EXHIBIT 2.18
AGREEMENT AND PLAN OF MERGER
dated as of May 18, 1998
between
COMMUNITY FIRST BANKSHARES, INC.
and
GUARDIAN BANCORP
INDEX TO AGREEMENT AND PLAN OF MERGER
Page
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ARTICLE 1 THE MERGER1
1.1 Effective Time of the Merger . . . . . . . . . . . . . . . . . . . . . . .1
1.2 Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
1.3 Effects of the Merger. . . . . . . . . . . . . . . . . . . . . . . . . . .2
1.4 Calculation of Guardian Value. . . . . . . . . . . . . . . . . . . . . . .2
ARTICLE 2 EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES3
2.1 Effect on Capital Stock. . . . . . . . . . . . . . . . . . . . . . . . . .3
(a) Conversion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
(b) Exchange Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
(c) Adjustments to Exchange Rate Based on CFB Trading Value . . . . . . .4
(d) Adjustments to Exchange Rate Based on Guardian Value. . . . . . . . .5
(e) Shareholders' Right of Dissent. . . . . . . . . . . . . . . . . . . .5
2.2 Exchange of Certificates . . . . . . . . . . . . . . . . . . . . . . . . .5
(a) Exchange Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . .5
(b) Exchange Procedures . . . . . . . . . . . . . . . . . . . . . . . . .5
(c) Distributions with Respect to Unexchanged Shares; Voting. . . . . . .6
(d) Transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
(e) Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . .6
(f) Termination of Exchange Fund. . . . . . . . . . . . . . . . . . . . .6
(g) Lost or Destroyed Shares. . . . . . . . . . . . . . . . . . . . . . .6
ARTICLE 3 REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . . . . . . .7
3.1 Representations and Warranties of Guardian . . . . . . . . . . . . . . . .7
(a) Subsidiary Organization . . . . . . . . . . . . . . . . . . . . . . .7
(b) Guardian Organization . . . . . . . . . . . . . . . . . . . . . . . .7
(c) Enforceability. . . . . . . . . . . . . . . . . . . . . . . . . . . .8
(d) Limitation of Bank's Powers . . . . . . . . . . . . . . . . . . . . .8
(e) Corporate Records . . . . . . . . . . . . . . . . . . . . . . . . . .8
(f) Insured Status of Bank. . . . . . . . . . . . . . . . . . . . . . . .8
(g) No Default; Creation of Liens . . . . . . . . . . . . . . . . . . . .8
(h) Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . .9
(i) Fidelity Insurance. . . . . . . . . . . . . . . . . . . . . . . . . .9
(j) Employment Contracts. . . . . . . . . . . . . . . . . . . . . . . . .9
(k) Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . . . .9
(l) Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(m) Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(n) Title to Property . . . . . . . . . . . . . . . . . . . . . . . . . 11
(o) Insurance Policies. . . . . . . . . . . . . . . . . . . . . . . . . 11
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(p) Bank Property . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(q) Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . . 11
(r) Loan Allowance and Documentation. . . . . . . . . . . . . . . . . . 12
(s) Leases and Contracts. . . . . . . . . . . . . . . . . . . . . . . . 12
(t) Shareholder Lists . . . . . . . . . . . . . . . . . . . . . . . . . 13
(u) Bank Principals . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(v) Information Supplied. . . . . . . . . . . . . . . . . . . . . . . . 13
(w) Agreements with Bank Regulators . . . . . . . . . . . . . . . . . . 13
(x) Year 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.2 Representations and Warranties of CFB. . . . . . . . . . . . . . . . . . 14
(a) CFB Organization. . . . . . . . . . . . . . . . . . . . . . . . . . 14
(b) Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(c) Enforceability. . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(d) No Default; Creation of Liens . . . . . . . . . . . . . . . . . . . 15
(e) Information Supplied. . . . . . . . . . . . . . . . . . . . . . . . 15
(f) No Plan to Transfer Assets. . . . . . . . . . . . . . . . . . . . . 15
(g) Limitation of CFB Banks' Powers . . . . . . . . . . . . . . . . . . 15
(h) Insured Status of CFB Banks . . . . . . . . . . . . . . . . . . . . 15
(i) Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(j) Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(k) Title to Property . . . . . . . . . . . . . . . . . . . . . . . . . 16
(l) Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . . . 16
(m) Material Adverse Changes. . . . . . . . . . . . . . . . . . . . . . 16
(n) Regulatory Approvals. . . . . . . . . . . . . . . . . . . . . . . . 17
(o) Availability of CFB Common Stock. . . . . . . . . . . . . . . . . . 17
ARTICLE 4 COVENANTS OF GUARDIAN AND CFB . . . . . . . . . . . . . . . . . . . . . 17
4.1 Covenants of Guardian. . . . . . . . . . . . . . . . . . . . . . . . . . 17
(a) Ordinary Course . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(b) Shareholder Meeting . . . . . . . . . . . . . . . . . . . . . . . . 17
(c) Proxy Statement . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(d) Confidential Information. . . . . . . . . . . . . . . . . . . . . . 18
(e) Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(f) No Solicitations. . . . . . . . . . . . . . . . . . . . . . . . . . 19
(g) Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(h) Pooling Restrictions. . . . . . . . . . . . . . . . . . . . . . . . 19
(i) Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . 19
(j) Additional Covenants of Guardian. . . . . . . . . . . . . . . . . . 19
