Exhibit 2.2
REORGANIZATION AGREEMENT
BY AND BETWEEN
CAROLINA FIRST CORPORATION,
CAROLINA FIRST BANK,
AND
MIDLANDS NATIONAL BANK
Dated as of November 14, 1994
TABLE OF CONTENTS
SECTION I. DEFINITIONS . . . . . . . . . . . . . . . . . . . 5
1.1. Agreement. . . . . . . . . . . . . . . . . . . . . 5
1.2. Articles of Merger. . . . . . . . . . . . . . . . 5
1.3. CFC. . . . . . . . . . . . . . . . . . . . . . . . 5
1.4. CFC Common Stock. . . . . . . . . . . . . . . . . 5
1.5. CFB. . . . . . . . . . . . . . . . . . . . . . . . 5
1.7. Confidential Information. . . . . . . . . . . . . 5
1.8. Code. . . . . . . . . . . . . . . . . . . . . . . 5
1.9. Merger. . . . . . . . . . . . . . . . . . . . . . 5
1.10. ERISA. . . . . . . . . . . . . . . . . . . . . . . 5
1.11. Effective Time. . . . . . . . . . . . . . . . . . 6
1.12. FDIC. . . . . . . . . . . . . . . . . . . . . . . 6
1.13. Midlands Common Stock. . . . . . . . . . . . . . . 6
1.14. OCC. . . . . . . . . . . . . . . . . . . . . . . . 6
1.15. OTS. . . . . . . . . . . . . . . . . . . . . . . . 6
1.16. Plan of Merger. . . . . . . . . . . . . . . . . . 6
1.17. Proxy Statement. . . . . . . . . . . . . . . . . . 6
1.18. Registration Statement. . . . . . . . . . . . . . 6
1.19. SEC. . . . . . . . . . . . . . . . . . . . . . . . 6
1.20. Securities Act. . . . . . . . . . . . . . . . . . 6
1.21. State Board. . . . . . . . . . . . . . . . . . . . 6
1.22. Stockholder Approvals. . . . . . . . . . . . . . . 6
1.23. Stockholders' Meeting. . . . . . . . . . . . . . . 6
1.24. Surviving Corporation. . . . . . . . . . . . . . . 6
SECTION II. THE MERGER . . . . . . . . . . . . . . . . . . . 6
2.1. General Provisions. . . . . . . . . . . . . . . . 6
2.2. The Closing. . . . . . . . . . . . . . . . . . . . 6
2.3. Consideration for the Merger. . . . . . . . . . . 6
2.4. Approval of Midlands Stockholders. . . . . . . . . 6
2.5. Tax Treatment. . . . . . . . . . . . . . . . . . . 6
SECTION III. REPRESENTATIONS AND WARRANTIES OF MIDLANDS . . 7
3.1. Organization, Good-Standing and Conduct of
Business. . . . . . . . . . . . . . . . . . . . . 7
3.2. Corporate Authority. . . . . . . . . . . . . . . . 7
3.3. Binding Effect. . . . . . . . . . . . . . . . . . 7
3.4. Capitalization of Midlands. . . . . . . . . . . . 7
3.5. Absence of Defaults. . . . . . . . . . . . . . . . 7
3.6. Non-Contravention and Defaults; No Liens. . . . . 7
3.7. Necessary Approvals. . . . . . . . . . . . . . . . 8
3.8. Financial Statements. . . . . . . . . . . . . . . 8
3.9. Tax Returns. . . . . . . . . . . . . . . . . . . . 8
3.10. Undisclosed Liabilities. . . . . . . . . . . . . . 8
3.11. Title to Properties, Encumbrances. . . . . . . . . 9
3.12. Litigation. . . . . . . . . . . . . . . . . . . . 9
3.13. Reports. . . . . . . . . . . . . . . . . . . . . . 9
3.14. Brokers. . . . . . . . . . . . . . . . . . . . . . 9
3.15. Expenditures. . . . . . . . . . . . . . . . . . . 9
3.16. Insurance. . . . . . . . . . . . . . . . . . . . . 9
3.17. Contracts and Commitments. . . . . . . . . . . . . 9
3.18. Employee Benefit Plans . . . . . . . . . . . . . . 10
3.19. Midlands Information. . . . . . . . . . . . . . . 10
3.20. Due Diligence. . . . . . . . . . . . . . . . . . . 10
3.21. Resale of CFC Common Stock. . . . . . . . . . . . 11
SECTION IV. REPRESENTATIONS AND WARRANTIES BY CFC AND CFB . 11
4.1. Organization, Good-Standing and Conduct of
Business. . . . . . . . . . . . . . . . . . . . . 11
4.2. Corporate Authority. . . . . . . . . . . . . . . . 11
4.3. Binding Effect. . . . . . . . . . . . . . . . . . 11
4.4. Capitalization of CFC. . . . . . . . . . . . . . . 11
4.5. Subsidiaries of CFC. . . . . . . . . . . . . . . . 12
4.6. Absence of Defaults. . . . . . . . . . . . . . . . 12
4.7. Non-Contravention and Defaults; No Liens. . . . . 12
4.8. Necessary Approvals. . . . . . . . . . . . . . . . 12
4.9. Financial Statements. . . . . . . . . . . . . . . 13
4.10. Tax Returns. . . . . . . . . . . . . . . . . . . . 13
4.11. Undisclosed Liabilities. . . . . . . . . . . . . . 13
4.12. Litigation. . . . . . . . . . . . . . . . . . . . 13
4.13. Reports. . . . . . . . . . . . . . . . . . . . . . 13
4.14. CFC Information. . . . . . . . . . . . . . . . . . 13
4.15. Due Diligence. . . . . . . . . . . . . . . . . . . 14
SECTION V. CONDUCT OF BUSINESS PENDING CLOSING . . . . . . 14
5.1. Conduct of Midlands Pending Closing. . . . . . . . 14
5.2. Conduct of CFC Pending Closing. . . . . . . . . . 15
SECTION VI. COVENANTS OF THE PARTIES . . . . . . . . . . . . 15
6.1. Access to Properties and Records. . . . . . . . . 15
6.2. Regulatory Filings. . . . . . . . . . . . . . . . 16
6.3. Registration Statement/Proxy Statement. . . . . . 16
6.4. Affiliates' Letters. . . . . . . . . . . . . . . . 16
6.5. Listing of CFC Common Stock. . . . . . . . . . . . 16
6.6. Letters from Accountants. . . . . . . . . . . . . 16
6.7. Tax Treatment/Accounting Treatment. . . . . . . . 16
6.8. Expenses. . . . . . . . . . . . . . . . . . . . . 17
6.9. Material Events . . . . . . . . . . . . . . . . . 17
6.10. Public Announcements . . . . . . . . . . . . . . . 17
6.11. Employment Contracts . . . . . . . . . . . . . . . 17
SECTION VII. CONDITIONS TO CFC'S OBLIGATION TO CLOSE . . . 17
7.1. Performance of Acts and Representations by
Midlands. . . . . . . . . . . . . . . . . . . . . . 17
7.2. Opinion of Counsel for Midlands. . . . . . . . . . 17
7.3. Conduct of Business. . . . . . . . . . . . . . . . 18
7.4. Consents. . . . . . . . . . . . . . . . . . . . . 18
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7.5. Certificate. . . . . . . . . . . . . . . . . . . . 18
7.6. Limit on Dissent. . . . . . . . . . . . . . . . . 18
7.7. Pooling of Interests. . . . . . . . . . . . . . . 18
7.8. Affiliates' Letters. . . . . . . . . . . . . . . . 18
7.9. Due Diligence. . . . . . . . . . . . . . . . . . . 18
SECTION VIII. CONDITIONS TO THE OBLIGATION OF MIDLANDS TO
CLOSE . . . . . . . . . . . . . . . . . . . . . . . . . 18
8.1. Performance of Acts and Representations by CFC
and CFB. . . . . . . . . . . . . . . . . . . . . 18
8.2. Opinion of Counsel for CFC. . . . . . . . . . . . 18
8.3. Conduct of Business. . . . . . . . . . . . . . . . 19
8.4. Consents. . . . . . . . . . . . . . . . . . . . . 19
8.5. Certificate. . . . . . . . . . . . . . . . . . . . 19
8.6. Tax Opinion. . . . . . . . . . . . . . . . . . . . 19
8.7. Fairness Opinion. . . . . . . . . . . . . . . . . 19
8.8. Stockholder Approvals. . . . . . . . . . . . . . . 19
SECTION IX. TERMINATIONS . . . . . . . . . . . . . . . . . 19
9.1. Termination. . . . . . . . . . . . . . . . . . . . 19
9.2. Effect of Termination. . . . . . . . . . . . . . . 20
SECTION X. INDEMNIFICATION . . . . . . . . . . . . . . . . 20
10.1. Information for Application and Statements. . . . 20
10.2. Indemnification of Directors and Officers. . . . 20
SECTION XI. MISCELLANEOUS . . . . . . . . . . . . . . . . . 20
11.1. Survival of Representations and Warranties. . . . 20
11.2. Entire Agreement. . . . . . . . . . . . . . . . . 21
11.3. Binding Agreement. . . . . . . . . . . . . . . . 21
11.4. Notices. . . . . . . . . . . . . . . . . . . . . 21
11.5. Counterparts. . . . . . . . . . . . . . . . . . . 21
11.6. Headings. . . . . . . . . . . . . . . . . . . . . 21
11.7. Law Governing. . . . . . . . . . . . . . . . . . 21
11.8. Amendment. . . . . . . . . . . . . . . . . . . . 21
11.9. Waiver. . . . . . . . . . . . . . . . . . . . . . 21
APPENDICES
Appendix A Plan of Merger
Appendix B Form of Employment Contracts
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This REORGANIZATION AGREEMENT is entered into as of this
14th day of November, 1994, between Carolina First Corporation
("CFC"), a corporation organized and existing under the laws of
the State of South Carolina, Carolina First Bank ("CFB"), a
corporation organized and existing under the laws of the State of
South Carolina, and Midlands National Bank ("Midlands"), a
national banking association organized and existing under the
laws of the United States of America.
