(c) Carolina Trust shall, and shall cause its and each Carolina Trust Entity’s directors, officers, employees, and Representatives to immediately cease any and all existing
activities, discussions, or negotiations with any Persons conducted heretofore with respect to any Acquisition Proposal and will use and cause to be used all commercially reasonable best efforts to enforce any confidentiality or similar or
related agreement relating to any Acquisition Proposal.
(d) Nothing contained in this Agreement shall prevent a Party or its Board of Directors from (i) complying with Rule 14e-2 under the Exchange Act with respect to an Acquisition
Proposal,
provided, however,
that
such Rule will in no way eliminate or modify the effect that any action pursuant to such Rule would otherwise have under
this Agreement; (ii) making any disclosure to Carolina Trust’s shareholders if Carolina Trust’s Board determines in good faith, after consultation with its outside legal counsel, that the failure to make such disclosure would be reasonably
likely to be inconsistent with applicable Law, (iii) informing any Person of the existence of the provisions contained in this Section 7.3 or (iv) making any “stop, look and listen” communication to Carolina Trust’s shareholders pursuant to
Rule 14d-9(f) under the Exchange Act (or any similar communication to Carolina Trust’s shareholders).
|
7.4
|
Consents of Regulatory Authorities.
|
The Parties hereto shall cooperate with each other and use their commercially reasonable efforts to promptly prepare and file all necessary documentation and applications, to effect all
applications, notices, petitions and filings, and to obtain as promptly as practicable all Consents of all Regulatory Authorities and other Persons which are necessary or advisable to consummate the transactions contemplated by this
Agreement (including the Merger). The Parties agree that they will consult with each other with respect to the obtaining of all Consents of all Regulatory Authorities and other Persons necessary or advisable to consummate the transactions
contemplated by this Agreement and each Party will keep the other apprised of the status of matters relating to consummation of the transactions contemplated herein. Each Party also shall promptly advise the other upon receiving any
communication from any Regulatory Authority or other Person whose Consent is required for consummation of the transactions contemplated by this Agreement which causes such Party to believe that there is a reasonable likelihood that any
requisite Consent will not be obtained or that the receipt of any such Consent will be materially delayed.
|
7.5
|
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 commercially 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 commercially reasonable efforts to lift or rescind any Order adversely affecting its ability to consummate the transactions contemplated herein and to cause to be satisfied the conditions referred to in
Article 8;
provided,
however,
that
nothing
herein shall preclude either Party from exercising its rights under this Agreement.
|
7.6
|
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 the consummation of the Merger and shall
permit the other Party to make or cause to be made such investigation of its business and properties (including that of 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 or materially with normal operations and that no such
investigation shall include sampling of the indoor or outdoor air, soil or soil vapor, surface water, or groundwater without Carolina Trust’s written consent. Between the date hereof and the Effective Time, Carolina Trust shall permit
Carolina Financial’s senior officers and independent accountants to meet with the senior officers of Carolina Trust, including officers responsible for the Carolina Trust Financial Statements, the internal controls of Carolina Trust, and
the disclosure controls and procedures of Carolina Trust and Carolina Trust’s independent public accountants, to discuss such matters as Carolina Financial may deem reasonably necessary or appropriate for Carolina Financial to satisfy its
obligations under Sections 302, 404 and 906 of the Sarbanes-Oxley Act.
(b) In addition to each Party’s obligations pursuant to Section 7.6(a), each Party shall, and shall cause its advisors 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) Carolina Trust shall use its commercially reasonable efforts to exercise, and shall not waive any of, its rights under confidentiality agreements entered into with Persons which
were considering an Acquisition Proposal with respect to Carolina Trust to preserve the confidentiality of the information relating to the Carolina Trust Entities provided to such Persons and their Affiliates and Representatives.
(d) 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 Carolina Trust Material Adverse Effect or a Carolina Financial Material Adverse Effect, as applicable.
(e) Each Carolina Financial Entity shall, in accordance with Carolina Financial’s comprehensive written data security program established and maintained pursuant to 15 U.S.C. § 6801
and regulations promulgated thereunder (“
Carolina Financial Security Program
”), safeguard IIPI disclosed to that Carolina Financial Entity pursuant to this Agreement or in connection with the transactions contemplated hereby. In the
event that any Carolina Financial Entity allows a third party to access such IIPI, Carolina Financial shall ensure that the third party safeguards that IIPI in accordance with a data security program substantially equivalent to the Carolina
Financial Security Program.
(f) Carolina Financial shall notify Carolina Trust promptly (but in no event more than 24 hours) of any Data Incident. All Carolina Financial Entities shall promptly take all
actions that are necessary and advisable to correct, mitigate, and prevent recurrence of the Data Incident. All Carolina Financial Entities shall cooperate fully with Carolina Trust and its designees in all reasonable efforts to
investigate the Data Incident.
(g) If this Agreement is terminated prior to the Effective Time, each Carolina Financial Entity shall promptly return or dispose of, and certify the return or disposal, of all IIPI
received by the Carolina Financial Entity in connection with this Agreement. Any disposal of such IIPI must be performed in a manner that ensures that the IIPI is rendered permanently unreadable and unrecoverable.
Prior to the Effective Time, Carolina Trust and Carolina Financial shall consult with each other as to the form and substance of any press release, communication with Carolina Trust’s
shareholders, or other public disclosure materially related to this Agreement, or any other transaction contemplated hereby;
provided,
however,
that
nothing in this Section 7.7 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.
Each Carolina Trust 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 Carolina Trust Entity or restrict or impair the ability of Carolina Financial or
any of its Subsidiaries to vote, or otherwise to exercise the rights of a shareholder with respect to, shares of any Carolina Trust Entity that may be directly or indirectly acquired or controlled by them.
|
7.9
|
Employee Benefits and Contracts.
|
(a) Except as specifically provided in this Agreement, all persons who are employees of the Carolina Trust Entities immediately prior to the Effective Time and whose employment is
not terminated, if any, at or prior to the Effective Time (a “
Continuing Employee
”) shall, at the Effective Time, become at-will employees of the Surviving Bank or one of its subsidiaries;
provided,
however,
that in no event shall any of the employees of the Carolina Trust Entities be officers of the Surviving Corporation or the Surviving Bank, or have or exercise any power or duty conferred upon such an officer, unless and
until duly elected or appointed to such position by the Board of Directors of the Surviving Corporation or the Surviving Bank and in accordance with the Bylaws of the Surviving Corporation or the Surviving Bank. All of the Continuing
Employees shall be employed at the will of the Surviving Bank, and no contractual right to employment shall inure to such employees because of this Agreement except as may be otherwise expressly set forth in this Agreement.
(b) As of the Effective Time, each Continuing Employee shall be eligible to participate in each of Carolina Financial’s Employee Benefit Plans with full credit for prior service
with Carolina Trust and any other Carolina Trust Entity solely for purposes of eligibility and vesting, except that such service shall also be credited for purposes of calculating benefits under Carolina Financial’s standard severance
policy. For the avoidance of doubt, each Continuing Employee who is terminated involuntarily other than for cause (as determined by Carolina Financial) will be eligible to receive severance benefits under Carolina Financial’s standard
severance policy for its employees, an accurate and complete description of which has been provided to Carolina Trust, in addition to outplacement assistance;
provided, however,
that any Continuing
Employees who are eligible to receive severance benefits, change of control benefits or any payments that are enhanced on account of the Merger pursuant to an individual employment arrangement, change of control arrangement or deferred
compensation plan other than any Cash Retention Bonus Agreement or Cash and Stock Retention Bonus Agreement in the form of
Exhibit E
or
Exhibit F
, respectively, shall not be eligible to receive severance benefits under
Carolina Financial’s standard severance policy.
(c) As of the Effective Time, Carolina Financial shall make available employer-provided benefits under Carolina Financial Employee Benefit Plans to each Continuing Employee on the
same basis as it provides such coverage to Carolina Financial or CresCom Bank employees. With respect to Carolina Financial Employee Benefit Plans providing health coverage, Carolina Financial shall use commercially reasonable efforts to
cause any pre-existing condition, eligibility waiting period, or other limitations or exclusions otherwise applicable under such plans to new employees not to apply to a Continuing Employee or their covered dependents who were covered under
a similar Carolina Trust plan at the Effective Time of the Merger. In addition, if any such transition occurs during the middle of a plan year, Carolina Financial shall use commercially reasonable efforts to cause any such successor
Carolina Financial Employee Benefit Plan providing health coverage to give credit towards satisfaction of any annual deductible limitation and out-of-pocket maximum applied under such successor plan for any deductible, co-payment and other
cost-sharing amounts previously paid by a Continuing Employee respecting his or her participation in the corresponding Carolina Trust Employee Benefit Plan during that plan year prior to the transition effective date.