4.2 Covenants of CFB . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(a) Ordinary Course . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(b) Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(c) Proxy Statement . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(d) Prospectus. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(e) Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
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(f) Shares to be Issued . . . . . . . . . . . . . . . . . . . . . . . . 23
(g) Blue Sky. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
(h) Confidential Information. . . . . . . . . . . . . . . . . . . . . . 24
(i) Pooling Restrictions. . . . . . . . . . . . . . . . . . . . . . . . 24
(j) Director and Officer Indemnification. . . . . . . . . . . . . . . . 24
(k) Rule 144. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.3 Covenants of Guardian and CFB. . . . . . . . . . . . . . . . . . . . . . 24
(a) Governing Documents . . . . . . . . . . . . . . . . . . . . . . . . 24
(b) Other Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
(c) Advice of Changes; Government Filings . . . . . . . . . . . . . . . 25
(d) Title to Property . . . . . . . . . . . . . . . . . . . . . . . . . 25
(e) Environmental Assessment. . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE 5 ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.1 Regulatory Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.2 Access to Information. . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.3 Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
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 Guardian. . . . . . . . . . . . . . . 28
(c) Minimum Guardian Value. . . . . . . . . . . . . . . . . . . . . . . 29
(d) Pooling Letter. . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(e) Legal Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
6.3 Conditions to Obligations of Guardian. . . . . . . . . . . . . . . . . . 29
(a) Representations and Warranties. . . . . . . . . . . . . . . . . . . 29
(b) Performance of Obligations of CFB . . . . . . . . . . . . . . . . . 29
(c) Consents Under Agreements . . . . . . . . . . . . . . . . . . . . . 29
(d) Tax Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(e) Legal Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
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(f) No Material Adverse Change. . . . . . . . . . . . . . . . . . . . . 30
(e) Fairness Opinion. . . . . . . . . . . . . . . . . . . . . . . . . . 30
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. . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.1 Non-Survival of Representations and Warranties . . . . . . . . . . . . . 31
8.2 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.3 Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.4 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.5 Entire Agreement: Third Party Beneficiaries; Rights of Ownership.. . . . 32
8.6 Publicity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
8.7 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
8.8 Enforcement of Agreement . . . . . . . . . . . . . . . . . . . . . . . . 33
8.9 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
TABLE OF EXHIBITS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of May 18, 1998 (the
"Agreement"), by and between Community First Bankshares, Inc., a Delaware
corporation ("CFB"), and Guardian Bancorp, a Utah corporation ("Guardian").
WHEREAS, the Boards of Directors of CFB and Guardian 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 Guardian will be merged with and into CFB (the
"Merger"); and
WHEREAS, CFB and Guardian 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 Guardian 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 Guardian and thereafter
delivered for filing to the Secretary of State of the State of Utah, as
provided in the Utah Business Corporation Act (the "Utah 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 Utah or at such other time as CFB and Guardian 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 Guardian
shall cease and Guardian 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 Guardian Common Stock (as
defined in Section 2.1(a) below) shall cease to have any rights as
shareholders of Guardian, except such rights, if any, as they may have
pursuant to Sections 16-10a-1301 to 16-10a-1331 of the Utah 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 Guardian 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 Guardian
Common Stock have been converted as provided herein.
(b) As used in this Agreement, the term "Constituent Corporations"
shall mean Guardian 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 Section 16-10a-1106
of the Utah Act.
1.4 CALCULATION OF GUARDIAN VALUE. As of the "Determination Date" (as
hereinafter defined), Guardian shall prepare a consolidated balance sheet of
Guardian 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 (but not less than five (5) business days prior to the
Effective Time) so that CFB and its accountants may review and confirm their
accuracy. For purposes of this Agreement, the "Guardian Value" shall be
equal to the total consolidated assets of Guardian minus the total
consolidated liabilities of Guardian, as reflected on the Determination Date
Financial Statements, prepared in accordance
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with this Section 1.4. Total consolidated liabilities of Guardian shall
include, without limitation, provisions for (i) income and real property
taxes, (ii) the expenses of preparation of final tax returns of Guardian and
(iii) all anticipated transaction expenses.
