EXHIBIT 2.17
AGREEMENT AND PLAN OF MERGER
dated as of April 2, 1998
between
COMMUNITY FIRST BANKSHARES, INC.
and
WESTERN BANCSHARES OF LAS CRUCES, INC.
INDEX TO AGREEMENT AND PLAN OF MERGER
PAGE
ARTICLE 1 THE MERGER1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Effective Time of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Effects of the Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Calculation of Western Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 2 EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES3 . . . . . . . . . . . . . . . . . . . . 3
2.1 Effect on Capital Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(a) Conversion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(b) Exchange Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(c) Shareholders' Right of Dissent. . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.2 Exchange of Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(a) Exchange Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(b) Exchange Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(c) Distributions with Respect to Unexchanged Shares; Voting. . . . . . . . . . . . . 5
(d) Transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(e) Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(f) Termination of Exchange Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(g) Lost or Destroyed Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE 3 REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.1 Representations and Warranties of Western. . . . . . . . . . . . . . . . . . . . . . . 6
(a) Subsidiary Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(b) Insured Status of Bank. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(c) Western Organization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(d) Enforceability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(e) Limitation of Bank's Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(f) Corporate Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(g) No Default; Creation of Liens . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(h) Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(i) Fidelity Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(j) Employment Contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(k) Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(l) Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(m) Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(n) Title to Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(o) Insurance Policies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(p) Bank Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(q) Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
i
(r) Loan Allowance and Documentation. . . . . . . . . . . . . . . . . . . . . . . . . 11
(s) Leases and Contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(t) Shareholder Lists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(u) Bank Principals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(v) Information Supplied. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(w) Agreements with Bank Regulators . . . . . . . . . . . . . . . . . . . . . . . . . 13
(x) Year 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.2 Representations and Warranties of CFB. . . . . . . . . . . . . . . . . . . . . . . . . 13
(a) CFB Organization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(b) Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(c) Enforceability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(d) No Default; Creation of Liens . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(e) Information Supplied. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(f) No Plan to Transfer Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(g) Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(h) Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(i) Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(j) Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(k) Material Adverse Changes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(l) Regulatory Approvals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(m) Availability of CFB Common Stock. . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE 4 COVENANTS OF WESTERN AND CFB . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.1 Covenants of Western . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(a) Ordinary Course . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(b) Shareholder Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(c) Proxy Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(d) Confidential Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(e) Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(f) No Solicitations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(g) Management Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(h) Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(i) Pooling Restrictions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(j) Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(k) Additional Covenants of Western . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.2 Covenants of CFB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(a) Ordinary Course . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(b) Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(c) Proxy Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(d) Prospectus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
(e) Listing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
(f) Shares to be Issued. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
(g) Blue Sky . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
(h) Confidential Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
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(i) Director and Officer Indemnification . . . . . . . . . . . . . . . . . . . . . . .24
(j) Rule 144 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
4.3 Covenants of Western and CFB. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
(a) Governing Documents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
(b) Other Actions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
(c) Advice of Changes; Government Filings. . . . . . . . . . . . . . . . . . . . . . .24
(d) Title to Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
(e) Environmental Assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
(f) WDSI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
ARTICLE 5 ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
5.1 Regulatory Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
5.2 Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
5.3 Affiliates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
5.4 Employee Benefit Plans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27
5.5 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27
5.6 Additional Agreements; Best Efforts . . . . . . . . . . . . . . . . . . . . . . . . . .27
ARTICLE 6 CONDITIONS PRECEDENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27
6.1 Conditions to Each Party's Obligation to Effect the Merger. . . . . . . . . . . . . . .27
(a) Stockholder Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
(b) Nasdaq Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
(c) Approvals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
(d) No Injunctions or Restraints; Illegality . . . . . . . . . . . . . . . . . . . . .28
(e) No Unduly Burdensome Condition . . . . . . . . . . . . . . . . . . . . . . . . . .28
6.2 Conditions to Obligations of CFB . . . . . . . . . . . . . . . . . . . . . . . . . . .28
(a) Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . .28
(b) Performance of Obligations of Western. . . . . . . . . . . . . . . . . . . . . . .29
(c) Minimum Western Value. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
(d) Pooling Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
(e) Legal Opinion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
6.3 Conditions to Obligations of Western. . . . . . . . . . . . . . . . . . . . . . . . . .29
(a) Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . .29
(b) Performance of Obligations of CFB. . . . . . . . . . . . . . . . . . . . . . . . .29
(c) Consents Under Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
(d) Tax Opinion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
(e) Legal Opinion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
(f) No Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
(g) Fairness Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
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ARTICLE 7 TERMINATION AND AMENDMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
7.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
7.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31
7.3 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31
7.4 Extension; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31
ARTICLE 8 GENERAL PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32
8.1 Non-Survival of Representations and Warranties. . . . . . . . . . . . . . . . . . . . .32
8.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32
8.3 Interpretation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32
8.4 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33
8.5 Entire Agreement: Third Party Beneficiaries; Rights of Ownership. . . . . . . . . . . .33
8.6 Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33
8.7 Assignment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33
8.8 Enforcement of Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33
TABLE OF EXHIBITS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35
iv
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of April 2, 1998 (the
"Agreement"), by and between Community First Bankshares, Inc., a Delaware
corporation ("CFB"), and Western Bancshares of Las Cruces, Inc., a New Mexico
corporation ("Western").
WHEREAS, the Boards of Directors of CFB and Western have approved, and
deem it advisable and in the best interests of their respective companies and
their stockholders to consummate the business combination transaction
provided for herein in which Western will be merged with and into CFB (the
"Merger"); and
WHEREAS, CFB and Western desire to make certain representations,
warranties, covenants and agreements in connection with the Merger and also
to prescribe various conditions to the Merger; and
WHEREAS, for Federal income tax purposes, it is intended that the Merger
shall qualify as a reorganization under the provisions of Section
368(a)(1)(A) of the Internal Revenue Code of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, and
intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE 1
THE MERGER
1.1 EFFECTIVE TIME OF THE MERGER. Subject to the provisions of this
Agreement, a certificate of merger (the "Certificate of Merger") in
substantially the form as attached hereto as EXHIBIT 1.1A shall be duly
prepared, executed and acknowledged by CFB and Western and thereafter
delivered for filing to the Secretary of State of the State of Delaware, as
provided in the Delaware Corporation Law (the "Delaware Law") and articles of
merger (the "Articles of Merger") in substantially the form attached hereto
as EXHIBIT 1.1B shall be duly prepared, executed and acknowledged by CFB and
Western and thereafter delivered for filing to the Secretary of State of the
State of New Mexico, as provided in the New Mexico Business Corporation Act
(the "New Mexico Act"), on the Closing Date (as defined in Section 1.2). The
Merger shall become effective upon the filing of the Certificate of Merger
with the Secretary of State of Delaware and upon the filing of the Articles
of Merger with the Secretary of State of New Mexico or at such other time as
CFB and Western may agree in writing to provide in the Certificate of Merger
and the Articles of Merger (the "Effective Time"). Notwithstanding the
immediately preceding sentence, however, the parties intend that the
effective date and time of the Closing, as defined in Section 1.2 below, for
both financial and tax reporting purposes, shall be as of the close of
business on the Closing Date.
1.2 CLOSING. Subject to the terms and conditions hereof, the closing
of the Merger (the "Closing") will take place after the satisfaction or
waiver (subject to applicable law) of the latest to occur of the conditions
set forth in Article 6 hereof (the "Closing Date"), at the offices of
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, in Denver, Colorado, unless another time, date or place
is agreed to in writing by the parties hereto. Each of the parties agrees to
use its best efforts to cause the Merger to be completed within thirty (30)
days after the satisfaction or waiver of the conditions set forth in Article
6 of this Agreement.
1.3 EFFECTS OF THE MERGER.
(a) At the Effective Time: (i) the separate existence of Western
shall cease and Western shall be merged with and into CFB; (ii) the
Certificate of Incorporation of CFB, as in effect immediately prior to the
Effective Time shall be the Certificate of Incorporation of the Surviving
Corporation until duly amended in accordance with applicable law; (iii) the
By-laws of CFB, as in effect immediately prior to the Effective Time shall be
the By-laws of the Surviving Corporation until amended in accordance with
applicable law; (iv) the holders of the outstanding capital stock of CFB
shall continue as shareholders of the Surviving Corporation; and (v) the
holders of certificates representing shares of Western Common Stock (as
defined in Section 2.1(a) below) shall cease to have any rights as
shareholders of Western, except such rights, if any, as they may have
pursuant to Sections 53-15-3 and 53-15-4 of the New Mexico Act, and their
sole right shall be the right to receive (A) the number of whole shares of
CFB Common Stock (as defined in Section 2.1(a) below) into which their shares
of Western Common Stock have been converted in the Merger as provided herein
(together with any dividend payments with respect thereto, to the extent
provided in Section 2.2(c) below), and (B) the cash value of any fraction of
a share of CFB Common Stock into which their shares of Western Common Stock
have been converted as provided herein.
(b) As used in this Agreement, the term "Constituent Corporations"
shall mean Western and CFB. The term "Surviving Corporation" shall mean CFB,
after giving effect to the Merger.
(c) At and after the Effective Time, the Merger will have the
effects set forth in Section 252 of the Delaware Law and ▇▇▇▇▇▇▇ ▇▇-▇▇-▇ ▇▇
▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇.
1.4 CALCULATION OF WESTERN VALUE. As of the last day of the month
immediately preceding the Effective Time (the "Determination Date"), Western
shall prepare a consolidated balance sheet of Western in accordance with
generally accepted accounting principles, but excluding the effects of any
adjustments otherwise required by FASB 115 and excluding any footnotes that
might be required to be included with such financial statements (the
"Determination Date Financial Statements"). The Determination Date Financial
Statements shall be delivered to CFB as soon as they are prepared so that CFB
and its accountants may review and confirm their accuracy. For purposes of
this Agreement, the "Western Value" shall be equal to the total consolidated
assets of Western minus the total consolidated liabilities of Western. Total
consolidated liabilities of Western shall include, without limitation,
provisions for (i) taxes, (ii)
2
the expenses of preparation of final tax returns of Western, and (iii) the
expenses of settlement and release of the Western employee compensation
agreements and other contracts identified in Sections 4.1(e) and 4.1(g)
hereof. For purpose of section 6.2(c), Western Value shall be calculated as
of the Determination Date, based upon the Determination Date Financial
Statements.