WHEREAS, CFC desires to acquire Midlands through the merger
of Midlands with and into CFB (the "Merger");
WHEREAS, the respective Boards of Directors of CFC, CFB and
Midlands have approved such Merger pursuant to the terms and
conditions of this Agreement and the Plan of Merger attached
hereto as Appendix A (the "Plan of Merger");
WHEREAS, for Federal income tax purposes, it is intended
that the Merger shall qualify as a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code of 1986,
as amended; and
NOW, THEREFORE, in consideration of the premises and the
mutual representations, warranties and agreements herein
contained, CFC, CFB and Midlands hereby agree as follows:
SECTION I. DEFINITIONS
1.1. Agreement. This Reorganization Agreement between CFC,
CFB and Midlands, together with all schedules, exhibits and
appendices attached hereto.
1.2. Articles of Merger. The Articles of Merger to be
executed by CFC, CFB and Midlands and in form appropriate for
filing with the Secretary of State of South Carolina and the OCC,
and relating to the effective consummation of the Merger as
contemplated by the Plan of Merger.
1.3. CFC. Carolina First Corporation, a bank holding
company headquartered in Greenville, South Carolina, which term
shall include, when the context permits, CFC and all CFC
subsidiaries.
1.4. CFC Common Stock. The common stock, par value $1.00
per share, of CFC.
1.5. CFB. Carolina First Bank, a South Carolina
corporation and a wholly-owned subsidiary of CFC.
1.6. Closing Date. The term Closing Date shall have the
meaning ascribed to it in Section 2.2 hereof.
1.7. Confidential Information. The term "Confidential
Information" shall mean all information of any kind concerning a
party hereto that is furnished by such party or on its behalf
pursuant to Section 6.2 hereof and designated in writing as
"Confidential Information", except information (i) ascertainable
or obtained from public or published information, (ii) received
from a third party not known to the recipient of Confidential
Information to be under an obligation to keep such information
confidential, (iii) which is or becomes known to the public
(other than through a breach of this Agreement), (iv) of which
the recipient was in possession prior to disclosure thereof in
connection with the Merger, or (v) which was independently
developed by the recipient without the benefit of Confidential
Information.
1.8. Code. The Internal Revenue Code of 1986, as amended.
1.9. Merger. The merger of Midlands with and into CFB as
more particularly set forth herein and in the Plan of Merger.
1.10. ERISA. The Employee Retirement Income Security Act of
1974, as amended.
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1.11. Effective Time. The date and time which the Merger
becomes effective as more particularly set forth in Section 2.2
of the Plan of Merger.
1.12. FDIC. The Federal Deposit Insurance Corporation.
1.13. Midlands Common Stock. The common stock, par value
$5.00 per share, of Midlands.
1.14. OCC. The Office of Comptroller of the Currency.
1.15. OTS. The Office of Thrift Supervision.
1.16. Plan of Merger. The Plan of Merger attached to this
Reorganization Agreement as Appendix A.
1.17. Proxy Statement. The proxy statement included in the
Registration Statement which shall be furnished to the Midlands
stockholders in connection with the solicitation by the Midlands
Board of Directors of proxies for the approval of this Agreement
and the matters contemplated hereby.
1.18. Registration Statement. The Registration Statement on
Form S-4 to be filed with the SEC registering the CFC Common
Stock to be issued to the Midlands shareholders in connection
with the Merger.
1.19. SEC. The Securities and Exchange Commission.
1.20. Securities Act. The Securities Act of 1933, as
amended.
1.21. State Board. The South Carolina State Board of
Financial Institutions.
1.22. Stockholder Approvals. This term shall mean, as the
context may require, the written consent (duly authorized) of CFC
to the Merger of Midlands with and into CFB and the approval by
the requisite vote of the stockholders of Midlands at the
Stockholders' Meeting of the Merger of Midlands with and into
CFB, all in accordance with the Reorganization Agreement and this
Plan of Merger.
1.23. Stockholders' Meeting. The meeting of the
stockholders of Midlands at which the Merger shall be voted upon.
1.24. Surviving Corporation. The surviving corporation
after consummation of the Merger, which shall be CFB.
SECTION II. THE MERGER
2.1. General Provisions. Subject to the terms and
conditions of this Agreement, including the Plan of Merger, at
the Effective Time, Midlands shall be merged with and into CFB,
which shall be the Surviving Corporation and remain a wholly-
owned subsidiary of CFC. At the Effective Time, the separate
corporate existence of Midlands shall cease. CFC and Midlands
hereby agree that the Merger will be effected pursuant to the
terms set forth in the Plan of Merger.
2.2. The Closing. The Closing of the transaction
contemplated herein shall be held as soon as reasonably
practicable after fulfillment of all conditions set forth in
Section VII and Section VIII hereof (the "Closing Date"), at the
offices of Wyche, Burgess, Freeman & Parham, P.A. or at such
other place and time as the parties hereto may mutually agree;
provided, however, that in the event that Closing has not
occurred by May 31, 1995, either party hereto shall have the
right to terminate this Agreement.
2.3. Consideration for the Merger. The manner of
converting the shares of Midlands into shares of CFC shall be as
set forth in Articles II and III of the Plan of Merger.
2.4. Approval of Midlands Stockholders. CFC, CFB and
Midlands shall jointly prepare the Proxy Statement, which shall
be reasonably acceptable to all parties. The Proxy Statement
shall be mailed to Midlands shareholders as soon as reasonably
practicable after the SEC's declaration of effectiveness of the
Registration Statement, with due consideration given to the
anticipated length of time that will be required to obtain the
necessary regulatory approvals.
2.5. Tax Treatment. CFC and Midlands intend that the
Merger shall qualify as a tax-free reorganization under Section
368(a) of the Code.
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SECTION III. REPRESENTATIONS AND WARRANTIES OF MIDLANDS
Midlands hereby represents and warrants to CFC the following
matters on and as of the date of this Agreement and at the
Effective Time; provided, however, that before any breach of or
inaccuracy in any of the representations or warranties given in
this Section III shall be actionable or shall constitute grounds
for termination of or failure to perform under the terms of this
Agreement by CFC, such breach or inaccuracy must be materially
adverse in the aggregate with respect to the business of
Midlands.
3.1. Organization, Good-Standing and Conduct of Business.
Midlands is a corporation, duly organized, validly existing and
in good standing under the laws of the United States of America,
and has full power and authority and all necessary governmental
and regulatory authorization to own all of its properties and
assets and to carry on its business as it is presently being
conducted, and is properly licensed, qualified and in good
standing as a foreign corporation in all jurisdictions wherein
the character of the properties or the nature of the business
transacted by Midlands makes such license or qualification
necessary.
3.2. Corporate Authority. The execution, delivery and
performance of this Agreement have been duly authorized by the
Board of Directors of Midlands. Other than approval of the
Merger by the shareholders of Midlands, no other corporate acts
or proceedings on the part of Midlands are required or necessary
to authorize this Agreement or the Merger.
3.3. Binding Effect. Subject to receipt of Stockholder
Approval and any required regulatory approvals, when executed,
this Agreement will constitute a valid and legally binding
obligation of Midlands, enforceable against Midlands in
accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect relating to creditors' rights or the
relief of debtors generally. Each document and instrument
contemplated by this Agreement, when executed and delivered by
Midlands in accordance with the provisions hereof, shall be duly
authorized, executed and delivered by Midlands and enforceable
against Midlands in accordance with its terms, subject to the
exceptions in the previous sentence.
3.4. Capitalization of Midlands. The authorized capital
stock of Midlands consists solely of (i) 10,000,000 authorized
shares of common stock ($5.00 par value), of which 354,526 shares
are issued and outstanding. All of the issued and outstanding
shares of Midlands are validly issued and fully paid and, except
as provided in 12 U.S.C.A. (section mark)55, nonassessable. Except
for the items set forth on Schedule 3.4 attached hereto, there are no
outstanding obligations, options, warrants or commitments of any
kind or nature or any outstanding securities or other instruments
convertible into shares of any class of capital stock of
Midlands, or pursuant to which Midlands is or may become
obligated to issue any shares of its capital stock. None of the
shares of the Midlands Common Stock is subject to any
restrictions as to the transfer thereof, except as set forth in
Midlands's Articles of Incorporation or Bylaws and except for
restrictions on account of applicable federal or state securities
laws. Midlands does not hold 10% of any class of equity
securities of any other company or legal entity.
3.5. Absence of Defaults. Midlands is not in default
under, or in violation of, any provision of its Articles of
Incorporation or Bylaws. Midlands is not in default under, or in
violation of, any agreement to which Midlands is a party, the
effect of which default or violation would have a material
adverse effect on Midlands or its business operations or
prospects. Midlands is not in violation of any applicable law,
rule or regulation, the effect of which would have a material
adverse effect on Midlands or its business operations or
prospects.