As used herein, the "Determination Date" shall be the last day of the
month immediately preceding the Effective Time; provided, however, that in
the event the Effective Time shall be within the first ten (10) days of a
calendar month, the "Determination Date" shall be the last day of the month
next preceding the Effective Time, and income for the month immediately
preceding the Effective Time shall be determined by multiplying the number of
days in the month by the average daily net income (determined by dividing
year-to-date net income through the Determination Date by the number of days
from January 1, 1998 to the Determination Date).
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,
no par value, of Guardian ("Guardian Common Stock"), each issued and
outstanding share of Guardian Common Stock, other than shares of Guardian
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
16-10a-1301 to 16-10a-1331 of the Utah Act, 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 Guardian Common Stock shall be determined in
accordance with Section 2.1(b). All such shares of Guardian Common Stock
shall no longer be outstanding and shall automatically be canceled and
retired and shall cease to exist. Each Guardian shareholder's certificate or
certificates previously representing shares of Guardian Common Stock (each a
"Guardian Certificate") shall be aggregated (if a single stockholder holds
more than one Guardian Certificate) and exchanged for a single 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
Guardian 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 Guardian Common Stock shall be converted will
equal the number of shares of CFB Common Stock that the holders of shares of
Guardian Common Stock would have received pursuant to such reorganization,
recapitalization,
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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 (i) the confirmation of the
minimum Guardian Value, as provided in Section 6.2(c) hereof, (ii) prior
exercise or termination of all options, warrants and rights for shares of
Guardian Common Stock in accordance with Section 3.1(b) hereof, and (iii) the
limitations and conditions of Section 2.1(c) hereof, the aggregate number of
shares of CFB Common Stock to be exchanged for all of the issued and
outstanding shares of Guardian Common Stock (the "Merger Consideration")
shall be determined by dividing Thirty-Eight Million Dollars ($38,000,000.00)
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 Guardian Common Stock outstanding or subject to option, warrant or
other right of issuance, whether or not vested or accrued as of the Effective
Time.
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) ADJUSTMENTS TO EXCHANGE RATE BASED ON CFB TRADING VALUE.
Notwithstanding anything to the contrary in this Article 2, the Exchange Rate
shall be subject to modification as set forth below:
(i) If the CFB Trading Value is less than $24.00 per share, then
the number of shares of CFB common stock to be issued in exchange for all
of the issued and outstanding shares of Guardian common stock shall be
1,583,333;
(ii) If the CFB Trading Value is greater than $29.00 per share,
then the number of shares of CFB common stock to be issued for all of the
issued and outstanding shares of Guardian common stock shall be 1,310,345.
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 Market System 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, shares of CFB
Common Stock shall be changed into a different number of shares or a different
class of shares by reason of any reclassification, recapitalization, split-up,
combination, exchange of shares or readjustment or stock dividend).
Calculations 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).
Illustrations of the above Exchange Rate calculations are attached as EXHIBIT
2.1(c) hereto and incorporated herein by reference.
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(d) ADJUSTMENTS TO EXCHANGE RATE BASED ON GUARDIAN VALUE.
Guardian shall use its best efforts to distribute all amounts in excess of
the minimum Guardian Value (as provided in Section 6.2(c) hereof) to its
shareholders on or before the Determination Date. In the event that the
Guardian Value, calculated in accordance with Section 1.4, above, shall be
greater than $8,300,000, then, at the election of Guardian and subject to the
requirements of Section 6.2(e) hereof, either (i) the difference shall be
paid by special dividend to Guardian shareholders immediately prior to the
Determination Date or (ii) the Merger Consideration determined in accordance
with Sections 2.1(b) and (c) shall be subject to increase. The amount of
increase shall be determined by (i) subtracting the difference between the
Guardian Value and $8,300,000, and then (ii) dividing such difference by the
CFB Trading Value.
(e) SHAREHOLDERS' RIGHT OF DISSENT. Any holder of shares of
Guardian Common Stock who does not vote in favor of the Merger at the meeting
of shareholders of Guardian 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 Guardian Common Stock so held by him or her, in
accordance with Sections 16-10a-1301 to 16-10a-1331 of the Utah 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 Guardian 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 Guardian
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 Guardian Certificate or Guardian Certificates (i) a letter of
transmittal which shall specify that delivery shall be effective, and risk of
loss and title to the Guardian Certificate(s) shall pass, only upon delivery
of the Guardian Certificate(s) to the Exchange Agent and which shall be in
such form and have such other provisions as CFB and Guardian may reasonably
specify not later than five business days before the Closing Date and (ii)
instructions for use in effecting the surrender of the Guardian
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 Guardian Certificate or Guardian Certificates
for cancellation to the Exchange Agent together with such letter of
transmittal, duly executed, the holder of such Guardian 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 Guardian Certificate(s) surrendered, as provided
in Section 2.2(c) below, and the Guardian 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,
5
payable to holders of Guardian Certificates. In the event of a transfer of
ownership of Guardian Common Stock which is not registered in the transfer
records of Guardian, 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
Guardian Certificate representing such Guardian 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 Guardian 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 Guardian Certificates shall not be entitled to vote
after the Closing Date at any meeting of CFB shareholders until they have
exchanged their Guardian Certificates.