ARTICLE 2
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
2.1 EFFECT ON CAPITAL STOCK.
(a) CONVERSION. At the Effective Time, by virtue of the Merger
and without any action on the part of any holder of shares of common stock,
$5.00 par value, of Western ("Western Common Stock"), each issued and
outstanding share of Western Common Stock, other than shares of Western
Common Stock held by persons who have taken all steps required to perfect
their right to be paid the fair value of such shares under Sections 53-15-3
and 53-15-4 of the New Mexico Act ("Dissenting Shareholders"), shall be
converted into validly issued, fully paid and nonassessable shares of common
stock of CFB, $.01 par value ("CFB Common Stock"). The number of shares of
CFB Common Stock exchanged for shares of Western Common Stock shall be
determined in accordance with Section 2.1(b). All such shares of Western
Common Stock shall no longer be outstanding and shall automatically be
canceled and retired and shall cease to exist. Each Western shareholder's
certificate or certificates previously representing shares of Western Common
Stock (each a "Western Certificate") shall be aggregated (if a single
stockholder holds more than one Western Certificate) and exchanged for a
certificate representing whole shares of CFB Common Stock and cash in lieu of
any fractional share issued in consideration therefor upon the surrender of
such Western Certificates in accordance with Section 2.2, without any
interest thereon. In the event that, subsequent to the date of this
Agreement but prior to the Effective Time, the outstanding shares of CFB
Common Stock shall have been increased, decreased, changed into or exchanged
for a different number or kind of shares or securities through a
reorganization, recapitalization, reclassification, stock dividend, stock
split, reverse stock split, or other similar change in CFB's capitalization,
then an appropriate and proportionate adjustment shall be made to the
"Exchange Rate," as hereinafter defined, so that the number of shares of CFB
Common Stock into which a share of Western Common Stock shall be converted
will equal the number of shares of CFB Common Stock that the holders of
shares of Western Common Stock would have received pursuant to such
reorganization, recapitalization, reclassification, stock dividend, stock
split, reverse stock split or other similar change had the record date
therefor been immediately following the Closing Date.
(b) EXCHANGE RATE. Subject to the confirmation of the minimum
Western Value, as provided in Section 6.2(c) hereof, and subject to prior
exercise or termination of all options, warrants and rights for shares of
Western Common Stock in accordance with Section 3.1(b) hereof, the aggregate
number of shares of CFB Common Stock to be exchanged for all of the
3
issued and outstanding shares of Western Common Stock (the "Merger
Consideration") shall be determined by dividing Forty-Eight Million Dollars
($48,000,000.00) by the CFB Trading Value.
For purposes of this Agreement, the "Exchange Rate" shall be determined
by dividing the Merger Consideration, as determined above, by the number of
shares of Western Common Stock outstanding or subject to option, warrant or
other right of issuance, whether or not vested or accrued as of the Effective
Time.
For purposes of this Agreement, the "CFB Trading Value" of the CFB
Common Stock shall be the average of the per share closing price for the CFB
Common Stock as reported by the Nasdaq National Market for the 20 trading
days ending at the end of the fourth trading day immediately preceding the
Closing Date (as appropriately and proportionately adjusted in the event
that, between the date hereof and the termination of such twenty trading day
period, the outstanding shares of CFB Common Stock shall have been increased,
decreased, changed into or exchanged for a different number or kind of shares
or securities through a reorganization, recapitalization, reclassification,
stock dividend, stock split, reverse stocks split, or other similar change in
CFB's capitalization.
Calculation of the Exchange Rate will be rounded to four decimal places.
Any fractional share of CFB Common Stock will be paid in cash in accordance
with Section 2.2(e).
(c) SHAREHOLDERS' RIGHT OF DISSENT. Any holder of shares of
Western Common Stock who does not vote in favor of the Merger at the meeting
of shareholders of Western called to vote on the Merger and has given notice
in writing to the presiding officer prior to or at the meeting of his or her
objection to the proposed corporate action shall be entitled to demand to
receive the fair value of the Western Common Stock so held by him or her, in
accordance with Sections 53-15-3 and 53-15-4 of the New Mexico Act.
2.2 EXCHANGE OF CERTIFICATES.
(a) EXCHANGE AGENT. At the Closing, CFB shall deposit with
Norwest Bank Minnesota, N.A. or such other bank or trust company acceptable
to the parties (the "Exchange Agent"), for the benefit of the holders of
shares of Western Common Stock, certificates dated the Closing Date
representing the shares of CFB Common Stock and the cash to be paid in lieu
of fractional shares (such cash and certificates for shares of CFB Common
Stock together with any dividends or distributions with respect thereto,
being hereinafter referred to as the "Exchange Fund") to be issued and paid
pursuant to Section 2.1 in exchange for the outstanding shares of Western
Common Stock.
(b) EXCHANGE PROCEDURES. Within five (5) business days after the
Closing Date, CFB shall cause the Exchange Agent to mail to each holder of
record of a Western Certificate or Western Certificates (i) a letter of
transmittal which shall specify that delivery shall be effective, and risk of
loss and title to the Western Certificate(s) shall pass, only upon delivery
of the Western Certificate(s) to the Exchange Agent and which shall be in
such form and have such
4
other provisions as CFB and Western may reasonably specify not later than
five business days before the Closing Date and (ii) instructions for use in
effecting the surrender of the Western Certificate(s) in exchange for a
certificate representing shares of CFB Common Stock and the cash to be paid
in lieu of any fractional share. Upon surrender of a shareholder's Western
Certificate or Western Certificates for cancellation to the Exchange Agent
together with such letter of transmittal, duly executed, the holder of such
Western Certificate(s) shall be entitled to receive in exchange therefor (1)
a certificate representing the number of whole shares of CFB Common Stock and
(2) a check representing the amount of the cash to be paid in lieu of a
fractional share, if any, and unpaid dividends and distributions, if any,
which such holder has the right to receive in respect of the Western
Certificate(s) surrendered, as provided in Section 2.2(c) below, and the
Western Certificate(s) so surrendered shall forthwith be canceled. No
interest will be paid on the cash in lieu of fractional shares and unpaid
dividends and distributions, if any, payable to holders of Western
Certificates. In the event of a transfer of ownership of Western Common
Stock which is not registered in the transfer records of Western, a CFB
Certificate representing the proper number of shares of CFB Common Stock,
together with a check for the cash to be paid in lieu of a fractional share,
may be issued to such a transferee if the Western Certificate representing
such Western Common Stock is presented to the Exchange Agent, accompanied by
all documents required to evidence and effect such transfer.
(c) DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES; VOTING. The
Exchange Agent shall receive and hold, for distribution without interest to
the first record holder of the certificate or certificates representing
shares of Western Common Stock, all dividends and other distributions paid on
shares of CFB Common Stock held in the Exchange Agent's name as agent.
Holders of unsurrendered Western Certificates shall not be entitled to vote
after the Closing Date at any meeting of CFB shareholders until they have
exchanged their Western Certificates.
(d) TRANSFERS. After the Effective Time, there shall be no
transfers on the stock transfer books of Western of the shares of Western
Common Stock which were outstanding immediately prior to the Effective Time.
If, after the Effective Time, Western Certificates are presented to the
Surviving Corporation, they shall be canceled and exchanged for the shares of
CFB Common Stock and cash, in an amount as determined in accordance with the
provisions of Section 2.1(a) and this Section 2.2, deliverable in respect
thereof pursuant to this Agreement. Western Certificates surrendered for
exchange by any person constituting an "affiliate" of Western for purposes of
Rule 145(c) under the Securities Act of 1933, as amended (the "Securities
Act"), shall not be exchanged until CFB has received a written agreement from
such person as provided in Section 5.3.
(e) FRACTIONAL SHARES. No fractional shares of CFB Common Stock
shall be issued pursuant hereto. In lieu of the issuance of any fractional
share, cash adjustments will be paid to holders in respect of any fractional
share of CFB Common Stock that would otherwise be issuable, and the amount of
such cash adjustment shall be equal to such fractional proportion of the
Trading Value of a share of CFB Common Stock. For purposes of calculating
fractional shares, a holder of Western Common Stock with more than one
Western Certificate shall receive
5
cash only for the fractional share remaining after aggregating all of its,
his or her Western Common Stock to be exchanged.
(f) TERMINATION OF EXCHANGE FUND. Any portion of the Exchange
Fund (including the proceeds of any investments thereof and any CFB Common
Stock) that remains unclaimed by the shareholders of Western for twelve
months after the Closing Date shall be paid to CFB. Any shareholders of
Western who have not theretofore complied with this Article 2 shall
thereafter look only to CFB for payment of their shares of CFB Common Stock,
and cash in an amount as determined in accordance with the provisions of
Section 2.1(a) and this Section 2.2, without any interest thereon.
Notwithstanding the foregoing, none of CFB, the Exchange Agent nor any other
person shall be liable to any former holder of shares of Western Common Stock
for any amount properly delivered to a public official pursuant to applicable
abandoned property, escheat or similar laws.
(g) LOST OR DESTROYED SHARES. In the event any Western
Certificate shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the person claiming such Western Certificate to be
lost, stolen or destroyed and, if required by the Exchange Agent, the posting
by such person of a bond in such amount as CFB may direct as indemnity
against any claim that may be made against it with respect to such Western
Certificate, the Exchange Agent will issue in exchange for such lost, stolen
or destroyed Western Certificate the shares of CFB Common Stock, and cash in
an amount as determined in accordance with the provisions of Section 2.1(a)
and this Section 2.2, deliverable in respect thereof pursuant to this
Agreement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
3.1 REPRESENTATIONS AND WARRANTIES OF WESTERN. In order to induce CFB
to enter into this Agreement, Western represents and warrants to CFB, in all
material respects, as of the date of this Agreement (except as otherwise
expressly provided), as follows, except as disclosed on the attached EXHIBIT
3.1 (the "Western Disclosure Schedule"), which Western Disclosure Schedule
has been provided to CFB for review not less than three (3) business days
prior to execution of this Agreement, and the schedules thereunder (which are
numbered to correspond to the representations set forth below):
(a) SUBSIDIARY ORGANIZATIONS. The Western Bank, Las Cruces
("Bank") is a New Mexico banking corporation duly organized and validly
existing and in good standing under the laws of the State of New Mexico. The
Bank has authorized capital of $1,125,000, consisting of 450 shares of one
class of common stock, par value $2,500 per share. All of the shares of
stock of the Bank which are presently issued and outstanding, have been
validly issued, fully paid and non-assessable, and there are no stock options
or other commitments outstanding pursuant to which the Bank is obligated to
issue additional shares of such stock or purchase or redeem any outstanding
shares of such stock.
6
Western Data Services, Inc. ("WDSI") is a corporation duly organized, validly
existing and in good standing under the laws of the State of New Mexico, with
authorized capital stock consisting of 500,000 shares of common stock, $1.00
par value per share, of which 237,753 shares are issued and outstanding.
WDSI has all requisite power, authority, charters, licenses and franchises
necessary or required by law to carry on the business activity in which it is
presently engaged, except where the failure to have any such power,
authority, charter, license or franchise would not reasonably be expected to
have a material adverse effect on the business, operations, prospects or
financial condition of WDSI.
(b) INSURED STATUS OF BANK. The Bank is an insured bank under the
provisions of Chapter 16 of Title 12, United States Code Annotated, known as
the "Federal Deposit Insurance Act," and no act or default on the part of the
Bank exists that could reasonably be expected to have a material adverse
effect on its status as an insured bank thereunder. The Bank possesses and
is in full compliance with all licenses, franchises, permits and other
governmental authorizations that are legally required to hold its properties
or conduct its business, except where the failure to possess any such
licenses, franchises, permits or other governmental authorizations would not
reasonably be expected to have a material adverse effect on Western or the
Bank.
