Exhibit 10.32
C O N F I D E N T I A L
ACQUISITION DOCUMENT
(Cash Purchase and Reverse Triangular Merger Transaction)
****
MERGER AGREEMENT
AMONG
BOK FINANCIAL CORPORATION,
BOKF MERGER CORPORATION NUMBER ELEVEN,
COLORADO FUNDING COMPANY,
COLORADO STATE BANK AND TRUST,
AND
CERTAIN SHAREHOLDERS OF COLORADO FUNDING COMPANY
* * * *
Agreement Date of July 8, 2003
Agreement Date of July 8, 2003
INDEX
to
MERGER AGREEMENT
Section Page
------- ----
1. Purpose of this Merger Agreement....................................... 1
2. The Merger..............................................................2
3. Effect of the Merger....................................................5
4. Representations and Warranties of CFC ..................................5
5. Representations and Warranties of BOKF and Merger Corp.................17
6. Covenants..............................................................19
7. Conditions Precedent to Closing by BOKF and Merger Corp................33
8. Conditions Precedent to Closing by CFC and Bank .......................35
9. Closing................................................................36
10. General Escrow..........................................................37
11. Credits Escrow..........................................................40
12. Tax Escrow.............................................................43
13. Shareholders Committee.................................................46
14. Break-up Fee...........................................................48
15. Miscellaneous Provisions...............................................49
Exhibit Caption Exhibit Number
--------------- --------------
Options 4.3
Material Liabilities 4.6.3
Conduct of Business Exceptions 4.7
Material Contracts and Commitments 4.9
Litigation 4.10
Encumbrances 4.14
Employee Contracts and Benefit Plans 4.15
Exceptions to Ordinary Course since 1/1/03 4.22
Offeree Employees 6.9
Form of Escrow Agreement 10.2
MERGER AGREEMENT
This merger agreement ("Merger Agreement" or "Agreement") is made as of
July 8, 2003 (the "Agreement Date") among:
(i) Colorado Funding Company, a Colorado corporation ("CFC");
(ii) Colorado State Bank and Trust, a Colorado state bank ("Bank");
(iii) BOK Financial Corporation, an Oklahoma corporation ("BOKF");
(iv) BOKF Merger Corporation Number Eleven, a Colorado corporation
("Merger Corp"); and,
(v) Those shareholders of CFC hereafter signing this Agreement (the
"Principal Shareholders").
In consideration of the mutual covenants contained herein, the adequacy
of which is hereby expressly acknowledged, and intending to be legally bound
hereby, CFC, Bank, BOKF, Merger Corp and the Principal Shareholders agree as
follows:
1. Purpose of this Merger Agreement. The purpose of this Merger Agreement is as
follows:
1.1. CFC is a bank holding company organized under the laws of Colorado
with offices in Denver, Colorado. CFC is subject to regulation by the
Board of Governors of the Federal Reserve System ("FRB"). CFC owns all
of the issued and outstanding capital stock of Bank (headquartered in
Denver, Colorado). Bank is a bank organized in accordance with the
laws of the State of Colorado and subject to regulation by the
Colorado Department of Regulatory Agencies, Division of Banking. The
issued and outstanding capital stock of CFC consists solely of a
single class of two hundred fifty thousand (250,000) shares of common
stock of a par value of $10.00 per share of which 116,125 shares are
issued and outstanding. The issued and outstanding capital stock of
Bank consists solely of a single class of one hundred thousand
(100,000) shares of common stock of a par value of $20.00 per share
("Bank Common Stock"). The common stock of CFC issued and outstanding
as of the Closing is hereafter called the "CFC Common Stock".
1.2. BOKF is a bank holding company organized under the laws of the State
of Oklahoma. BOKF is subject to regulation by the FRB. BOKF owns all
of the capital stock of Merger Corp. Merger Corp is a bank holding
company organized under the laws of the State of Oklahoma. Merger Corp
is subject to regulation by the FRB. The issued and outstanding
capital stock of Merger Corp consists solely of 1,000 shares of common
stock, par value of $1.00 per share, of which 1,000 shares are issued
and outstanding.
1.3. The purpose of this Merger Agreement is to set forth the terms and
conditions on which CFC and Merger Corp shall merge. This Merger
Agreement shall constitute a plan of merger for corporate law purposes
and for federal income tax purposes under Section 368(a)(2)(E) of the
Internal Revenue Code.