(d) Except as disclosed in Section 7.9 of the Carolina Trust Disclosure Memorandum, Carolina Trust shall use commercially reasonable efforts to cause each director of Carolina Trust
or Carolina Trust Bank who will not be an employee or director of Carolina Financial or CresCom Bank immediately following the Effective Time, to execute and deliver a Non-Employee Director Non-Competition Agreement dated as of the date
hereof in the form attached hereto as
Exhibit B
.
(e) Carolina Trust shall cause each director of Carolina Trust or Carolina Trust Bank and each Executive Officer to execute and deliver
a Shareholder
Support Agreement dated as of the date hereof in the form attached hereto as
Exhibit C
pursuant to which he or she will vote his or her shares of Carolina
Trust Common Stock in favor of this Agreement and the transactions contemplated hereby
.
(f) No officer, employee, or other Person (other than the corporate Parties to this Agreement) shall be deemed a third party or other beneficiary of this Agreement, and no such
Person shall have any right or other entitlement to enforce any provision of this Agreement or seek any remedy in connection with this Agreement, except as may be expressly set forth in Section 7.11. No provision of this Agreement
constitutes or shall be deemed to constitute, an employee benefit plan or other arrangement, an amendment of any employee benefit plan or other arrangement, or any provision of any employee benefit plan or other arrangement.
(g) Carolina Trust shall use its reasonable best efforts to cause the employees designated by Carolina Financial to execute a CresCom Merger / Cash Retention Bonus Agreement in the
form attached hereto as
Exhibit E
or a CresCom Merger / Cash and Stock Retention Bonus Agreement in the form attached hereto as
Exhibit F
.
(h) Concurrently with or as soon as practicable after the execution and delivery of this Agreement, Jerry L. Ocheltree shall enter into an employment agreement in the form attached
hereto as
Exhibit G
, which shall become effective only upon the effective time of the Merger.
(i) Upon not less than 10 days’ notice prior to the Closing Date from Carolina Financial to Carolina Trust, Carolina Trust shall cause the adoption of resolutions (which are
acceptable to Carolina Financial) by each applicable Carolina Trust Entity’s Board of Directors terminating, amending or causing other appropriate modification of each Carolina Trust Benefit Plan as specified by Carolina Financial in such
notice, effective as of the date which immediately precedes the Closing Date or as of the Closing Date (as shall be specified in such notice), provided that (a) Carolina Trust shall be required to take such action only with respect to
Carolina Trust Benefit Plans that may unilaterally be terminated, amended or modified, as applicable, as requested by Carolina Financial, by a Carolina Trust Entity in accordance with the terms of the plan and applicable Law, (b) Carolina
Trust shall not be required to take such action if and to the extent it would cause a plan participant to be denied a benefit, or vesting of a benefit, that the participant would have been entitled to under the plan if the plan had not been
so terminated, amended or modified at or prior to the Effective Time; and (c) for the avoidance of doubt, any reasonable costs or expenses that are incurred by a Carolina Trust Entity in connection with such termination, amendment or
modification (including without limitation the payment of any benefits or compensation) shall be considered reasonable expenses incurred by a Carolina Trust Entity in connection with the Merger. Upon such action, participants in such
applicable Carolina Trust Benefit Plans that are Carolina Trust ERISA Plans shall be 100% vested in their account balances or other applicable plan benefits.
Prior to the Effective Time, Carolina Trust and Carolina Financial shall take all such steps as may be required to cause (in the case of Carolina Trust) any dispositions of
Carolina Trust Common Stock (including derivative securities with respect to Carolina Trust Common Stock) by each individual who is subject to the reporting requirements of Section 16(a) of the Exchange Act with respect to Carolina Trust (“
Carolina
Trust Insiders
”) or (in the case of Carolina Financial) any acquisitions of Carolina Financial Common Stock (including derivative securities with respect to Carolina Financial Common Stock) by any Carolina Trust Insiders who,
immediately following the Merger, will be subject to the reporting requirements of Section 16(a) of the Exchange Act with respect to Carolina Financial, in each case resulting from the transactions contemplated by this Agreement, to be
exempt from liability pursuant to Rule 16b-3 promulgated under the Exchange Act to the fullest extent permitted by applicable law. Carolina Trust agrees to promptly furnish Carolina Financial with all requisite information necessary for
Carolina Financial to take the actions contemplated by this Section 7.10.
(a) Carolina Financial shall indemnify, defend, and hold harmless the present and former directors and executive officers of the Carolina Trust 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 a Carolina Trust Entity or, at Carolina Trust’s request, of
another corporation, partnership, joint venture, trust, or other enterprise occurring at or prior to the Effective Time (including service in connection with the transactions contemplated by this Agreement) to the fullest extent permitted
under the DGCL, the NCBCA, Section 402 of the Sarbanes-Oxley Act, the Securities Laws and FDIC Regulations Part 359, and by the Articles of Incorporation and Bylaws of Carolina Trust and any other Carolina Trust Entity as in effect on the
date hereof, including provisions relating to advances of expenses incurred in the defense of any Litigation and whether or not any Carolina Trust Entity is insured against any such matter.
(b) Prior to the Effective Time, Carolina Financial shall purchase, or shall direct Carolina Trust to purchase, an extended reporting period endorsement under Carolina Trust’s
existing directors’ and officers’ liability insurance coverage (“
Carolina Trust Entities’ D&O Policies
”) for acts or omissions occurring prior to the Effective Time by such directors and officers currently covered by Carolina
Trust Entities’ D&O Policies. The directors and officers of Carolina Trust shall take all reasonable actions required by the insurance carrier necessary to procure such endorsement. Such endorsement shall provide such directors and
officers with coverage (including bankers’ professional liability, cyber and employment practices coverage) following the Effective Time for six years or such lesser period of time as can be purchased for an aggregate amount equal to 300%
of the current annual premiums for the Carolina Trust Entities’ D&O Policies (the “
Premium Multiple
”). If Carolina Financial is unable to obtain or maintain the insurance coverage called for in this Section 7.11(b), then
Carolina Financial shall obtain the most advantageous coverage that can be purchased for the Premium Multiple.
(c) Any Indemnified Party wishing to claim indemnification under paragraph (a) of this Section 7.11, upon learning of any such Liability or Litigation, shall promptly notify
Carolina Financial and the Surviving Corporation thereof in writing. In the event of any such Litigation (whether arising before or after the Effective Time), (i) Carolina Financial or the Surviving Corporation shall have the right to
assume the defense thereof and neither Carolina Financial 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 Financial 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 Financial or the Surviving Corporation and the Indemnified Parties, the Indemnified Parties may retain counsel satisfactory to them, and Carolina Financial 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, however,
that Carolina Financial and the Surviving Corporation shall
be obligated pursuant to this paragraph (c) to pay for only one firm of counsel for all Indemnified Parties in any jurisdiction; (ii) the Indemnified Parties will cooperate in good faith in the defense of any such Litigation; and (iii)
neither Carolina Financial nor the Surviving Corporation shall be liable for any settlement effected without its prior written consent and which does not provide for a complete and irrevocable release of all Carolina Financial’s Entities
and their respective directors, officers, and controlling persons, employees, agents, and Representatives; and
provided, further,
that neither Carolina Financial 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.
(d) If Carolina Financial or any successors or assigns shall consolidate with or merge into any other Person and shall not be the continuing or surviving Person of such
consolidation or merger or shall transfer all or substantially all of its assets to any Person, then and in each case, proper provision shall be made so that the successors and assigns of Carolina Financial or the Surviving Corporation
shall assume the obligations set forth in this Section 7.11.