(c) WESTERN ORGANIZATION. Western is a corporation duly
organized, validly existing and in good standing under the laws of the State
of New Mexico, with authorized capital stock consisting of 250,000 shares of
common stock (the "Western Common Stock"), $5.00 par value per share, of
which 185,322.759 shares are issued and outstanding. All of the shares of
Western Common Stock issued and outstanding have been validly issued, fully
paid and non-assessable. Except as set forth in Section 3.1(b) of the
Western Disclosure Schedule, there are no options, warrants or other
commitments outstanding pursuant to which Western is or could become
obligated to issue additional shares. On or before the Effective Time,
Western shall have provided for the acceleration and exercise of all such
options, warrants and rights or their termination and written release of
Western from further liability thereunder. Western has all requisite power,
authority, charters, licenses and franchises necessary or required by law to
carry on the business activity in which it is presently engaged, except where
the failure to have any such power, authority, charter, license or franchise
would not reasonably be expected to have a material adverse effect on the
business, operations, prospects or financial condition of Western. Western
is registered as a company under Section 1841 of Title 12, United States
Code, as amended (the "Bank Holding Company Act"). Western has no direct or
indirect subsidiaries except the Bank and WDSI and is not a partner to any
partnership. Western owns all of the shares of stock of the Bank, and 66,571
shares of stock of WDSI, in each case free and clear of any liens or
encumbrances.
(d) ENFORCEABILITY. Subject only to the required approval of the
Merger by the shareholders of Western, Western has the corporate power and
authority to enter into this Agreement and to carry out its obligations
hereunder. The execution, delivery and performance of this Agreement by
Western and the consummation of the transactions contemplated hereby have
been duly authorized by the Board of Directors of Western. Subject to
approval by the Western shareholders and of government agencies and other
governing bodies having regulatory
7
authority over Western or the Bank as may be required by statute or
regulation, this Agreement constitutes a valid and binding obligation of
Western, enforceable against it in accordance with its terms, subject to the
effect of bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to creditors' rights generally and general equitable
principles..
(e) LIMITATION OF BANK'S POWERS. There are no proceedings or actions
pending by any federal or state regulatory body having authority over the Bank
to limit or impair any of the their powers, rights or privileges, to terminate
deposit insurance or to dissolve the Bank. The Bank has not received any
written protest, complaint or criticism in the last three (3) years by the
public or any regulatory agency relating to the Bank's performance under the
Community Reinvestment Act or any other consumer protection statute or
regulation.
(f) CORPORATE RECORDS. Western's Articles of Incorporation and
Bylaws, and the Bank's and WDSI's respective Articles of Incorporation and
Bylaws are each unchanged from the form in which they were delivered to CFB on
or before the date of this Agreement. The minute books of Western and the Bank
contain reasonably complete and accurate records of all meetings and corporate
actions of each of their respective shareholders and Boards of Directors
(including committees of the Boards of Directors).
(g) NO DEFAULT; CREATION OF LIENS. Neither the execution and
delivery of this Agreement, nor the consummation of the Merger will (i) conflict
with, result in the breach of, constitute a default under or accelerate the
performance provided by the terms of (A) any judgment, order or decree of any
court or other governmental agency to which Western or the Bank may be subject,
(B) any of the "Material Contracts," as hereinafter defined, or (C) the Articles
of Incorporation or Bylaws of Western or the Bank, or (ii) constitute an event
that, with the lapse of time or action by a third party, would result in a
default under any of the foregoing or result in the creation of any lien, charge
or encumbrance upon the Western Common Stock or any of the Bank's capital stock.
(h) FINANCIAL STATEMENTS. The following financial statements of the
Bank and Western (the "Financial Statements") have been delivered to CFB and are
incorporated by reference herein:
(i) The Consolidated Reports of Condition and Income of the Bank
as of December 31 for each of the years 1995, 1996 and 1997; and
(ii) The audited consolidated financial statements of
Western, prepared in the ordinary course of business for each of the
years ended December 31, 1995, 1996 and 1997.
Each of the aforementioned financial statements is, and the Determination Date
Financial Statements will be (when delivered pursuant to Section 1.4), true and
correct in all material respects, and together they fairly present, in
accordance with generally accepted accounting principles (applied on a
consistent basis except as disclosed in the footnotes thereto and except
8
that the unaudited financial statements are subject to any adjustments which
might be required as a result of an examination by independent accountants)
the financial position and results of operation of each of the Bank and
Western as of the dates and for the periods therein set forth. To the
knowledge of Western, such financial statements did not, as of the date of
the preparation thereof, include any material assets or omit to state any
material liability, absolute or contingent, the inclusion or omission of
which renders such financial statements, in light of the circumstances in
which they were made, misleading in any material respect. Since December 31,
1997, there has been no material adverse change in the financial condition,
results of operation or business of the Bank and Western, taken as a whole
(other than changes in banking laws or regulations, changes in generally
accepted accounting principles or interpretations thereof that affect the
banking industry generally, or changes in general economic conditions that
affect the banking industry on a nationwide basis, including changes in the
general level of interest rates).
(i) FIDELITY INSURANCE. The Bank is insured under a Banker's Blanket
Bond which is in full force and effect and the Bank has not received notice of
cancellation or non-renewal thereof, or filed any claim thereunder during the
past five years. There are no unresolved claims.
(j) EMPLOYMENT CONTRACTS. Neither Western nor the Bank is a party to
or bound by any written or oral (i) employment or consulting contract that is
not terminable without penalty by Western or the Bank on 30 days' or less notice
or (ii) any collective bargaining agreement covering employees.
(k) EMPLOYEE BENEFITS. Section 3.1(k) of the Western Disclosure
Schedule lists every employee benefit plan within the meaning of Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), which
the Bank or Western maintain or to which the Bank or Western contribute on
behalf of current or former employees of the Bank or Western. All of the plans
and programs listed in Section 3.1(k) of the Western Disclosure Schedule
(hereinafter referred to as the "Plans") are in compliance in all material
respects with all applicable requirements of ERISA and all other applicable
federal and state laws. Each of the Plans that is a defined benefit pension
plan has assets with an aggregate value that exceeds the present value of its
liability for accrued benefits, all as determined on a termination basis. None
of the Plans has engaged in a "prohibited transaction," within the meaning of
Section 4975 of the Code or Section 406 of ERISA, none of the Plans which is
subject to Title IV of ERISA or any trust created thereunder has been terminated
nor have there been any "reportable events" as that term is defined in Section
4043 of ERISA with respect to any Plan and none of the Plans has incurred an
accumulated funding deficiency within the meaning of Section 412(a) of the Code.
Western has delivered to CFB copies of (i) each Plan or if no plan
document exists, a written summary of the material terms thereof, (ii) current
summary plan descriptions of each Plan for which they are required, (iii) each
trust agreement, insurance policy or other instrument relating to the funding of
any Plan, (iv) the most recent Annual Reports (Form 5500 series) and
accompanying schedules filed with the IRS or United States Department of Labor
with respect to each Plan for which they are required, (v) the most recent
determination letter issued by the IRS with respect to each Plan that is
intended to qualify under Section 401 of the Code, (vi) the most
9
recent available financial statements for each Plan that has assets, and
(vii) the most recent audited financial statements for each Plan for which
audited financial statements are required by ERISA.
(l) LITIGATION. No claims have been asserted by written notice to
Western, the Bank or WDSI and no relief has been sought against Western, the
Bank, WDSI or any of the Plans in any pending litigation or governmental
proceedings or otherwise. Neither Western nor the Bank is a party to any
unsatisfied order, judgment or decree which is adverse to Western or the Bank,
and neither Western nor either of the Bank (i) is the subject of any cease and
desist order, or other formal or informal enforcement action by any regulatory
authority; or (ii) has made any commitment to or entered into any agreement with
any regulatory authority that restricts or adversely affects its operations or
financial condition.
(m) TAXES. Western and the Bank have filed all federal and state
income tax returns and all other returns with respect to any taxes, either
federal, state or local, which it is required to have filed; said returns have
been correctly and accurately prepared; all taxes reflected thereon have been
paid or adequately accrued or reserved for; no notice of any deficiency,
assessments or additions to tax have been received by Western or the Bank;
neither Western nor the Bank has waived any statute of limitations with respect
to any taxes reflected on said returns; and deferred taxes have been properly
reflected on the Financial Statements. Except as set forth in Section 3.1(m) of
the Western Disclosure Schedule, there are no other taxes of any kind or
character for which either Western or the Bank is or may be liable which are now
past due, delinquent and/or unpaid. Neither Western nor the Bank has made any
payments, or been a party to an agreement that under any circumstances could
obligate it to make payments based upon the consummation of the transactions
contemplated hereby constituting a change of the nature described in Section
280G of the Code, that are or will not be deductible because of Section 280G of
the Code. Consummation of the transactions contemplated hereby will not result
in the loss or disqualification of net operating loss carry forwards of Western
or the Bank.
(n) TITLE TO PROPERTY. The Bank has good and marketable title to all
material assets and properties, whether real or personal, that it purports to
own, including without limitation all real and personal assets and properties
reflected in its Consolidated Reports of Condition and Income as of December 31,
1997, or acquired subsequent thereto (except to the extent that such assets and
properties have been disposed of for fair value in the ordinary course of
business since December 31, 1997) subject to no liens, mortgages, security
interests, encumbrances or charges of any kind, except (i) as noted in said
Consolidated Reports or the Schedules thereto; (ii) statutory liens for taxes
not yet delinquent; (iii) security interests granted to secure deposits of funds
by federal, state or other governmental agencies; (iv) minor defects and
irregularities in title and encumbrances that do not materially impair the use
thereof for the purposes for which they are held by the Bank as of the date
hereof; and (v) such liens, mortgages, security interests, encumbrances and
charges that are not in the aggregate material to the assets and properties of
the Bank.
10
(o) INSURANCE POLICIES. Western has delivered to CFB true, accurate
and complete copies of all insurance policies of Western and the Bank as of the
date of this Agreement. Each such policy is in full force and effect, with all
premiums due thereon on or prior to the date of this Agreement having been paid
as and when due.
(p) BANK PROPERTY. All buildings, structures, fixtures, and
appurtenances comprising the premises of the Bank (the "Property") are in good
condition, subject to ordinary wear and tear. Except for the facts set forth in
the Assessment (as defined in Section 4.3(e) of this Agreement), Western and the
Bank are, and have been at all times, in substantial compliance with all
applicable Environmental Laws (as defined below), and have not engaged in any
activity resulting in a material violation of any applicable Environmental Law.
There are no underground or above ground storage tanks (whether or not currently
in use) located on or under the Property, and no underground tank previously
located on the Property has been removed therefrom. To the best knowledge of
Western, there is no legal, administrative, or other proceeding, claim,
investigation (with respect to which Western is aware), inquiry, order, hearing
or action of any nature seeking to impose, or that would reasonably be expected
to result in the imposition, on Western, the Bank or WDSI, of any liability
arising from any violation of or obligation under any local, state or federal
environmental statute, regulation or ordinance including, without limitation,
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended ("Environmental Laws"), pending or, to the knowledge of
Western, threatened against Western, the Bank or WDSI; to the knowledge of
Western and except for the facts set forth in the Assessment, there is no
reasonable basis for any such proceeding, claim, investigation, inquiry, order,
hearing or action; and neither Western nor the Bank nor WDSI is subject to any
agreement, order, judgment, or decree by or with court, governmental authority
or third party imposing any such environmental liability. No claims have been
made by any governmental authority or third party against Western since it was
incorporated, or the Bank during the past ten (10) years relating to damage,
contribution, cost recovery, compensation, loss or inquiry resulting from any
violation of or obligation under any Environmental Law.
