of business, without Carolina First's prior written
approval.
7.3 Covenants of Carolina First. From the date of this
Agreement until the earlier of the Effective Time or the termination of this
Agreement, unless the prior written consent of CB&T shall have been obtained,
and except as otherwise expressly contemplated herein, Carolina First covenants
and agrees that it shall (a) 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 Carolina First Common Stock and the business
prospects of the Carolina First Entities and to the extent consistent therewith
use all reasonable efforts to preserve intact the Carolina First Entities' core
businesses and goodwill with their respective employees and the communities they
serve, and (b) take no action which would (i) 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
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Section 9.1(b) or 9.1(c), or (ii) 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 Carolina First Entity from acquiring
any Assets or other businesses or from discontinuing or disposing of any of its
Assets or business if such action is, in the reasonable judgment of Carolina
First, desirable in the conduct of the business of Carolina First and its
Subsidiaries, provided that such actions shall not materially delay the
Effective Time or materially hinder consummation of the Merger. Carolina First
further covenants and agrees that it will not, without the prior written consent
of CB&T, which consent shall not be unreasonably withheld, amend the Articles of
Incorporation or Bylaws of Carolina First, in each case, in any manner adverse
to the holders of CB&T Common Stock as compared to rights of holders of Carolina
First Common Stock generally as of the date of this Agreement.
7.4 [Reserved].
7.5 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 CB&T Material Adverse Effect or a Carolina First Material Adverse
Effect, as applicable, 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.
7.6 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 shareholders' 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 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; Shareholder
Approval. As soon as reasonably practicable after execution of this Agreement,
Carolina First shall prepare and 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
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taken under the applicable state Blue Sky or securities Laws in connection with
the issuance of the shares of Carolina First Common Stock upon consummation of
the Merger. CB&T shall cooperate in the preparation and filing of the
Registration Statement and shall furnish all information concerning it and the
holders of its capital stock as Carolina First may reasonably request in
connection with such action. CB&T shall call a Shareholders' 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
Shareholders' Meeting, (i) CB&T and Carolina First shall prepare and file with
the SEC a Proxy Statement/Prospectus and mail such Proxy Statement/Prospectus to
the CB&T shareholders, (ii) the Parties shall furnish to each other all
information concerning them that they may reasonably request in connection with
such Proxy Statement/Prospectus, (iii) the Board of Directors of CB&T shall
recommend to its shareholders the approval of the matters submitted for approval
(unless the Board of Directors of CB&T, after having consulted with and
considered the advice of outside counsel, reasonably determining in good faith
that the making of such recommendation, or the failure to withdraw or modify its
recommendation, would constitute a breach of fiduciary duties of the members of
such Board of Directors to CB&T's shareholders under applicable law), (iv) the
Board of Directors and officers of CB&T shall use their reasonable efforts to
obtain such shareholders' approval (subject to the Board of Directors of CB&T,
after having consulted with and considered the advice of outside counsel,
reasonably determining in good faith that the taking of such actions would not
constitute a breach of fiduciary duties of the members of such Board of
Directors to CB&T's shareholders under applicable law), and (v) Carolina First
shall approve the Merger as the sole shareholder of Sub. Carolina First and CB&T
shall make all necessary filings with respect to the Merger under the Securities
Laws.
8.2 [Reserved].
8.3 Applications. Carolina First shall prepare and file, and
CB&T 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. The
Parties shall deliver to each other copies of all filings, correspondence and
orders to and from all Regulatory Authorities in connection with the
transactions contemplated hereby.
8.4 Filings with State Offices. Upon the terms and subject to
the conditions of this Agreement, Sub shall execute and file the Articles of
Merger with the Secretary of State of the State of North Carolina 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 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
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satisfied the conditions referred to in Article 9; 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) In addition to the Parties' respective
obligations under the Confidentiality Agreement, which is hereby reaffirmed and
adopted, and incorporated by reference herein 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 CB&T Material
Adverse Effect or a Carolina First Material Adverse Effect, as applicable.
8.7 Press Releases. Prior to the Effective Time, CB&T and
Carolina First 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 CB&T Entity nor any Affiliate thereof
nor any Representatives thereof retained by any CB&T Entity shall directly or
indirectly solicit any Acquisition Proposal by any Person. Except to the extent
the Board of Directors of CB&T, after having consulted with and considered the
advice of outside counsel, reasonably determines in good faith that the failure
to take such actions would constitute a breach of fiduciary duties of the
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members of such Board of Directors to CB&T's shareholders under applicable law,
no CB&T Entity or any Affiliate or Representative thereof shall furnish any
non-public information that it is not legally obligated to furnish in connection
with, negotiate with respect to, or enter into any Contract with respect to, any
Acquisition Proposal, but CB&T may communicate information about such an
Acquisition Proposal to its shareholders if and to the extent that it is
required to do so in order to comply with its legal obligations as advised by
outside counsel. CB&T shall promptly advise Carolina First following the receipt
of any Acquisition Proposal and the details thereof, and advise Carolina First
of any developments with respect to such Acquisition Proposal promptly upon the
occurrence thereof. CB&T shall (i) immediately 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 all of its Affiliates and 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 CB&T Entity shall take all
necessary steps to exempt the transactions contemplated by this Agreement from,
or if necessary to challenge the validity or applicability of, any applicable
Takeover Law, including Articles 9 and 9A of the NCBCA.
8.11 Charter Provisions. Each CB&T Entity 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 CB&T Entity or
restrict or impair the ability of Carolina First or any of its Subsidiaries to
vote, or otherwise to exercise the rights of a shareholder with respect to,
shares of any CB&T Entity that may be directly or indirectly acquired or
controlled by them, except as may be provided under Article 13 of the NCBCA.