(e) The provisions of this Section 7.11 are intended to be for the benefit of, shall be enforceable by, and may not be modified without the prior written consent of each
Indemnified Party and their respective heirs and legal and personal representatives.
|
7.12
|
Tax Covenants of Carolina Financial.
|
At and after the Effective Time, Carolina Financial covenants and agrees that it:
(a) will not take any action that could reasonably be expected to cause the Merger to fail to qualify as a reorganization under Section 368(a)(1)(A) of the Code;
(b) will maintain all books and records and prepare and file all federal, state and local income Tax Returns and schedules thereto of Carolina Financial, Carolina Trust and all
Affiliates thereof in a manner consistent with the Merger’s being qualified as a reorganization and nontaxable exchange under Section 368(a)(1)(A) of the Code (and comparable provisions of any applicable state or local Tax Laws);
(c) will, either directly or through a member of Carolina Financial’s Qualified Group, continue at least one significant historic business line of Carolina Trust, or use at least a
significant portion of the historic business assets of Carolina Trust in a business, in each case within the meaning of Treasury Regulations Section 1.368-1(d);
(d) in connection with the Merger, will not reacquire, and will not permit any Person that is a “related person” (as defined in Treasury Regulations Section 1.368-1(e)(4)) to
Carolina Financial to acquire, any of the Carolina Financial Common Stock issued in connection with the Merger; and
(e) will not sell or otherwise dispose of any of Carolina Trust’s assets acquired in the Merger, and will not cause or permit CresCom Bank to sell or otherwise dispose of any of
the Bank’s assets acquired in the Bank Merger, except for dispositions made in the ordinary course of business or transfers described in Section 368(a)(2)(C) of the Code or described and permitted in Treasury Regulations Section 1.368-2(k).
ARTICLE 8
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
|
8.1
|
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 10.6:
(a)
Shareholder Approvals
. The shareholders of Carolina Trust shall have approved this Agreement and the consummation of the transactions contemplated hereby, including
the Merger, by the Requisite Carolina Trust Shareholder Vote, as and to the extent required by Law and by the provisions of Carolina Trust’s Articles of Incorporation and Bylaws.
(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. No Consent obtained from any Regulatory Authority which is necessary to consummate the transactions contemplated
hereby shall be conditioned or restricted in a manner (including requirements relating to the raising of additional capital or the disposition of Assets) which in the reasonable judgment of the Board of Directors of Carolina Financial would
so materially adversely affect the economic or business benefits of the transactions contemplated by this Agreement that, had such condition or requirement been known, Carolina Financial would not, in its reasonable judgment, have entered
into this Agreement.
(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 8.1(b))
or for the preventing of any Default under any Contract or Permit of such Party which, if not obtained or made, would be reasonably likely to have, individually or in the aggregate, a Carolina Trust Material Adverse Effect or a Carolina
Financial Material Adverse Effect, as applicable. Carolina Trust shall have obtained the Consents listed in Section 8.1(c) of the Carolina Trust Disclosure Memorandum, including Consents from the lessors of each office leased by Carolina
Trust, if any. 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 Financial
would so materially adversely affect the economic or business benefits of the transactions contemplated by this Agreement that, had such condition or requirement been known, Carolina Financial would not, in its reasonable judgment, have
entered into this Agreement.
(d)
Registration Statement
. The Registration Statement shall have been declared effective by the SEC, and no proceedings shall be pending or threatened by the SEC to
suspend the effectiveness of the Registration Statement.
(e)
Legal Proceedings
. No Governmental 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.
(f)
Exchange Listing
. Carolina Financial shall have filed with the NASDAQ Stock Market a notification form for the listing of all shares of Carolina Financial Common
Stock to be delivered as Merger Consideration, and the NASDAQ Stock Market shall not have objected to the listing of such shares of Carolina Financial Common Stock.
(g)
Tax Opinion
. Carolina Financial and Carolina Trust shall have received the opinion of Carolina Financial’s legal counsel, dated as of the Closing, in form and
substance customary in transactions of the type contemplated hereby, substantially to the effect that on the basis of the facts, representations, and assumptions set forth in such opinion, which are consistent with the state of facts
existing at the Effective Time, (i) the Merger will be treated for federal income Tax purposes as a reorganization within the meaning of Section 368(a) of the Code, and (ii) Carolina Financial and Carolina Trust will each be a party to that
reorganization within the meaning of Section 368(b) of the Code. Such opinion may be based on, in addition to the review of such matters of fact and Law as the opinion given considers appropriate, representations contained in certificates
of officers of Carolina Financial and Carolina Trust.
|
8.2
|
Conditions to Obligations of Carolina Financial.
|
The obligations of Carolina Financial 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 Financial pursuant to Section 10.6(a):
(a)
Representations and Warranties
. For purposes of this Section 8.2(a), the accuracy of the representations and warranties of Carolina Trust set forth in this Agreement
shall be assessed as of the date of this Agreement and as of the Effective Time with the same effect as though all such representations and warranties had been made on and as of the Effective Time (
provided,
that
representations and warranties which are confined to a specified date shall speak only as of such date). The representations and warranties set forth in Sections 4.1, 4.2(a), 4.2(b)(i), 4.3, and 4.24 shall be true and
correct (except for inaccuracies which are
de minimis
in amount or effect). There shall not exist inaccuracies in the representations and warranties of Carolina Trust set forth in this Agreement
(including the representations and warranties set forth in Sections 4.1, 4.2(a), 4.2(b)(i), 4.3, and 4.24) such that the aggregate effect of such inaccuracies has, or is reasonably likely to have, a Carolina Trust 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 Trust 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)
Officers’ Certificate
. Carolina Trust shall have delivered to Carolina Financial (i) a certificate, dated as of the Closing Date 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 8.1 as they relate to Carolina Trust and in Sections 8.2(a), 8.2(b), and 8.2(f) have been satisfied.
(d)
Secretary’s Certificate
. Carolina Trust and Carolina Trust Bank shall have delivered a certificate of the secretary of Carolina Trust and Carolina Trust Bank, dated as
of the Closing Date, certifying as to (i) the incumbency of officers of Carolina Trust and Carolina Trust Bank executing documents executed and delivered in connection herewith, (ii) a copy of the Articles of Incorporation of Carolina Trust
as in effect from the date of this Agreement until the Closing Date, along with a certificate (dated not more than 10 days prior to the Closing Date) of the North Carolina Secretary of State as to the existence of Carolina Trust; (iii) a
copy of the Bylaws of the Carolina Trust as in effect from the date of this Agreement until the Closing Date, (iv) a copy of the consent or resolutions of Carolina Trust’s Board of Directors authorizing and approving the applicable matters
contemplated hereunder, (v) a certificate of the Federal Reserve (dated not more than 10 days prior to the Closing Date) certifying that the Carolina Trust is a registered bank holding company, (vi) a copy of the Articles of Incorporation
of Carolina Trust Bank as in effect from the date of this Agreement until the Closing Date, (vii) a copy of the Bylaws of Carolina Trust Bank as in effect from the date of this Agreement until the Closing Date, (viii) a certificate of the
North Carolina Commissioner of Banks (dated not more than 10 days prior to the Closing Date) as to the good standing of Carolina Trust Bank, and (ix) a certificate of the FDIC (dated not more than 10 days prior to the Closing Date)
certifying that Carolina Trust Bank is an insured depository institution.
(e)
Claims Letters
. Each of the directors of Carolina Trust and Carolina Trust Bank and the Executive Officers shall have executed claims letters in the form attached
hereto as
Exhibit D
and delivered the same to Carolina Financial.
(f)
Non-Employee Director Non-Competition Agreements
. Each of the Non-Employee Director Non-Competition Agreements executed and delivered pursuant to Section 7.9(d) of
this Agreement shall remain in full force and effect and no director party thereto shall have advised Carolina Financial that he or she intends to breach any such agreement.
(g)
Employment Agreement
. The Employment Agreement executed and delivered pursuant to Section 7.9(h) of this Agreement shall remain in full force and effect and the
executive party thereto shall not have advised Carolina Financial that he intends to breach such agreement.
(h)
No Material Adverse Effect
. There shall not have occurred any Carolina Trust Material Adverse Effect from the March 31, 2019 balance sheet to the Effective Time with
respect to Carolina Trust or Carolina Trust Bank.
(i)
Bank Merger
. The Parties shall stand ready to consummate the Bank Merger immediately after the Merger.
|
8.3
|
Conditions to Obligations of Carolina Trust.
|
The obligations of Carolina Trust 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 Trust pursuant to Section 10.6(b):
(a)
Representations and Warranties
. For purposes of this Section 8.3(a), the accuracy of the representations and warranties of Carolina Financial set forth in this
Agreement shall be assessed as of the date of this Agreement and as of the Effective Time with the same effect as though all such representations and warranties had been made on and as of the Effective Time (provided that representations
and warranties which are confined to a specified date shall speak only as of such date). The representations and warranties set forth in Sections 5.1, 5.2(a) and 5.2(b)(i), and 5.5 shall be true and correct (except for inaccuracies which
are
de minimis
in amount or effect). There shall not exist inaccuracies in the representations and warranties of Carolina Financial set forth in this Agreement (including the representations and
warranties set forth in Sections 5.1, 5.2(a) and 5.2(b)(i), and 5.5) such that the aggregate effect of such inaccuracies has, or is reasonably likely to have, a Carolina Financial 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 Financial 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)
Officers’ Certificate
. Carolina Financial shall have delivered to the Carolina Trust a certificate, dated as of the Closing Date 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 8.1 as they relate to Carolina Financial and in Sections 8.3(a), 8.3(b), and 8.3(f) have been satisfied.