3.6. Non-Contravention and Defaults; No Liens. Neither the
execution or delivery of this Agreement, nor the fulfillment of,
or compliance with, the terms and provisions hereof, will (i)
result in a breach of the terms, conditions or provisions of, or
constitute a default under, or result in a violation of,
termination of or acceleration of the performance provided by the
terms of, any agreement to which Midlands is a party or by which
it may be bound, (ii) violate any provision of any law, rule or
regulation,
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(iii) result in the creation or imposition of any lien, charge,
restriction, security interest or encumbrance of any nature
whatsoever on any asset of Midlands, or (iv) violate
any provisions of Midlands's Articles of Incorporation or Bylaws.
To the best of Midlands's knowledge, no other party to any
material agreement to which Midlands is a party is in default
thereunder or in breach of any provision thereof. To the best of
Midlands's knowledge, there exists no condition or event which,
after notice or lapse of time or both, would constitute a default
by any party to any such agreement.
3.7. Necessary Approvals. Midlands has obtained all
certificates of authority, licenses, permits, franchises,
registrations of foreign ownership or other regulatory approvals
in every jurisdiction necessary for the continuing conduct of its
business and ownership of its assets. Except for those which may
be renewed or extended in the ordinary course of business, no
such certificate, license, permit, franchise, registration or
other approval is about to expire, lapse, has been threatened to
be revoked or has otherwise become restricted by its terms which
would, upon such expiration, lapse, revocation or restriction,
have a material adverse effect on the financial circumstances of
Midlands. Further, there is no reasonable basis for any such
expiration, lapse, revocation, threat of revocation or
restriction. Except for any necessary filings with, and
approvals and authorizations of the OCC, the FDIC and the State
Board, no consent, approval, authorization, registration, or
filing with or by any governmental authority, foreign or
domestic, is required on the part of Midlands in connection with
the execution and delivery of this Agreement or the consummation
by Midlands of the transactions contemplated hereby. Except for
the agencies in the preceding sentence or as disclosed in
Schedule 3.7 attached hereto, Midlands is not required to procure
the approval of any person, firm, corporation, or other entity,
foreign or domestic, in order to prevent the termination of any
right, privilege, license or contract of Midlands as a result of
this Agreement.
3.8. Financial Statements. The audited financial
statements of Midlands for each of the fiscal years 1991, 1992
and 1993, the unaudited financial statements of Midlands at and
for the six month period ending June 30, 1994 and the unaudited
monthly statements subsequent to June 30, 1994 (the "Midlands
Financial Statements") all of which have been provided to CFC,
are true, correct and complete in all material respects and
present fairly, in conformity with generally accepted accounting
principles consistently applied, the financial position of
Midlands at the dates indicated and the results of its operations
for each of the periods indicated, except as otherwise set forth
in the notes thereto. The books and records of Midlands have
been kept, and will be kept to the Closing Date, in reasonable
detail, and will fairly and accurately reflect in all material
respects to the Closing Date, the transactions of Midlands.
3.9. Tax Returns. Midlands files its income tax returns
and maintains its tax books and records on the basis of a taxable
year ending December 31. Midlands has duly filed all tax reports
and returns required to be filed by any federal, state or local
taxing authorities (including, without limitation, those due in
respect of its properties, income, franchises, licenses, sales
and payrolls) through the date hereof, and Midlands has duly paid
all taxes with respect to the periods covered thereby and has
established adequate reserves in accordance with generally
accepted accounting principles consistently applied for the
payment of all income, franchises, property, sales, employment or
other taxes anticipated to be payable after the date hereof.
Midlands is not delinquent in the payment of any taxes,
assessments or governmental charges and no deficiencies have been
asserted or assessed, which have not been paid or for which
adequate reserves have not been established. Midlands does not
have in effect any waiver relating to any statute of limitations
for assessment of taxes with respect to any federal, state or
local income, property, franchise, sales, license or payroll tax.
Midlands does not know, or have reason to know, of any questions
which have been raised or which may be raised by any taxing
authority relating to taxes or assessments of Midlands which, if
determined adversely, would result in the assertion of any
deficiency.
3.10. Undisclosed Liabilities. Except for the liabilities
which are disclosed in the Midlands Financial Statements or as
set forth on Schedule 3.10, Midlands has no material liabilities
or material
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obligations of any nature, whether absolute, accrued,
contingent or otherwise, and whether due or to become due. Since
December 31, 1993, there has been (i) no material adverse change
in the business or operations of Midlands, (ii) no incurrence by
or subjection of Midlands to any obligation or liability (whether
fixed, accrued or contingent) or commitment material to Midlands
not referred to in this Agreement, except such obligations or
liabilities as were or may be incurred in the ordinary course of
business and which are reflected on the Midlands Financial
Statements at and for the periods subsequent to December 31,
1993.
3.11. Title to Properties, Encumbrances. All real property
and personal property owned by Midlands is set forth on Schedule
3.11. Midlands has good and marketable title to all of the real
property and personal property set forth on Schedule 3.11, free
and clear of any liens, claims, charges, options or other
encumbrances, except for any lien for current taxes not yet due
and payable.
3.12. Litigation. Except as set forth on Schedule 3.12,
there are no claims, actions, suits or proceedings pending or
threatened against Midlands, or to its knowledge affecting
Midlands, at law or in equity, before or by any Federal, state,
municipal, administrative or other court, governmental
department, commission, board, or agency, an adverse
determination of which could have a material adverse effect on
the business or operations of Midlands, and Midlands knows of no
basis for any of the foregoing. There is no order, writ,
injunction, or decree of any court, domestic or foreign, or any
Federal agency affecting Midlands or to which Midlands is
subject.
3.13. Reports. Midlands has duly made all reports and
filings required to be made pursuant to applicable law, except
for failures to file or reports which would not have a material
adverse effect on the business or financial condition of
Midlands.
3.14. Brokers. Midlands has not incurred any liability for
any commission or fee in the nature of a finder's, originator's
or broker's fee in connection with the transaction contemplated
herein.
3.15. Expenditures. Schedule 3.15 sets forth any single
expenditure of $25,000 or more proposed to be made by Midlands
after the date hereof and a summary of the terms and conditions
pertaining thereto. At least 20 business days prior to the
Closing Date, Midlands will advise CFC of any changes to Schedule
3.15 reflecting additions or deletions thereto since the date
hereof.
3.16. Insurance. Attached hereto as Schedule 3.16 is a true
and complete summary of the policies of fire, liability, life and
other type of insurance held by Midlands, setting forth with
respect to each such policy, the policy number, name of the
insured party, type of insurance, insurance company, annual
premium, expiration date, deductible amount, if any, and amount
of coverage. Each such policy is in an amount reasonably
sufficient for the protection of the assets and business covered
thereby, and, in the aggregate, all such policies are reasonably
adequate for the protection of all the assets and business of
Midlands taking into account the availability and cost of such
coverage. All such policies shall remain in full force and
effect for a period of at least 90 days following the Closing
Date. There is no reason known to Midlands that any such policy
will not be renewable on terms and conditions as favorable as
those set forth in such policy.
3.17. Contracts and Commitments. Schedule 3.17 attached
hereto sets forth each contract or other commitment of Midlands
which requires an aggregate payment by Midlands after the date
hereof of more than $25,000, and any other contract or commitment
that in the opinion of the Midlands management materially affects
the business of Midlands. Except for the contracts and
commitments described in this Agreement or as set forth in
Schedule 3.17, Midlands is not party to or subject to:
1. Any contracts or commitments which are
material to its business, operations or financial condition;
2. Any employment contract or arrangement,
whether oral or written, with any officer, consultant,
director or employee which is not terminable on 30 day's
notice without penalty or liability to make any payment
thereunder for more than 30 days after such termination;
9
3. Any plan or contract or other arrangement,
oral or written, providing for insurance for any officer or
employee or members of their families;
4. Any plan or contract or other arrangement,
oral or written, providing for bonuses, pensions, options,
deferred compensation, retirement payments, profit-sharing
or other benefits for employees;
5. Any contract or agreement with any labor
union;
6. Any contract or agreement with customers for
the sale of products or the furnishing of services, or any
sales agency, broker, distribution or similar contract,
except contracts made in the ordinary course of business;
7. Any contract restricting Midlands from
carrying on its business anywhere in the United States;
8. Any instrument or arrangement evidencing or
related to indebtedness for money borrowed or to be
borrowed, whether directly or indirectly, by way of purchase
money obligation, guaranty, conditional sale, lease-
purchase, or otherwise;
9. Any joint venture contract or arrangement or
any other agreement involving a sharing of profits;
10. Any license agreement in which Midlands is the
licensor or licensee;
11. Any material contract or agreement, not of the
type covered by any of the other items of this Section 3.17,
which by its terms is either (i) not to be performed prior
to 30 days from the date hereof, or (ii) does not terminate,
or is not terminable without penalty to Midlands, or any
successors or assigns prior to 30 days from the date hereof.
3.18. Employee Benefit Plans.
(a) Except as described on Schedule 3.18, Midlands
does not sponsor or maintain and is not otherwise a party to
or liable under, any plan, program, fund or arrangement
(whether or not qualified for Federal income tax purposes,
whether benefiting a single individual or multiple
individuals, and whether funded or not) that is an "employee
pension benefit plan", or an "employee welfare benefit
plan", as such terms are defined in ERISA, or any incentive
or other benefit arrangement for its employees, their
dependents and beneficiaries.
(b) Midlands has, for all periods ending on or prior
to the date hereto, administered each employee welfare
benefit plan described on Schedule 3.18 in material
compliance with the reporting, disclosure and all other
requirements applicable under ERISA, the Code or any other
applicable law.
(c) All amounts required to be accrued under generally
accepted accounting principles applied consistently by
Midlands under any incentive or other compensation plan have
been accrued and are reflected in the balance sheet
contained in the December 31, 1993 Midlands Financial
Statements.