2. The Merger. On the terms and conditions hereafter stated, Merger Corp shall
be merged into CFC (the "Merger").
2.1. CFC shall be the surviving corporation ("Surviving Corporation").
2.2. The Articles of Incorporation of Merger Corp shall be the Articles of
Incorporation of the Surviving Corporation until changed as provided
by law.
2.3. The Bylaws of Merger Corp shall be the Bylaws of the Surviving
Corporation until changed as provided by law.
2.4. The officers of Merger Corp shall be the officers of the Surviving
Corporation, until changed as provided by law.
2.5. The directors of Merger Corp shall be the directors of the Surviving
Corporation until changed as provided by law.
2.6. The Merger shall be effective at the Closing (as hereafter provided in
Section 9.
2.7. Each share of issued and outstanding CFC Common Stock shall, subject
to dissenters rights pursuant to ▇-▇▇▇-▇▇▇ et seq. of the Colorado
Business Corporation Act, automatically and without any action on the
part of the holder thereof, be cancelled and converted solely into the
right to receive:
2.7.1. At Closing, subject to Sections 9.2.1 and 9.3 below, an amount
of United States Dollars equal to (x) the Cash Consideration (as
hereafter defined) less the Escrow Amounts (as hereafter
defined), divided by (y) the number of shares of issued and
outstanding CFC Common Stock; and,
2.7.2. Upon termination of the Escrow Accounts, her, his, or its
proportionate share of the remaining Escrow Amounts, as provided
in Sections 10, 11, and 12 below.
2.8. The Cash Consideration shall equal Eighty-one Million Seven Hundred
Thousand Dollars ($81,700,000) less:
2.8.1. the Transaction Costs (as hereafter defined), if any;
2.8.2. the Equity Deficit (as hereafter defined), if any;
2.8.3. one hundred fourteen and three/tenths percent (114.3%) of the
aggregate amounts of the Cash Closing Bonuses (as defined below);
2.8.4. eighty percent (80%) of the aggregate amounts of the Vested
Payments (as defined in the Employment Agreements between the
Bank and certain senior executives of the Bank of even date - the
"BOKF Employment Agreements");
2.8.5. sixty five percent (65%) of the aggregate amounts of the
Unvested Payments (as defined in the BOKF Employment Agreements);
and,
2.8.6. one hundred percent of the Outside Director Payments (as
defined below), if any.
2.9. For purposes of this Merger Agreement, "Transaction Costs" means all
accounting, brokerage, commission, legal, and other similar costs
attributable to, or resulting from, the negotiation, execution,
delivery, and consummation of this Agreement incurred by CFC and Bank
through Closing in excess of One Hundred Fifty Thousand Dollars
($150,000); provided, however, that Transaction Costs do not include
payments pursuant to CFC's existing commitment to ▇▇▇▇▇ Financial, LLC
("▇▇▇▇▇") which may and shall be paid and expensed by CFC effective
the day prior to Closing except to the extent such payments to ▇▇▇▇▇
are in excess of Eight Hundred Sixty Five Thousand Dollars ($865,000)
in which case, such excess amounts shall constitute Transaction Costs.
2.10.For purposes of this Merger Agreement, "Equity Deficit" means the
amount, if any, by which the shareholders' equity of CFC (determined
in accordance with generally accepted accounting principles
consistently applied), as of the effective time of Closing, is less
than the Minimum Equity, where the "Minimum Equity" means:
2.10.1. an amount equal to Twenty-Six Million Five Hundred Thousand
Dollars ($26,500,000), less
2.10.2. the net book value of the investment of the Bank in C.S.B.
Corporation as of Closing, determined in accordance with
generally accepted accounting principles consistently applied,
less
2.10.3. one hundred fourteen and three tenths percent (114.3%) of the
aggregate amounts of the Cash Closing Bonuses, less
2.10.4. one hundred percent (100%) of the sum of the aggregate amounts
of the Vested Payments and the Outside Director Payments.