(d)
Secretary’s Certificate
. Carolina Financial and CresCom Bank shall have delivered a certificate of the secretary of Carolina Financial and CresCom Bank, dated as of the
Closing Date, certifying as to (i) the incumbency of officers of Carolina Financial and CresCom Bank executing documents executed and delivered in connection herewith, (ii) a copy of the Certificate of Incorporation of the Carolina
Financial as in effect from the date of this Agreement until the Closing Date, along with a certificate (dated not more than 10 days prior to the Closing Date) of the Secretary of State of the State of Delaware as to the good standing of
the Carolina Financial; (iii) a copy of the Bylaws of the Carolina Financial as in effect from the date of this Agreement until the Closing Date, (iv) a copy of the consent or resolutions of Carolina Financial’s Board of Directors
authorizing and approving the applicable matters contemplated hereunder, (v) a certificate of the Federal Reserve (dated not more than 10 days prior to the Closing Date) certifying that the Carolina Financial is a registered financial
holding company, (vi) a copy of the Articles of Incorporation of CresCom Bank as in effect from the date of this Agreement until the Closing Date, (vii) a copy of the Bylaws of CresCom Bank as in effect from the date of this Agreement until
the Closing Date, (viii) a certificate of the South Carolina Board of Financial Institutions (dated not more than 10 days prior to the Closing Date) as to the good standing of CresCom Bank, and (ix) a certificate of the FDIC (dated not more
than 10 days prior to the Closing Date) certifying that CresCom Bank is an insured depository institution.
(e)
Payment of Merger Consideration
. Carolina Financial shall have executed and delivered an agreement with the Exchange Agent obligating Carolina Financial to deliver the
Merger Consideration and cash in an aggregate amount sufficient for payment in lieu of fractional shares of Carolina Financial Common Stock to which holders of Carolina Trust Common Stock may be entitled to the Exchange Agent within five
Business Days of the Effective Time.
(f)
No Material Adverse Effect.
There shall not have occurred any Carolina Financial Material Adverse Effect from the March 31, 2019 balance sheet to the Effective Time
with respect to Carolina Financial.
ARTICLE 9
TERMINATION
Notwithstanding any other provision of this Agreement, and notwithstanding the approval of this Agreement by the shareholders of Carolina Trust, this Agreement may be terminated and the
Merger abandoned at any time prior to the Effective Time:
(a) By mutual written agreement of Carolina Financial and Carolina Trust; or
(b) By Carolina Financial or Carolina Trust (
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 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 permit such Party to refuse to consummate the transactions contemplated by this Agreement
pursuant to the standard set forth in Section 8.2 or 8.3 as applicable; or
(c) By Carolina Financial or Carolina Trust 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 non-appealable action of such authority or if any action taken by such authority is not appealed within the time limit for appeal, (ii) any Law or Order permanently restraining, enjoining or otherwise
prohibiting the consummation of the Merger shall have become final and non-appealable, or (iii) the Requisite Carolina Trust Shareholder Vote is not obtained at Carolina Trust’s Shareholders’ Meeting; or
(d) By Carolina Financial or Carolina Trust in the event that the Merger shall not have been consummated by February 28, 2020, 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 9.1(d); or
(e) By Carolina Financial (provided, that Carolina Financial is not then in material breach of any representation, warranty, covenant, or other agreement contained in this
Agreement) in the event that (i) Carolina Trust’s Board shall have made an Adverse Recommendation Change relating to an Acquisition Proposal; (ii) Carolina Trust’s Board shall have failed to reaffirm the Carolina Trust Recommendation within
10 business days after Carolina Financial requests such at any time following the public announcement of an Acquisition Proposal,
provided
,
however
, that
any actions taken by Carolina Trust pursuant to Section 7.3 of this Agreement shall not be considered a failure to reaffirm the Carolina Trust Recommendation, or (iii) Carolina Trust shall have failed to comply in all material respects with
its obligations under Section 7.1 or 7.3; or
(f) By Carolina Trust, if (i) Carolina Trust’s Shareholders’ Meeting has been held, (ii) the Requisite Carolina Trust Shareholder Vote has not been obtained, (iii) prior to
Carolina Trust’s Shareholders’ Meeting, Carolina Trust has received a Superior Proposal which did not result from a breach of Section 7.3, and (iv) Carolina Trust’s Board has determined to enter into a definitive agreement providing for
such Superior Proposal upon termination of this Agreement in accordance with this Section 9.1(f) and enters into such agreement concurrently with such termination;
provided
, that Carolina Trust
shall pay Carolina Financial the Termination Fee pursuant to Section 9.3(a) concurrently with and as a condition to the effectiveness of such termination; or
(g) by Carolina Trust, at any time prior to receipt of the Requisite Carolina Trust Shareholder Vote, if the Carolina Trust Board shall have effected an Adverse Recommendation
Change in response to, or as a result of, an Intervening Event.
|
9.2
|
Effect of Termination.
|
In the event of the termination and abandonment of this Agreement by either Carolina Financial or Carolina Trust pursuant to Section 9.1, this Agreement shall become void and have no
effect, except that (i) the provisions of Sections 7.6, 9.2, 9.3, 10.2, and 10.3 shall survive any such termination and abandonment, and (ii) no such termination shall relieve the breaching Party from Liability resulting from any breach by
that Party of this Agreement.
(a) If Carolina Financial terminates this Agreement pursuant to Section 9.1(e) of this Agreement or Carolina Trust terminates this Agreement pursuant to Section 9.1(f) of this
Agreement, then Carolina Trust shall pay to Carolina Financial the sum of $4,712,000 (the “
Termination Fee
”) within three business days of the termination date, except as required by Section 9.1(f). The Termination Fee shall be paid
to Carolina Financial in same day funds. Carolina Trust hereby waives any right to set-off or counterclaim against such amount.
(b) In the event that, (i) before the termination of this Agreement, an Acquisition Proposal with respect to Carolina Trust shall have been communicated to or otherwise made known
to the shareholders, senior management or Board of Directors of Carolina Trust, or any Person shall have publicly announced an intention (whether or not conditional) to make an Acquisition Proposal with respect to Carolina Trust, in either
case after the date of this Agreement, (ii) thereafter this Agreement is terminated (A) by Carolina Trust or Carolina Financial pursuant to Section 9.1(d) (if the Requisite Carolina Trust Shareholder Vote has not theretofore been obtained),
(B) by Carolina Financial pursuant to Section 9.1(b), or (C) by Carolina Trust or Carolina Financial pursuant to Section 9.1(c)(iii), and (iii) prior to the date that is 12 months after the date of such termination, Carolina Trust
consummates, or enters into a definitive agreement to consummate, an Acquisition Transaction in which, as applicable, the acquirer acquires a majority of the total outstanding voting securities of Carolina Trust or Carolina Trust Bank, the
shareholders of Carolina Trust immediately preceding the transaction hold less than a majority of the equity interests of the surviving or resulting entity or the acquirer acquires more than 50% of the assets of Carolina Trust, then
Carolina Trust shall on the earlier of the date such Acquisition Transaction is consummated or such definitive agreement is entered into, as applicable, pay Carolina Financial a fee equal to the Termination Fee in same day funds. Carolina
Trust hereby waives any right to set-off or counterclaim against such amount.
(c) The Parties acknowledge that the agreements contained in this Article 9 are an integral part of the transactions contemplated by this Agreement, and that without these
agreements, they would not enter into this Agreement; accordingly, if Carolina Trust fails to pay promptly any fee payable by it pursuant to this Section 9.3, then Carolina Trust shall pay to Carolina Financial its reasonable costs and
expenses (including reasonable attorneys’ fees) in connection with collecting such Termination Fee, together with interest on the amount of the fee at the prime annual rate of interest (as published in
The
Wall Street Journal
) plus 2% as the same is in effect from time to time from the date such payment was due under this Agreement until the date of payment.
|
9.4
|
Non-Survival of Representations and Covenants.
|
Except for Article 2, Article 3, Sections 7.6(b), 7.8, 7.9, 7.11, and 7.12 and this Article 9, the respective representations, warranties, obligations, covenants, and agreements of the
Parties shall not survive the Effective Time.
ARTICLE 10
MISCELLANEOUS
(a) Except as otherwise provided herein, the capitalized terms set forth below shall have the following meanings:
“Acquisition Agreement”
shall have the meaning as set forth in Section 7.3 of the Agreement.