(d) TRANSFERS. After the Effective Time, there shall be no
transfers on the stock transfer books of Guardian of the shares of Guardian
Common Stock which were outstanding immediately prior to the Effective Time.
If, after the Effective Time, Guardian 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. Guardian Certificates surrendered for
exchange by any person constituting an "affiliate" of Guardian 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 Guardian Common Stock with more than one
Guardian Certificate shall receive cash only for the fractional share
remaining after aggregating all of its, his or her Guardian 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 Guardian for twelve
months after the Closing Date shall be paid to CFB. Any shareholders of
Guardian 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 Guardian 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 Guardian
Certificate shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the person claiming such Guardian
6
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 Guardian Certificate, the Exchange Agent will issue in exchange for such
lost, stolen or destroyed Guardian 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 GUARDIAN. In order to induce CFB
to enter into this Agreement, Guardian 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 "Guardian Disclosure Schedule"), which Guardian 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 Guardian State Bank, Salt Lake
City, Utah ("Bank") is a banking corporation duly organized and validly
existing and in good standing under the laws of the State of Utah. The Bank
has authorized capital of $801,600, consisting of 200,400 shares of one class
of common stock, par value $4.00 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.
(b) GUARDIAN ORGANIZATION. Guardian is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Utah, with authorized capital stock consisting of (i) 1,000,000 shares of
common stock, no par value per share, (the "Guardian Common Stock"), of which
1,471.91 shares are issued and outstanding; (ii) 100,000 shares designated as
cumulative, convertible nonvoting Class A preferred stock, $10.00 par value,
(the "Guardian Class A Preferred Stock"), none of which shares are issued and
outstanding; and (iii) 500,000 shares designated as cumulative, voting Class
B preferred stock, no par value, (the "Guardian Class B Preferred Stock" and,
with the Guardian Class A Preferred Stock and the Guardian Common Stock the
"Guardian Stock"), none of which shares are issued and outstanding. All of
the shares of Guardian Stock issued and outstanding have been validly issued,
fully paid and non-assessable. Except as set forth in Section 3.1(b) of the
Guardian Disclosure Schedule, there are no options, warrants or other
commitments outstanding pursuant to which Guardian is or could become
obligated to issue additional shares. On or before the Effective Time,
Guardian shall have provided for the acceleration and exercise of all such
options, warrants and rights or their termination and written release of
Guardian from further liability thereunder. Guardian 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
7
adverse effect on the business, operations, prospects or financial condition
of Guardian. Guardian is registered as a company under Section 1841 of Title
12, United States Code, as amended (the "Bank Holding Company Act").
Guardian has no direct or indirect subsidiaries except the Bank and is not a
partner to any partnership. Guardian owns all of the shares of stock of the
Bank, free and clear of any liens or encumbrances.
(c) ENFORCEABILITY. Subject only to the required approval of the
Merger by the shareholders of Guardian, Guardian 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
Guardian and the consummation of the transactions contemplated hereby have
been duly authorized by the Board of Directors of Guardian. Subject to
approval by the Guardian shareholders and of government agencies and other
governing bodies having regulatory authority over Guardian or the Bank as may
be required by statute or regulation, this Agreement constitutes a valid and
binding obligation of Guardian, enforceable against it in accordance with its
terms; subject to applicable conservatorship, receivership, bankruptcy,
insolvency and similar laws affecting creditors' rights and remedies
generally, and subject, as to enforceability, to general principles of
equity, whether applied in a court of law or a court of equity.
(d) 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 its 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.
(e) CORPORATE RECORDS. Guardian's Articles of Incorporation and
Bylaws, and the Bank's 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 Guardian 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).
(f) 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 Guardian or the
Bank.
(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 Guardian or the Bank may be subject,
(B) any of the
8
"Material Contracts," as hereinafter defined, or (C) the Articles of
Incorporation or Bylaws of Guardian 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 Guardian Common Stock or any of the Bank's
capital stock, except for any of the foregoing that, individually or in the
aggregate, would not have a material adverse effect upon the financial
condition, results of operation or the business of Guardian or the Bank.
