Preview | Agreement and Plan of Merger |

Table of Contents


ARTICLE I	DEFINITIONS AND INTERPRETATION	1

	1.1 Definitions	1
	1.2 Terms Defined Elsewhere	1
	1.3 Interpretation	4

ARTICLE II	PLAN OF MERGER	5

	2.1 The Merger	5
	2.2 Effective Time and Effects of the Merger	5
	2.3 Tax Consequences	5
	2.4 Conversion of FLBK Common Stock	5
	2.5 TSFG Common Stock	6
	2.6 Articles of Incorporation and Bylaws	6
	2.7 Directors and Executive Officers	6
	2.8 TSFG to Make Shares Available	6
	2.9 Exchange of Shares	6
	2.10 [Reserved]	8
	2.11 Stock-Based Plans	8

ARTICLE III	DISCLOSURE SCHEDULES; STANDARDS FOR REPRESENTATIONS AND WARRANTIES	9

	3.1 Disclosure Schedules	9
	3.2 Standards	9
	3.3 Subsidiaries	9

ARTICLE IV	REPRESENTATIONS AND WARRANTIES OF FLBK	9

	4.1 Corporate Organization	9
	4.2 Capitalization	9
	4.3 Authority	10
	4.4 Consents and Approvals	10
	4.5 No Violations	10
	4.6 SEC Reports	11
	4.7 Regulatory Reports	11
	4.8 Financial Statements	11
	4.9 Brokers Fees	12
	4.10 Absence of Certain Changes or Events	12
	4.11 Legal Proceedings	12
	4.12 Taxes	12
	4.13 Employees	12
	4.14 FLBK Information	13
	4.15 Compliance with Applicable Law	13
	4.16 Certain Contracts	13
	4.17 Agreements with Regulatory Agencies	14
	4.18 Environmental Matters	14
	4.19 Opinion	14
	4.20 Approvals	15
	4.21 Loan Portfolio	15
	4.22 Property	15


	4.23 Reorganization	15

	4.24 State Takeover Laws and Charter Provisions	15

ARTICLE V	REPRESENTATIONS AND WARRANTIES OF TSFG	16

	5.1 Corporate Organization	16
	5.2 Capitalization	16
	5.3 Authority; No Violation	16
	5.4 Consents and Approvals	17
	5.5 SEC Reports	17
	5.6 Regulatory Reports	17
	5.7 Financial Statements	18
	5.8 Brokers Fees	18
	5.9 Absence of Certain Changes or Events	18
	5.10 Legal Proceedings	18
	5.11 TSFG Information	18
	5.12 Compliance with Applicable Law	19
	5.13 Ownership of FLBK Common Stock	19
	5.14 Approvals	19
	5.15 Reorganization	19
	5.16 Taxes	19

ARTICLE VI	COVENANTS RELATING TO CONDUCT OF BUSINESS	19

	6.1 Covenants of FLBK	19
	6.2 Covenants of TSFG	21

ARTICLE VII	ADDITIONAL AGREEMENTS	21

	7.1 Regulatory Matters	21
	7.2 Access to Information	22
	7.3 Certain Actions	23
	7.4 Stockholder Meeting	23
	7.5 Legal Conditions to Merger	23
	7.6 Affiliates	23
	7.7 Nasdaq Listing	23
	7.8 Employee Benefit Plans; Existing Agreements	24
	7.9 Indemnification of FLBK Directors and Officers	24
	7.10 Additional Agreements	24
	7.11 Appointment of Director	25
	7.12 Bank Board	25
	7.13 Accounting Matters	25
	7.14 Tax Opinion	25
	7.15 Exemption from Section 16	25
	7.16 Execution and Authorization of Bank Merger Agreement	25
	7.18 Employment Agreements	25

ARTICLE VIII	CONDITIONS PRECEDENT	25

	8.1 Conditions to Each Partys Obligation To Effect the Merger	25
	8.2 Conditions to Obligations of TSFG	26
	8.3 Conditions to Obligations of FLBK	27

AGREEMENT AND PLAN OF MERGER

AGREEMENT AND PLAN OF MERGER (this Agreement), dated as of March 17, 2004, between The South Financial Group, Inc., a South Carolina corporation (TSFG) and Florida Banks, Inc., a Florida corporation (FLBK).