3.19. Midlands Information. The written information with
respect to Midlands, and its officers, directors, and affiliates
supplied by Midlands to CFC for use in the Registration Statement
which shall be used in soliciting approval of the Merger by
shareholders of Midlands will not, on the date the Proxy
Statement is first mailed to shareholders of Midlands or on the
date of the Stockholders' Meeting, as amended or supplemented,
contain any untrue statement of a material fact, or omit to state
any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the
circumstances under which they were made, not misleading, or
necessary to correct any statement in any earlier communication
to Midlands shareholders with respect to the Merger.
3.20. Due Diligence. All information provided by Midlands
in connection with the due diligence investigation by CFC was, at
the time that such information was provided, fair, accurate and
complete in all material respects. Midlands has not failed to
provide or make available to CFC all material information
regarding Midlands.
10
3.21. Resale of CFC Common Stock. Midlands knows of no
present plan or intention on the part of its shareholders to
sell, assign, transfer or otherwise dispose of shares of CFC
Common Stock to be received by such shareholders in connection
with the Merger which would reduce said shareholders' holdings of
CFC common stock to a number of shares having, in the aggregate,
a value of less than 50% of the value of Midlands Common Stock
outstanding as of the Effective Time. For purposes of this
representation, the number of shares of CFC Common Stock which
would have been received by any dissenting shareholders of
Midlands had they not dissented, and shares of Midlands Common
Stock sold, redeemed or otherwise disposed of prior or subsequent
to and as part of the Merger, will be considered as shares
received by shareholders of Midlands and then disposed of by
shareholders of Midlands.
SECTION IV. REPRESENTATIONS AND WARRANTIES BY CFC AND CFB
CFC and CFB hereby represent and warrant to Midlands the
following matters on and as of the date of this Agreement and at
the Effective Time; provided, however, that before any breach of
or inaccuracy in any of the representations or warranties given
in this Section IV shall be actionable or shall constitute
grounds for termination of or failure to perform under the terms
of this Agreement by Midlands, such breach or inaccuracy must be
materially adverse in the aggregate with respect to the
businesses of CFC and CFB.
4.1. Organization, Good-Standing and Conduct of Business.
CFC and CFB are corporations, duly organized, validly existing
and in good standing under the laws of the State of South
Carolina, and have full power and authority and all necessary
governmental and regulatory authorization to own all of their
properties and assets and to carry on their business as they are
presently being conducted, and are properly licensed, qualified
and in good standing as foreign corporations in all jurisdictions
wherein the character of the properties or the nature of the
business transacted by CFC and CFB makes such license or
qualification necessary.
4.2. Corporate Authority. The execution, delivery and
performance of this Agreement have been duly authorized by the
Boards of Directors of CFC and CFB. No further corporate acts or
proceedings on the part of CFC or CFB are required or necessary
to authorize this Agreement or the Merger.
4.3. Binding Effect. When executed, this Agreement will
constitute a valid and legally binding obligation of CFC and CFB,
enforceable against CFC and CFB in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect
relating to creditors' rights or the relief of debtors generally.
Each document and instrument contemplated by this Agreement, when
executed and delivered by CFC and/or CFB in accordance with the
provisions hereof, shall be duly authorized, executed and
delivered by CFC and/or CFB and enforceable against CFC and/or
CFB in accordance with its terms, subject to the exceptions in
the previous sentence.
4.4. Capitalization of CFC. The authorized capital stock
of CFC consists solely of (i) 20,000,000 authorized shares of
common stock ($1.00 par value), of which 4,523,784 shares are
issued and outstanding and (ii) 10,000,000 shares of preferred
stock, of which 621,000 shares of 7.50% Noncumulative Convertible
Preferred Stock Series 1993, 60,000 shares of Convertible
Preferred Stock Series 1993B, and 920,000 shares of 7.32%
Noncumulative Convertible Preferred Stock Series 1994, are
outstanding. All of the issued and outstanding shares of CFC are
validly issued and fully paid and nonassessable. Except for (i)
stock options to purchase shares of CFC Common Stock granted
under employee benefit plans, (ii) the 621,000 shares of 7.50%
Noncumulative Convertible Preferred Stock Series 1993, (iii) the
60,000 shares of Convertible Preferred Stock Series 1993B, and
(iv) the 920,000 shares of 7.32% Noncumulative Convertible Pre-
ferred Stock Series 1994, (v) the CFC Shareholders' Rights Plan
entered into as of November 9, 1993 between CFC and CFB, or (vi)
as otherwise set forth
11
on Schedule 4.4, there are no outstanding
obligations, options, warrants or commitments of any kind or
nature or any outstanding securities or other instruments
convertible into shares of any class of capital stock of CFC, or
pursuant to which CFC is or may become obligated to issue any
shares of its capital stock. None of the shares of the CFC
Common Stock is subject to any restrictions as to the transfer
thereof, except as set forth in CFC's Articles of Incorporation
or Bylaws and except for restrictions on account of applicable
federal or state securities laws. The Common Stock to be issued
in connection with this Agreement and the Merger will, when
issued, be validly issued, fully paid and nonassessable and
issued pursuant to an effective registration statement.
4.5. Subsidiaries of CFC. CFC owns 100% of the issued and
outstanding shares of CFB, Carolina First Savings Bank, F.S.B and
Carolina First Mortgage Company. Other than CFC, no individual
or entity has rights to acquire shares of CFB, Carolina First
Savings Bank, F.S.B or Carolina First Mortgage Company. CFC does
not hold 10% of any class of equity securities of any other
company or legal entity other than CFB, Carolina First Savings
Bank, F.S.B. and Carolina First Mortgage Company.
4.6. Absence of Defaults. Neither CFC nor CFB is in
default under, or in violation of any provision of their Articles
of Incorporation or Bylaws. Neither CFC nor CFB is in default
under, or in violation of, any agreement to which they are a
party, the effect of which default or violation would have a
material adverse effect on CFC or CFB or their business
operations or prospects. Neither CFC nor CFB is in violation of
any applicable law, rule or regulation the effect of which would
have a material adverse effect on CFC or CFB or their business
operations or prospects.
4.7. Non-Contravention and Defaults; No Liens. Neither the
execution or delivery of this Agreement, nor the fulfillment of,
or compliance with, the terms and provisions hereof, will (i)
result in a breach of the terms, conditions or provisions of, or
constitute a default under, or result in a violation of,
termination of or acceleration of the performance provided by the
terms of, any agreement to which CFC or CFB is a party or by
which they may be bound, (ii) violate any provision of any law,
rule or regulation, (iii) result in the creation or imposition of
any lien, charge, restriction, security interest or encumbrance
of any nature whatsoever on any asset of CFC or CFB, or (iv)
violate any provisions of CFC's or CFB's Articles of
Incorporation or Bylaws. To the best of CFC's and CFB's
knowledge, no other party to any material agreement to which CFC
or CFB is a party is in default thereunder or in breach of any
provision thereof. To the best of CFC's and CFB's knowledge,
there exists no condition or event which, after notice or lapse
of time or both, would constitute a default by any party to any
such agreement.
4.8. Necessary Approvals. CFC and CFB have obtained all
certificates of authority, licenses, permits, franchises,
registrations of foreign ownership or other regulatory approvals
in every jurisdiction necessary for the continuing conduct of its
business and ownership of its assets. Except for those which may
be renewed or extended in the ordinary course of business, no
such certificate, license, permit, franchise, registration or
other approval is about to expire, lapse, has been threatened to
be revoked or has otherwise become restricted by their terms
which would, upon such expiration, lapse, revocation or
restriction, have a material adverse effect on the financial
circumstances of CFC or CFB. Further, there is no basis for any
such expiration, lapse, revocation, threat of revocation or re-
striction. Except for (i) any necessary filings with, and
approvals and authorizations of the OCC, the FDIC and the State
Board, and (ii) the filing with the SEC of the Registration
Statement and filings with blue sky authorities, no consent,
approval, authorization, registration, or filing with or by any
governmental authority, foreign or domestic, is required on the
part of CFC or CFB in connection with the execution and delivery
of this Agreement or the consummation by CFC and CFB of the
transactions contemplated hereby. Except for the agencies and
other entities in the preceding sentence, neither CFC nor CFB is
required to procure the approval of any person, firm, corpora-
tion, or other entity, foreign or domestic, in order to prevent
the termination of any right, privilege, license or contract of
CFC or CFB as a result of this Agreement.
12
4.9. Financial Statements. The audited financial
statements of CFC for each of the fiscal years 1991, 1992 and
1993, the unaudited financial statements of CFC at and for the
six month period ending June 30, 1994 and the unaudited monthly
statements subsequent to June 30, 1994 (the "CFC Financial
Statements") all of which have been provided to Midlands, are
true, correct and complete in all material respects and present
fairly, in conformity with generally accepted accounting
principles consistently applied, the financial position of CFC at
the dates indicated and the results of its operations for each of
the periods indicated, except as otherwise set forth in the notes
thereto. The books and records of CFC have been kept, and will
be kept to the Closing Date, in reasonable detail, and will
fairly and accurately reflect in all material respects to the
Closing Date, the transactions of CFC.