8.12 [Reserved].
8.13 Agreement of Affiliates. CB&T has disclosed in Section
8.13 of the CB&T Disclosure Memorandum each Person whom it reasonably believes
is an "affiliate" of CB&T for purposes of Rule 145 under the 1933 Act. CB&T
shall use its reasonable efforts to cause each such Person to deliver to
Carolina First not later than 30 days prior to the Effective Time, a written
agreement, substantially in the form of Exhibit 23, providing that such Person
will not sell, pledge, transfer, or otherwise dispose of the shares of CB&T
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 Carolina First 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, if the Merger is
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accounted for by the pooling-of-interests method of accounting, until such time
as financial results covering at least 30 days of combined operations of
Carolina First and CB&T have been published within the meaning of Section 201.01
of the SEC's Codification of Financial Reporting Policies. If the Merger is
accounted for using the pooling-of-interests method of accounting, shares of
Carolina First Common Stock issued to such affiliates of CB&T in exchange for
shares of CB&T Common Stock shall not be transferable until such time as
financial results covering at least 30 days of combined operations of Carolina
First and CB&T 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
8.13 (and Carolina First shall be entitled to place restrictive legends upon
certificates for shares of Carolina First Common Stock issued to affiliates of
CB&T pursuant to this Agreement to enforce the provisions of this Section 8.13).
Carolina First shall not be required to maintain the effectiveness of the
Registration Statement under the 1933 Act for the purposes of resale of Carolina
First Common Stock by such affiliates.
8.14 Employee Benefits and Contracts. Following the Effective
Time, Carolina First shall provide generally to officers and employees of the
CB&T Entities employee benefits under employee benefit and welfare plans (other
than stock option or other plans involving the potential issuance of Carolina
First Common Stock), on terms and conditions which when taken as a whole are
substantially similar to those currently provided by the Carolina First Entities
to their similarly situated officers and employees; provided, that, for a period
of 12 months after the Effective Time, Carolina First shall provide generally to
officers and employees of CB&T Entities severance benefits with the following
terms: (i) for Vice President and above, an amount equal to two weeks'
compensation for each year of continuous employment with CB&T (such amount not
to be less than one month nor greater than twelve months of compensation); (ii)
for Assistant Vice President, an amount equal to two weeks' compensation for
each year of continuous employment with CB&T (such amount not to be less than
one month nor greater than nine months of compensation); and (iii) for all other
employees, an amount equal to two weeks' compensation for each year of
continuous employment with CB&T (such amount not to be less than one month nor
greater than six months of compensation). All such payments will be paid in cash
and in full, not later than 30 days after termination. Carolina First will offer
such employees compensation for unused vacation days and career continuation
counseling and will give each such employee priority consideration for future
positions at Carolina First as they become available, consistent with said
employee's ability to perform such duties. Carolina First and CB&T will
cooperate to maintain the continuing employment of key employees during the
pendency of the transaction contemplated herein. The foregoing severance
benefits shall not be applicable to Allen W. Jackson, who is the subject of a
separate agreement. For purposes of participation, vesting and (except in the
case of Carolina First retirement plans) benefit accrual under Carolina First's
employee benefit plans, the service of the employees of the CB&T Entities prior
to the Effective Time shall be treated as service with a Carolina First Entity
participating in such employee benefit plans. Carolina First also shall offer
Ronnie D. Blanton an employment contract in the form attached hereto as Exhibit
3.
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8.15 Indemnification.
(a) For a period of three years after the Effective
Time, Carolina First shall, and shall cause the Surviving Corporation to,
indemnify, defend and hold harmless the present and former directors, officers,
employees and agents of the CB&T Entities (each, an "Indemnified Party") against
all Liabilities arising out of actions or omissions arising out of the
Indemnified Party's service or services as directors, officers, employees or
agents of CB&T or, at CB&T's request, of another corporation, partnership, joint
venture, trust or other enterprise occurring at or prior to the Effective Time
(including the transactions contemplated by this Agreement) to the fullest
extent permitted under North Carolina Law and by CB&T's Articles of
Incorporation and Bylaws as in effect on March 1, 1998, including provisions
relating to advances of expenses incurred in the defense of any Litigation and
whether or not any Carolina First Entity is insured against any such matter.
Nothing herein is intended, however, to affect the Indemnified Parties' rights
to indemnity under CB&T's Articles of Incorporation and Bylaws (as in effect on
March 1, 1998), subject to the Claims Letters to be delivered to Carolina First
prior to Closing. Without limiting the foregoing, in any case in which approval
by the Surviving Corporation is required to effectuate any indemnification, the
Surviving Corporation shall 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 Carolina First and the Indemnified Party.
(b) Any Indemnified Party wishing to claim
indemnification under paragraph (a) of this Section 8.15, upon learning of any
such Liability or Litigation, shall promptly notify Carolina First thereof. In
the event of any such Litigation (whether arising before or after the Effective
Time), (i) Carolina First or the Surviving Corporation shall have the right to
assume the defense thereof and neither Carolina First nor the Surviving
Corporation shall 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 Carolina First or
the Surviving Corporation elects not to assume such defense or counsel for the
Indemnified Parties advises that there are substantive issues which raise
conflicts of interest between Carolina First or the Surviving Corporation and
the Indemnified Parties, the Indemnified Parties may retain counsel satisfactory
to them, and Carolina First or the Surviving Corporation shall pay all
reasonable fees and expenses of such counsel for the Indemnified Parties
promptly as statements therefor are received; provided, that Carolina First and
the Surviving Corporation 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) neither Carolina First nor the Surviving Corporation
shall be liable for any settlement effected without its prior written consent;
and provided further that neither Carolina First nor the Surviving Corporation
shall 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.