(h) FINANCIAL STATEMENTS. The following financial statements of
the Bank and Guardian (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 March 31,
1998; and
(ii) The audited consolidated financial statements of
Guardian, 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 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 Guardian
as of the dates and for the periods therein set forth. To the knowledge of
Guardian, 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 Guardian, 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 Guardian 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 Guardian 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 Guardian Disclosure
Schedule lists every employee benefit plan within the meaning of Section 3(3) of
the Employee Retirement Income Security
9
Act of 1974, as amended ("ERISA"), which the Bank or Guardian maintain or to
which the Bank or Guardian contribute on behalf of current or former
employees of the Bank or Guardian. All of the plans and programs listed in
Section 3.1(k) of the Guardian 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.
Guardian 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 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
Guardian or the Bank and no relief has been sought against Guardian, the
Bank, or any of the Plans in any pending litigation or governmental
proceedings or otherwise. Neither Guardian nor the Bank is a party to any
unsatisfied order, judgment or decree which is adverse to Guardian or the
Bank, and neither Guardian 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. Guardian 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 Guardian or the Bank;
neither Guardian 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 Guardian Disclosure Schedule, there are no other taxes
of any kind or character for which either Guardian or the Bank is or may be
liable which are now past due, delinquent and/or unpaid. Neither Guardian
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
10
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 Guardian 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.
(o) INSURANCE POLICIES. Guardian has delivered to CFB true,
accurate and complete copies of all insurance policies of Guardian 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 hereinafter defined), Guardian 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. To
the best knowledge of Guardian, 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 Guardian, there is no legal,
administrative, or other proceeding, claim, investigation (with respect to
which Guardian 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 Guardian or the Bank 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 Guardian,
threatened against Guardian or the Bank; to the knowledge of Guardian 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 Guardian nor the Bank 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 Guardian 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.
11
(q) CONDUCT OF BUSINESS. Except for the facts set forth in the
Assessment, each of the Bank and Guardian 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 Guardian.
(r) LOAN ALLOWANCE AND DOCUMENTATION. Guardian's consolidated
allowance for losses on loans included in the Financial Statements as of
December 31, 1997 was $826,386, representing 1.42% of its total consolidated
loans held in portfolio. The amount of such allowance for losses on loans
was adequate (in accordance with applicable regulations and generally
accepted accounting principles in all material respects) to absorb reasonably
expected losses in the loan portfolio of the Bank. To the knowledge of
Guardian, as of December 31, 1997, there are no facts which would cause it to
increase the level of such allowance for losses on loans. The documentation
relating to loans made by the 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. Guardian 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 Guardian 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 Guardian or the Bank without
additional payment or penalty within sixty (60) days and obligates Guardian
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 Guardian 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 Guardian is a party or by which the Bank or Guardian 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,
12
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. Guardian 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
Guardian and (ii) identifies each shareholder who is an officer or director
of the Bank or Guardian.
(u) BANK PRINCIPALS. No director or executive officer of Guardian
or the Bank, nor any holder of ten percent or more of the outstanding capital
stock of Guardian, 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, 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 Guardian. 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 Guardian 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 Guardian
stockholders and at the time of the meeting of stockholders of Guardian 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 Guardian 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) except as set forth in Section
3.1(w) of the Guardian Disclosure Schedule, 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 Guardian 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 Guardian Disclosure Schedule
contains a true and complete summary of the status of all "mission critical"
systems of the Bank and Guardian with respect to "year 2000 compliance," in
accordance with the FFIEC Interagency Statements dated June 1996 (SR
13
96-16) and May 5, 1997 (SR 97-16) and related releases (collectively, the
Year 2000 Releases"). Guardian and the Bank shall cooperate with CFB in
connection with any software conversion or further compliance efforts and
shall continue to use their reasonable best efforts to identify and implement
year 2000 compliance actions directed by the Year 2000 Releases.
3.2 REPRESENTATIONS AND WARRANTIES OF CFB. CFB represents and warrants
to Guardian, 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 Guardian 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 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 the business, operations,
prospects or financial condition of 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 this Agreement and carry out its obligations hereunder. 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.
14
(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 any (a) judgment, order or decree of any court or other governmental
agency to which CFB or any of its subsidiaries may be subject, or (b) any
material 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, except
for any of the foregoing that, individually, or in the aggregate, would not
have a material adverse effect upon the financial conditions, results of
operation or the business of CFB.