4.10. Tax Returns. CFC files its income tax returns and
maintains its tax books and records on the basis of a taxable
year ending December 31. CFC has duly filed all tax reports and
returns required to be filed by any federal, state or local
taxing authorities (including, without limitation, those due in
respect of its properties, income, franchises, licenses, sales
and payrolls) through the date hereof, and CFC has duly paid all
taxes with respect to the periods covered thereby and has
established adequate reserves in accordance with generally
accepted accounting principles consistently applied for the
payment of all income, franchises, property, sales, employment or
other taxes anticipated to be payable in respect of the period
subsequent to the period ending after the date hereof. CFC is
not delinquent in the payment of any taxes, assessments or
governmental charges and no deficiencies have been asserted or
assessed, which have not been paid or for which adequate reserves
have not been established and which are not being contested in
good faith. CFC does not have in effect any waiver relating to
any statute of limitations for assessment of taxes with respect
to any federal, state or local income, property, franchise,
sales, license or payroll tax. Except as set forth on Schedule
4.10, CFC does not know, or have reason to know, of any questions
which have been raised or which may be raised by any taxing
authority relating to taxes or assessments of CFC which, if
determined adversely, would result in the assertion of any
deficiency.
4.11. Undisclosed Liabilities. Except for the liabilities
which are disclosed in the CFC Financial Statements or as set
forth on Schedule 4.11, CFC has no material liabilities or
material obligations of any nature, whether absolute, accrued,
contingent or otherwise, and whether due or to become due. Since
December 31, 1993, there has been no material adverse change in
the business or operations of CFC.
4.12. Litigation. There are no claims, actions, suits or
proceedings pending or threatened against or, to its knowledge,
affecting CFC at law or in equity, before or by any Federal,
state, municipal, administrative or other court, governmental
department, commission, board, or agency, an adverse
determination of which could have a material adverse effect on
the business or operations of CFC, and CFC knows of no basis for
any of the foregoing. There is no order, writ, injunction, or
decree of any court, domestic or foreign, or any Federal agency
affecting CFC or to which CFC is subject, except for a dividend
agreement between CFC and the OTS which regulates the payment of
dividends from Carolina First Savings Bank, F.S.B. to CFC.
4.13. Reports. CFC has duly made all reports and filings
required to be made pursuant to applicable law, except for
failures to file or reports which would not have a material
adverse effect on the business or financial condition of CFC.
4.14. CFC Information. The written information with respect
to CFC, and its officers, directors, and affiliates which shall
have been supplied by CFC (or any of its accountants, counsel or
other authorized representatives) specifically for use in
soliciting approval of the Merger by shareholders of Midlands, or
which shall be contained in the Registration Statement, will not,
on the date the Proxy Statement is first mailed to shareholders
of Midlands or on the date of the Stockholders' Meeting, or in
the case of the Registration Statement, at the time it becomes
effective, contain any untrue statement of a material fact, or
omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading,
13
or necessary to correct any statement in any earlier communication
to Midlands stockholders with respect to the Merger. The
Registration Statement will comply as to form with all applicable
laws, including the provisions of the Securities Act.
4.15. Due Diligence. All information provided by CFC in
connection with the due diligence investigation by Midlands was,
at the time that such information was provided, fair, accurate
and complete in all material respects. CFC has not failed to
provide or make available to Midlands all material information
regarding CFC.
SECTION V. CONDUCT OF BUSINESS PENDING CLOSING
5.1. Conduct of Midlands Pending Closing. During the
period commencing on the date hereof and continuing until the
Closing Date, Midlands covenants and agrees to the following
(except to the extent that CFC shall otherwise expressly consent
in writing, which consent shall not be unreasonably delayed or
withheld); provided, however, that any breach of or inaccuracy in
any of the covenants given in this Section 5.1 must be material
in the aggregate with respect to the business of Midlands before
such breach shall be actionable or shall constitute grounds for
termination or failure to perform under this Agreement.
(a) Midlands will carry on its business only in the
ordinary course in substantially the same manner as
heretofore conducted and, to the extent consistent with such
business, use all reasonable efforts to preserve intact its
business organization, maintain the services of its present
officers and employees and preserve its relationships with
customers, suppliers and others having business dealings
with it so that its goodwill and going business shall be
unimpaired at the Closing Date. Midlands shall not purchase
or otherwise acquire or enter into a contract to acquire
servicing or subservicing rights without the written consent
of CFC, which consent shall not be unreasonably withheld.
(b) Midlands will not amend its Articles of
Incorporation or Bylaws as in effect on the date hereof.
(c) Midlands will not issue, grant, pledge or sell, or
authorize the issuance of, reclassify or redeem, purchase or
otherwise acquire, any shares of its capital stock of any
class or any securities convertible into shares of any
class, or any rights, warrants or options to acquire any
such shares (except for employee stock options in the
ordinary course in accordance with past practice and only
upon prior notice to CFC); nor will it enter into any
arrangement or contract with respect to the issuance of any
such shares or other convertible securities (except that it
may permit the exercise of existing warrants to purchase
Midlands Common Stock which are currently exercisable); nor
will it declare, set aside or pay any dividends (of any
type) or make any other change in its equity capital
structure; provided, however, that Midlands shall be
permitted to pay in 1995 substantially the same regular cash
dividend (on an aggregate and percentage of net income
basis) to holders of the Midlands Common Stock as was paid
in 1994.
(d) Midlands will promptly advise CFC orally and in
writing of any change in the businesses of Midlands which is
or may reasonably be expected to be materially adverse to
the business of Midlands.
(e) Midlands will not take, agree to take, or
knowingly permit to be taken any action or do or knowingly
permit to be done anything in the conduct of the business of
Midlands, or otherwise, which would be contrary to or in
breach of any of the terms or provisions of this Agreement,
or which would cause any of the representations of Midlands
contained herein to be or become untrue in any material respect.
14
(f) Midlands will not incur any indebtedness for
borrowed money, issue or sell any debt securities, or assume
or otherwise become liable, whether directly, contingently
or otherwise, for the obligation of any other party, other
than in the ordinary course of business.
(g) Except for expenses attendant to the Merger and
current contractual obligations, Midlands will not incur any
expense in an amount in excess of $25,000 after the
execution of this Agreement without the prior written
consent of CFC.
(h) Midlands will not grant any executive officers any
increase in compensation (except in the ordinary course in
accordance with past practice and only upon prior notice to
CFC), or enter into any employment agreement with any
executive officer without the consent of CFC except as may
be required under employment or termination agreements in
effect on the date hereof which have been previously
disclosed to CFC in writing.
(i) Midlands will not acquire or agree to acquire by
merging or consolidating with, purchasing substantially all
of the assets of or otherwise, any business or any
corporation, partnership, association or other business
organization or division thereof.
5.2. Conduct of CFC Pending Closing. During the period
commencing on the date hereof and continuing until the Closing
Date, CFC covenants and agrees to the following (except to the
extent that Midlands shall otherwise expressly consent in
writing, which consent shall not be unreasonably delayed or
withheld); provided, however, that any breach of or inaccuracy in
any of the covenants given in this Section 5.2 must be material
in the aggregate with respect to the business of CFC before such
breach shall be actionable or shall constitute grounds for
termination or failure to perform under this Agreement.
(a) CFC shall carry on its business in substantially
the same manner as heretofore conducted.
(b) CFC will not amend its Articles of Incorporation
or Bylaws as in effect on the date hereof in any manner that
will adversely affect the Midlands stockholders in any
material respect.
(c) Except for the issuance of stock (i) in connection
with the Convertible Preferred Stock, (ii) in connection
with the items set forth on Schedule 4.4, (iii) in
connection with acquisitions (including, but not limited to,
the acquisitions listed on Schedule 4.4), or (iv) in the
ordinary course in accordance with past practice (such as
employee stock grants or options), CFC will not authorize,
create or issue any shares of capital stock.
(d) CFC will promptly advise Midlands orally and in
writing of any change in its business which is or may
reasonably be expected to be materially adverse to CFC.
(e) CFC will not take, agree to take, or knowingly
permit to be taken any action or do or knowingly permit to
be done anything in the conduct of its business or
otherwise, which would be contrary to or in breach of any of
the terms or provisions of this Agreement, or which would
cause any of the representations of CFC contained herein to
be or become untrue in any material respect.
SECTION VI. COVENANTS OF THE PARTIES
6.1. Access to Properties and Records. Between the date of
this Agreement and the Closing Date, the parties will provide to
each other and to their respective accountants, counsel and other
authorized representatives reasonable access (with due
consideration being given to the fact that CFC is a company
traded on the Nasdaq National Market, that CFC is acquiring all
of Midlands and that Midlands will constitute only a small
portion of CFC after the consummation of the transactions
herein), during reasonable business hours and upon reasonable
notice, to their respective premises, properties, contracts,
commitments, books, records and other information and will cause
their respective officers to
15
furnish to the other party and its authorized representatives
such financial, technical and operating data and other
information pertaining to their respective businesses, as the
parties shall from time to time reasonably request. Each party
will and will cause its employees and agents to hold in strict
confidence, unless disclosure is compelled by judicial or
administrative process, or in the opinion of its counsel,
by other requirements of law, all Confidential Information
and will not disclose the same to any person. Confidential
Information shall be used only for the purpose of and in
connection with consummating the transaction contemplated herein.
If this Agreement is terminated, each party hereto will promptly
return all documents received by it from each other party
containing Confidential Information. The covenants in this
Section 6.1 shall survive the Closing Date forever.
6.2. Regulatory Filings. The parties hereto will use their
respective best efforts and cooperate with each other to obtain
promptly all such regulatory approvals and to make such filings
as, in the opinion of their respective counsels, may be necessary
or advisable in connection with this transaction. CFC shall be
responsible for all filings fees required in connection with such
approvals or filings.