8.16 Certain Policies of CB&T. Carolina First and CB&T shall
consult with respect to their respective loan, litigation and real estate
valuation policies and practices (including loan classifications and levels of
reserves) and CB&T shall make such modification or changes to
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its policies and practices, if any, prior to the Effective Time as may be
mutually agreed upon. Carolina First and CB&T also shall consult with respect to
the character, amount and timing of restructuring and Merger-related expense
charges to be taken by each of the Parties in connection with the transactions
contemplated by this Agreement and shall take such charges in accordance with
GAAP, prior to the Effective Time, as may be mutually agreed upon by the
Parties. Neither Party's representations, warranties, covenants or agreements
contained in this Agreement shall be deemed to be inaccurate or breached in any
respect as a consequence of any modifications or charges undertaken solely on
account of this Section 8.16.
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 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:
(a) Shareholder Approval. The shareholders of CB&T 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.
(b) Regulatory Approvals. All Consents of, filings and
registrations with, and notifications to, all Regulatory Authorities
required for consummation of the 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.
(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)) 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 CB&T Material Adverse Effect or a Carolina First Material
Adverse Effect, as applicable. No Consent so obtained which is
necessary to consummate the transactions contemplated hereby shall be
conditioned or restricted in a manner which in the reasonable judgment
of the Board of Directors of Carolina First would so materially
adversely impact the economic or business benefits of the transactions
contemplated by this Agreement that, had such condition or requirement
been known, such Party would not, in its reasonable judgment, have
entered into this Agreement.
(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.
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(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 Carolina
First Common Stock issuable pursuant to the Merger shall have been
received.
(f) Pooling Letters. Each of the Parties shall have received a
letter, dated as of the date of the Effective Time, addressed to
Carolina First, in form and substance reasonably acceptable to Carolina
First, from KPMG Peat Marwick, L.L.P. to the effect that the Merger
will qualify for pooling-of-interests accounting treatment. Each of the
Parties also shall have received letters, dated as of the date of
filing of the Registration Statement with the SEC and as of the
Effective Time, addressed to Carolina First, in form and substance
reasonably acceptable to Carolina First, from KPMG Peat Marwick, L.L.P.
to the effect that such firm is not aware of any matters relating to
CB&T which would preclude the Merger from qualifying for
pooling-of-interests accounting treatment.
(g) Tax Matters. Each Party shall have received a written
opinion of counsel from Alston & Bird LLP, in form reasonably
satisfactory to such Parties (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 CB&T Common Stock for Carolina First Common Stock will not
give rise to gain or loss to the shareholders of CB&T with respect to
such exchange (except to the extent of any cash received), and (iii)
none of CB&T, Sub or Carolina First will recognize gain or loss as a
consequence of the Merger (except for amounts resulting from any
required change in accounting methods and any income and deferred gain
recognized pursuant to Treasury regulations issued under Section 1502
of the Internal Revenue Code). In rendering such Tax Opinion, such
counsel shall be entitled to rely upon representations of officers of
CB&T and Carolina First reasonably satisfactory in form and substance
to such counsel.
9.2 Conditions to Obligations of Carolina First. The
obligations of Carolina First 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 Carolina First
pursuant to Section 11.6(a):
(a) Representations and Warranties. For purposes of this
Section 9.2(a), the representations and warranties of CB&T set forth in
this Agreement shall be accurate and true 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, except that representations and warranties which are
confined to a specified date shall speak only as of such date. The
representations and warranties set forth in Section 5.3 shall be true
and correct (except for inaccuracies which are de minimis in amount).
The representations and warranties set forth in Sections 5.20, 5.21,
and 5.22 shall be true and
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correct in all material respects. There shall not exist inaccuracies in
the representations and warranties of CB&T set forth in this Agreement
(including the representations and warranties set forth in Sections
5.3, 5.20, 5.21, and 5.22) such that the aggregate effect of such
inaccuracies has, or is reasonably likely to have, a CB&T Material
Adverse Effect; provided that, for purposes of this sentence only,
those representations and warranties which are qualified by references
to "material" or "Material Adverse Effect" or to the "Knowledge" of any
Person shall be deemed not to include such qualifications.
(b) Performance of Agreements and Covenants. Each and all of
the agreements and covenants of CB&T 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. CB&T shall have delivered to Carolina First
(i) a certificate, dated as of the Effective Time and signed on its
behalf by its chief executive officer and its chief financial officer,
to the effect that the conditions set forth in Section 9.1 as relates
to CB&T and in Section 9.2(a) and 9.2(b) have been satisfied, and (ii)
certified copies of resolutions duly adopted by CB&T's Board of
Directors and shareholders 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 Carolina First
and its counsel shall request.
(d) Fairness Opinion. Carolina First shall have received from
The Robinson-Humphrey Company a letter, dated not more than five
business days prior to the date of the Proxy Statement, to the effect
that, in the opinion of such firm, the consideration to be paid by
Carolina First in connection with the Merger is fair, from a financial
point of view, to Carolina First.
(e) Affiliates Agreements. Carolina First shall have received
from each affiliate of CB&T the affiliates letter referred to in
Section 8.13, to the extent necessary to assure in the reasonable
judgment of Carolina First that the transactions contemplated hereby
will qualify for pooling-of-interests accounting treatment.