2.11.For purposes of this Merger Agreement, the "Escrow Amounts" shall be
the sum of the following escrow amounts:
2.11.1. One Million Dollars ($1,000,000, the "General Escrow Amount")
to be deposited in the general escrow established in accordance
with Section 10 (the "General Escrow");
2.11.2. Two Million Six Hundred Thousand Dollars ($2,600,000, the
"Credits Escrow Amount") to be deposited in the credits escrow
established in accordance with Section 11 (the "Credits Escrow");
and,
2.11.3. Ten Million Seventy-five Thousand Dollars ($10,075,000, the
"Tax Escrow Amount") to be deposited in the tax escrow
established in accordance with Section 12 (the "Tax Escrow").
2.12.Notwithstanding the provisions of Section 2.7, all holders of CFC
Common Stock electing to dissent to the Merger and perfecting their
dissenters rights pursuant to ▇-▇▇▇-▇▇▇ et seq. of the Colorado
Business Corporation Act shall have only those rights set forth
therein.
2.13.Each share of common stock of Merger Corp shall, automatically and
without any action on the part of the holder thereof, be converted
into one share of fully paid and non-assessable share of CFC Common
Stock.
3. Effect of the Merger. The Merger shall have the following effects:
3.1. The corporate franchise, existence, rights and liabilities of CFC
shall continue unaffected and unimpaired.
3.2. The corporate franchise, existence, rights and liabilities of Merger
Corp shall be merged into CFC and the separate existence of Merger
Corp shall cease.
3.3. CFC shall have and be vested with all of the rights, powers, assets,
property, liabilities and obligations of Merger Corp.
4. Representations and Warranties of CFC. CFC hereby represents and warrants
to BOKF that:
4.1. Incorporation and Corporate Power. CFC is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Colorado. Bank is a bank duly organized, validly existing and
in good standing under the laws of the State of Colorado. Each of CFC
and Bank has all the corporate power and authority necessary and
required to own its properties and to conduct its business as such
business is now being conducted. Each of CFC and Bank (A) is in
material compliance with all applicable provisions of all applicable
federal, state and local statutes, laws, regulations, ordinances and
other requirements of any governmental authorities (including, but not
limited to, whether similar or dissimilar, the Bank Holding Company
Act of 1956, the Colorado Business Corporation Act, the Colorado
Banking Code of 1957 and the filing of all administrative reports and
the payment of all fees) in effect as of the date of this Merger
Agreement, and (B) shall be in material compliance therewith at the
time of Closing.
4.2. Capital.
4.2.1. The CFC Common Stock is and at the Closing will be all of the
issued and outstanding capital stock of CFC.
4.2.2. CFC owns all of the issued and outstanding Bank Common Stock.
The Bank Common Stock is and at the Closing will be all of the
issued and outstanding capital stock of Bank. No person or entity
has any right or option to acquire any capital stock of Bank.
4.3. Capitalization of CFC and Bank. The CFC Common Stock and Bank Common
Stock are validly issued and outstanding, fully paid and
non-assessable. Except as set forth in Exhibit 4.3, there are no
outstanding subscriptions, conversion privileges, calls, warrants,
options or agreements obligating CFC and/or Bank to issue, sell or
dispose of, or to purchase, redeem or otherwise acquire any shares of
their capital stock (collectively, "options and rights"). At the
Closing, there will be no outstanding options and rights. None of the
CFC Common Stock and Bank Common Stock has been issued or disposed of
in violation of any preemptive rights of any shareholder nor in
violation of any agreement to which CFC or Bank was or is a party. CFC
and Bank have no subsidiaries and do not own, nor have the right or
obligation to acquire, any equity securities of any corporation,
limited liability company, partnership or other legal entity except
(i) Bank is a subsidiary of CFC, (ii) C.S.B. Corporation, which owns a
43.75% limited partnership interest in The Colorado State Bank
Building, Ltd., a Colorado limited partnership (the "CSB Limited
Partnership Interest"), is a wholly owned subsidiary of
---------------------------------- Bank, (iii) CSB Investment Co. is a
wholly-owned subsidiary of Bank, and (iv) the Bank owns less than 5%
of the stock of Arapahoe Bank & Trust, which stock is in the process
of being sold for approximately $86,000. As used herein Bank means
Bank and CSB Investment Co. severally and collectively.