“Acquisition Proposal”
means any proposal that is communicated to Carolina Trust’s chief executive officer, chief financial officer or Board of
Directors or publicly announced to Carolina Trust’s shareholders by any Person (other than Carolina Financial or any of its Affiliates) for an Acquisition Transaction involving Carolina Trust or any of its present or future consolidated
Subsidiaries, or any combination of such Subsidiaries, the assets of which constitute 5% or more of the consolidated assets of Carolina Trust as reflected on Carolina Trust’s consolidated statement of condition prepared in accordance with
GAAP.
“Acquisition Transaction”
means any transaction or series of related transactions (other than the transactions contemplated by this Agreement)
involving: (i) any acquisition or purchase from Carolina Trust by any Person or Group (other than Carolina Financial or any of its Affiliates) of 25% or more in interest of the total outstanding voting securities of Carolina Trust or any of
its Subsidiaries, or any tender offer or exchange offer that if consummated would result in any Person or Group (other than Carolina Financial or any of its Affiliates) beneficially owning 25% or more in interest of the total outstanding
voting securities of Carolina Trust or any of its Subsidiaries, or any merger, consolidation, business combination or similar transaction involving Carolina Trust pursuant to which the shareholders of Carolina Trust immediately preceding
such transaction hold less than 75% of the equity interests in the surviving or resulting entity (which includes the parent corporation of any constituent corporation to any such transaction) of such transaction; (ii) any sale or lease
(other than in the ordinary course of business), or exchange, transfer, license (other than in the ordinary course of business), acquisition or disposition of 5% or more of the assets of Carolina Trust; or (iii) any liquidation or
dissolution of Carolina Trust.
“Adverse Recommendation Change”
shall have the meaning as set forth in Section 7.1(b) of the Agreement.
“Affiliate”
of a Person means: (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.
“Aggregate Cash Limit”
shall have the meaning as set forth in Section 3.2(d) of the Agreement.
“Aggregate Stock Limit”
shall have the meaning as set forth in Section 3.2(d) of the Agreement.
“Agreement”
shall have the meaning as set forth in the introduction of the Agreement.
“Allowance”
shall have the meaning as set forth in Section 4.9(a) of the Agreement.
“Articles of Merger”
shall have the meaning as set forth in Section 1.3 of the Agreement.
“Assets”
of a Person means all of the assets, properties, businesses and rights of such Person of every kind, nature, character and description,
whether real, personal or mixed, tangible or intangible, accrued or contingent, or otherwise relating to or utilized in such Person’s business, directly or indirectly, in whole or in part, whether or not carried on the books and records of
such Person, and whether or not owned in the name of such Person or any Affiliate of such Person and wherever located.
“
Average Closing Price”
means the average of the closing sale prices of Carolina Financial Common Stock on the NASDAQ Capital Market (as reported by
Bloomberg L.P.) for the ten full trading days ending on the day preceding the date on which the Effective Time is to occur.
“Bank Agreement of Merger”
shall have the meaning as set forth in Section 1.6 of the Agreement, and the form attached hereto as
Exhibit A
.
“Bank Merger”
shall have the meaning as set forth in Section 1.6 of the Agreement.
“BHCA”
shall have the meaning as set forth in Section 4.1 of the Agreement.
“Carolina Financial”
shall have the meaning as set forth in the introduction of the Agreement.
“Carolina Financial Awards”
shall have the meaning as set forth in Section 3.1(e) of the Agreement.
“Carolina Financial Common Stock”
means the common stock, par value $0.01 per share, of Carolina Financial.
“Carolina Financial Entities”
means, collectively, Carolina Financial and all Carolina Financial Subsidiaries.
“Carolina Financial Exchange Act Reports”
shall have the meaning as set forth in the Section 5.4(a) of the Agreement.
“Carolina Financial Financial Advisor”
shall mean Sandler O’Neill & Partners, L.P.
“Carolina Financial Financial Statements”
means (i) the consolidated balance sheets of Carolina Financial as of March 31, 2019, and the related
statements of income, changes in stockholders’ equity, and cash flows (including related notes and schedules, if any) for the period ended March 31, 2019, and for each of the three fiscal years ended December 31, 2018, included in Exchange
Act Documents filed with the SEC by Carolina Financial, and (ii) the consolidated balance sheets of Carolina Financial (including related notes and schedules, if any) and related statements of income, changes in stockholders’ equity, and
cash flows (including related notes and schedules, if any) included in Exchange Act Documents filed with the SEC by Carolina Financial with respect to periods ended subsequent to March 31, 2017.
“Carolina Financial Material Adverse Effect”
means an event, change or occurrence which, individually or together with any other event, change or
occurrence, has a material adverse effect on (i) the financial position, property, business, assets or results of operations of Carolina Financial and its Subsidiaries, taken as a whole, or (ii) the ability of Carolina Financial to perform
its material obligations under this Agreement or to consummate the Merger or the other transactions contemplated by this Agreement,
provided, that
“Carolina Financial Material Adverse Effect” shall
not be deemed to include the effects of (A) changes in banking and other Laws of general applicability or interpretations thereof by Governmental Authorities, (B) changes in GAAP or regulatory accounting principles generally applicable to
banks and their holding companies, (C) actions and omissions of Carolina Financial (or any of its Subsidiaries) taken with the prior written Consent of Carolina Trust in contemplation of the transactions contemplated hereby, (D) changes in
economic conditions affecting financial institutions generally, including changes in interest rates, credit availability and liquidity, and price levels or trading volumes in securities markets, except to the extent Carolina Financial is
materially and adversely affected in a disproportionate manner as compared to other community banks and their holding companies in the Southeastern United States, (E) changes resulting from the announcement or pendency of the transactions
contemplated by this Agreement, or (F) the direct effects of negotiating, entering into, and compliance with this Agreement on the operating performance of Carolina Financial. “Carolina Financial Material Adverse Effect” shall not be deemed
to include any failure to meet analyst projections, in and of itself, or, in and of itself, or the trading price of Carolina Financial Common Stock (it being understood that the facts or occurrences giving rise or contributing to any such
effect, change or development which affects or otherwise relates to the failure to meet analyst financial forecasts or the trading price, as the case may be, may be deemed to constitute, or be taken into account in determining whether there
has been, or would reasonably be expected to be, a Carolina Material Adverse Effect).
“Carolina Financial Security Program”
shall have the meaning as set forth in Section 7.6(e) of the Agreement.
“Carolina Financial Subsidiaries”
means the Subsidiaries of Carolina Financial, which shall include any corporation, bank, savings association,
limited liability company, limited partnership, limited liability partnership or other organization acquired as a Subsidiary of Carolina Financial in the future and held as a Subsidiary by Carolina Financial at the Effective Time.
“Carolina Trust”
shall have the meaning as set forth in the introduction of the Agreement.
“Carolina Trust Benefit Plan(s)”
shall have the meaning as set forth in Section 4.15(a) of the Agreement.
“Carolina Trust’s Board”
means the Board of Directors of Carolina Trust.
“Carolina Trust Book-Entry Shares”
shall have the meaning set forth in Section 3.1(b) of the Agreement.
“Carolina Trust Common Stock”
means the $2.50 par value common stock of Carolina Trust.
“Carolina Trust Contracts”
shall have the meaning as set forth in Section 4.16(a) of the Agreement.
“Carolina Trust Disclosure Memorandum”
means the written information entitled “Carolina Trust Disclosure Memorandum” delivered with this Agreement,
it being understood that a disclosure in any section of the Carolina Trust Disclosure Memorandum shall be deemed to have been set forth in all other applicable sections of the Carolina Trust Disclosure Memorandum where it is reasonably
apparent on the face of such disclosure that such disclosure is applicable to such other sections of the Carolina Trust Disclosure Memorandum, notwithstanding the omission of any cross-reference to such other section, and it being
understood further that the inclusion of any disclosure on the Carolina Trust Disclosure Memorandum does not make such disclosure a material disclosure.
“Carolina Trust Entities”
means, collectively, Carolina Trust and all Carolina Trust Subsidiaries.
“Carolina Trust Entities’ D&O Policies”
shall have the meaning as set forth in Section 7.11(b) of the Agreement.
“Carolina Trust Equity Plans”
means the Carolina Trust Bank 2001 Incentive Stock Option Plan, the Carolina Trust Bank 2005 Incentive Stock Option
Plan, the Carolina Trust Bank 2005 Nonstatutory Stock Option Plan, the Carolina Commerce Bank Employee Stock Option Plan, and the Carolina Commerce Bank Director Stock Option Plan.