(q) CONDUCT OF BUSINESS. Except for the facts set forth in the
Assessment, each of the Bank and Western are in compliance in all material
respects with all laws, regulations and orders (including zoning ordinances)
applicable to them and to the conduct of their business, including without
limitation, all statutes, rules and regulations pertaining to the conduct of the
Bank' banking activities (including the exercise of fiduciary and trust powers),
except where the failure to comply would not reasonably be expected to have a
material adverse effect on Western.
(r) LOAN ALLOWANCE AND DOCUMENTATION. Western's consolidated
allowance for losses on loans included in the Financial Statements as of
December 31, 1997 was $1,529,000, representing 1.35% of its total consolidated
loans held in portfolio. The amount of such allowance for losses on loans was
adequate (in accordance with applicable regulatory guidelines and generally
accepted accounting principles in all material respects) to absorb reasonably
expectable losses in the loan portfolio of the Bank. To the knowledge of
Western, there are no facts which would cause it to make a material increase or
reduction in the level of such allowance for losses on loans as of December 31,
1997. The documentation relating to loans made by the
11
Bank and relating to all security interests, mortgages and other liens with
respect to all collateral for such loans, taken as a whole, is adequate for
the enforcement of the material terms of such loans and of the related
security interests, mortgages and other liens. The terms of such loans and
of the related security interests, mortgages and other liens comply in all
material respects with all applicable laws, rules and regulations (including
laws, rules and regulations relating to the extension of credit). There are
no loans, leases, other extensions of credit or commitments to extend credit
of the Bank that have been or should in accordance with generally acceptable
accounting principles, have been classified by the Bank as nonaccrual, as
restructured, as 90 days past due, as still accruing and doubtful of
collection or any comparable classification. Western has provided to CFB
true, correct and complete in all material respects such written information
concerning the loan portfolios of the Bank as CFB has requested.
(s) LEASES AND CONTRACTS. Neither the Bank nor Western is a party to
or bound by any written or oral (i) lease or license with respect to any
property, real or personal, with a value in excess of $20,000, whether as a
lessor, lessee, licensor or licensee; (ii) contract or commitment for capital
expenditures in excess of $20,000 for any one project or $50,000 in the
aggregate; (iii) contract or commitment for total expenses in excess of $20,000
made in the ordinary course of business for the purchase of materials, supplies,
or for the performance of services for a period of more than 180 days from the
date of this Agreement; (iv) contract or option for the purchase or sale of any
real or personal property other than in the ordinary course of business; or (v)
any other contract, agreement or understanding which is not terminable by
Western or the Bank without additional payment or penalty within sixty (60) days
and obligates Western or the Bank for payments or other consideration with a
value in excess of $20,000 (all such agreements, contracts, and commitments
collectively are herein referred to as the "Material Contracts"). The Bank and
Western have performed in all material respects all obligations required to be
performed by them to date, and are not in material default under, and no event
has occurred which, with the lapse of time or action by a third party, could
result in a material default under any of the Material Contracts to which the
Bank or Western is a party or by which the Bank or Western is bound. Each of
the Material Contracts is a valid and legally binding obligation of the Bank and
the other party or parties thereto, subject to (i) all applicable bankruptcy,
insolvency, moratorium or other similar laws affecting the enforcement of
creditors' rights generally, and (ii) the application of equitable principles if
equitable remedies are sought.
(t) SHAREHOLDER LISTS. Western has furnished to CFB a current
shareholder list as of the date set forth therein that (i) sets forth the record
name and number of shares held by each holder of common stock of Western and
(ii) identifies each shareholder who is an officer or director of the Bank or
Western.
(u) BANK PRINCIPALS. No director or executive officer of Western or
the Bank, nor any holder of ten percent or more of the outstanding capital stock
of Western, nor any affiliate of such person as that term is defined under
12 USC 371(c) ("Bank Principal") (i) is or has during the period subsequent to
December 31, 1995, been a party (other than as a depositor) to any transaction
with the Bank, whether as a borrower or otherwise, which (a) was made other than
in the ordinary course of business; (b) was made on other than substantially the
same terms,
12
including interest rate and collateral, as those prevailing at the time for
comparable transactions for other persons; or (c) involves more than the
normal risk of collectibility or presents other unfavorable features; or (ii)
is a party to any loan or loan commitment, whether written or oral, from the
Bank involving an amount in excess of $10,000. No Bank Principal holds any
position with any depository organization other than the Bank or with
Western. For the purposes of this provision, the term "depository
organization" means a commercial bank (including a private bank), a savings
bank, a trust company, a savings and loan association, a homestead
association, a cooperative bank, an industrial bank, a credit union, or a
depository organization holding company.
(v) INFORMATION SUPPLIED. None of the information supplied or to be
supplied by Western or the Bank for inclusion or incorporation by reference in
the "Proxy Statement" (as hereinafter defined) or any amendment or supplement
thereto will, at the date of mailing to the Western stockholders and at the time
of the meeting of stockholders of Western to be held in connection with the
Merger, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they are made, not
misleading.
(w) AGREEMENTS WITH BANK REGULATORS. Neither Western nor the Bank:
(i) is a party to any written agreement or memorandum of understanding with;
(ii) is subject to any order or directive by; (iii) is subject to any
extraordinary supervisory letter from; or (iv) has adopted any Board resolutions
at the request of, federal or state governmental entities charged with the
supervision or regulation of Bank or bank holding companies or engaged in the
insurance of bank deposits ("Bank Regulators"), nor has Western been advised by
any Bank Regulator that it is contemplating issuing or requesting any such
order, directive, written agreement, memorandum of understanding, extraordinary
supervisory letter, commitment letter, board resolutions or similar undertaking.
(x) YEAR 2000. Section 3.1(x) of the Western Disclosure Schedule
contains a status report regarding year 2000 compliance for the systems of the
Bank, WDSI and Western, in accordance with the FFIEC Interagency Statements
dated June 1996 (SR 96-16) and May 5, 1997 (SR 97-16) and related releases.
Western shall use its reasonable best efforts and cooperate in all material
respects with CFB in the identification of "mission critical" systems and
necessary and appropriate efforts to assure year 2000 compliance.
3.2 REPRESENTATIONS AND WARRANTIES OF CFB. CFB represents and warrants to
Western, in all material respects, as of the date of this Agreement (except as
otherwise expressly provided) as follows, except as disclosed on the attached
EXHIBIT 3.2 the "CFB Disclosure Schedule"), which CFB Disclosure Schedule has
been provided to Western for review not less than three (3) business days prior
to execution of this agreement; and the schedules thereunder (which are numbered
to correspond to the representations set forth below):
(a) CFB ORGANIZATION. CFB is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, with
authorized capital stock consisting
13
of 30,000,000 shares of common stock, par value of $.01 per share, of which
20,323,046 shares were issued and outstanding as of December 31, 1997 and
2,000,000 shares of preferred stock, no shares of which were issued and
outstanding as of December 31, 1997. CFB has all requisite power, authority,
charters, licenses and franchises necessary or required by law to carry on
the business activity in which it is presently engaged, except where the
failure to have any such power, authority, charter, license or franchise
would not reasonably be expected to have a material adverse effect on CFB.
CFB is registered as a company under Section 1841 of Title 12, United States
Code, as amended (the "Bank Holding Company Act").
(b) REPORTS. CFB and its subsidiaries have filed all reports,
registrations and statements, together with any required amendments thereto,
that they were required to file with (i) the Securities and Exchange Commission
("SEC"), including, but not limited to, Forms 10-K, Forms 10-Q and proxy
statements, (ii) the Federal Reserve Board, (iii) the FDIC, (iv) the Comptroller
and (v) any applicable state securities or banking authorities. All such
reports and statements filed with any such regulatory body or authority are
collectively referred to herein as the "CFB Reports." As of their respective
dates, the CFB Reports complied in all material respects with all the rules and
regulations promulgated by the SEC, the Federal Reserve Board, the FDIC, the
Comptroller and any applicable state securities or banking authorities, as the
case may be, and did not contain any untrue statement of material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. CFB has timely filed with the SEC all reports, statements and
forms required to be filed pursuant to the Securities Exchange Act of 1934, as
amended (the "Exchange Act").
(c) ENFORCEABILITY. CFB has the corporate power and authority to
enter into the Agreement and carry out its obligations thereunder. The
execution, delivery and performance of this Agreement by CFB and the
consummation of the transactions contemplated hereby have been duly authorized
by the Board of Directors of CFB. Subject to approval by the government
agencies and other governing bodies having regulatory authority over CFB as may
be required by statute or regulation, this Agreement constitutes a valid and
binding obligation of CFB, enforceable against it in accordance with its terms.
This Agreement does not require the approval of CFB shareholders.
(d) NO DEFAULT; CREATION OF LIENS. Neither the execution and
delivery of this Agreement nor the consummation of the transaction contemplated
hereby will (i) conflict with, result in the breach of, constitute a default
under or accelerate the performance provided by the terms of (A) any judgment,
order or decree of any court or other governmental agency to which CFB or any of
its subsidiaries may be subject, (B) any contract, agreement or instrument to
which CFB or any of its subsidiaries is a party or by which CFB or any of its
subsidiaries is bound or committed, or (C) the Articles of Incorporation or
Bylaws of CFB, or (ii) constitute an event that, with the lapse of time or
action by a third party, could result in a default under any of the foregoing or
result in the creation of any lien, charge or encumbrance upon the CFB Common
Stock or the capital stock of any of its subsidiaries.
14
(e) INFORMATION SUPPLIED. None of the information supplied or to
be supplied by CFB or its subsidiaries for inclusion or incorporation by
reference in the Prospectus (as hereinafter defined) or the Proxy Statement
and any amendment or supplement thereto will, at the date of mailing to
Western stockholders and at the time of the meeting of stockholders of
Western to be held in connection with the Merger, contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary in order to make the statements therein not
misleading. The issuance of CFB common stock in the Merger to Western
shareholders has been duly registered with the Securities Exchange Commission
and no stop order or suspension of effectiveness has been issued or
threatened to be issued by the SEC.
(f) NO PLAN TO TRANSFER ASSETS. CFB has no plan or intention to
sell or otherwise dispose of any of the assets of the Bank to be acquired in
the Merger, except for dispositions in the ordinary course of business or
transfers to controlled subsidiaries as described in Section 368(a)(2)(C) of
the Code.
(g) LITIGATION. No claims have been asserted by written notice to
CFB and no relief has been sought against CFB in any pending litigation or
governmental proceedings or otherwise. CFB is not a party to any unsatisfied
order, judgment or decree which is adverse to CFB, and CFB (i) is not the
subject of any cease and desist order, or other formal or informal
enforcement action by any regulatory authority; or (ii) has not made any
commitment to or entered into any agreement with any regulatory authority
that restricts or adversely affects its operations or financial condition.