(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
Guardian stockholders and at the time of the meeting of stockholders of
Guardian 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 Guardian
shareholders has been duly registered with the Securities and 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) LIMITATION OF CFB BANKS' POWERS. There are no proceedings or
actions pending by any federal or state regulatory body having authority over
any CFB subsidiary bank (the "CFB Banks") to limit or impair any of their
powers, rights or privileges, to terminate deposit insurance or to dissolve a
CFB Bank. The CFB Banks have not received any written protest, complaint or
criticism in the last three (3) years by the public or any regulatory agency
relating to the CFB Bank's performance under the Community Reinvestment Act
or any other consumer protection statute or regulation which would reasonably
be anticipated to have a material adverse effect upon the ability of CFB to
obtain any Requisite Regulatory Approval.
(h) INSURED STATUS OF CFB BANKS. Each of the CFB Banks 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 any of the CFB Banks exists that could reasonably be
expected to have a material adverse effect on its status as an insured bank
thereunder. The CFB Banks possess and are in full compliance with all
licenses, franchises, permits and other governmental authorizations that are
legally required to hold their respective properties or conduct their
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 CFB.
15
(i) 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.
(j) 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.
(k) TITLE TO PROPERTY. Each of the CFB Banks 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 CFB 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 CFB.
(l) 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.
(m) MATERIAL ADVERSE CHANGES. Since March 31, 1998, 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
16
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).
(n) 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.
(o) 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 GUARDIAN AND CFB
4.1 COVENANTS OF GUARDIAN. During the period from the date of this
Agreement and continuing until the Effective Time, Guardian agrees as follows:
(a) ORDINARY COURSE. Except as otherwise required under this
Agreement or by CFB, Guardian and the Bank 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. Except
with the prior written consent of CFB, Guardian shall not, nor shall it
permit the Bank to (i) enter into any new material line of business, (ii)
increase or decrease the current number of the directors of Guardian 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.
Notwithstanding the foregoing, Guardian shall continue to declare and pay
dividends and distributions with respect to its stock in a rate and manner
consistent with prior practices.
(b) SHAREHOLDER MEETING. Guardian 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. Guardian will (i) cause proper notice
of such meeting to be given to its shareholders in compliance with the Utah
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.
17
(c) PROXY STATEMENT. Guardian 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 Guardian, for
distribution to Guardian shareholders in connection with the meeting called
to consider and vote upon the proposal. Guardian 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. Guardian
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 Guardian becomes
incorrect or incomplete in any material respect and to provide the
information needed to correct such inaccuracy or omission.
(d) CONFIDENTIAL INFORMATION. Guardian will hold in confidence
all documents and nonpublic information concerning CFB and its subsidiaries
furnished to Guardian 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 Guardian'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 Guardian, in the public
domain, or later acquired by Guardian 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. Guardian 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 fully expense or accrue
as of the Determination Date Financial Statements, any resulting financial
obligation or liability incurred. Guardian 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),
Guardian 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
Guardian or the Bank and one or more of its directors or officers; provided,
however, that Guardian 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 Guardian 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 Guardian in excess of 105%
18
of that in effect as of March 31, 1998, 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 Guardian 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. Guardian 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 Guardian from taking any action or permitting any of its
representatives from taking any action if the Board of Directors of Guardian
is complying with its fiduciary duties to shareholders and such Board based
its determination of such fiduciary duties on a written opinion of counsel.
Guardian 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
involving Guardian or any proposal or offer to acquire in any manner a
substantial equity interest in, or a substantial portion of the assets of
Guardian other than the transactions contemplated or permitted by this
Agreement.
(g) INSURANCE. Guardian 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.
(h) POOLING RESTRICTIONS. Guardian and the Bank shall take any
and all action reasonably requested by CFB which is necessary, in the opinion
of CFB's accountants, to qualify the Merger as a "pooling of interests" for
accounting purposes. From and after the date of this Agreement, neither
Guardian nor the Bank shall take any action which CFB has advised, with
respect to Guardian, would disqualify the Merger as a "pooling of interests"
for accounting purposes.
(i) FINANCIAL STATEMENTS. Guardian 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.