“Carolina Trust ERISA Plan”
shall have the meaning as set forth in Section 4.15(a) of the Agreement.
“Carolina Trust Financial Advisor”
means Raymond James & Associates, Inc.
“Carolina Trust Financial Statements”
means (i) the consolidated balance sheets of Carolina Trust as of March 31, 2019, and the related statements of
income, changes in shareholders’ equity, and cash flows (including related notes and schedules, if any) for the quarter ended March 31, 2019, and for each of the three fiscal years ended December 31, 2018, included in Exchange Act Documents
filed with the SEC by Carolina Trust, and (ii) the consolidated balance sheets of Carolina Trust (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 Exchange Act Documents filed with the SEC by Carolina Trust with respect to periods ended subsequent to March 31, 2019.
“Carolina Trust Material Adverse Effect”
means an event, change or occurrence which, individually or together with any other event, change or
occurrence, has a material adverse effect on (i) the financial position, property, business, assets or results of operations of Carolina Trust and its Subsidiaries, taken as a whole, or (ii) the ability of Carolina Trust to perform its
material obligations under this Agreement or to consummate the Merger or the other transactions contemplated by this Agreement, provided, that “Carolina Trust Material Adverse Effect” shall not be deemed to include the effects of (A)
changes in banking and other Laws of general applicability or interpretations thereof by Governmental Authorities, (B) changes in GAAP or regulatory accounting principles generally applicable to banks and their holding companies, (C)
actions and omissions of Carolina Trust (or any of its Subsidiaries) taken with the prior written consent of Carolina Financial in contemplation of the transactions contemplated hereby, (D) changes in economic conditions affecting financial
institutions generally, including changes in interest rates, credit availability and liquidity, and price levels or trading volumes in securities markets, except to the extent Carolina Trust is materially and adversely affected in a
disproportionate manner as compared to other community banks and their holding companies in the Southeastern United States, (E) changes resulting from the announcement or pendency of the transactions contemplated by this Agreement, or (F)
the direct effects of negotiating, entering into, and compliance with this Agreement on the operating performance of Carolina Trust. “Carolina Trust Material Adverse Effect” shall not be deemed to include any failure to meet analyst
projections, in and of itself, or, in and of itself, or the trading price of the Carolina Trust Common Stock (it being understood that the facts or occurrences giving rise or contributing to any such effect, change or development which
affects or otherwise relates to the failure to meet analyst financial forecasts or the trading price, as the case may be, may be deemed to constitute, or be taken into account in determining whether there has been, or would reasonably be
expected to be, a Carolina Trust Material Adverse Effect).
“Carolina Trust Options”
shall have the meaning as set forth in Section 3.4(b) of the Agreement.
“
Carolina Trust Recommendation
” shall have the meaning as set forth in Section 7.1(a) of the Agreement.
“Carolina Trust Realty”
shall have the meaning as set forth in Section 4.10(e) of the Agreement.
“Carolina Trust’s Shareholders’ Meeting”
means the meeting of Carolina Trust’s shareholders to be held pursuant to Section 7.1(a), including any
postponements or adjournments thereof.
“Carolina Trust Subsidiaries”
means the Subsidiaries of Carolina Trust and Carolina Trust Bank. As of the date of this Agreement, the only Carolina
Trust Subsidiaries are Carolina Trust Bank, which is a Subsidiary of Carolina Trust, and Western Carolina Holdings, LLC, which is a Subsidiary of Carolina Trust Bank.
“Cash Consideration”
shall have the meaning as set forth in Section 3.1(a) of the Agreement.
“Cash Election”
shall have the meaning as set forth in Section 3.2(b) of the Agreement.
“Cash Election Number”
shall have the meaning as set forth in Section 3.2(b) of the Agreement.
“Cash Election Shares”
shall have the meaning as set forth in Section 3.2(b) of the Agreement.
“Certificate of Merger”
shall have the meaning as set forth in Section 1.3 of the Agreement.
“Certificates”
shall have the meaning as set forth in Section 3.1(b) of the Agreement.
“
Closing”
shall have the meaning as set forth in Section 1.2 of the Agreement.
“
Closing Date”
means the date on which the Closing occurs.
“Code”
means the Internal Revenue Code of 1986, as amended, in effect from time to time.
“Consent”
means any consent, approval, authorization, clearance, exemption, waiver, or similar affirmation by any Person pursuant to any Contract,
Law, Order, or Permit.
“Consumer Loan”
a loan or other extension of credit to one or more individuals for household, family and other consumer purposes
which has been or would be classified as a “Consumer loan” in tabular data presented by Carolina Trust in an Exchange Act Document, which, for the avoidance of doubt, excludes a loan which is or would be classified in such Exchange Act
Document as a “Residential mortgage.”
“Continuing Employee”
shall have the meaning as set forth in Section 7.9(a) of the Agreement.
“Contract”
means any written or oral agreement, arrangement, authorization, commitment, contract, indenture, instrument, lease, license, obligation,
plan, practice, restriction, understanding, or undertaking of any kind or character, or other document to which any Person is a party or that is binding on any Person or its capital stock, Assets or business.
“Data Incident”
means any actual or reasonably suspected unauthorized access to or acquisition, disclosure, use, or loss of IIPI disclosed to any
Carolina Financial Entity in connection with this Agreement (including hard copies) or breach or compromise of Carolina Financial’s Security Program that presents a viable threat to any such IIPI or any Carolina Trust Entity’s systems.
“Default”
means (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.
“
DGCL
” means the Delaware General Corporation Law.
“Director Non-Competition Agreement”
shall have the meaning as set forth in Section 7.9(e) of the Agreement.
“Disqualified Person”
shall have the meaning as set forth in Section 4.15(f) of the Agreement.
“DOL”
shall have the meaning as set forth in Section 4.15(b) of the Agreement.
“Effective Date”
shall have the meaning as set forth in Section 1.2 of the Agreement.
“Effective Time”
shall have the meaning as set forth in Section 1.3 of the Agreement.
“Election Deadline”
shall have the meaning as set forth in Section 3.2(c) of the Agreement.
“Employee Benefit Plan”
means each pension, retirement, profit-sharing, deferred compensation, stock option, equity incentive, synthetic equity
incentive, phantom stock, employee stock ownership, share purchase, severance pay, vacation, bonus, retention, change in control or other incentive plan, medical, vision, dental or other health plan, any life insurance plan, flexible
spending account, cafeteria plan, vacation, holiday, disability or any other employee benefit plan or fringe benefit plan, including any “employee benefit plan,” as that term is defined in Section 3(3) of ERISA and any other plan, fund,
policy, program, practice, custom understanding or arrangement providing compensation or other benefits, whether or not such Employee Benefit Plan is or is intended to be (i) covered or qualified under the Code, ERISA or any other
applicable Law, (ii) written or oral, (iii) funded or unfunded, (iv) actual or contingent or (v) arrived at through collective bargaining or otherwise.
“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 Governmental Authorities with jurisdiction over, and
including common law in respect of, pollution or protection of the environment, including: (i) the Comprehensive Environmental Response Compensation and Liability Act, 42 U.S.C. §§9601 et seq. (“
CERCLA
”); (ii) the Solid Waste
Disposal Act, as amended by the Resource Conservation and Recovery Act, 42 U.S.C. §§6901 et seq. (“
RCRA
”); (iii) the Emergency Planning and Community Right to Know Act (42 U.S.C. §§11001 et seq.); (iv) the Clean Air Act (42 U.S.C.
§§7401 et seq.); (v) the Clean Water Act (33 U.S.C. §§1251 et seq.); (vi) the Toxic Substances Control Act (15 U.S.C. §§2601 et seq.); (vii) any state, county, municipal or local statues, laws or ordinances similar or analogous to the
federal statutes listed in parts (i) - (vi) of this subparagraph; (viii) any existing amendments to the statues, laws or ordinances listed in parts (i) - (vi) of this subparagraph, (ix) any rules, regulations, guidelines, directives, orders
or the like adopted pursuant to or implementing the statutes, laws, ordinances and amendments listed in parts (i) - (vii) of this subparagraph; and (x) any other law, statute, ordinance, amendment, rule, regulation, guideline, directive,
order or the like in effect now relating to environmental, health or safety matters and other Laws relating to emissions, discharges, releases, or threatened releases of any Hazardous Material, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport, or handling of any Hazardous Material.
“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended through the date of this Agreement.
“ERISA Affiliate”
means any trade or business, whether or not incorporated, which together with a Carolina Trust Entity would be treated as a single
employer under Code Section 414 or would be deemed a single employer within the meaning of Code Section 414.