(h) TAXES. CFB has filed all federal and state income tax returns
and all other returns with respect to any taxes, either federal, state or
local, which it is required to have filed; said returns have been correctly
and accurately prepared; all taxes reflected thereon have been paid or
adequately accrued or reserved for; no notice of any deficiency, assessments
or additions to tax have been received by CFB; CFB has not waived any statute
of limitations with respect to any taxes reflected on said returns; and
deferred taxes have been properly reflected on its financial statements.
There are no other taxes of any kind or character for which CFB is or may be
liable which are now past due, delinquent and/or unpaid, in any material
amount.
(i) PROPERTY. CFB is and has been at all times, in substantial
compliance with all applicable Environmental Laws (as defined below), and
have not engaged in any activity resulting in a material violation of any
applicable Environmental Law. To the best knowledge of CFB, there is no
legal, administrative, or other proceeding, claim, investigation (with
respect to which CFB is aware), inquiry, order, hearing or action of any
nature seeking to impose, or that would reasonably be expected to result in
the imposition, on CFB, of any liability arising from any violation of or
obligation under any local, state or federal environmental statute,
regulation or ordinance including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
("Environmental Laws"), pending or, to the knowledge of CFB, threatened
against CFB.
15
(j) EMPLOYEE BENEFITS. All of the plans and programs which CFB
maintains or to which CFB contributes on behalf of current or former
employees (hereinafter referred to as the "CFB Plans") are in compliance in
all material respects with all applicable requirements of ERISA and all other
applicable federal and state laws. Each of the CFB Plans that is a defined
benefit pension plan has assets with an aggregate value that exceeds the
present value of its liability for accrued benefits, all as determined on a
termination basis. None of the CFB Plans has engaged in a "prohibited
transaction," within the meaning of Section 4975 of the Code or Section 406
of ERISA, none of the CFB Plans which is subject to Title IV of ERISA or any
trust created thereunder has been terminated nor have there been any
"reportable events" as that term is defined in Section 4043 of ERISA with
respect to any CFB Plan and none of the CFB Plans has incurred an accumulated
funding deficiency within the meaning of Section 412(a) of the Code.
(k) MATERIAL ADVERSE CHANGES. Since December 31, 1997, there has
been no material adverse change in the financial condition, results of
operation or business of CFB and its subsidiaries, taken as a whole (other
than changes in banking laws or regulations, changes in generally accepted
accounting principles or interpretations thereof that affect the banking
industry generally, or changes in general economic conditions that affect the
banking industry on a nationwide basis, including changes in the general
level of interest rates).
(l) REGULATORY APPROVALS. CFB has no reason to believe that it
will not be able to obtain all requisite regulatory approvals necessary to
consummate the transactions set forth in this Agreement.
(m) AVAILABILITY OF CFB COMMON STOCK. CFB has available a
sufficient number of authorized and unissued shares of CFB Common Stock to
pay the Merger Consideration, and CFB will take such action during the term
of this Agreement to ensure that it will have a sufficient number of
authorized and unissued shares of CFB Common Stock to pay the Merger
Consideration.
ARTICLE 4
COVENANTS OF WESTERN AND CFB
4.1 COVENANTS OF WESTERN. During the period from the date of this
Agreement and continuing until the Effective Time, Western agrees as follows:
(a) ORDINARY COURSE. Except as otherwise required under this
Agreement or by CFB, Western, the Bank and WDSI shall carry on their
respective businesses in the usual, regular and ordinary course in
substantially the same manner as heretofore conducted and use all reasonable
efforts to preserve intact their present business organizations, maintain
their rights and franchises and preserve their relationships with customers,
suppliers and others having business dealings with them to the end that their
goodwill and ongoing businesses shall not be impaired in any material
respect. Western shall not, nor shall it permit the Bank to (i) enter into
any new
▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, (▇▇) increase or decrease the current number of
the directors of Western or the Bank, (iii) change its or the Bank's lending,
investment, liability management or other material banking policies in any
respect that is material to such party; or (iv) incur or commit to any
capital expenditures (or any obligations or liabilities in connection
therewith) other than capital expenditures (and obligations or liabilities in
connection therewith) incurred or committed to in accordance with the current
capital budget of the Bank, a copy of which has been provided to CFB as of
the date hereof. Western and the Bank shall each continue to declare and pay
dividends to shareholder at times and rates consistent with recent past
practices.
(b) SHAREHOLDER MEETING. Western will cause to be duly called,
and will cause to be held not later than sixty (60) days from the date
hereof, a meeting of its shareholders and will direct that this Agreement be
submitted to a vote at such meeting. Western will (i) cause proper notice of
such meeting to be given to its shareholders in compliance with the New
Mexico Act and other applicable laws and regulations; (ii) recommend by the
affirmative vote of a majority of the Board of Directors a vote in favor of
approval of this Agreement; and (iii) use its best efforts to solicit from
its shareholders proxies in favor thereof.
(c) PROXY STATEMENT. Western shall promptly prepare a proxy
statement (the "Proxy Statement") (including financial statements, prepared
in accordance with generally accepted accounting principles, in form suitable
for inclusion in the Proxy Statement) in conformity with applicable law and
regulation and the Articles of Incorporation and Bylaws of Western, for
distribution to Western shareholders in connection with the meeting called to
consider and vote upon the proposal. Western shall also provide all
information requested by CFB in connection with any statement or application
made by CFB to any governmental body in connection with the Merger. Western
agrees promptly to advise CFB if at any time prior to the Effective Date of
the Merger, any information provided by or on behalf of Western becomes
incorrect or incomplete in any material respect and to provide the
information needed to correct such inaccuracy or omission.
(d) CONFIDENTIAL INFORMATION. Western will hold in confidence all
documents and nonpublic information concerning CFB and its subsidiaries
furnished to Western and its representatives in connection with the Merger
and will not release or disclose such information to any other person, except
as required by law and except to Western's outside professional advisers in
connection with this Agreement, with the same undertaking from such
professional advisers. If the Merger contemplated by this Agreement shall
not be consummated, such confidence shall be maintained and such information
shall not be used in competition with CFB (except to the extent that such
information can be shown to be previously known to Western, in the public
domain, or later acquired by Western from other legitimate sources) and, upon
request, all such documents, any copies thereof and extracts therefrom shall
immediately thereafter be returned to CFB.
(e) BENEFIT PLANS. Western and the Bank shall terminate each of
the agreements and arrangements with directors and/or officers identified on
EXHIBIT 4.1(e), attached hereto, on a basis mutually agreeable to the parties
to the respective agreement or arrangement, and shall
17
fully expense or accrue as of the Determination Date Financial Statements,
any resulting financial obligation or liability incurred. Western and the
Bank shall, to the extent legally permissible, take all action necessary or
required (i) to terminate or amend, if requested by CFB, all qualified
pension and welfare benefit plans and all non-qualified benefit plans and
compensation arrangements as of the Effective Time; and (ii) to submit
application to the Internal Revenue Service for a favorable determination
letter for each of the Plans which is subject to the qualification
requirements of Section 401(a) of the Code prior to the Effective Time.
Except as otherwise required pursuant to this Section 4.1(e),
Western agrees as to itself and the Bank that it will not, without the prior
written consent of CFB, (i) enter into, adopt, amend (except as may be
required by law) or terminate any Plan, as the case may be, or any other
employee benefit plan or any agreement, arrangement, plan or policy between
Western or the Bank and one or more of its directors or officers; provided,
however, that Western or the Bank may amend any of the Plans to reduce or
eliminate a requirement of mandatory periodic contributions (provided that if
any of the Plans do not have assets with an aggregate value that exceeds the
present value of its liability for accrued benefits, all as determined on a
termination basis, then Western shall accrue on its Determination Date
Financial Statements the amount by which any of the Plans are underfunded);
(ii) except for normal increases in the ordinary course of business
consistent with past practice that in the aggregate do not result in
aggregate annual base compensation expense to Western in excess of 105% of
that in effect as of December 31, 1997, increase in any manner the
compensation of any director, officer, or employee, or pay any benefit not
required by any plan and arrangement as in effect as of the date hereof
(including, without limitation, the granting of stock options, stock
appreciation rights, restricted stock, restricted stock units or performance
units or shares) or enter into any contract, agreement, commitment or
arrangement to do any of the foregoing; or (iii) enter into or renew any
contract, agreement, commitment or arrangement providing for the payment to
any director, officer or employee of Western or the Bank of compensation or
benefits contingent, or the terms of which are materially altered, upon the
occurrence of the Merger.
(f) NO SOLICITATIONS. Western shall not permit the Bank to, nor
shall it authorize or permit any of its officers, directors or employees or
any investment banker, financial advisor, attorney, accountant or other
representative or agent retained by it or the Bank to solicit, or take any
other action to facilitate, any inquiries or the making of any proposal which
constitutes, or may reasonably be expected to lead to, any takeover proposal
(as defined below), or agree or endorse any takeover proposal, or participate
in any discussions or negotiations, or provide third parties with any
nonpublic information, relating to any such inquiry or proposal; provided,
however, that nothing contained in this provision shall prohibit the Board of
Directors of Western from taking any action or permitting any of its
representatives to take any action if the Board of Directors of Western is
complying with its fiduciary duties to shareholders and such Board based its
determination of such fiduciary duties on a written opinion of counsel.
Western shall promptly advise CFB orally and in writing of any such inquiries
or proposals, including all of the material terms thereof. As used in this
Agreement, "takeover proposal" shall mean any tender or exchange offer,
proposal for a merger, consolidation or other business combination
18
involving Western or any proposal or offer to acquire in any manner a
substantial equity interest in, or a substantial portion of the assets of
Western other than the transactions contemplated or permitted by this
Agreement.
(g) MANAGEMENT AGREEMENTS. As of the Effective Time, Western and
the Bank shall terminate their respective Management Consulting Services
Agreements, dated January 1, 1997, with Bank Consultants, Inc., as well as
the Consulting Services Agreement, dated October 18, 1995, between WDSI and
the Bank, and shall fully expense or accrue as of the Determination Date
Financial Statements, any resulting financial obligation or liability
incurred.
(h) INSURANCE. Western and the Bank shall maintain the insurance
coverage (or coverage of a like kind and amount) referenced in Section 3.1(o)
through the Effective Time.
(i) POOLING RESTRICTIONS. From and after the date of this
Agreement, neither Western nor the Bank shall take any action which, with
respect to Western, would disqualify the Merger as a "pooling of interests"
for accounting purposes.
(j) FINANCIAL STATEMENTS. Western shall prepare, file and submit
to CFB all quarterly and management prepared financial statements for any
periods ending at least 30 days before the Closing Date.