(j) ADDITIONAL COVENANTS OF GUARDIAN. From the date of this
Agreement to the Closing Date or the earlier termination of this Agreement,
Guardian, EXCEPT WITH THE PRIOR WRITTEN CONSENT OF CFB, or as specifically
required under the Agreement, shall not, nor shall it allow the Bank to:
19
(i) Sell or commit to issue or sell any shares of capital stock
of Guardian or the Bank, securities convertible into or exchangeable
for capital stock of Guardian 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
Guardian;
(ii) Redeem, purchase or otherwise acquire (except for trust
account shares) directly or indirectly, any shares of capital stock of
Guardian or the Bank or any securities convertible or exercisable for
any shares of capital stock of Guardian or the Bank;
(iii) Split, combine or reclassify any of capital stock of
Guardian 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 Guardian 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;
(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 Guardian's Articles 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
Guardian 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;
20
(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 secured loan for an amount
in excess of $250,000 to any one borrower, 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;
(B) make, or agree to make any additional loan or advance which, when
combined with existing loans, would result in a secured loan in excess
of $250,000 to any one borrower, unless said loan or advance 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
or is within the commitment of the Bank to the Borrower which has
previously been approved by CFB; (C) make, or agree to make, any
unsecured loan for an amount in excess of $50,000 to any one borrower,
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; (D) make, or agree to make any additional loan
or advance which, when combined with existing loans, would result in
an unsecured loan in excess of $50,000 to any one borrower, unless
said loan or advance 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 (E) 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 (F) 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 C of this section shall not apply to
renewals of existing loans, advances under existing loans or increases
to existing loans for an amount below the applicable limit set forth
in parts A and C); 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;
21
(xviii) Fail to timely pay and discharge all federal and state
taxes and other accounts payable for which it is liable, provided,
that Guardian 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 salary or
other compensation to any of the officers, directors or employees of
Guardian or the Bank at a rate which exceeds 105% of aggregate
compensation at March 31, 1998;
(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;
(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
Guardian if such failure would have a material adverse effect upon
Guardian;
(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 $1,310,000;
(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
Guardian Value as of the Closing Date to less than $8,300,000, or,
subject to the foregoing, fail to declare and pay dividends and
distributions with respect to its stock in a rate and manner
consistent with recent prior practices; or
22
(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 Guardian 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 Guardian
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 Guardian all the
information concerning CFB required for inclusion in, and will cooperate in
the preparation of, the Proxy Statement to be sent to the shareholders of
Guardian. CFB agrees promptly to advise Guardian 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 Guardian copies of a
prospectus relating to the CFB common stock to be issued to Guardian
shareholders in the Merger (the "Prospectus"), to be sent to the shareholders
of Guardian. CFB agrees promptly to advise Guardian 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 Guardian shareholders, at the time of the
Guardian 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 Guardian 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 Guardian pursuant to this Agreement
will, upon such issuance and delivery to said
23
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 Guardian 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 Guardian 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 Guardian (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 sources)
and, upon request, all such documents, copies thereof or extracts therefrom
shall immediately thereafter be returned to Guardian.
(i) POOLING RESTRICTIONS. From and after the date of this
Agreement, CFB shall not take any action which Ernst & Young LLP has advised,
with respect to CFB, would disqualify the Merger as a "pooling of interests"
for accounting purposes.
(j) DIRECTOR AND OFFICER INDEMNIFICATION. CFB agrees to permit
Guardian to obtain an extended reporting period (otherwise known as "tail
coverage") under Guardian'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 Guardian and its subsidiaries
have pursuant to the Articles of Incorporation (and their respective Bylaws)
of Guardian and the Bank shall survive the Merger for six (6) years from the
Effective Time and shall continue in full force and effect and be fully
honored.
(k) 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 Guardian who may be deemed "underwriters" (within or
meaning to Rule 145 under the Securities Act) of the Guardian 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 GUARDIAN AND CFB. During the period from the date of
this Agreement and continuing until the Effective Time, Guardian 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.
24
(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 between the date of this Agreement
and the Effective Time and shall deliver to Guardian copies of all such
reports promptly after the same are filed. CFB, Guardian and each subsidiary
of CFB or Guardian 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 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. Guardian agrees to deliver to CFB (at
Guardian's expense) within 30 days of the date hereof, a title insurance
commitment for all real property owned by Guardian or the Bank in the State
of Utah (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 Guardian, 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 Guardian 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. Guardian 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 Guardian 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 thirty (30) days after the date of such
notice unless during such thirty (30) day period Guardian corrects or
25
satisfies such objections, or indemnifies CFB against loss, liability or
expense, to the reasonable satisfaction of CFB.
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").
Guardian 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
Guardian 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) Guardian and CFB shall promptly furnish each other with copies
of written communications received by Guardian 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, Guardian 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, Guardian 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 contemplated that
CFB may conduct an examination of Guardian and the Bank prior to the Closing
Date in order to confirm compliance with the representations, warranties and
covenants set forth in this Agreement and verify the Determination Date
Financial Statements. No investigation by either party shall affect the
representations and warranties set forth herein.
26
5.3 AFFILIATES. Guardian 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 Guardian to deliver to
CFB, as soon as practicable after the date hereof, 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 accountants' and attorneys'
fees and fees payable to ▇▇▇▇▇ Financial) incurred or to be incurred by
Guardian 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 Guardian Common Stock, as required by the Utah Act and the Articles of
Incorporation and Bylaws of Guardian.