“Exchange Act”
means the Securities Exchange Act of 1934, and the rules and regulations promulgated thereunder.
“Exchange Act Documents”
means all forms, proxy statements, registration statements, reports, schedules, and other documents, as amended or
supplemented, including all certifications and statements required by the Exchange Act or Section 906 of the Sarbanes-Oxley Act with respect to any report that is an Exchange Act Document, filed, or required to be filed, by a Party or any
of its Subsidiaries with any Regulatory Authority pursuant to the Securities Laws.
“Exchange Agent”
shall have the meaning as set forth in Section 3.2(a) of the Agreement.
“Exchange Fund”
shall have the meaning as set forth in Section 3.2(a) of the Agreement.
“Exchange Ratio”
shall have the meaning as set forth in Section 3.1(a) of the Agreement.
“Executive Officers”
means the President and Chief Executive Officer of Carolina Trust, Executive Vice President and Chief Financial Officer of
Carolina Trust and the Executive Vice President and Chief Credit Officer of Carolina Trust Bank.
“Exhibits”
means 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 or thereto.
“Extinguished Shares”
shall have the meaning as set forth in Section 3.1(f) of the Agreement.
“
FDIC
” means the Federal Deposit Insurance Corporation.
“Federal Reserve
” means the Board of Governors of the Federal Reserve System and the Federal Reserve Bank of Richmond, as applicable.
“GAAP”
means generally accepted accounting principles in the United States, consistently applied during the periods involved.
“Governmental Authority”
means any federal, state, local, foreign, or other court, board, body, commission, agency, authority or instrumentality,
arbitral authority, self-regulatory authority, mediator, tribunal, including Regulatory Authorities and Taxing Authorities.
“Group”
shall have the meaning as set forth in Section 13(d) of the Exchange Act.
“Hazardous Material”
means any chemical, substance, waste, material, pollutant, or contaminant defined as or deemed hazardous or toxic or otherwise
regulated under any Environmental Law, including RCRA hazardous wastes, CERCLA hazardous substances, and state regulated substances,
pesticides and other agricultural chemicals, oil and petroleum
products or byproducts and any constituents thereof, urea formaldehyde insulation, lead in paint or drinking water, mold, asbestos (and specifically shall include asbestos requiring abatement, removal, or encapsulation pursuant to the
requirements of Environmental Law), and polychlorinated biphenyls (PCBs), provided, notwithstanding the foregoing or any other provision in this Agreement to the contrary, the words “Hazardous Material” shall not mean or include any such
Hazardous Material used, generated, manufactured, stored, disposed of or otherwise handled in normal quantities in the ordinary course of business in compliance with all applicable Environmental Laws, or such that may be naturally occurring
in any ambient air, surface water, ground water, land surface or subsurface strata.
“Holder Representative”
shall have the meaning as set forth in Section 3.2(b) of the Agreement.
“IIPI”
shall have the meaning as set forth in Section 4.13(b)(vii) of the Agreement.
“Indemnified Party”
shall have the meaning as set forth in Section 7.11(a) of the Agreement.
“Individually Identifiable Personal Information” or “IIPI”
shall have the meaning as set forth in Section 4.13(b)(vii) of the Agreement.
“Intellectual Property”
means copyrights, patents, trademarks, service marks, service names, trade names, domain names, together with all goodwill
associated therewith, registrations and 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.
“Intervening Event”
shall have the meaning as set forth in Section 7.1(b) of the Agreement.
“IRS”
shall have the meaning as set forth in Section 4.15(b) of the Agreement.
“Knowledge”
as used with respect to a Person (including references to such Person being aware of a particular matter) means those facts that are
known, or should reasonably have been known after reasonable inquiry of the records and employees of such Person, by the chief executive officer or chief financial officer of such Person without any further investigation.
“Law”
means any code, law (including common law), ordinance, regulation, reporting or licensing requirement, rule, statute, regulation or order
applicable to a Person or its Assets, Liabilities or business, including those promulgated, interpreted or enforced by any Regulatory Authority.
“Liability”
or
“Liabilities”
means any direct or indirect, primary or secondary, liability, indebtedness,
obligation, penalty, cost or expense (including reasonable attorneys’ fees, 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”
means 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 any property
interest, other than (i) Liens for current property Taxes not yet due and payable, and
(ii) for any depository institution, pledges to secure public deposits and other Liens incurred in the ordinary
course of the banking business.
“Litigation”
means any action, arbitration, cause of action, lawsuit, claim, complaint, criminal prosecution, governmental or other examination or
investigation, audit (other than regular audits of financial statements by outside auditors), compliance review, inspection, hearing, administrative or other proceeding relating to or affecting a Party, its business, its Assets or
Liabilities (including Contracts related to Assets or Liabilities), or the transactions contemplated by this Agreement, but shall not include regular, periodic examinations of depository institutions and their Affiliates by Regulatory
Authorities.
“Loan”
means all loan agreements, notes or borrowing arrangements (including leases, credit enhancements, commitments, guarantees and
interest-bearing assets) payable to the Carolina Trust Entities.
“Material”
or
“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.
“Merger”
shall have the meaning as set forth in the Recitals of the Agreement.
“Merger Consideration”
shall have the meaning as set forth in Section 3.1(a) of the Agreement.
“Mixed Election”
shall have the meaning as set forth in Section 3.2(b) of the Agreement.
“NCBCA”
means the North Carolina Business Corporation Act.
“Non-Election”
shall have the meaning as set forth in Section 3.2(b) of the Agreement.
“Non-Election Shares”
shall have the meaning as set forth in Section 3.2(b) of the Agreement.
“Notice of Recommendation Change”
shall have the meaning as set forth in Section 7.1(b) of the Agreement.
“Off-Balance Sheet Arrangements”
shall have the meaning as set forth in Section 4.6 of the Agreement.
“Order”
means any administrative decision or award, decree, injunction, judgment, order, quasi-judicial decision or award, directive, ruling, or writ
of any Governmental Authority.
“Party”
means Carolina Trust or Carolina Financial, as applicable, and
“Parties”
means Carolina Trust and
Carolina Financial.
“Party in Interest”
shall have the meaning as set forth in Section 4.15(f) of the Agreement.
“Permit”
means any federal, state, local, and foreign Governmental Authority 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, the absence of which or a default under would constitute a
Carolina Financial Material Adverse Effect or Carolina Trust Adverse Effect, as the case may be.
“Per Share Purchase Price”
shall have the meaning as set forth in Section 3.1(a) of the Agreement.
“Person”
means a natural person or any legal, commercial or Governmental Authority, such as, but not limited to, a corporation, general partnership,
joint venture, limited partnership, limited liability company, limited liability partnership, trust, business association, group acting in concert, or any person acting in a representative capacity.
“PPACA”
shall have the meaning as set forth in Section 4.15(x) of the Agreement.
“
Premium Multiple
” shall have the meaning as set forth in Section 7.11(b) of the Agreement.
“Prohibited Transaction”
shall have the meaning as set forth in Section 4.15(f) of the Agreement.
“Proxy Statement/Prospectus”
shall have the meaning as set forth in Section 4.2(c) of the Agreement.
“
Qualified Group
” shall have the meaning set forth in Section 5.8 of the Agreement.
“RCRA”
shall have the meaning as set forth in the definition of “Environmental Laws” set forth above.
“Registration Statement”
shall have the meaning set forth in Section 4.2(c) of the Agreement.
“Regulatory Authorities”
means, collectively, the SEC, the NASDAQ Stock Market, the Financial Industry Regulatory Authority, Inc., the North Carolina
Commissioner of Banks, the North Carolina Banking Commission, the South Carolina Board of Financial Institutions, the FDIC, the Department of Justice, and the Federal Reserve and all other federal, state, county, local or other Governmental
Authorities having jurisdiction over a Party or its Subsidiaries.
“Representative”
means any investment banker, financial advisor, attorney, accountant, consultant, or other representative or agent of a Person.
“Requisite Carolina Trust Shareholder Vote”
shall have the meaning as set forth in Section 4.2(a) of the Agreement.
“Rights”
shall mean all arrangements, calls, commitments, Contracts, options, rights to subscribe to, scrip, warrants, or other binding obligations
of any character whatsoever by which a Person is or may be bound to issue additional shares of its capital stock or other securities, securities or rights convertible into or exchangeable for, shares of the capital stock or other securities
of a Person or by which a Person is or may be bound to issue additional shares of its capital stock or other Rights.
“Sarbanes-Oxley Act”
means the Sarbanes-Oxley Act of 2002, and the rules and regulations promulgated thereunder.