(k) ADDITIONAL COVENANTS OF WESTERN. From the date of this
Agreement to the Closing Date or the earlier termination of this Agreement,
Western, EXCEPT WITH THE PRIOR WRITTEN CONSENT OF CFB, or as specifically
required under the Agreement, shall not, nor shall it allow the Bank to:
(i) Sell or commit to issue or sell any shares of capital stock
of Western or the Bank, securities convertible into or exchangeable
for capital stock of Western or the Bank, warrants, options or other
rights to acquire such stock, or enter into any agreement with respect
to the foregoing other than issuance by the Bank of capital stock to
Western;
(ii) Redeem, purchase or otherwise acquire (except for trust
account shares) directly or indirectly, any shares of capital stock of
Western or the Bank or any securities convertible or exercisable for
any shares of capital stock of Western or the Bank;
(iii) Split, combine or reclassify any of capital stock of
Western or the Bank or issue or authorize or propose the issuance of
any other securities in respect of, in lieu of, or in substitution for
shares of capital stock of Western or the Bank;
(iv) Borrow, assume, guarantee, endorse or otherwise as an
accommodation become responsible for the obligations of any other
individual, corporation or other entity, in any material amount;
19
(v) Other than in the ordinary course of business, discharge or
satisfy any material lien or encumbrance on the properties or assets
of the Bank or pay any material liability;
(vi) Mortgage, pledge or subject to any lien or other encumbrance
any of its assets, except (A) in the ordinary course of business, (B)
liens and encumbrances for current property taxes not yet due and
payable, and (C) liens and encumbrances which do not materially affect
the value or interfere with the current use or ability to convey the
property subject thereto or affected thereby;
(vii) Sell, assign or transfer any tangible or intangible assets
with a book value greater than $10,000, except in the ordinary course
of business;
(viii) Enter into any individual employment, agency or other
contract or arrangement for the performance of personal services for
an amount in excess of $10,000;
(ix) Amend the Bank's or Western's Articles of Association,
Certificate of Incorporation, Bylaws or other governing documents;
(x) Fail to maintain a reserve for loss and costs associated
with those litigation matters reflected in Section 3.1(1) of the
Western Disclosure Schedule to the extent required by generally
accepted accounting principles;
(xi) Cancel any material debt or claim or waive any right of
material value, except in the ordinary course of business;
(xii) Repurchase or enter into any agreement to repurchase all or
any portion of any loan previously participated to any other financial
institution other than loans repurchased in compliance with all
applicable laws and regulations ;
(xiii) Originate any loan which is thereafter participated to
another financial institution providing for payment upon default on
any basis other than pro rata;
(xiv) Unless the Bank is under a legal obligation to do so, make
or commit to make any further advances on any loan which is either in
default or classified, whether such classification is a result of a
federal or state bank regulatory examination or internal
classification of substandard or lower by the Bank's officers or
directors;
(xv) (A) make, or agree to make, any fully secured loan for an
amount in excess of $300,000 to any one borrower, or increase any
existing fully secured loan by an amount which, when aggregated with
all loans to such borrower, would exceed $300,000 unless said loan is
made pursuant to a properly documented and
20
legally enforceable commitment of the Bank to the borrower made
prior to the date of this Agreement; (B) make, or agree to make,
any unsecured loan for an amount in excess of $50,000 to any one
borrower, or increase any existing unsecured loan by an amount
which, when aggregated with all loans to such borrower, would
exceed $50,000, unless said loan is made pursuant to a properly
documented and legally enforceable commitment of the Bank to the
borrower made prior to the date of this Agreement; (C) make, or
agree to make any new loan or advance on any existing loan, except
in conformity with the Bank's current loan policies; or (D) make
any change with respect to the terms of any existing loan, except
in the ordinary course of business (the provisions of parts A and B
of this section shall not apply to renewals of existing loans for
an amount below the applicable limit set forth in parts A and B);
PROVIDED, HOWEVER, for any loan requiring CFB's approval, CFB shall
provide its decision within two (2) business days of receipt of
request, accompanied by appropriate information for evaluation of
the loan request, and the loan shall be deemed approved if CFB
fails to disapprove within such two (2) business day period of
review.
(xvi) Make or agree to make any loan to any Bank Principal or any
person, corporation or entity in violation of any state or federal law
or regulation;
(xvii) Incur any obligation or liability with respect to capital
expenditures which is not provided for in the current capital budget
and which exceeds $10,000 for any single matter or $50,000 in the
aggregate;
(xviii) Fail to timely pay and discharge all federal and state
taxes and other accounts payable for which it is liable, provided,
that Western or the Bank may deposit an amount equal to any such
taxes, in lieu of the payment thereof, into a reserve account,
determined consistently with prior practices, from which such taxes
will be paid when and to the extent they are found to be properly due
and payable;
(xix) Except as provided herein, pay or commit to pay any
additional salary or other compensation to any of the officers,
directors or employees of Western or the Bank;
(xx) Except as otherwise required pursuant to Section 4.1(e),
enter into, adopt, amend (except as may be required by law), terminate
or make or grant any increase above current funding levels in any of
the Plans (other than normal premium increases on current health care
insurance);
(xxi) Purchase or sell any bonds or other investment securities
without prior written consent of CFB or make or agree to make any
investment in violation of any federal law or regulation, except that
the Bank may purchase U.S. Treasury or Agencies securities with
maturity dates of 36 months or less;
21
(xxii) Fail to charge and pay interest rates on loans and
deposits, respectively, not generally consistent with the Bank's prior
practices and currently prevailing conditions in the Bank's
marketplace;
(xxiii) Fail to use its reasonable best efforts to comply with
any law, rule, regulation or order applicable to the Bank and/or
Western if such failure would have a material adverse effect upon
Western;
(xxiv) With respect to the Bank, fail to make all appropriate and
required transfers to the Bank's loan loss reserves based upon
existing policies of the Bank or at the request of any regulatory
agency or, in any event, fail to maintain a loan loss reserve of at
least equal to the greater of 1.35% of total loans or $1,529,000;
(xxv) Change any accounting methods, practices or procedures with
respect to the accumulation and presentation of financial information,
except as directed by applicable law or regulation or to conform with
accounting standards;
(xxvi) Declare or pay any dividends or distributions with respect
to its stock which would have the effect of reducing the Western Value
as of the Closing Date to less than $16,000,000.00. Western may, in
its discretion, pay dividends in amounts which do not result in a
decrease in Western Value below $16,000,000.00 or which would
disqualify the Merger from pooling accounting treatment; or
(xxvii) Fail to use its reasonable best efforts to obtain the
consent or approval of each person (other than the government
authorities referred to in Section 6.1(c)) whose consent or approval
is required in order to permit a succession by the Surviving
Corporation pursuant to the Merger to any obligation, right or
interest of Western or the Bank under any loan or credit agreement,
note, mortgage, indenture, lease, license or other agreement or
instrument.
4.2 COVENANTS OF CFB. During the period from the date of this Agreement
and continuing until the Effective Time, CFB agrees as follows:
(a) ORDINARY COURSE. CFB shall carry on its business in the usual,
regular and ordinary course in substantially the same manner as heretofore
conducted.
(b) APPLICATION. Subject to the required cooperation of Western and
its affiliates, CFB shall use its reasonable best efforts to prepare and submit
within thirty (30) days of the date hereof an application to the Federal Reserve
Bank of Minneapolis for prior approval pursuant to Section 3(a)(5) of the Bank
Holding Company Act of 1956, as amended, of the proposed transaction, and to
prosecute all required federal and state applications.
(c) PROXY STATEMENT. CFB will furnish to Western all the information
concerning CFB required for inclusion in, and will cooperate in the preparation
of, the Proxy Statement to be
22
sent to the shareholders of Western. CFB agrees promptly to advise Western
if at any time prior to the Effective Date of the Merger, any information
provided by CFB in the Proxy Statement becomes incorrect or incomplete in any
material respect and to provide the information needed to correct such
inaccuracy or omission.
(d) PROSPECTUS. CFB will furnish to Western copies of a
prospectus relating to the CFB common stock to be issued to Western
shareholders in the Merger (the "Prospectus"), to be sent to the shareholders
of Western. CFB agrees promptly to advise Western if at any time prior to
the Effective Date of the Merger, any information provided by CFB in the
Prospectus becomes incorrect or incomplete in any material respect and to
provide the information needed to correct such inaccuracy or omission. At
the time of mailing thereof to the Western shareholders, at the time of the
Western shareholders' meeting referred to in Section 4.1(b) hereof and at the
Effective Time of the Merger, the Prospectus will not contain any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements contained therein, in light of the circumstances under
which they are made, not misleading or omit to state a material fact
necessary to correct any statement in any earlier communication with respect
to the solicitation of any proxy for the Western shareholders' meeting.
(e) LISTING. CFB will file all documents required to be filed to
obtain approval for listing the CFB Common Stock to be issued pursuant to the
Merger on the Nasdaq National Market and use its best efforts to effect said
listing.
(f) SHARES TO BE ISSUED. The shares of CFB Common Stock to be
issued by CFB to the shareholders of Western pursuant to this Agreement will,
upon such issuance and delivery to said shareholders pursuant to the
Agreement, be duly authorized, validly issued, fully paid and nonassessable.
The shares of CFB Common Stock to be delivered to the shareholders of Western
pursuant to this Agreement are and will be free of any preemptive rights of
the stockholders of CFB.
(g) BLUE SKY. CFB will file all documents required to obtain
prior to the Effective Time of the Merger all necessary Blue Sky permits and
approvals, if any, required to carry out the transactions contemplated by
this Agreement, will pay all expenses incident thereto and will use its best
efforts to obtain such permits and approvals.
(h) CONFIDENTIAL INFORMATION. CFB will hold in confidence all
documents and information concerning Western and the Bank furnished to it and
its representatives in connection with the transactions contemplated by this
Agreement and will not release or disclose such information to any other
person, except as required by law and except to its outside professional
advisers in connection with this Agreement, with the same undertaking from
such professional advisers. If the transactions contemplated by this
Agreement shall not be consummated, such confidence shall be maintained and
such information shall not be used in competition with Western (except to the
extent that such information can be shown to be previously known to CFB, in
the public domain, or later acquired by CFB from other legitimate
23
sources) and, upon request, all such documents, copies thereof or extracts
therefrom shall immediately thereafter be returned to Western.
(i) DIRECTOR AND OFFICER INDEMNIFICATION. CFB agrees to permit
Western to obtain an extended reporting period (otherwise known as "tail
coverage") under Western's existing director and officer liability policy.
CFB shall ensure that all rights to indemnification and limitations of
liability that the directors and officers of Western and its subsidiaries
have pursuant to the Articles of Incorporation or Association (and their
respective Bylaws) of Western and its subsidiaries shall survive the Merger
for six (6) years from the Effective Time and shall continue in full force
and effect and be fully honored.
(j) RULE 144. From and for a period of two (2) years after the
Effective Time, CFB shall file all reports with the SEC necessary to permit
the shareholders of Western who may be deemed "underwriters" (within or
meaning to Rule 145 under the Securities Act) of the Western Common Stock to
sell CFB Common Stock received by them in connection with the Merger pursuant
to Rules 144 and 145(d) of the Securities Act if they would otherwise be so
entitled.
4.3 COVENANTS OF WESTERN AND CFB. During the period from the date of
this Agreement and continuing until the Effective Time, Western and CFB agree
as to themselves and their subsidiaries that, except as expressly
contemplated or permitted by this Agreement, or to the extent that the
parties shall otherwise consent in writing:
(a) GOVERNING DOCUMENTS. No party shall amend its Certificate or
Articles of Incorporation or Bylaws.