4.4. Non-Violation of Other Agreements. The execution and delivery of this
Merger Agreement, and the compliance with its terms and provisions by
CFC and Bank (including the execution and delivery of any document
required to be executed by CFC or Bank) will not breach any material
agreement, lease, or obligation, whether similar or dissimilar, by
which CFC or Bank is bound.
4.5. Financial Statements. CFC has delivered to BOKF, or will have
delivered to BOKF prior to the Closing as soon as future financial
statements are available, copies of the following ("Financial
Statements"):
4.5.1. Consolidated Financial Statements (Audited) for CFC and
Subsidiaries, December 31, 2001 and 2002;
4.5.2. Financial Statements (Unaudited) for Bank, December 31, 2001
and 2002;
4.5.3. Financial Statements (Unaudited) for CFC and Subsidiaries,
March 31, 2003 and the most recent monthly financial statements
as are available as of the Closing; and,
4.5.4. Financial Statements (Unaudited) for Bank, March 31, 2003 and
the most recent monthly financial statements as are available as
of the Closing.
The Financial Statements described in Section 4.5.1 and 4.5.2, (a)
have been prepared or will have been prepared in accordance with
generally accepted regulatory accounting principles, consistently
applied and (b) fairly reflect the financial condition and results of
operations for the indicated periods. The Financial Statements
described in Sections 4.5.3 and 4.5.4, (a) have been prepared or will
have been prepared in accordance with generally accepted regulatory
accounting principles, consistently applied and (b) fairly reflect the
financial condition and results of operations for the indicated
periods, subject to normal year-end adjustments and omission of
footnotes.
4.6. Material Liabilities. Neither CFC nor Bank has any material
liabilities (including, but not limited to, whether similar or
dissimilar, liabilities or obligations for taxes, whether due or to
become due) except:
4.6.1. Those fully reflected or reserved against, or otherwise
disclosed, in the Financial Statements;
4.6.2. Those incurred with due care since March 31, 2003 in the normal
course of business consistent with past practices;
4.6.3. Those under the BOKF Employment Agreements; and,
4.6.4. Those specifically disclosed in the Exhibits to this Merger
Agreement.
4.7. Conduct of Business Prior to Closing. Except as set forth in Exhibit
4.7, since December 31, 2002, (A) each of CFC and Bank has carried on
its business only in the ordinary and normal course consistent with
past practices, and (B) has not:
4.7.1. Incurred any material liabilities, commitments or obligations,
contingent or otherwise, or dispose of any of its assets, except
in the ordinary course of its business consistent with past
practices and for the purpose of carrying on the business as a
going concern
4.7.2. Incurred any bank or other institutional debt, or enter into
any agreement for the borrowing of money, except borrowing of
federal funds or borrowing from the Federal Home Loan Bank by
Bank consistent with past practices;
4.7.3. Suffered any material adverse change in the financial
conditions, assets, liabilities, business or property of CFC
taken as a whole or of Bank taken as a whole; and/or
4.7.4. Made any material change in the manner in which business is
conducted (including, without limitation, branch relations,
branch closings, and any material change in products offered to
customers).
4.7.5. From the date of this Agreement to the date of Closing, CFC and
Bank will not voluntarily take any of the actions described in
the foregoing provisions of this Section 4.7.
4.8. Tax Returns/Reports.
4.8.1. Each of CFC and Bank has duly filed all tax reports and returns
required to be filed by it and has duly paid all taxes and other
charges claimed to be due from it by federal, state and local
taxing authorities.
4.8.2. No waivers of the statute of limitation have been issued with
respect to unaudited years.
4.8.3. CFC and Bank have no knowledge of any facts which could
reasonably be expected to result in a material deficiency with
respect to unaudited tax returns which would result in a material
adverse effect on CFC taken as a whole or Bank taken as a whole.
4.8.4. Without limiting the generality of any other representation and
warranty set forth in this Section, CFC qualified for S
corporation status on January 1, 1997 under the Internal Revenue
Code and has at all times since properly maintained S corporation
status in accordance with all requirements of the Internal
Revenue Code.
4.9. Contracts and Commitments.
4.9.1. A list of all contracts and commitments, other than credit and
lending, deposit or borrowing transactions entered into in the
ordinary course of business by CFC or Bank which are material to
the business, operations or financial condition of CFC or Bank as
of this date, is set forth on Exhibit 4.9. For the purpose of
Exhibit 4.9, materiality shall mean those contracts and
commitments (including a series of related contracts or
commitments) for which payment or other consideration to be
furnished by any party is more than $25,000 a year or $100,000
over the remaining life of the contract.