6.3. Registration Statement/Proxy Statement. CFC shall
file the Registration Statement with the SEC and shall pay the
required filing fees. The parties will use their respective best
efforts and cooperate with each other to obtain promptly the
effectiveness of the Registration Statement. CFC shall also take
any reasonable action required to be taken under the blue sky
laws in connection with the issuance of CFC Common Stock in the
Merger. Midlands shall file the Proxy Statement with the OCC and
mail, at its expense, the Proxy Statement to its shareholders.
6.4. Affiliates' Letters. Midlands shall deliver to CFC a
letter identifying all persons who are, at the time the Merger is
submitted to a vote of the shareholders of Midlands, "affiliates"
of Midlands for purposes of Rule 145 of the General Rules and
Regulations under the Securities Act. Midlands shall use its
best efforts to cause each person who is identified as an
"affiliate" in the letter referred to above to deliver to CFC on
or prior to the Effective Time a written agreement, in form
reasonably satisfactory to CFC, (a) that such person will not
offer to sell, transfer or otherwise dispose of any of the shares
of CFC Common Stock issued to such person pursuant to the Merger
in such a manner so as to destroy the tax-free status of the
Merger or the qualification by the Merger as a pooling of
interests transaction, and (b) that such person will not offer to
sell, transfer or otherwise dispose of any of the shares of CFC
Common Stock issued to such person pursuant to the Merger, except
in accordance with the applicable provisions of Rule 145.
6.5. Listing of CFC Common Stock. CFC shall cause the
shares of CFC Common Stock to be issued in the transactions
contemplated by this Reorganization Agreement to be approved for
quotation on the Nasdaq National Market, subject to official
notice of issuance, prior to the Effective Time. CFC shall give
such notice to Nasdaq as may be required to permit the listing of
the CFC Common Stock issued in connection with the Merger.
6.6. Letters from Accountants. Prior to the date the
Registration Statement is declared effective and prior to the
Effective Time, Midlands will deliver to CFC letters from Donald
G. Jones and Company, P.A. addressed to CFC and dated not more
than two business days before the date on which such Registration
Statement shall have become effective and not more than two
business days prior to the Effective Time, respectively, in form
and substance satisfactory to CFC, and CFC will deliver to
Midlands letters from Elliott Davis & Co., addressed to Midlands
and dated not more than two business days before the Registration
Statement shall have become effective and not more than two
business days prior to the Effective Time, respectively, in form
and substance satisfactory to Midlands, in each case with respect
to the financial condition of the other party and such other
matters as are customary in accountants' comfort letters.
6.7. Tax Treatment/Accounting Treatment. Midlands and CFC
shall each take such acts within their power as may be reasonably
necessary to cause the Merger to qualify (i) as a
"reorganization" within the meaning of Section 368(a) of the Code
and (ii) as a "pooling of interests" under general
16
accepted accounting practices, except to the extent such
performance or failure would be prohibited by law. Such
reasonable acts shall include, without limitation, the
abstention from resales of CFC Common Stock received in
connection herewith.
6.8. Expenses. The parties shall pay their own fees and
expenses (including legal and accounting fees) incurred in
connection with this transaction.
6.9. Material Events. At all times prior to the Closing
Date, each party shall promptly notify the other in writing of
the occurrence of any event which will or may result in the
failure to satisfy the conditions specified in Section VI or
Section VII of this Agreement.
6.10. Public Announcements. At all times until after the
Closing Date, neither Midlands nor CFC shall issue or permit any
of its respective subsidiaries, affiliates, officers, directors
or employees to issue any press release or other information to
the press with respect to this Agreement, without the express
prior consent of the other party, except as may be required by
law or the policies of NASDAQ.
6.11. Employment Contracts. At Closing, CFC shall enter
into employment contracts with David W. Bowers and E. Monte
Bowers, which contracts shall be substantially in the form of
those contracts attached hereto as Appendix B.
SECTION VII. CONDITIONS TO CFC'S OBLIGATION TO CLOSE
The obligation of CFC and CFB to consummate the transactions
contemplated in this Agreement is subject to the satisfaction of
the following conditions at or before the Closing Date:
7.1. Performance of Acts and Representations by Midlands.
Each of the acts and undertakings of Midlands to be performed on
or before the Closing Date pursuant to the terms of this
Agreement shall have been duly authorized and duly performed, and
each of the representations and warranties of Midlands set forth
in this Agreement shall be true on the Closing Date, except as to
transactions contemplated by this Agreement.
7.2. Opinion of Counsel for Midlands. Midlands shall have
furnished CFC with an opinion of its counsel, dated as of the
Closing Date, and in form and substance reasonably satisfactory
to CFC and its counsel, to the effect that: (i) Midlands is duly
organized, validly existing and in good standing under the laws
of the United States of America; (ii) the consummation of the
transactions contemplated by this Agreement will not (A) violate
any provision of Midlands's Articles of Incorporation or Bylaws,
(B) violate any provision of, result in the termination of, or
result in the acceleration of any obligation under, any mortgage,
lien, lease, franchise, license, permit, agreement, instrument,
order, arbitration award, judgment or decree known to counsel to
which Midlands is a party, or by which it is bound, except as
such would not, in the aggregate, have a material adverse effect
on the business or financial condition of Midlands, or (C)
violate or conflict with any other restriction of any kind or
character of which such counsel has knowledge and to which
Midlands is subject; (iii) all of the shares of Midlands Common
Stock are validly authorized and issued, fully paid and, except
as provided in 12 U.S.C.A. (section mark)55, non-assessable; (iv)
Midlands has the legal right and power, and all authorizations and
approvals required by law, to enter into this Agreement, and to
consummate the transactions contemplated herein; (v) Midlands has full
corporate power and authority to enter into this Agreement, and
this Agreement has been duly authorized, executed and delivered
by Midlands and constitutes a valid and legally binding
obligation of Midlands enforceable against Midlands in accordance
with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, fraudulent conveyance or
similar laws now or hereafter in effect relating to creditors'
rights or debtors' obligations generally; (vi) to the best
knowledge of such counsel, no material suit or proceeding is
pending or threatened against Midlands or other parties which
would have a material adverse effect on Midlands's business or
properties or its abilities to make the representations and
warranties and perform the obligations set forth herein.
17
7.3. Conduct of Business. The business of Midlands shall
have been conducted in the usual and customary manner, and there
shall have been no material casualty or material adverse change
in the business or financial condition of Midlands from the date
hereof through the Closing Date.
7.4. Consents. All permits, orders, consents, or other
authorizations necessary, in the reasonable opinion of counsel
for CFC, to the consummation of the transactions contemplated
hereby shall have been obtained, and no governmental agency or
department or judicial authority shall have issued any order,
writ, injunction or decree prohibiting the consummation of the
transactions contemplated hereby. Approvals of all applicable
regulatory agencies shall have been obtained without the
imposition of any condition or requirements that, in the
reasonable judgment of CFC, renders the consummation of this
transaction unduly burdensome.
7.5. Certificate. CFC shall have been furnished with such
certificates of officers of Midlands and/or such certificates of
Midlands stockholders, in form and substance reasonably
satisfactory to CFC, dated as of the Closing Date, certifying to
such matters as CFC may reasonably request, including but not
limited to the fulfillment of the conditions specified in this
Section VII.
7.6. Limit on Dissent. The holders of 10% or more of the
Midlands Common Stock outstanding at the time of the
Stockholders' Meeting shall not have dissented to the Merger by
demanding payment for fair value of their shares in the manner
provided by 12 U.S.C.A. (section mark)214a.
7.7. Pooling of Interests. CFC shall have received
reasonable assurance from Elliott, Davis & Co. that the Merger
will qualify for pooling of interests accounting treatment under
general accepted accounting practices.
7.8. Affiliates' Letters. CFC shall have received letters
from all affiliates of Midlands as contemplated in Section 6.4
hereof.
7.9. Due Diligence. CFC shall have completed a due
diligence investigation of Midlands by a date not later than two
weeks from the date hereof, the results of which shall be
reasonably satisfactory to CFC.
SECTION VIII. CONDITIONS TO THE OBLIGATION OF MIDLANDS TO CLOSE
The obligation of Midlands to consummate the transactions
contemplated in this Agreement is subject to the satisfaction of
the following conditions at or before the Closing Date:
8.1. Performance of Acts and Representations by CFC and
CFB. Each of the acts and undertakings of CFC and CFB to be
performed on or before the Closing Date pursuant to the terms of
this Agreement shall have been duly authorized and duly
performed, and each of the representations and warranties of CFC
and CFB set forth in this Agreement shall be true on the Closing
Date, except as to transactions contemplated by this Agreement.
8.2. Opinion of Counsel for CFC. CFC shall have furnished
Midlands with an opinion of its counsel, dated as of the Closing
Date, and in form and substance reasonably satisfactory to
Midlands and its counsel, to the effect that: (i) CFC and CFB
are duly organized, validly existing and in good standing under
the laws of the State of South Carolina; (ii) the consummation of
the transactions contemplated by this Agreement will not (A)
violate any provision of CFC's or CFB's Articles of Incorporation
or Bylaws, (B) violate any provision of, result in the
termination of, or result in the acceleration of any obligation
under, any mortgage, lien, lease, franchise, license, permit,
agreement, instrument, order, arbitration award, judgment or
decree known to counsel to which CFC or CFB is a party, or by
which it is bound, except as such would not, in the aggregate,
have a material adverse effect on the business or financial
condition of CFC, or (C) violate or conflict with any other re-
striction of any kind or character of which such counsel has
knowledge and to which CFC or CFB is subject; (iii) all of the
shares of CFC Common Stock to be issued in connection with the
Merger will be, when issued, validly authorized and issued,
18
fully paid and non-assessable; (iv) CFC and CFB have the legal
right and power, and all authorizations and approvals required
by law, to enter into this Agreement, and to consummate the
transactions contemplated herein; (v) CFC and CFB have full
corporate power and authority to enter into this Agreement, and
this Agreement has been duly authorized, executed and delivered by
CFC and CFB and constitutes a valid and legally binding obligation
of CFC and CFB enforceable against CFC and CFB in accordance with
its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, fraudulent conveyance or
similar laws now or hereafter in effect relating to creditors'
rights or debtors' obligations generally; (vi) to the best
knowledge of such counsel, no material suit or proceeding
is pending or threatened against CFC or other parties which
would have a material adverse effect on CFC's business or
properties or its abilities to make the representations and
warranties and perform the obligations set forth herein.