“SEC”
means the United States Securities and Exchange Commission.
“Securities Act”
means the Securities Act of 1933, and the rules and regulations promulgated thereunder.
“Securities Laws”
means the Securities Act, the Exchange Act, the Investment Company Act of 1940, the Investment Advisors Act of 1940, the Trust
Indenture Act of 1939, and the rules and regulations of any Regulatory Authority promulgated thereunder.
“Shareholder Support Agreements”
shall have the meaning as set forth in Section 7.9(e) of the Agreement.
“Stock Consideration”
shall have the meaning as set forth in Section 3.1(a) of the Agreement.
“Stock Election”
shall have the meaning as set forth in Section 3.2(b) of the Agreement.
“Stock Election Number”
shall have the meaning as set forth in Section 3.2(b) of the Agreement.
“Stock Election Shares”
shall have the meaning as set forth in Section 3.2(b) of the Agreement.
“Subsidiaries”
means all those corporations, banks associations, or other 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 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.
“Superior Proposal”
means any bona fide written Acquisition Proposal made by a third party that if consummated would result in such Person (or its
shareholders) owning, directly or indirectly, more than 50% of the shares of Carolina Trust Common Stock then outstanding (or of the shares of the surviving entity in a merger or the direct or indirect parent of the surviving entity in a
merger) or all or substantially all of the assets of Carolina Trust which Carolina Trust’s Board (after consultation with the Carolina Trust Financial Advisor and the Carolina Trust’s outside counsel) determines (taking into account all
financial, legal, regulatory, and other aspects of such proposal and the third party making the proposal) in good faith to be (i) more favorable to Carolina Trust’s Shareholders from a financial point of view than the Merger (taking into
account all the terms and conditions of such proposal and this Agreement (including any changes to the financial terms of this Agreement proposed by Carolina Financial in response to such offer or otherwise)), and (ii) reasonably capable of
being completed.
“Surviving Corporation”
means Carolina Financial as the surviving corporation resulting from the Merger as set forth in Section 1.1 of the Agreement.
“Surviving Bank”
means CresCom Bank as the surviving bank resulting from the Bank Merger as set forth in Section 1.6 of the Agreement.
“Tax”
or
“Taxes”
means any and all taxes and charges, fees, levies, imposts, duties, or assessments in the
nature of a tax, including income, gross receipts, excise, employment, sales, use, transfer, recording license, payroll, franchise, severance, documentary, 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 taxes, fees, assessments or charges of any kind whatsoever, that, in any case, are imposed or required to be withheld by any Governmental Authority (domestic or foreign),
including any interest, penalties, and additions imposed thereon or with respect thereto.
“Tax Return”
means any report, return, information return, or other information required to be supplied to a Governmental Authority in connection
with Taxes, including any return of an affiliated or combined or unitary group that includes a Party or its Subsidiaries.
“Taxing Authority”
means the Internal Revenue Service and any other Governmental Authority responsible for the administration of any Tax.
“Termination Fee”
shall have the meaning as set forth in Section 9.3(a) of the Agreement.
“
Treasury Regulations
” means the final regulations promulgated under the Code by the United States Department of the Treasury.
“WARN Act”
shall have the meaning as set forth in Section 4.14(d) of the Agreement.
(b) 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”, and such terms shall not be limited by enumeration or example.
When used in this Agreement, words such as “herein”,
“hereinafter”, “hereof”, “hereto”, and “hereunder” refer to this Agreement as a whole, unless the context clearly requires otherwise.
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, and which in the case of Carolina Trust, shall be paid at or prior to Closing
and prior to the Effective Time.
|
10.3
|
Brokers and Finders.
|
Except for the Carolina Trust Financial Advisor as to Carolina Trust and the Carolina Financial Financial Advisor as to Carolina Financial, 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 such broker’s representing or being retained by or allegedly representing or being retained by Carolina
Trust or Carolina Financial, each of Carolina Trust or Carolina Financial, as the case may be, agrees to indemnify and hold the other Party harmless from any Liability in respect of any such claim. Carolina Trust has provided a copy of the
Carolina Trust Financial Advisor’s engagement letter and expected fee for its services as disclosed in Section 10.3 of the Carolina Trust Disclosure Memorandum and shall pay all amounts due thereunder at Closing and prior to the Effective
Time.
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. 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 7.9 and 7.11.
To the extent permitted by Law, and subject to Section 1.4, 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 the Requisite Carolina Trust Shareholder Vote and the Requisite Carolina Financial Stockholder Votes of this Agreement have been obtained;
provided, that
after any such
approval by the holders of Carolina Trust Common Stock, there shall be made no amendment that (a) reduces or modifies in any respect the consideration to be received by holders of Carolina Trust Common Stock or (b) alters or changes any of
the terms and conditions of this Agreement if such alteration or change would adversely affect the holders of Carolina Trust Common Stock.
(a) Prior to or at the Effective Time, Carolina Financial, acting through its Board of Directors, chief executive officer, or other authorized officers, shall have the right to
waive any Default in the performance of any term of this Agreement by Carolina Trust, to waive or extend the time for the compliance or fulfillment by Carolina Trust 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 Financial 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 Financial.
(b) Prior to or at the Effective Time, Carolina Trust, 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 Financial, to waive or extend the time for the compliance or fulfillment by Carolina Financial
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 Trust 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 Trust.
(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.
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,
including by merger or consolidation, 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.
All notices or other communications which are required or permitted hereunder shall be in writing and sufficient if delivered by hand, by registered or certified mail, postage pre-paid, or
by courier or overnight carrier, or email (with, in the case of email, confirmation of date and time by the transmitting equipment) 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 or refused:
Carolina Financial:
|
Carolina Financial Corporation
|
|
288 Meeting Street
|
|
Charleston, SC 29401
|
|
Attention: Jerold L. Rexroad
|
Copy to Counsel:
|
Nelson Mullins Riley & Scarborough LLP
|
|
Poinsett Plaza, Suite 900
|
|
104 South Main Street
|
|
Greenville, SC 29601
|
|
Attention: Neil E. Grayson
|
Carolina Trust:
|
Carolina Trust BancShares, Inc.
|
|
901 East Main Street
|
|
Lincolnton, NC 28092
|
|
Attention: Jerry L. Ocheltree
|
Copy to Counsel:
|
Wyrick Robbins Yates & Ponton LLP
|
|
4101 Lake Boone Trail, Suite 300
|
|
Raleigh, NC 27607
|
|
Attention: Todd H. Eveson
|
|
10.9
|
Governing Law; Jurisdiction.
|
Regardless of any conflict of law or choice of law principles that might otherwise apply, the Parties agree that this Agreement shall be governed by and construed in all respects in
accordance with the laws of the State of South Carolina. The Parties agree that any suit, action or proceeding brought by either Party to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement
or the transactions contemplated hereby shall be brought in any federal or state court located in Charleston, South Carolina. Each of the Parties submits to the jurisdiction of any such court in any suit, action or proceeding seeking to
enforce any provision of, or based on any matter arising out of, or in connection with, this Agreement or the transactions contemplated hereby and hereby irrevocably waives the benefit of jurisdiction derived from present or future domicile
or otherwise in such action or proceeding. Each Party irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such
court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.
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.
|
10.11
|
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.
(a) 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.
(b) No disclosure, representation or warranty shall be required to be made (or any other action taken) pursuant to this Agreement that would involve the disclosure of confidential
supervisory information of a Governmental Authority by any Party hereto to the extent prohibited by applicable law, and, to the extent legally permissible, appropriate substitute disclosures or actions shall be made or taken under
circumstances in which the limitations of this sentence apply.
(c)
Any reference contained in this Agreement to specific statutory or regulatory provisions or to specific Governmental Authorities includes any
successor statute or regulation, or Governmental Authority, as the case may be. Unless otherwise specified, the references to “Section” and “Article” in this Agreement are to the Sections and Articles of this Agreement.
|
10.13
|
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.
Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction. If
any provision of this Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only so broad as is enforceable.
[Signature page follows]
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 FINANCIAL CORPORATION
|
|
|
|
|
By:
|
/s / Jerold L. Rexroad
|
|
|
Name:
|
Jerold L. Rexroad
|
|
Title:
|
President and CEO
|
|
CAROLINA TRUST BANCSHARES, INC.
|
|
|
|
|
By:
|
/s/ Jerry L. Ocheltree
|
|
|
Name:
|
Jerry L. Ocheltree
|
|
Title:
|
President & CEO
|
[Signature page to Agreement and Plan of Merger and Reorganization]