4.9.2. Except as set forth on Exhibit 4.9, each of CFC and Bank has in
all material respects performed and is performing all contractual
and other obligations required to be performed by them.
4.10.Litigation. Except as set forth in Exhibit 4.10, there is not pending,
or, to the knowledge of CFC and Bank threatened, any claim,
litigation, proceeding, order of any court or governmental agency, or
governmental investigation or inquiry to which CFC or Bank is a party
or which involves their business operations, any of their property or
any property leased by them which, individually or in the aggregate:
4.10.1. May reasonably result in any material adverse change in the
financial condition, business, prospects, assets, properties or
operations of CFC taken as a whole or Bank taken as a whole; or,
4.10.2. May reasonably involve the expenditure of more than a total of
$25,000 in legal fees or costs;
4.11.Brokerage Fees. Except with regard to ▇▇▇▇▇, neither CFC nor Bank has
incurred or will incur, directly or indirectly, any liability for
brokerage, finder's, financial advisor's or agent's fees or
commissions by virtue of any commitment made by any of them in
connection with this Merger Agreement or any transaction contemplated
hereby.
4.12.Required Corporate Action. The execution, delivery and consummation
of this Merger Agreement has been duly and validly authorized by the
board of directors of CFC and will at the time of Closing have been
duly and validly authorized by the board of directors of Bank and,
subject to consummation of the Closing, the shareholders of CFC and
Bank in accordance with the requirements of the Colorado Bank Code of
1957, the Colorado Business Corporation Act and all other applicable
law.
4.13.Authorized Execution. This Merger Agreement has been duly executed
and delivered by duly authorized officers of CFC and Bank. This Merger
Agreement constitutes the legal, valid and binding agreement and
obligation of CFC and Bank, enforceable against each of them in
accordance with its terms, except as may be limited by applicable
bankruptcy, insolvency, moratorium, receivership, and other similar
laws affecting the rights of creditors generally.
4.14.Title to Assets; Encumbrances. CFC and Bank have good and valid title
(with respect to real estate, good and valid title shall mean such
title as may be insured on standard title insurance forms with no
exceptions materially and adversely affecting the value or use of the
fee real estate) to their assets, and in each case subject to no
mortgage, pledge, lien, security interest, conditional sale agreement,
or other encumbrance of any nature whether similar or dissimilar,
except:
4.14.1. Such encumbrances which are purchase money security interests
entered into in the ordinary course of business consistent with
past practice reflected on their books and records;
4.14.2. Lessors' interests in leased tangible real and personal
property reflected on their books and records;
4.14.3. Such encumbrances for taxes and assessments not yet due and
payable;
4.14.4. Encumbrances as do not materially detract from the value or
interfere with the use or operation of the asset subject thereto;
and,
4.14.5. Repossessed and foreclosed assets acquired in satisfaction of
debt previously contracted.
4.15.Employees. Except as set forth in Sections 4.3 and 6.3.7, and on
Exhibit 4.15, none of the employees of CFC and Bank is employed under
any employment contract (oral or written) or is the beneficiary of any
compensation plan (oral or written) or is entitled to any payment from
CFC and Bank by reason of this Merger Agreement or the Merger and
there are no employment contracts, management contracts, consulting
agreements, union contracts, labor agreements, pension plans, profit
sharing plans or employee benefit plans to which CFC or Bank are a
party or by which either of them is bound.
4.16.Environmental Laws. The existence, use and operation of the assets of
CFC and Bank are in material compliance with all applicable statutes,
rules and regulations including, without limiting the generality of
the foregoing, all environmental and zoning laws and the Americans
With Disabilities Act.