Recitals

The Boards of Directors of TSFG and FLBK have determined that it is in the best interests of their respective companies and their shareholders to consummate the business combination transaction provided for herein in which FLBK will, subject to the terms and conditions set forth herein, merge (the Merger) with and into TSFG.

The parties desire to make certain representations, warranties and agreements in connection with the Merger and also to prescribe certain conditions to the Merger.

Agreement

In consideration of the mutual covenants, representations, warranties and agreements contained herein, and intending to be legally bound hereby, the parties agree as follows:

ARTICLE I
DEFINITIONS AND INTERPRETATION

1.1 Definitions. The following terms shall have the indicated definitions.

Acquisition Proposal. Any tender offer or exchange offer or any proposal for a merger, reorganization, consolidation, share exchange, recapitalization, liquidation, dissolution or other business combination involving FLBK or any proposal or offer to acquire a substantial equity interest in, or a substantial portion of the assets of, FLBK, other than the transaction contemplated by this Agreement.

Articles of Merger. The articles of merger complying with the FBCA and the SCBCA reflecting the merger of FLBK with and into TSFG.

BHC Act. The Bank Holding Company Act of 1956, as amended.

DPC Shares. Shares held by FLBK, TSFG or any of TSFGs Subsidiaries in respect of a debt previously contracted.

Determination Date. The third business day prior to the day of the Effective Time.

Effective Time. The effective time of the Merger as specified in the Articles of Merger.

Environmental Laws. Applicable federal, state and local laws, including common law, regulations and ordinances, and all applicable decrees, orders and contractual obligations relating to pollution or the discharge of, or exposure to, Hazardous Materials in the environment or workplace.

ERISA. The Employee Retirement Income Security Act of 1974, as amended.

Exchange Act. The Securities Exchange Act of 1934, as amended.

Exchange Agent. Registrar & Transfer Company or the successor stock transfer agent of TSFG, which shall be responsible for the exchange of the Merger Consideration for the FLBK Common Stock.

Exchange Ratio. .77 shares of TSFG Common Stock for each share of FLBK Common Stock, subject to adjustment, if any, as contemplated in Section 9.1(h).

Fair Market Value. The average of the last reported sale price per share (expressed to three decimal places) of the TSFG Common Stock as reported on the NASDAQ/NMS (as reported in the Wall Street Journal or another mutually agreeable authoritative source) for the ten consecutive trading days immediately prior to the Determination Date.

FBCA. The Florida Business Corporation Act, as amended.

FDIC. The Federal Deposit Insurance Corporation.

Federal Reserve Board. The Board of Governors of the Federal Reserve System.

FLBK Common Stock. The common stock, par value $0.01 per share, of FLBK.

FLBK Restricted Stock. Shares of FLBK Common Stock issued pursuant to the FLBK Second Amended and Restated Incentive Compensation Plan that are subject to vesting requirements.

FLBK Stock-Based Plans. The FLBK Amended and Restated 1998 Stock Option Plan, the FLBK Amended and Restated Employee Stock Purchase Plan and the FLBK Second Amended and Restated Incentive Compensation Plan.

FLBK Stock Certificate. A certificate which previous to the Merger represented any shares of FLBK Common Stock.

Florida Bank. Florida Bank, N.A., a wholly-owned subsidiary of FLBK.

GAAP. Generally accepted accounting principles consistently applied during the periods involved.

Governmental Entity. Any court, administrative agency or commission or other governmental authority or instrumentality.

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ARTICLE IX	TERMINATION AND AMENDMENT	27

	9.1 Termination	27
	9.2 Effect of Termination	29
	9.3 Amendment	29
	9.4 Extension; Waiver	30

ARTICLE X	GENERAL PROVISIONS	30

	10.1 Closing	30
	10.2 Nonsurvival of Representations, Warranties and Agreements	30
	10.3 Expenses	30
	10.4 Notices	30
	10.5 Counterparts	31
	10.6 Entire Agreement	31
	10.7 Governing Law	31
	10.8 Severability	31
	10.9 Publicity	31
	10.10 Assignment; No Third Party Beneficiaries	31