(f) Shareholders' Equity. CB&T's shareholders' equity as of
the Closing shall not be less than CB&T's shareholders' equity as of
December 31, 1997, excluding for purposes of the calculation of such
shareholders' equity the effects of (i) all costs, fees and charges,
including fees and charges of CB&T's accountants, counsel and financial
advisors, whether or not accrued or paid, that are related to the
transactions contemplated by this Agreement, (ii) all net charges
resulting from the application of FASB Statement No. 115 with respect to
unrealized securities gains and losses, and (iii) any reductions in
CB&T's shareholders' equity resulting from any actions or changes in
policies of CB&T taken at the request of Carolina First, including those
described in Section 8.16.
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(g) Exercise of Dissenter's Rights. Shareholders of CB&T shall
not have given notice of their intent to exercise their statutory
rights of dissent with respect to more than 5% of the outstanding
shares of CB&T Common Stock.
(h) Claims Letters. Each director and officer of each CB&T
Entity shall have executed and delivered to Carolina First, letters in
substantially the form of Exhibit 4 hereto, and which are reasonably
satisfactory to Carolina First.
9.3 Conditions to Obligations of CB&T. The obligations of CB&T
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 CB&T pursuant to Section 11.6(b):
(a) Representations and Warranties. For purposes of this
Section 9.3(a), the representations and warranties of Carolina First
set forth in this Agreement shall be accurate and true 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, except that representations and warranties which
are confined to a specified date shall speak only as of such date. The
representations and warranties of Carolina First set forth in Section
6.21 shall be true and correct in all material respects. The
representations and warranties set forth in Section 6.3 shall be true
and correct (except for inaccuracies which are de minimis in amount).
There shall not exist inaccuracies in the representations and
warranties of Carolina First set forth in this Agreement (including the
representations and warranties set forth in Section 6.3 and 6.21) such
that the aggregate effect of such inaccuracies has, or is reasonably
likely to have, a Carolina First Material Adverse Effect; provided
that, for purposes of this sentence only, those representations and
warranties which are qualified by references to "material" or "Material
Adverse Effect" or to the "Knowledge" of any Person shall be deemed not
to include such qualifications.
(b) Performance of Agreements and Covenants. Each and all of
the agreements and covenants of Carolina First 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. Carolina First shall have delivered to CB&T
(i) a certificate, dated as of the Effective Time and signed on its
behalf by its chief executive officer and its chief financial officer,
to the effect that the conditions set forth in Section 9.1 as relates
to Carolina First and in Section 9.3(a) and 9.3(b) have been satisfied,
and (ii) certified copies of resolutions duly adopted by Carolina
First's Board of Directors and Sub's Board of Directors and sole
shareholder 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 CB&T and its counsel shall request.
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(d) Fairness Opinion. CB&T shall have received from Smith
Capital, Inc. a letter, dated not more than five business days prior to
the date of the Proxy Statement, to the effect that, in the opinion of
such firm, the consideration to be received by CB&T shareholders in
connection with the Merger is fair, from a financial point of view, to
such shareholders.
(e) Exchange Agent Certification. The Exchange Agent shall
have delivered to CB&T a certificate, dated as of the Effective Time,
to the effect that the Exchange Agent has received from Carolina First
appropriate instructions and authorization for the Exchange Agent to
issue a sufficient number of shares of Carolina First Common Stock in
exchange for outstanding shares of CB&T Common Stock and that Carolina
First has deposited with the Exchange Agent sufficient funds to pay a
reasonable estimate of the cash payments necessary to make all
fractional share payments as required by Section 3.5.
ARTICLE 10
TERMINATION
10.1 Termination. Notwithstanding any other provision of this
Agreement, and notwithstanding the approval of this Agreement by the
shareholders of CB&T, this Agreement may be terminated and the Merger abandoned
at any time prior to the Effective Time:
(a) By mutual consent of Carolina First and CB&T; or
(b) By either Party (provided that the terminating Party is
not then in material breach of any representation, warranty, covenant,
or other agreement contained in this Agreement) in the event of a
material breach by the other Party of any representation or warranty
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 and which breach is reasonably likely, in the
opinion of the non-breaching Party, to have, individually or in the
aggregate, a CB&T Material Adverse Effect or a Carolina First Material
Adverse Effect, as applicable, on the breaching Party; or
(c) By either Party (provided that the terminating Party is
not then in material breach of any representation, warranty, covenant,
or other agreement contained in this Agreement) in the event of a
material breach by the other 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 either Party (provided that the terminating Party is
not then in material breach of any representation, warranty, covenant,
or other agreement contained in this Agreement) 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 shareholders of CB&T
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fail to vote their approval of the matters relating to this Agreement
and the transactions contemplated hereby at the Shareholders' Meeting
where such matters were presented to such shareholders for approval and
voted upon; or
(e) By either Party in the event that the Merger shall not
have been consummated by November 30, 1998, 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 either Party (provided that the terminating Party is
not then in material breach of any representation, warranty, 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); or
(g) By Carolina First, in the event that the Board of
Directors of CB&T shall have resolved not to reaffirm or support the
Merger (to the exclusion of any other Acquisition Proposal) or shall
have affirmed, recommended or authorized entering into any other
Acquisition Proposal or other transaction involving a merger, share
exchange, consolidation or transfer of all or substantially all of the
Assets of CB&T.
10.2 Effect of Termination. In the event of the termination
and abandonment of this Agreement pursuant to Section 10.1, this Agreement 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) shall survive any such termination and
abandonment, and (ii) a termination pursuant to Sections 10.1(b), 10.1(c) or
10.1(f) 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.
10.3 Non-Survival of Representations and Covenants. The
respective representations, warranties, obligations, covenants, and agreements
of the Parties shall not survive the Effective Time except this Section 10.3 and
Articles 1, 2, 3, 4 and 11 and Sections 8.13, 8.14 and 8.15.