▇.▇▇.▇▇▇▇ Portfolio. Except as to any breach that would not have a
material adverse effect on the financial position of Bank, (i) all
loans and discounts shown on the Financial Statements were and will be
made in all material respects for good, valuable and adequate
consideration in the ordinary course of Bank's business, in accordance
in all material respects with sound banking practices, and are not
subject to any material known defenses, setoffs or counterclaims,
including without limitation any such as are afforded by usury or
truth in lending laws, except as may be provided by bankruptcy,
insolvency or similar laws or by general principles of equity; (ii)
the notes or other evidences of indebtedness evidencing such loans and
all forms of pledges, mortgages and other collateral documents and
security agreements are and will be, in all material respects,
enforceable, valid, true and genuine and what they purport to be; and
(iii) Bank has complied and will prior to the Closing Date comply with
all laws and regulations relating to such loans, or to the extent
there has not been such compliance, such failure to comply will not
materially interfere with the collection of any such loan.
4.18.Zoning and Related Laws. All real property owned or leased by CFC or
Bank and the use thereof complies with all applicable laws,
ordinances, regulations, orders or requirements, including without
limitation, building, zoning and other laws, except as to any
violations which would not have a material adverse affect on the
financial condition of CFC and/or Bank.
4.19.Compliance with Law. Bank and CFC have all licenses, franchises,
permits and other governmental authorizations that are legally
required to enable them to conduct their business in all material
respects and are in compliance with all applicable laws and
regulations except to the extent that the failure to so comply could
not have a material adverse effect on Bank or CFC. Without limiting
the generality of the foregoing, CFC and Bank have at all times
maintained their employee benefit plans in compliance with the
Internal Revenue Code and the Employee Retirement Income Security Act
and all applicable rules and regulations promulgated pursuant thereto.
4.20.Agreements with Regulatory Agencies. Neither Bank nor CFC is subject
to any cease-and-desist or other order issued by, or a party to any
written agreement or memorandum of understanding with or is a party to
any commitment letter or similar undertaking to, or is subject to any
order or directive, or is a recipient of any extraordinary supervisory
letter from, or has adopted any board resolutions at the request of
(each a "Regulatory Agreement") any regulatory agency that materially
restricts the conduct of its business or that in any manner relates to
its capital adequacy, its credit policies, its management or its
business, nor has Bank or CFC been advised by any regulatory agency
that it is considering issuing or requesting any Regulatory Agreement.
4.21.Parachute Payments. No payment to be made in connection with this
Merger Agreement and/or the Merger will be a non-deductible excess
parachute payment within the meaning of Section 280G of the Internal
Revenue Code.
4.22.Actions From and After December 31, 2002. CFC and Bank have not taken
any action from and after December 31, 2002 until the date of this
Agreement that is prohibited to be taken from and after the date of
this Agreement by the provisions of Section 6.3. Without limiting the
generality of the foregoing:
4.22.1. From and after March 31, 2003, CFC has paid no dividends
except, for the period of April 1, 2003 through June 30, 2003,
CFC declared and has paid a dividend in the amount of $929,000;
4.22.2. From and after March 31, 2003, except as otherwise disclosed
in the Exhibits to this Agreement, CFC has made no changes in the
compensation of any employees other than non-material cost of
living and merit adjustments consistent with past practices and
has paid no bonuses other than regular bonus awards in the
ordinary course of business pursuant to bonus plans in effect as
of March 1, 2003.
4.22.3. Neither CFC nor the Bank has any liability or obligation in
respect of the CSB Limited Partnership Interest.
4.23.Survival and Independence of Representations and Warranties. The
representations and warranties of CFC and Bank made in this Merger
Agreement shall survive the Closing notwithstanding any investigation
or knowledge of BOKF or Merger Corp; provided BOKF shall give notice
to the Shareholders Committee (as hereafter defined) of any claim of a
breach of any such representations and warranties on or before the
first anniversary of the Closing Date (the "Claim Notice Deadline").
Absent actual fraud, General Claims not asserted by BOKF prior to the
Claim Notice Deadline shall be deemed barred; provided, however, that
the Claim Notice Deadline shall not be applicable to, or bar, any
claim of a breach of the representations and warranties set forth in
Subsection 4.8.4 or the matters covered by Sections 11 and 12 below.
Each of the representations and warranties of CFC and Bank set forth
in this Merger Agreement is a separate and independent representation
and warranty, shall be cumulative of and in addition to all other
warranties and representations, and shall not limit or be interpreted
to be in derogation of any other representation or warranty made
herein. Any disclosure made on any Exhibit hereto shall be applicable
to the entire Agreement and not just one representation or warranty.