(b) OTHER ACTIONS. Unless such action is required by law, no
party shall, nor shall permit any of its subsidiaries to, take any action
that (i) is intended to result in any of its representations and warranties
set forth in this Agreement being or becoming untrue in any material respect,
or in any of the conditions to the Merger set forth in Article 6 not being
satisfied or in a violation of any provision of this Agreement, or (ii) would
adversely affect the ability of any of them to obtain any of the Requisite
Regulatory Approvals (as defined in Section 5.1(c)) without imposition of a
condition or restriction of the type referred to in Section 6.1(e) hereof
except, in every case, as may be required by applicable law or this Agreement.
(c) ADVICE OF CHANGES; GOVERNMENT FILINGS. Each party shall
promptly advise the other orally and in writing of any change or event
constituting a material breach of any of the representations, warranties or
covenants of such party contained herein. CFB shall file all reports
required to be filed by it with the SEC and bank regulatory authorities
between the date of this Agreement and the Effective Time and shall deliver
to Western copies of all such reports promptly after the same are filed.
CFB, Western and each subsidiary of CFB or Western that is a bank shall file
all call reports with the appropriate bank regulators and all other
applications and other documents required to be filed with the appropriate
bank regulators between the date hereof
24
and the Closing Date and shall make available to the other party copies of
all such reports promptly after the same are filed.
(d) TITLE TO PROPERTY. Western agrees to deliver to CFB (at
Western's expense) within 30 days of the date hereof, a title insurance
commitment for all real property owned by Western or the Bank in the State of
New Mexico (other than property held as OREO) (the "Title Commitments"). CFB
shall have 30 days after receipt by CFB's counsel of said Title Commitments
within which to notify Western, in writing, of CFB's objection to any
exceptions (other than any exception of the type described in Section
3.1(n)(i) through (iv)) to the title shown in said Title Commitments. In the
event of any such objection, then Western shall have 30 days from the date of
such objection within which to attempt to eliminate such objections to
exceptions to title from the Title Commitment. In the event such objected to
exceptions are not eliminated or satisfied to the reasonable satisfaction of
CFB, CFB may terminate this Agreement pursuant to Section 7.1 hereof.
(e) ENVIRONMENTAL ASSESSMENT. Western shall engage at its expense
an independent, a qualified environmental engineering firm, acceptable to CFB
for the purpose of conducting a Phase I Hazardous Waste Assessment (the
"Assessment") of all real properties owned or controlled by the Bank. CFB
shall review and approve the scope of engagement for the Assessment, which
shall satisfy ASTM's E-1527 Standard Practice and shall include a record
review of publicly available federal, state and local sources of
environmental records. The Assessment shall be completed within 30 days after
the date hereof. CFB shall have a period of 30 days from the date of receipt
of the written report of such Assessment to review such Assessment and give
written notice to Western stating either that (i) such Assessment is approved
by CFB or (ii) such Assessment is not approved by CFB and the reasons
therefor.
If CFB gives a notice pursuant to (ii) above which sets forth specific
objections to the Assessment, then CFB may, at its option, terminate this
Agreement as of the date which is 60 days after the date of such notice
unless during such 60 day period Western corrects or satisfies such
objections, or indemnifies CFB against loss, liability or expense, to the
reasonable satisfaction of CFB.
(f) WDSI. WDSI shall continue to provide data processing services
to the Bank for a period of up to 6 months after the Effective Time pursuant
to the terms of the Data Processing Services Agreement in substantially the
form attached hereto as Exhibit 4.3(f) (the "Data Processing Agreement");
provided, however, that the Bank may terminate the Data Processing Agreement
at any time, upon thirty (30) days' prior written notice to WDSI. Upon
termination of the Data Processing Agreement, Western Commerce Bancshares,
Inc. shall purchase all of the Bank's right, title and interest in and to
WDSI, including 66,571 shares of WDSI common stock, for a purchase price
equal to the value of the Bank's investment in WDSI shown on the
Determination Date Financial Statements. The purchase price shall be payable
in immediately available funds to the Bank on the date of termination of the
Data Processing Agreement. Notwithstanding termination of the Data
Processing Agreement, WDSI agrees to continue to provide additional services
to the Bank, including but not limited to imaging, on reasonable terms and
conditions, pursuant to mutual agreement.
25
ARTICLE 5
ADDITIONAL AGREEMENTS
5.1 REGULATORY MATTERS.
(a) The parties hereto shall cooperate with each other and use
their reasonable best efforts to promptly prepare and file all necessary
documentation, to effect all necessary applications, notices, petitions,
filings and other documents, and to obtain as promptly as practicable all
necessary permits, consents, and authorizations of all governmental entities
necessary to consummate the Merger ("Requisite Regulatory Approvals").
Western and CFB shall have the right to review in advance, and to the extent
practicable each will consult the other on, subject to applicable laws
relating to the exchange of information, all the information relating to
Western or CFB, as the case may be, and any of their respective subsidiaries,
which appear in any filing made with, or written materials submitted to any
governmental entity in connection with the Merger. In exercising the
foregoing right, each of the parties hereto shall act reasonably and as
promptly as practicable.
(b) Western and CFB shall promptly furnish each other with copies
of written communications received by Western or CFB, as the case may be, or
any of their respective Subsidiaries, Affiliates or Associates (as such items
are defined in Rule 12b-2 under the Exchange Act as in effect on the date
hereof) from, or delivered by any of the foregoing to, any governmental
entity in respect of the Merger.
5.2 ACCESS TO INFORMATION.
Upon reasonable notice and subject to applicable laws relating to the
exchange of confidential information, Western and CFB shall each (and cause
each of its subsidiaries to) afford to the officers, employees, accountants,
counsel and other representatives of each, access during normal business
hours during the period prior to the Effective Time, to all its properties,
books, contracts, commitments and records for the purpose of updating any
review of such items performed prior to the date of this Agreement and,
during such period, Western and CFB shall (and shall cause each of its
subsidiaries to) make available to the other: (a) a copy of each report,
schedule, registration statement and other document filed or received by it
during such period pursuant to the requirements of federal or state
securities laws or federal or state banking laws (other than reports or
documents which either party is not permitted to disclose under applicable
law); and (b) all other information concerning its business, properties and
personnel as either party may reasonably request. It is the intention of the
parties that CFB shall conduct an examination of Western and the Bank prior
to the Closing Date in order to confirm compliance with the representations,
warranties and covenants set forth in this Agreement. No investigation by
either party shall affect the representations and warranties set forth herein.
26
5.3 AFFILIATES. Each of Western and CFB shall use its reasonable best
efforts to cause each director, executive officer and other person who is an
"affiliate" (for purposes of Rule 145 under the Securities Act) of Western or
CFB to deliver to the other party hereto, as soon as practicable after the
date hereof, and at least 32 days prior to the Closing Date, a written
agreement substantially in the form of EXHIBIT 5.3.
5.4 EMPLOYEE BENEFIT PLANS. Each person who is an employee of the Bank
as of the Effective Time ("Bank Employees") shall be participants in the
employee welfare plans, and shall be eligible for participation in the
pension plans of CFB, as in effect from time to time, subject to any
eligibility requirements (with full credit for years of past service to the
Bank, or to any predecessor-in-interest of the Bank to the extent such
service is presently given credit under the Plans of the Bank described in
Section 3.1(k) hereof, for the purpose of satisfying any eligibility and
vesting periods) applicable to such plans (but not subject to any
pre-existing condition exclusions) and shall enter each welfare plan
immediately after the Effective Time and shall enter each pension plan not
later than the first day of the calendar quarter which begins at least 180
days after the Effective Time. For the purpose of determining each Bank
Employee's benefit for the year in which the Merger occurs under the CFB
vacation program, vacation taken by a Bank Employee in the year in which the
Merger occurs will be deducted from the total CFB benefit. Each Bank
Employee shall be eligible for participation, as a new employee with the
credit for past service described above, in the CFB Plans under the terms
thereof.
5.5 EXPENSES. Except as otherwise stated herein, whether or not the
Merger is consummated, all costs and expenses incurred in connection with
this Agreement, and the transactions contemplated hereby shall be paid by the
party incurring such expense, except as may be permitted by Section 7.2. All
of the expenses (including but not limited to broker's professional fees)
incurred or to be incurred by Western in connection with the Merger and not
paid as of the Determination Date shall be estimated and accrued as expenses
on the Determination Date Financial Statements.
5.6 ADDITIONAL AGREEMENTS; BEST EFFORTS. Subject to the terms and
conditions of this Agreement, each of the parties hereto agrees to use its
reasonable best efforts to take all action and to do all things necessary,
proper or advisable under applicable laws and regulations to consummate and
make effective the transactions contemplated by this Agreement, including,
without limitation, cooperating fully with the other party hereto, providing
the other party hereto with any appropriate information and making all
necessary filings in connection with the Requisite Regulatory Approvals.
ARTICLE 6
CONDITIONS PRECEDENT
6.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The
respective obligation of each party to effect the Merger shall be subject to
the satisfaction prior to the Effective Time of the following conditions:
27
(a) STOCKHOLDER APPROVAL. This Agreement shall have been approved
and adopted by the affirmative vote of the holders of the outstanding shares
of Western Common Stock, as required by the New Mexico Act and the Articles
of Incorporation and Bylaws of Western.
(b) NASDAQ LISTING. The shares of CFB Common Stock issuable to
the Western stockholders pursuant to this Agreement shall have been approved
for listing on the Nasdaq Market System, upon notice of issuance.
(c) APPROVALS. Other than the filing provided for by Section 1.1,
all consents, orders or approvals of, or declarations or filings with, and
all expirations of waiting periods imposed by, any governmental entity which
are prescribed by law as necessary for the consummation of the Merger and the
other transactions contemplated hereby shall have been filed, occurred or
been obtained and all Requisite Regulatory Approvals shall be in full force
and effect.
(d) NO INJUNCTIONS OR RESTRAINTS; ILLEGALITY. No order,
injunction or decree issued by any court or agency of competent jurisdiction
or other legal restraint or prohibition (an "Injunction") preventing the
consummation of the Merger or any of the transactions contemplated hereby
shall be in effect, nor shall any proceeding by any governmental entity
seeking any such Injunction be pending. No statute, rule, regulation, order,
injunction or decree shall have been enacted, entered, or enforced by any
governmental entity which prohibits, restricts or makes illegal consummation
of the Merger.
(e) NO UNDULY BURDENSOME CONDITION. There shall not be any action
taken, or any statute, rule, regulation or order enacted, entered, enforced
or deemed applicable to the Merger or any of the transactions contemplated
hereby, by any federal or state governmental entity which, in connection with
the grant of a Requisite Regulatory Approval, imposes any condition or
restriction upon CFB, or any of its subsidiaries which would so materially
adversely impact the economic or business benefits of the transactions
contemplated by this Agreement as to render the consummation of the Merger
inadvisable, in the reasonable business judgment of the Board of Directors of
CFB.
6.2 CONDITIONS TO OBLIGATIONS OF CFB. The obligation of CFB to effect
the Merger are also subject to the satisfaction or waiver by CFB prior to the
Effective Time of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Western set forth in this Agreement shall be true and correct
in all material respects as of the date of the Agreement and (except to the
extent such representations and warranties speak as of an earlier date) as of
the Closing Date as though made on the Closing Date, except where the failure
to be true and accurate in all material respects would not have or would not
be reasonably expected to have a material adverse effect on Western, and CFB
shall have received a certificate signed on behalf of Western by the chief
executive officer and chief financial officer of Western to such effect.