ARTICLE 11
MISCELLANEOUS
11.1 Definitions.
(a) Except as otherwise provided herein, the
capitalized terms set forth below shall have the following meanings:
"1933 Act" shall mean the Securities Act of 1933, as amended.
"1934 Act" shall mean the Securities Exchange Act of 1934, as
amended.
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"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 the acquisition of 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 delivered pursuant hereto and incorporated
herein by reference.
"Articles of Merger" shall mean the Articles of Merger to be
executed by Sub and filed with the Secretary of State of the State of
North Carolina relating to the Merger as contemplated by Section 1.1.
"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.
"BHC Act" shall mean the federal Bank Holding Company Act of
1956, as amended.
"Carolina First Capital Stock" shall mean, collectively, the
Carolina First Common Stock, the Carolina First Preferred Stock and any
other class or series of capital stock of Carolina First.
"Carolina First Common Stock" shall mean the 2.50 par value
common stock of Carolina First.
"Carolina First Disclosure Memorandum" shall mean the written
information entitled "Carolina First BancShares, Inc. Disclosure
Memorandum" delivered prior to the date of this Agreement to CB&T
describing in reasonable detail the matters contained therein and, with
respect to each disclosure made therein, specifically referencing each
Section of this Agreement under which such disclosure is being made.
Information disclosed with respect to one Section shall not be deemed
to be disclosed for purposes of any other Section not specifically
referenced with respect thereto.
"Carolina First Entity" shall mean each of Carolina First and
all Carolina First Subsidiaries.
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"Carolina First Financial Statements" shall mean (i) the
consolidated balance sheets (including related notes and schedules, if
any) of Carolina First as of December 31, 1997 and 1996, and the
related statements of income, changes in shareholders' equity, and cash
flows (including related notes and schedules, if any) for each of the
three fiscal years ended December 31, 1997, 1996 and 1995, as filed by
Carolina First in SEC Documents, and (ii) the consolidated balance
sheets of Carolina First (including related notes and schedules, if
any) and related statements of income, changes in shareholders' equity,
and cash flows (including related notes and schedules, if any) included
in SEC Documents filed with respect to periods ended subsequent to
December 31, 1997.
"Carolina First Material Adverse Effect" 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 position, business, or results of operations of Carolina
First and its Subsidiaries, taken as a whole, or (ii) the ability of
Carolina First 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 generally accepted accounting
principles or regulatory accounting principles generally applicable to
banks and their holding companies, (c) actions and omissions of
Carolina First (or any of its Subsidiaries) taken with the prior
informed written Consent of CB&T in contemplation of the transactions
contemplated hereby, and (d) the direct effects of compliance with this
Agreement on the operating performance of Carolina First, including
expenses incurred by Carolina First in consummating the transactions
contemplated by this Agreement.
"Carolina First Stock Plans" shall mean the existing stock
option and other stock-based compensation plans of Carolina First.
"Carolina First Subsidiaries" shall mean the Subsidiaries of
Carolina First, which shall include Lincoln Bank of North Carolina,
Cabarrus Bank of North Carolina and all other Carolina First
Subsidiaries described in Section 6.4 and any corporation, bank,
savings association, or other organization acquired as a Subsidiary of
Carolina First in the future and held as a Subsidiary by Carolina First
at the Effective Time.
"CB&T Common Stock" shall mean the $2.50 par value common
stock of CB&T.
"CB&T Disclosure Memorandum" shall mean the written
information entitled "Community Bank & Trust Company Disclosure
Memorandum" delivered prior to the date of this Agreement to Carolina
First describing in reasonable detail the matters contained therein
and, with respect to each disclosure made therein, specifically
referencing each Section of this Agreement under which such disclosure
is being made. Information disclosed with respect to one Section shall
not be deemed to be disclosed for purposes of any other Section not
specifically referenced with respect thereto.
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"CB&T Entity" shall mean each of CB&T and all CB&T
Subsidiaries.
"CB&T Financial Statements" shall mean (i) the consolidated
balance sheet (including related notes and schedules, if any) of CB&T
as of December 31, 1997 and 1996, and the related statements of income,
changes in shareholders' equity, and cash flows (including related
notes and schedules, if any) for each of the three fiscal years ended
December 31, 1997, 1996 and 1995, as filed by CB&T in SEC Documents,
and (ii) the consolidated balance sheets of CB&T (including related
notes and schedules, if any) and related statements of income, changes
in shareholders' equity, and cash flows (including related notes and
schedules, if any) included in SEC Documents filed with respect to
periods ended subsequent to December 31, 1997.
"CB&T Material Adverse Effect" 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
position, business, or results of operations of CB&T, or (ii) the
ability of CB&T 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 generally accepted accounting
principles or regulatory accounting principles generally applicable to
banks and their holding companies, (c) actions and omissions of CB&T
taken with the prior informed written Consent of Carolina First in
contemplation of the transactions contemplated hereby, and (d) the
Merger on the operating performance of CB&T, including expenses
incurred by CB&T in consummating the transactions contemplated by this
Agreement.
"CB&T Stock Plan" shall mean the existing stock option and
other stock-based compensation plans of CB&T.
"CB&T Subsidiaries" shall mean the Subsidiaries of CB&T, which
shall include any corporation, bank, savings association, or other
organization acquired as a Subsidiary of CB&T in the future and held as
a Subsidiary by CB&T at the Effective Time.
"CB&T" shall mean Community Bank & Trust Company, a North
Carolina Bank.
"Closing Date" shall mean the date on which the Closing
occurs.
"Confidentiality Agreement" shall mean that certain
Confidentiality Agreement between CB&T and Carolina First.
"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,
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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.