4.24.Knowledge. As used herein, the knowledge of CFC and/or the Bank shall
mean the knowledge which any one or more of Messrs. Wilkinson,
Steeples, Azari, Yosten, ▇▇▇▇▇ or ▇▇▇▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇, or any
member of the Board of Directors of CFC or the Bank have or, in the
reasonable exercise of their respective duties and responsibilities,
should have knowledge.
5. Representations and Warranties of BOKF and Merger Corp. BOKF and Merger
Corp represent and warrant, jointly and severally, to CFC that:
5.1. Incorporation and Corporate Power. BOKF and Merger Corp are
corporations duly organized, validly existing and in good standing
under the laws of their respective states of organization. BOKF and
Merger Corp have all the corporate power and authority necessary and
required to consummate the transactions contemplated by this Merger
Agreement.
5.2. Non-Violation of Other Agreements. The execution and delivery of this
Merger Agreement, and compliance with its terms and provisions by BOKF
and Merger Corp and the execution of any document required to be
executed by BOKF or Merger Corp, will not:
5.2.1. Violate, conflict with or result in the breach of their
respective certificates of incorporation or bylaws or any of the
terms, conditions or provisions of any agreement or instrument to
which BOKF or Merger Corp is a party, or by which BOKF or Merger
Corp is bound;
5.2.2. Result in the creation or imposition of any lien, charge,
encumbrance or restriction of any nature whatever upon any of the
property, contracts or business of BOKF and Merger Corp; or,
5.2.3. Require the consent of any party to a contract with BOKF and
Merger Corp in order to keep the contract enforceable.
5.3. Required Corporate Action. The execution, delivery and consummation of
this Merger Agreement by BOKF and Merger Corp has been duly and
validly authorized by the boards of directors of BOKF and Merger Corp
and, as of the Closing, will have been approved by the shareholder of
Merger Corp. The approval of the shareholders of BOKF is not required.
This Merger Agreement has been duly executed and delivered by duly
authorized officers of BOKF and Merger Corp. This Merger Agreement
constitutes a legal, valid and binding agreement and obligation of
BOKF and Merger Corp enforceable against BOKF and Merger Corp in
accordance with its terms, except as may be limited by applicable
bankruptcy, insolvency, moratorium, receivership, and other similar
laws affecting the rights of creditors generally.
5.4. Brokerage Fees. Neither BOKF nor Merger Corp has incurred or will
incur, directly or indirectly, any liability for brokerage, finder's,
financial advisor's or agent's fees or commissions by virtue of any
commitment made by BOKF or Merger Corp in connection with this Merger
Agreement or any transaction contemplated hereby. Neither BOKF nor
Merger Corp has any knowledge that any party has asserted any claim of
such nature against BOKF or Merger Corp.
5.5. Survival and Independence of Representations and Warranties. The
representations and warranties of BOKF and Merger Corp made in this
Merger Agreement shall not survive the Closing hereof; provided,
however, the indemnification obligations of Section 5.6 hereof shall
survive the Closing indefinitely. Each of the representations and
warranties of BOKF and Merger Corp set forth in this Merger Agreement
is a separate and independent representation and warranty, shall be
cumulative of and in addition to all other warranties and
representations; and shall not limit any other representation or
warranty made herein.
5.6. BOKF and Merger Corp Indemnification. BOKF and Merger Corp shall
indemnify the present and future directors, officers and employees of
CFC and Bank (the "Indemnified Parties") to the fullest extent to
which such Indemnified Parties were entitled under the Articles of
Incorporation and Bylaws of CFC and/or the Articles of Association and
Bylaws of Bank as in effect as of the date hereof.
6. Covenants.
6.1. Full Access. In order that BOKF shall have the full opportunity to
make such investigations as it shall reasonably desire concerning CFC
and Bank and their business affairs, CFC and Bank shall:
6.1.1. Give BOKF, its employees, counsel, accountants and other
authorized representatives, as necessary to conduct the
investigation and whose names shall have been provided to (and
approved by) CFC, full access, upon reasonable notice to CFC and
at reasonable times without unduly interfering with the conduct
of business by CFC and Bank throughout the period up to the
Closing, to all of the facilities, properties, books, contracts
and records of CFC and Bank.