8.3. Conduct of Business. There shall have been no
material casualty or material adverse change in the business or
financial condition of CFC from the date hereof through the
Closing Date.
8.4. Consents. All permits, orders, consents, or other
authorizations necessary, in the reasonable opinion of counsel
for Midlands, to the consummation of the transactions
contemplated hereby shall have been obtained, and no governmental
agency or department or judicial authority shall have issued any
order, writ, injunction or decree prohibiting the consummation of
the transactions contemplated hereby. Approvals of all
applicable regulatory agencies shall have been obtained without
the imposition of any condition or requirements that, in the
reasonable judgment of Midlands, renders the consummation of this
transaction unduly burdensome.
8.5. Certificate. Midlands shall have been furnished with
such certificates of officers of CFC, in form and substance
reasonably satisfactory to Midlands, dated as of the Closing
Date, certifying to such matters as Midlands may reasonably
request, including but not limited to the fulfillment of the
conditions specified in this Section VIII.
8.6. Tax Opinion. Midlands shall have received from Wyche,
Burgess, Freeman & Parham, P.A. a tax opinion, reasonably
satisfactory to Midlands, opining, subject to reasonable
qualifications, that the Merger shall, upon compliance with
reasonable conditions, qualify as a tax-free reorganization under
Section 368(a) of the Code.
8.7. Fairness Opinion. The Board of Directors of Midlands
shall have received a fairness opinion from a reputable
investment banking firm, which opinion is reasonably acceptable
to Midlands.
8.8. Stockholder Approvals. The Stockholder Approvals
shall have been obtained.
SECTION IX. TERMINATIONS
9.1. Termination. This Agreement may be terminated at any
time prior to the Closing Date:
(a) by mutual consent of the parties;
(b) by either CFC or Midlands, at that party's option,
if a permanent injunction or other order (including any
order denying any required regulatory consent or approval)
shall have been issued by any Federal or state court of
competent jurisdiction in the United States or by any United
States Federal or state governmental or regulatory body,
which order prevents the consummation of the transactions
contemplated herein;
(c) by either CFC or Midlands if the other party has
failed to comply with the agreements or fulfill the
conditions contained herein, provided, however, that any
such failure of compliance or fulfillment must be material
to the consolidated businesses of either CFC or Midlands and
the breaching must be given notice of the failure to comply
and a reasonable period of time to cure; or
(d) by either CFC or Midlands as set forth in Section
2.2 hereof.
19
9.2. Effect of Termination. In the event of termination of
this Agreement by either CFC or Midlands as provided above, this
Agreement shall forthwith become void and there shall be no
liability hereunder on the part of CFC or Midlands, or their
respective officers or directors, except for intentional breach;
provided, however, that in the event this Agreement is
terminated, (i) any agreements between the two parties as to
confidential information and (ii) the grant of the option to
purchase 65,000 shares of Midlands common stock as set forth in
that certain Letter of Intent between CFC and Midlands dated
September 21, 1994, shall survive such termination.
SECTION X. INDEMNIFICATION
10.1. Information for Application and Statements. Each of
CFC and Midlands represents and warrants that all information
concerning it which is or will be included in any statement and
application made to any governmental agency (including the
Registration Statement) in connection with the transactions
contemplated by the Agreement shall be true and correct in all
material respects and shall not omit any material fact required
to be stated therein or necessary to make the statements made, in
light of the circumstances under which they were made, not
misleading. Each of CFC and Midlands so representing and
warranting will indemnify and hold harmless the other, each of
its directors and officers, who controls the other within the
meaning of the Securities Act, from and against any and all
losses, claims, damages, expenses or liabilities to which any of
them may become subject under applicable laws and rules and
regulations thereunder and will reimburse them for any legal or
other expenses reasonably incurred by them in connection with
investigating or defending any actions whether or not resulting
in liability, insofar as such losses, claims, damages, expenses,
liabilities or actions arise out of are based upon any untrue
statement or alleged untrue statement of a material fact
contained in any such application or statement or arise out of or
are based upon the omission or alleged omission to state therein
a material fact required to be stated therein, or necessary in
order to make the statements therein not misleading, but only
insofar as any such statement or omission was made in reliance
upon and in conformity with information furnished in writing by
the representing and warranting party expressly for use therein.
Each of CFC and Midlands agrees, at any time upon the request of
the other, to furnish to the other a written letter or statement
confirming the accuracy of the information contained in any proxy
statement, registration statement, report or other application or
statement, or in any draft of any such document, and confirming
that the information contained in such document or draft was
furnished expressly for use therein or, if such is not the case,
indicating the inaccuracies contained in such document or draft
or indicating the information not furnished expressly for use
therein. The indemnity agreement contained in this Section X
shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of the other party.
10.2. Indemnification of Directors and Officers. CFC shall
ensure that all rights to indemnification and limitations of
liability existing in favor of officers and directors of Midlands
as provided in the charter documents and bylaws of Midlands
arising from facts or events existing or occurring prior to the
Effective Time shall survive the transactions contemplated by
this Agreement and shall continue in full force and effect for a
period of not less than three years.
SECTION XI. MISCELLANEOUS
11.1. Survival of Representations and Warranties. Except
with respect to confidentiality provisions contained herein, the
representations, warranties and covenants contained in this
Agreement or in any other documents delivered pursuant hereto,
shall not survive the Closing of the transactions
20
contemplated hereby. Notwithstanding any investigation made by
or on behalf of the parties, whether before or after Closing Date,
the parties shall be entitled to rely upon the representations and
warranties given or made by the other party(ies) herein.
11.2. Entire Agreement. This Agreement, including any
schedules, exhibits, lists and other documents referred to herein
which form a part hereof, contains the entire agreement of the
parties with respect to the subject matter contained herein and
there are no agreements, warranties, covenants or undertakings
other than those expressly set forth herein.
11.3. Binding Agreement. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and
their respective successors and assigns; provided, however, that
the Agreement shall not be assigned by either of the parties
hereto without the prior written consent of the other party
hereto.
11.4. Notices. Any notice given hereunder shall be in
writing and shall be deemed delivered and received upon
reasonable proof of receipt. Unless written designation of a
different address is filed with each of the other parties hereto,
notice shall be transmitted to the following addresses:
For CFC: William S. Hummers III
Carolina First Corporation
102 South Main Street
Greenville, South Carolina 29601
Copies to: William P. Crawford, Jr.
Wyche, Burgess, Freeman & Parham, P.A.
Post Office Box 728
Greenville, South Carolina 29602
For Midlands: David W. Bowers
Midlands National Bank
Post Office Box 248
Prosperity, South Carolina 29127
Copy to: Robert C. Schwartz
Smith Gambrell & Russell
3343 Peachtree Road N.E., Suite 1800
Atlanta, Georgia 30326
11.5. Counterparts. This Agreement may be executed in one
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.
11.6. Headings. The section and paragraph headings
contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretations of
this Agreement.
11.7. Law Governing. This Agreement shall be governed by
and construed in accordance with the laws of the State of South
Carolina.
11.8. Amendment. This Agreement may not be amended except
by an instrument in writing signed on behalf of all of the
parties.
11.9. Waiver. Any term, provision or condition of this
Agreement (other than the required by law) may be waived in
writing at any time by the party which is entitled to the
benefits thereof.
END OF PAGE
21
IN WITNESS WHEREOF, this Agreement has been duly entered as
of the date first written above.
Witnesses CAROLINA FIRST CORPORATION
By:
William S. Hummers III
Executive Vice President
Witnesses CAROLINA FIRST BANK
By:
Mack I. Whittle, Jr.
Chairman
MIDLANDS NATIONAL BANK
By:
David W. Bowers
President and Chief Executive Officer
22
APPENDIX A
PLAN OF MERGER
OF
MIDLANDS NATIONAL BANK
WITH AND INTO
CAROLINA FIRST BANK
Pursuant to this Plan of Merger (this "Plan of Merger"),
Midlands National Bank ("Midlands"), a national banking
association existing under the laws of the United States of
America, shall be acquired by Carolina First Corporation ("CFC"),
a corporation existing under the laws of the State of South
Carolina, by the merger of Midlands with and into Carolina First
Bank ("CFB"), a banking corporation existing under the laws of
the State of South Carolina and a wholly-owned subsidiary of CFC.
ARTICLE I. DEFINITIONS
The capitalized terms set forth below shall have the
following meanings:
1.1. "Articles of Merger" shall mean the Articles of Merger
to be executed by CFC, CFB and Midlands and in form appropriate
for filing with the Secretary of State of South Carolina and
relating to the effective consummation of the Merger as
contemplated by the Plan of Merger.
1.2. "CFC Common Stock" shall mean the common stock, par
value $1.00 per share, of CFC.
1.3. "Conversion Ratio" shall mean the number of shares of
CFC Common Stock issuable in exchange for one share of Midlands
Common Stock, as calculated pursuant to Section 3.1 hereof.