"Default" shall mean (i) any breach or violation of, default
under, contravention of, or conflict with, any Contract, Law, 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, default under, contravention of, or conflict with, any Contract,
Law, 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 of any Person to exercise any remedy or obtain any relief
under, terminate or revoke, suspend, cancel, or modify or change the
current terms of, or renegotiate, or to accelerate the maturity or
performance of, or to increase or impose any Liability under, any
Contract, Law, Order, or Permit, where, in any such event, such Default
is reasonably likely to have, individually or in the aggregate, a CB&T
Material Adverse Effect or a Carolina First Material Adverse Effect, as
applicable.
"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.
"Equity 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 Equity Rights.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
"Exhibits" 1 through 4, 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.
"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
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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).
"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.
"Intellectual Property" shall mean copyrights, patents,
trademarks, service marks, service names, trade names, applications
therefor, technology rights and licenses, computer software (including
any source or object codes therefor or documentation relating thereto),
trade secrets, franchises, know-how, inventions, and other intellectual
property rights.
"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 those facts that are known or should reasonably have been known
after due inquiry by the chairman, president, chief financial officer,
chief accounting officer, chief operating officer, chief credit
officer, general counsel, any assistant or deputy general counsel, or
any senior, executive or other vice president of such Person and the
knowledge of any such persons obtained or which would have been
obtained from a reasonable investigation.
"Law" shall mean any code, law (including common 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 current property Taxes not yet due
and payable, (ii) for depository institution Subsidiaries of a Party,
pledges to secure deposits and other Liens incurred in the ordinary
course of the banking business, and (iii) Liens which do not materially
impair the use of or title to the Assets subject to such Lien.
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"Litigation" shall mean any action, arbitration, cause of
action, claim, complaint, criminal prosecution, governmental or other
examination or investigation, hearing, administrative or other
proceeding 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.
"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.
"NASD" shall mean the National Association of Securities
Dealers, Inc.
"Nasdaq National Market" shall mean the National Market System
of the National Association of Securities Dealers Automated Quotations
System.
"NCBCA" shall mean the North Carolina Business Corporation
Act.
"NYSE" shall mean the New York Stock Exchange, Inc.
"Operating 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 interest 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.
"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 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 CB&T or Carolina First, and
"Parties" shall mean both CB&T and Carolina First.
"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.
"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
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partnership, limited liability company, trust, business association,
group acting in concert, or any person acting in a representative
capacity.
"Proxy Statement/Prospectus" shall mean the proxy
statement/prospectus used by CB&T to solicit the approval of its
shareholders of the transactions contemplated by this Agreement, which
shall include the prospectus of Carolina First relating to the issuance
of the Carolina First Common Stock to holders of CB&T 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
Carolina First under the 1933 Act with respect to the shares of
Carolina First Common Stock to be issued to the shareholders of CB&T in
connection with the transactions contemplated by this Agreement.
"Regulatory Authorities" shall mean, collectively, the SEC,
the United States Department of Justice, the Board of the Governors of
the Federal Reserve System, the Federal Deposit Insurance Corporation,
and all other federal, state, county, local or other governmental or
regulatory agencies, authorities (including self-regulatory
authorities), instrumentalities, commissions, boards or bodies having
jurisdiction over the Parties and their respective Subsidiaries.
"Representative" shall mean any investment banker, financial
advisor, attorney, accountant, consultant, or other representative
engaged by a Person.
"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.
"Shareholders' Meeting" shall mean the meeting of the
shareholders of CB&T to be held pursuant to Section 8.1, including any
adjournment or adjournments thereof.
"Significant Subsidiary" shall mean any present or future
consolidated Subsidiary of the Party in question, the assets of which
constitute ten percent (10%) or more of the consolidated assets of such
Party as reflected on such Party's consolidated statement of condition
prepared in accordance with GAAP.
"Sub Common Stock" shall mean the $1.00 par value common stock
of Sub.
"Subsidiaries" shall mean all those corporations,
associations, or other business entities of which the entity in
question either (i) 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
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indirectly by its parent (provided, there shall not be included any
such entity the equity securities of which are owned or controlled in a
fiduciary capacity), (ii) in the case of partnerships, serves as a
general partner, (iii) in the case of a limited liability company,
serves as a managing member, or (iv) otherwise has the ability to elect
a majority of the directors, trustees or managing members thereof.
"Surviving Corporation" shall mean CB&T as the surviving
corporation resulting from the Merger.
"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.
"Tax" or "Taxes" shall mean any federal, state, county, local,
or 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,
imposes or required to be withheld by the United States or any state,
county, local or foreign government or subdivision or agency thereof,
including any interest, penalties, and additions imposed thereon or
with respect thereto.
(b) The terms set forth below shall have the meanings
ascribed thereto in the referenced sections:
Allowance Section 5.9
Carolina First Benefit Plans Section 6.15
Carolina First Contracts Section 6.16
Carolina First ERISA Plan Section 6.15
Carolina First Pension Plan Section 6.15
Carolina First SEC Reports Section 6.5(a)
CB&T Benefit Plans Section 5.15
CB&T Contracts Section 5.16
CB&T ERISA Plan Section 5.15
CB&T Options Section 3.6
CB&T Pension Plan Section 5.15
CB&T SEC Reports Section 5.5(a)
Closing Section 1.2
Directors' Agreements Section 5.24
Effective Time Section 1.3
ERISA Affiliate Section 5.15(b)
Exchange Agent Section 4.1
Exchange Ratio Section 3.1(c)
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Merger Section 1.1
Takeover Laws Section 5.21
Tax Opinion Section 9.1(h)
Threshold Prices Section 3.1(c)
(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 each of the Parties shall bear
and pay one-half of the filing fees payable in connection with the Registration
Statement and the Proxy Statement/Prospectus and printing costs incurred in
connection with the printing of the Registration Statement and the Proxy
Statement/Prospectus.