(b) NASDAQ LISTING. The shares of CFB Common Stock issuable to
the Guardian 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 Guardian 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 Guardian, and CFB
shall have received a certificate signed on behalf of Guardian by the chief
executive officer and chief financial officer of Guardian to such effect.
(b) PERFORMANCE OF OBLIGATIONS OF GUARDIAN. Guardian 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 Guardian by the chief
executive officer and chief financial officer Guardian to such effect.
28
(c) MINIMUM GUARDIAN VALUE. The Guardian Value as of the
Determination Date shall not be less than $8,300,000. The confirmation of
the minimum Guardian 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
Guardian's accountants, in form and substance reasonably satisfactory to
Ernst & Young, confirming certain facts on behalf of Guardian.
(e) LEGAL OPINION. CFB shall have received the opinion of ▇▇▇▇▇,
▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.C., counsel to Guardian, 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 GUARDIAN. The obligation of Guardian
to effect the Merger is also subject to the satisfaction or waiver by
Guardian 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 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 CFB, and Guardian
shall have received a certificate signed on behalf of CFB by duly authorized
senior executive officers 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 Guardian shall have
received a certificate signed on behalf of CFB by duly authorized senior
executive officers 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 Guardian, individually or in the
aggregate, have a material adverse effect on CFB or upon the consummation of
the transactions contemplated hereby.
(d) TAX OPINION. Guardian shall have received the opinion of
▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.C., counsel to Guardian, 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
29
Section 368(a)(1)(A) of the Code, (ii) CFB and Guardian will each be a party
to that reorganization within the meaning of Section 368(b) of the Code,
(iii) shareholders of Guardian who exchange their shares of Guardian 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) Guardian will not recognize gain or loss,
for purposes of federal income tax, as a result of consummation of the Merger.
(e) LEGAL OPINION. Guardian 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. Guardian shall have received letters from
▇▇▇▇▇ Financial dated the date of the mailing of the Proxy Statement to the
Guardian shareholders and dated the date of the meeting of shareholders to
consider the Merger, in each case in form and substance satisfactory to
Guardian, confirming such financial advisor's opinion that the consideration
to be paid in the Merger is fair to the Guardian 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 Guardian, only in the following circumstances:
(a) by mutual consent of CFB and Guardian 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 Guardian 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
(c) by either CFB or Guardian if the Merger shall not have been
consummated on or before December 31, 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
30
(d) by either CFB or Guardian 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 either CFB or Guardian if the fairness opinion provided
pursuant to Section 6.3(g) hereof is withdrawn; or
(f) by CFB pursuant to the terms of Section 4.3(d) or 4.3(e), as
applicable.
7.2 EFFECT OF TERMINATION. In the event of termination of this
Agreement by either CFB or Guardian 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, 7.2 and 8.6 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 Guardian, 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.
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(j), 4.2(k), 5.4 and 8.5 shall survive the Merger,
and Sections 4.1(d) and 4.2(h), 5.5, 7.2 and 8.6 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):
31
(a) if to CFB, to: Community First Bankshares, Inc.
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
with copies to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ P.L.L.P.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
and
(b) if to Guardian, to: Guardian Bancorp
Attn: ▇▇▇ ▇. ▇▇▇▇▇▇, President
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
with copies to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.C.
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ (300 ▇▇▇▇▇)
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
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".
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(d) are intended for the benefit of the Guardian
shareholders; Section 4.2(j) is intended for the benefit of Guardian officers
and directors; Section 4.2(k) is intended for the benefit of Guardian
affiliates; 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.
32
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 Guardian 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.
8.9 GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the laws of the State of Utah.
IN WITNESS WHEREOF, CFB and Guardian 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/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Attest: Title: Executive Vice President-Finance, Chief
Financial Officer and Chief Information Officer
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President-Acquisitions
GUARDIAN BANCORP
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------------
Attest: Name: ▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Title: President
----------------------------------------
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------
Title: Senior Vice President/Corporate Secretary
-----------------------------------------
33
TABLE OF EXHIBITS
EXHIBIT 1.1A -- Certificate of Merger
EXHIBIT 1.1B -- Articles of Merger
EXHIBIT 2.1(c) -- Illustrations of Calculation of Exchange Rate
EXHIBIT 3.1 -- Guardian Disclosure Schedule
EXHIBIT 3.2 -- CFB Disclosure Schedule
EXHIBIT 4.1(e) -- Officer/Director Agreements
EXHIBIT 4.1(f) -- Other Agreements
EXHIBIT 5.3 -- Affiliate Agreement
EXHIBIT 6.2 -- ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.C. Opinion
EXHIBIT 6.3 -- ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.L.L.P. Opinion