28
(b) PERFORMANCE OF OBLIGATIONS OF WESTERN. Western shall have
performed in all materials respects all obligations required to be performed
by it under this Agreement at or prior to the Closing Date, and CFB shall
have received a certificate signed on behalf of Western by the chief
executive officer and chief financial officer Western to such effect.
(c) MINIMUM WESTERN VALUE. The Western Value as of the
Determination Date shall not be less than $16,000,000.00. The confirmation
of the minimum Western Value shall be made pursuant to the procedures set
forth in Section 1.4.
(d) POOLING LETTER. CFB shall have received a letter from Ernst &
Young, in form and substance reasonably satisfactory to CFB, approving the
accounting treatment of the Merger as a "pooling of interests" in accordance
with generally accepted accounting principles, as of a date no more than five
business days prior to the Closing Date; in support of the Ernst & Young
pooling letter, Ernst & Young and CFB shall have received a letter from
Western's accountants, in form and substance reasonably satisfactory to Ernst
& Young, confirming certain facts on behalf of Western.
(e) LEGAL OPINION. CFB shall have received the opinion of
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, L.L.P., counsel to Western, dated the Closing Date, in
substantially the form attached as EXHIBIT 6.2, and such opinion shall not
have been withdrawn prior to the Effective Time.
6.3 CONDITIONS TO OBLIGATIONS OF WESTERN. The obligation of Western to
effect the Merger is also subject to the satisfaction or waiver by Western
prior to the Effective Time of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of CFB set forth in this Agreement shall be true and correct in
all material respects as of the date of this Agreement and (except to the
extent such representations and warranties speak as of an earlier date) as of
the Closing Date as though made on the Closing Date, except as otherwise
contemplated by this Agreement, and Western shall have received a certificate
signed on behalf of CFB by the chief executive officer and by the chief
financial officer of CFB to such effect.
(b) PERFORMANCE OF OBLIGATIONS OF CFB. CFB shall have performed
in all material respects all obligations required to be performed by it under
this Agreement at or prior to the Closing Date, and Western shall have
received a certificate signed on behalf of CFB by the chief executive officer
and by the chief financial officer of CFB to such effect.
(c) CONSENTS UNDER AGREEMENTS. CFB shall have obtained the
consent or approval of each person (other than the Governmental Entities
referred to in Section 6.1(c)) whose consent or approval shall be required in
connection with the transactions contemplated hereby under any loan or credit
agreement, note, mortgage, indenture, lease, license or other agreement or
instrument to which CFB or any of its subsidiaries is a party or is otherwise
bound, except those for which failure to obtain such consents and approvals
would not, in the reasonable opinion of
29
Western, individually or in the aggregate, have a material adverse effect
on CFB or upon the consummation of the transactions contemplated hereby.
(d) TAX OPINION. Western shall have received the opinion of
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, L.L.P., counsel to Western, dated the Closing Date,
with a copy provided to CFB, to the effect that (i) the Merger will be
treated for federal income tax purposes as a reorganization within the
meaning of Section 368(a)(1)(A) of the Code, (ii) CFB and Western will each
be a party to that reorganization within the meaning of Section 368(b) of the
Code, (iii) shareholders of Western who exchange their shares of Western
Common Stock for shares of CFB Common Stock will not recognize gain or loss,
for purposes of federal income tax, except to the extent of the cash received
in lieu of fractional shares, and (iv) Western will not recognize gain or
loss, for purposes of federal income tax, as a result of consummation of the
Merger.
(e) LEGAL OPINION. Western shall have received the opinion of
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.L.L.P., counsel to CFB, dated the Closing Date, in
substantially the form attached as EXHIBIT 6.3, and such opinion shall not
have been withdrawn prior to the Effective Time.
(f) NO MATERIAL ADVERSE CHANGE. Since the date of this Agreement,
no material adverse change in the financial condition, results of operations,
business or prospects of CFB and its subsidiaries, taken as a whole, shall
have occurred, and CFB and its subsidiaries shall not have suffered any
damage, destruction or loss (whether or not covered by insurance) materially
adversely affecting the properties or business of CFB and its subsidiaries,
taken as a whole.
(g) FAIRNESS OPINION. Western shall have received letters from
▇▇▇▇▇ Financial dated the date of the mailing of the Proxy Statement to the
Western shareholders and dated the date of the meeting of shareholders to
consider the Merger, in each case in form and substance satisfactory to
Western, confirming such financial advisor's opinion that the consideration
to be paid in the Merger is fair to the Western shareholders from a financial
point of view.
ARTICLE 7
TERMINATION AND AMENDMENT
7.1 TERMINATION. This Agreement may be terminated in writing at any
time prior to the Effective Time, whether before or after approval of the
Merger by the stockholders of Western, only in the following circumstances:
(a) by mutual consent of CFB and Western in a written instrument,
if the Board of Directors of each so determines by a vote of a majority of
the members of its entire Board; or
(b) by either CFB or Western if (i) any Requisite Regulatory
Approval shall have been denied; or (ii) any governmental entity of competent
jurisdiction shall have issued a final nonappealable order enjoining or
otherwise prohibiting the consummation of the transactions contemplated by
this Agreement; or
30
(c) by either CFB or Western if the Merger shall not have been
consummated on or before November 30, 1998, unless the failure of
consummation shall be due to the failure of the party seeking to terminate to
perform or observe in all material respects the covenants and agreements
hereunder to be performed or observed by such party; or
(d) by either CFB or Western if there shall have been a material
breach of any of the covenants or agreements set forth in this Agreement on
the part of the other party, which breach shall not have been cured before
Closing or within twenty (20) business days following receipt by the
breaching party of written notice of such breach from the other party,
whichever occurs first; or
(e) by CFB pursuant to the terms of Section 4.3(d) or 4.3(e) or
5.3, as applicable.
7.2 EFFECT OF TERMINATION. In the event of termination of this
Agreement by either CFB or Western as provided in Section 7.1, this Agreement
shall forthwith become void and have no effect, except that the obligations
under Sections 4.1(d), 4.2(h), 5.5, and 7.2 shall survive termination of this
Agreement; provided, however, that no party shall be relieved or released
from any liabilities or damages arising out of the willful breach by such
party of any provision of this Agreement.
7.3 AMENDMENT. This Agreement may be amended by the parties hereto, by
action taken or authorized by their respective Boards of Directors, at any
time before or after approval of the matters presented in connection with the
Merger by the stockholders of Western, provided, however, that after any such
approval, no amendment shall be made which by law requires further approval
by such stockholders, without such further approval. This Agreement may not
be amended except by an instrument in writing signed on behalf of each of the
parties hereto.
7.4 EXTENSION; WAIVER. At any time prior to the Effective Time, the
parties hereto, by action taken or authorized by their respective Board of
Directors, may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties
hereto; (ii) waive any inaccuracies in the representations and warranties
contained herein or in any of the Schedules; and (iii) waive compliance with
any of the agreements or conditions contained herein. Any agreement on the
part of a party hereto to any such extension or waiver shall be valid only if
set forth in a written instrument signed on behalf of such party.
31
ARTICLE 8
GENERAL PROVISIONS
8.1 NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES. No representation or
warranty contained in this Agreement shall survive the Merger or the termination
of this Agreement, except that Sections 3.2, 4.2(d), 4.2(e), 4.2(f), 4.2(g),
4.2(h), 4.2(i), 5.4 and 8.5 shall survive the Merger, and Sections 4.1(d) and
4.2(h), 5.5 and 7.2 shall survive the termination of this Agreement.
8.2 NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed given when received by the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
(a) if to CFB, to: Community First Bankshares, Inc.
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
with copies to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ P.L.L.P.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
and
(b) if to Western, to: Western Bancshares of Las Cruces, Inc.
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, CFO
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
with copies to: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, L.L.P.
South Tower Pennzoil Place
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
8.3 INTERPRETATION. When a reference is made in this Agreement to
Sections, Exhibits or Schedules, such reference shall be to a Section of or
Exhibit or Schedule to this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include", "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation".
32
8.4 COUNTERPARTS. This Agreement may be executed in counterparts, all of
which shall be considered one and the same agreement.
8.5 ENTIRE AGREEMENT: THIRD PARTY BENEFICIARIES; RIGHTS OF OWNERSHIP.
This Agreement (including the documents and the instruments referred to herein)
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof. This Agreement is not intended to confer upon any person
other than the parties hereto any rights or remedies hereunder, except that
Sections 3.2 and 4.2(i) are intended for the benefit of the Western
shareholders; and Section 5.4 is intended for the benefit of employees of the
Bank. No party shall have the right to acquire or shall be deemed to have
acquired shares of common stock of the other party pursuant to the Merger until
consummation thereof.
8.6 PUBLICITY. Except as otherwise required by law or the rules of the
Nasdaq or the National Association of Securities Dealers, so long as this
Agreement is in effect, neither CFB nor Western shall, nor shall either of them
permit any of its subsidiaries to, issue or cause the publication of any press
release or other public announcement with respect to the transactions
contemplated by this Agreement without the consent of the other party, which
consent shall not be unreasonably withheld.
8.7 ASSIGNMENT. Neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by any of the parties hereto (whether
by operation of law or otherwise) without the prior written consent of the other
parties. 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.
8.8 ENFORCEMENT OF AGREEMENT. Each of the parties hereto agrees that it
will not object if the other party seeks to obtain an injunction to prevent
breaches of this Agreement or to enforce specifically the terms and provision
hereof in any court in the United States or any state have jurisdiction. The
enforcing party shall be entitled to recover its attorneys fees incurred in the
successful enforcement of the terms and provisions of this Agreement.
33
IN WITNESS WHEREOF, CFB and Western have caused this Agreement to be signed
by their respective officers thereunto duly authorized as of the date first
above written.
COMMUNITY FIRST BANKSHARES, INC.
By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------
Attest: Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Chairman and President
/S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Executive Vice President WESTERN BANCSHARES OF
LAS CRUCES, INC.
By: /S/ ▇▇▇ ▇▇▇▇
---------------------------------------
Attest: Name: ▇▇▇ ▇▇▇▇
---------------------------------------
Title: PRESIDENT
---------------------------------------
/S/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------
Title: SECRETARY/TREASURER
--------------------------
34
TABLE OF EXHIBITS
EXHIBIT 1.1A -- Certificate of Merger
EXHIBIT 1.1B -- Articles of Merger
EXHIBIT 3.1 -- Western Disclosure Schedule
EXHIBIT 3.2 -- CFB Disclosure Schedule
EXHIBIT 4.1(e) -- Officer/Director Agreements
EXHIBIT 4.1(f) -- WDSI Agreement
EXHIBIT 4.3(f) -- Data Processing Services Agreement
EXHIBIT 5.3 -- Affiliate Agreement
EXHIBIT 6.2 -- ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, L.L.P. Opinion
EXHIBIT 6.3 -- ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.L.L.P. Opinion