(b) Notwithstanding the foregoing, if, after the date
of this Agreement and within six (6) months following
(i) any termination of this Agreement
(1) by Carolina First pursuant to Sections
10.1(b), 10.1(c), 10.1(f) (but only on the basis of the
failure of CB&T to satisfy any of the conditions enumerated in
Section 9.2, other than Section 9.2(d) or (e)) or 10.1(g), or
(2) by either Party pursuant to Section
10.1(d)(ii) (with respect to approval of the shareholders of
CB&T), or
(ii) failure to consummate the Merger by reason of
any failure of CB&T to satisfy the conditions enumerated in Section
9.2, other than Section 9.2(d) or (e), or 9.1(a) (as such section
relates to approval by the shareholders of CB&T),
any third-party shall acquire, merge with, combine with, purchase 25% or more of
the Assets of, or engage in any other business combination with, or purchase any
equity securities involving an acquisition of 25% or more of the voting stock
of, CB&T, or enter into any binding agreement to do any of the foregoing
(collectively, a "Business Combination") or any of the directors of CB&T
individually or with other Persons enters into any commitment, option,
agreement, understanding or arrangement (whether or not binding) with respect to
any Business Combination, such third-party that is a party to the Business
Combination shall pay to Carolina First, prior to the earlier of consummation of
the Business Combination or execution of any letter of intent or definitive
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agreement with CB&T relating to such Business Combination, an amount in cash
equal to the sum of $1.6 million, which amount represents the Parties' best
estimate of the value of the management time, overhead, opportunity costs and
other costs of Carolina First incurred by or on behalf of Carolina First in
connection with the transactions contemplated by this Agreement which cannot be
calculated with certainty. In the event such third-party shall refuse to pay
such amounts within 10 days of demand therefor by Carolina First, the amounts
shall be an obligation of CB&T and shall be paid by CB&T promptly upon notice to
CB&T by Carolina First.
11.3 Brokers and Finders. Except for Smith Capital, Inc. as to
CB&T and except for The Robinson-Humphrey Company as to Carolina First, 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 a claim by
any broker or finder based upon his or its representing or being retained by or
allegedly representing or being retained by CB&T or by Carolina First, each of
CB&T and Carolina First, 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 (except, as to Section
8.6(b), for the Confidentiality Agreement). 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 8.14
and 8.15.
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 each of the Parties, whether before or after shareholder
approval of this Agreement has been obtained; provided, that after any such
approval by the holders of CB&T Common Stock, there shall be made no amendment
that pursuant to the NCBCA requires further approval by such shareholders
without the further approval of such shareholders.
11.6 Waivers.
(a) Prior to or at the Effective Time, Carolina
First, acting through its Board of Directors, chief executive officer or other
authorized officer, shall have the right to waive any Default in the performance
of any term of this Agreement by CB&T, to waive or extend the time for the
compliance or fulfillment by CB&T of any and all of its obligations under this
Agreement, and to waive any or all of the conditions precedent to the
obligations of Carolina First 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 Carolina
First.
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(b) Prior to or at the Effective Time, CB&T, acting
through its Board of Directors, chief executive officer or other authorized
officer, shall have the right to waive any Default in the performance of any
term of this Agreement by Carolina First, to waive or extend the time for the
compliance or fulfillment by Carolina First of any and all of its obligations
under this Agreement, and to waive any or all of the conditions precedent to the
obligations of CB&T 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 CB&T.
(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:
CB&T: Community Bank & Trust Company
2 South Main Street
Marion, North Carolina 28752
Telecopy Number: (828) 659-7939
Attention: Ronnie D. Blanton
Copy to Counsel: Brooks, Pierce, McLendon, Humphrey &
Leonard, L.L.P.
2000 Renaissance Plaza
230 North Elm Street
Greensboro, North Carolina 27420
Telecopy Number: (910) 378-1001
Attention: Edward C. Winslow III
Carolina First: Carolina First BancShares, Inc.
402 E. Main Street
Lincolnton, North Carolina 28092
Telecopy Number: (704) 732-7201
Attention: James E. Burt, III
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Copy to Counsel: Alston & Bird LLP
One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30309-3424
Telecopy Number: (404)881-4777
Attention: Ralph F. MacDonald, III
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.
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; Articles and Sections. The captions contained
in this Agreement are for reference purposes only and are not part of this
Agreement. Unless otherwise indicated, all references to particular Articles or
Sections shall mean and refer to the referenced Articles and Sections 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 all parties hereto.
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
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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.
IN WITNESS WHEREOF, each of the Parties has caused this
Agreement to be executed on its behalf by its duly authorized officers as of the
day and year first above written.
CAROLINA FIRST BANCSHARES, INC.