1.4. "Dissenting Stockholder" shall mean the holder of
shares of Midlands Common Stock who has made a timely demand for
payment of the fair value of his or her shares by the effective
exercise of dissenters' rights in the manner provided in 12
U.S.C.A. (section mark)214a.
1.5. "Effective Time" shall mean the date and time which
the Merger becomes effective as more particularly set forth in
Section 2.2 hereof.
1.6. "Merger" shall mean the merger of Midlands with and
into CFB as more particularly set forth herein and in the
Reorganization Agreement.
1.7. "Fair Market Value" shall mean, with respect to the
CFC Common Stock for a particular day in question, the average of
the high and low sale prices as quoted on the Nasdaq National
Market for that particular day and the immediately preceding four
business days.
1.8. "OCC" shall mean the Office of Comptroller of the
Currency.
1.9. "Reorganization Agreement" shall mean the Agreement
and Plan of Reorganization between CFC, CFB and Midlands, to
which this Plan of Merger is attached as Appendix A.
1.10. "Stockholder Approvals" shall mean, as the context
may require, the written consent (duly authorized) of CFC to the
merger of Midlands with and into CFB and the approval by the
requisite vote of the stockholders of Midlands at the
Stockholders' Meeting of the merger of Midlands with and into
CFB, all in accordance with the Reorganization Agreement and this
Plan of Merger.
1.11. "Stockholders' Meeting" shall mean the meeting of the
stockholders of Midlands at which the Merger shall be voted upon.
1.12. "Surviving Corporation" shall mean CFB after
consummation of the Merger.
ARTICLE II. THE MERGER
2.1. Merger. Subject to the terms and conditions set forth
in the Reorganization Agreement, unless effectively waived as
provided therein, and in accordance with all applicable laws,
regulations and regulatory requirements, at the Effective Time,
Midlands shall be merged with and into CFB. CFB shall
be the Surviving Corporation of the Merger and shall continue
to be governed by the laws of the State of South Carolina.
2.2. Effective Time. The Merger shall become effective on
the date and at the time specified in the Articles of Merger, and
in the form to be filed with the Secretary of State of the State
of South Carolina as applicable.
2.3. Capitalization The number of authorized shares of
capital stock of the Surviving Corporation shall be the same as
immediately prior to the Merger.
2.4. Charter. The charter of CFB as in effect at the
Effective Time shall be and remain the charter of the Surviving
Corporation.
2.5. Bylaws. The Bylaws of CFB, as in effect at the
Effective Time, shall continue in full force and effect as the
bylaws of the Surviving Corporation until otherwise amended as
provided by law or by such bylaws.
2.6. Properties and Liabilities of Midlands and CFB. At the
Effective Time, the separate existence and corporate organization
of Midlands shall cease, and CFB shall thereupon and thereafter,
to the extent consistent with its charter and the changes, if
any, provided by the Merger, possess all the rights, privileges,
immunities, liabilities and franchises, of a public as well as a
private nature, of Midlands without further act or deed.
ARTICLE III. MANNER OF CONVERTING SHARES
3.1. Midlands Common Stock. Each share of Midlands Common
Stock issued and outstanding immediately prior to the Effective
Time shall, by virtue of the Merger and without any action on the
part of the holder thereof, be exchanged for and converted into
such number of shares of CFC Common Stock as shall be equal to
the quotient (rounded to the nearest 1/100th of a share)
resulting from the division of (i) 225% of the September 30, 1994
tangible book value per share of Midlands Common Stock by (ii)
the Fair Market Value per share of the CFC Common Stock on
September 30, 1994.
3.2. CFB Common Stock. None of the shares of CFB shall be
converted in the Merger and the capitalization of CFB after the
Merger shall remain unchanged.
3.3. Treasury Shares. Any and all shares of Midlands Common
Stock held as treasury shares by Midlands shall be cancelled and
retired at the Effective Time, and no consideration shall be
issued or given in exchange therefor.
3.4. Fractional Shares. No fractional shares of CFC Common
Stock will be issued as a result of the Merger. In lieu of the
issuance of fractional shares pursuant to Section 3.1 hereof,
cash will be paid to the holders of the Midlands Common Stock in
respect of any fractional share that would otherwise be issuable
based on the Fair Market Value of the CFC Common Stock on the
last trading day immediately preceding the Effective Time.
ARTICLE IV. EXCHANGE OF COMMON STOCK CERTIFICATES
4.1. Issuance of CFC Certificates; Cash for Fractional
Shares. After the Effective Time, each holder of shares of
Midlands Common Stock issued and outstanding at the Effective
Time shall surrender the certificate or certificates representing
such shares to CFC or its transfer agent, and shall promptly upon
surrender receive in exchange therefor the consideration provided
in Section 3.1 of this Plan of Merger. The certificate or
certificates of Midlands Common Stock so surrendered shall be
duly endorsed as CFC or its transfer agent may require. To the
extent required by Section 3.4 of this Plan of Merger,
24
each holder of shares of Midlands Common Stock issued and
outstanding at the Effective Time also shall receive, upon
surrender of the certificate or certificates representing such
shares, cash in lieu of any fractional share of CFC Common
Stock to which such holder might be entitled.
4.2. Authorized Withholdings. CFC shall not be obligated to
deliver the consideration to which any former holder of Midlands
Common Stock is entitled as a result of the Merger until such
holder surrenders his or her certificate or certificates
representing the shares of Midlands Common Stock for exchange as
provided in this Article IV, or, in default thereof, an
appropriate affidavit of loss and indemnity agreement and/or a
bond as may be reasonably required in each case by CFC or
Midlands. In addition, no dividend or other distribution payable
to the holders of record of CFC Common Stock as of any time
subsequent to the Effective Time shall be paid to the holder of
any certificate representing shares of Midlands Common Stock
issued and outstanding at the Effective Time until such holder
surrenders such certificate for exchange as provided in Section
4.1 above. However, upon surrender of the Midlands Common Stock
certificate both the CFC Common Stock certificate, together with
all such withheld dividends or other distributions and any
withheld cash payments in respect of fractional share interest,
but without any obligation for payment of interest by such
withholding, shall be delivered and paid with respect to each
share represented by such certificate.
4.3. Limited Rights of Former Midlands Stockholders. After
the Effective Time, each outstanding certificate representing
shares of Midlands Common Stock prior to the Effective Time shall
be deemed for all corporate purposes (other than the payment of
dividends and other distributions to which the former stockholder
of Midlands Common Stock may be entitled) to evidence only the
right of the holder thereof to surrender such certificate and
receive the requisite number of shares of CFC Common Stock in
exchange therefor as provided in this Plan of Merger.
ARTICLE V. STOCK OPTIONS
5.1. Options. At the Effective Time, all outstanding
obligations, commitments, options, warrants or other securities
set forth on Schedule 3.4 of the Reorganization Agreement which
are exercisable for or convertible into, or which require the
issuance of, shares of any class of capital stock of Midlands,
shall, after the Effective Date, represent only the right to
receive shares of CFC Common Stock as shall be equal to the
quotient (rounded to the nearest 1/100th of a share) resulting
from the division of (i) 225% of the September 30, 1994 tangible
book value per share of Midlands Common Stock by (ii) the Fair
Market Value per share of the CFC Common Stock on September 30,
1994.
ARTICLE VI. MISCELLANEOUS
6.1. Conditions Precedent. Consummation of the Merger is
conditioned upon receipt of the Stockholder Approvals. In
addition, consummation of the Merger is conditioned upon the
fulfillment of the conditions precedent set forth in Section VII
and Section VIII of the Reorganization Agreement, subject to
waiver of any such conditions, if appropriate, as provided
thereunder.
6.2. Rights of Dissenting Stockholders. If any stockholder
of Midlands shall have filed with Midlands, prior to or at the
meeting of stockholders of Midlands at which the Merger is
submitted to a vote, written notice that he or she objects to the
Merger as provided in 12 U.S.C.A. (section mark)214a, CFC, upon
written notice from Midlands as to the identity of each
such Dissenting Stockholder and of the number of shares of
Midlands Common Stock held by such Dissenting Stockholder, shall
not include in the certificate or certificates for the CFC Common
Stock to be issued pursuant to Section 3.1, the number of shares of
CFC Common Stock to which any such Dissenting Stockholder would have
been entitled
25
under said Section. Each Dissenting Stockholder who, pursuant to
12 U.S.C.A. (section mark) 214a, becomes entitled to payment of
the fair value of his or her Midlands Common Stock shall
receive payment therefor from CFC (but only after such value
shall have been agreed upon or as finally determined as provided
in 12 U.S.C.A (section mark)214a). In the event that CFC shall
become obligated after the Effective Time to deliver shares of
CFC Common Stock to any Dissenting Stockholder who shall have
failed to perfect, or shall have effectively lost or abandoned, his
or her right to appraisal of or payment for his or her shares of
Midlands Common Stock, CFC shall issue and deliver for the
benefit of such Dissenting Stockholder a certificate representing
the shares of CFC Common Stock to which he or she is then entitled.
6.3. Termination. This Plan of Merger may be terminated at
any time prior to the Effective Time as provided in Section IX of
the Reorganization Agreement.
6.4. Amendments. To the extent permitted by law, this Plan
of Merger may be amended by a subsequent writing signed by all of
the parties hereto upon the approval of the board of directors of
each of the parties hereto; provided, however, that this Plan of
Merger may not be amended after the Stockholders' Meeting except
in accordance with applicable law.
Dated as of this _____ day of _____________, 1995.
26
APPENDIX B AND SCHEDULES
Appendix B and the Schedules are omitted. Such documents will be
provided to the Commission upon request.
27