By: ______________________________
President
COMMUNITY BANK & TRUST COMPANY
By: ______________________________
President
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TABLE OF CONTENTS
Page
Parties ........................................................................... 1
Preamble .......................................................................... 1
ARTICLE 1 - TRANSACTIONS AND TERMS OF MERGER....................................... 1
1.1 Merger........................................................... 1
1.2 Time and Place of Closing........................................ 2
1.3 Effective Time................................................... 2
ARTICLE 2 - TERMS OF MERGER........................................................ 2
2.1 Charter.......................................................... 2
2.2 Bylaws........................................................... 2
2.3 Directors and Officers........................................... 2
ARTICLE 3 - MANNER OF CONVERTING SHARES............................................ 3
3.1 Conversion of Shares............................................. 3
3.2 Anti-Dilution Provisions......................................... 3
3.3 Shares Held by CB&T or Carolina First............................ 4
3.4 Dissenting Shareholders.......................................... 4
3.5 Fractional Shares................................................ 4
3.6 Conversion of Stock Options; Restricted Stock.................... 4
ARTICLE 4 - EXCHANGE OF SHARES..................................................... 6
4.1 Exchange Procedures.............................................. 6
4.2 Rights of Former CB&T Shareholders............................... 7
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES OF CB&T................................. 8
5.1 Organization, Standing, and Power................................ 8
5.2 Authority of CB&T; No Breach By Agreement........................ 8
5.3 Capital Stock.................................................... 9
5.4 CB&T Subsidiaries................................................ 9
5.5 SEC Filings; Financial Statements................................ 9
5.6 Absence of Undisclosed Liabilities............................... 10
5.7 Absence of Certain Changes or Events............................. 10
5.8 Tax Matters...................................................... 10
5.9 Allowance for Possible Loan Losses............................... 12
5.10 Assets........................................................... 12
5.11 Intellectual Property............................................ 13
61
5.12 Environmental Matters............................................ 13
5.13 Compliance with Laws............................................. 14
5.14 Labor Relations.................................................. 14
5.15 Employee Benefit Plans........................................... 14
5.16 Material Contracts............................................... 16
5.17 Legal Proceedings................................................ 17
5.18 Reports.......................................................... 17
5.19 Statements True and Correct...................................... 17
5.20 Accounting, Tax and Regulatory Matters........................... 18
5.21 State Takeover Laws.............................................. 18
5.22 Charter Provisions............................................... 18
5.23 Reserved......................................................... 19
5.24 Directors' Agreements............................................ 19
5.25 Opinion of Financial Advisor..................................... 19
5.26 Board Recommendation............................................. 19
5.27 Millennium Compliance............................................ 19
ARTICLE 6 - REPRESENTATIONS AND WARRANTIES OF CAROLINA FIRST....................... 19
6.1 Organization, Standing, and Power................................ 19
6.2 Authority; No Breach By Agreement................................ 20
6.3 Capital Stock.................................................... 21
6.4 Carolina First Subsidiaries...................................... 22
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 Allowance for Possible Loan Losses............................... 24
6.10 Assets........................................................... 24
6.11 Intellectual Property............................................ 25
6.12 Environmental Matters............................................ 25
6.13 Compliance With Laws............................................. 26
6.14 Labor Relations.................................................. 26
6.15 Employee Benefit Plans........................................... 27
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6.16 Reserved......................................................... 28
6.17 Legal Proceedings................................................ 28
6.18 Reports.......................................................... 28
6.19 Statements True and Correct...................................... 28
6.20 Authority of Sub................................................. 29
6.21 Accounting, Tax and Regulatory Matters........................... 29
6.22 Opinion of Financial Advisor..................................... 29
6.23 Millennium Compliance............................................ 29
ARTICLE 7 - CONDUCT OF BUSINESS PENDING CONSUMMATION............................... 30
7.1 Affirmative Covenants of CB&T.................................... 30
7.2 Negative Covenants of CB&T....................................... 30
7.3 Covenants of Carolina First...................................... 32
7.4 Reserved......................................................... 32
7.5 Adverse Changes in Condition..................................... 32
7.6 Reports.......................................................... 33
ARTICLE 8 - ADDITIONAL AGREEMENTS.................................................. 33
8.1 Registration Statement; Proxy Statement;
Shareholder Approval........................................ 33
8.2 [Reserved]....................................................... 34
8.3 Applications..................................................... 34
8.4 Filings with State Offices....................................... 34
8.5 Agreement as to Efforts to Consummate............................ 34
8.6 Investigation and Confidentiality................................ 34
8.7 Press Releases................................................... 35
8.8 Certain Actions.................................................. 35
8.9 Accounting and Tax Treatment..................................... 35
8.10 State Takeover Laws.............................................. 36
8.11 Charter Provisions............................................... 36
8.12 Reserved......................................................... 36
8.13 Agreements of Affiliates......................................... 36
8.14 Employee Benefits and Contracts.................................. 37
8.15 Indemnification.................................................. 37
8.16 Certain Policies of CB&T......................................... 38
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ARTICLE 9 - CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE...................... 38
9.1 Conditions to Obligations of Each Party.......................... 38
9.2 Conditions to Obligations of Carolina First...................... 40
9.3 Conditions to Obligations of CB&T................................ 41
ARTICLE 10 - TERMINATION........................................................... 43
10.1 Termination...................................................... 43
10.2 Effect of Termination............................................ 44
10.3 Non-Survival of Representations and Covenants.................... 44
ARTICLE 11 - MISCELLANEOUS......................................................... 44
11.1 Definitions...................................................... 44
11.2 Expenses......................................................... 53
11.3 Brokers and Finders.............................................. 53
11.4 Entire Agreement................................................. 54
11.5 Amendments....................................................... 54
11.6 Waivers.......................................................... 54
11.7 Assignment....................................................... 55
11.8 Notices.......................................................... 55
11.9 Governing Law.................................................... 56
11.10 Counterparts..................................................... 56
11.11 Captions; Articles and Sections.................................. 56
11.12 Interpretations.................................................. 56
11.13 Enforcement of Agreement......................................... 56
11.14 Severability..................................................... 56
Signatures......................................................................... 57
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LIST OF EXHIBITS
Exhibit Number Description
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1. Form of Directors' Agreement. (ss. 5.24).
2. Form of agreement of affiliates of CB&T. (ss.ss.
8.13, 9.2(g)).
3. Form of employment agreement between Carolina First
and Ronnie D. Blanton. (ss. 8.14).
4. Form of Claims Letter (ss. 9.2(h)).