6.1.2. Authorize its accountants to give BOKF full access to the
accountants' records, including work papers; and,
6.1.3. Furnish to BOKF throughout the period up to the Closing all
additional financial, operating and other information concerning
CFC and Bank and their business affairs, as BOKF may reasonably
request.
All information provided pursuant to this Section 6.1 shall be subject
to the provisions of Section 6.6.
6.2. Conduct of Business Prior to the Closing Date. From this date until
the Closing Date, each of CFC and Bank shall, except as may be first
approved in writing by BOKF (such approval not to be unreasonably
withheld, delayed or denied) or as is otherwise permitted or
contemplated in this Merger Agreement:
6.2.1. Maintain their corporate existence in good standing;
6.2.2. Maintain the general character of their business and conduct
their business in their ordinary and usual manner consistent with
past practices;
6.2.3. Maintain proper business and accounting records generally in
accordance with past practices;
6.2.4. Maintain their properties (except repossessed and foreclosed
assets acquired in satisfaction of debts previously contracted)
in normal repair and condition, normal wear and tear and damage
due to fire or other unavoidable casualty excepted;
6.2.5. Preserve their business organizations intact, use their
reasonable efforts to maintain satisfactory relationships with
suppliers, customers and others having business relations with
them whose relationships they believe are desirable to maintain,
and use their reasonable efforts to procure the willingness of
all of the personnel employed by them immediately prior to the
execution of this Merger Agreement who are material to the
success of their business to continue in their employ on
substantially the same terms and conditions as those on which
such personnel were employed immediately prior to the execution
of this Merger Agreement;
6.2.6. Maintain in full force and effect insurance comparable in
amount and in scope of coverage to that now maintained by them on
the date hereof;
6.2.7. Except as otherwise disclosed in this Merger Agreement, perform
all of their obligations under all material contracts, leases and
agreements relating to or affecting their assets, properties and
businesses; and,
6.2.8. Comply in all material respects with and perform all
obligations and duties imposed upon them by federal, state and
local laws, and all rules, regulations and orders imposed by
federal, state or local governmental authorities, except as may
be contested by them in good faith by appropriate proceedings.
6.3. CFC and Bank Prohibited Actions Prior to the Closing Date. From this
date until the Closing Date, CFC and Bank shall not, except as
otherwise permitted by this Merger Agreement or as requested or
approved by BOKF in writing (which approval shall not be unreasonably
withheld, delayed or denied):
6.3.1. Incur any indebtedness for borrowed money or incur any
noncurrent indebtedness for the purchase price of any fixed or
capital asset, or make any extension of credit or any loans to,
guarantee the obligations of, or make any additional investments
in, any other person, corporation or joint venture (whether an
existing customer or a new customer) except:
6.3.1.1. Extensions of credit, loans and guarantees (i) less than
Five Hundred Thousand Dollars ($500,000) per transaction or
(ii) less than Two Hundred Fifty Thousand Dollars ($250,000)
with existing CFC customers having existing credit of Five
Hundred Thousand Dollars ($500,000) or more made by Bank in
the usual and ordinary course of its banking business,
consistent with prior practices and policies;
6.3.1.2. Legal investments by Bank in the usual and ordinary
course of its banking business consistent with prior
practices and policies; and
6.3.1.3. Borrowings from the Federal Home Loan Bank, the Federal
Reserve Bank, deposit liabilities, and federal funds
transactions by Bank in the ordinary course of business
consistent with past practices.
6.3.2. Make any (a) material change, except in the ordinary and usual
course of business, in their assets (including, but not limited
to, any change in the composition of such assets so as to
materially alter the proportion of cash) or liabilities, (b)
material commitment for any capital expenditures, excluding
expenditures for repairs in the ordinary and usual course of
business, or (c) sale or other disposition of any material
capital asset other than for fair value in the ordinary course of
business;
6.3.3. Make any change in their Articles of Incorporation or
Association or Bylaws
6.3.4. Authorize any shares of their capital stock for issuance, issue
any shares of any previously authorized but unissued capital
stock or grant, issue or make any option or commitment relating
to their capital stock;
6.3.5. Enter into any letter of intent or agreement to sell any of
their material assets, except in the normal and ordinary course
of their business, or acquire, be acquired by, or merge,
consolidate or reorganize with any person, firm or corporation;
6.3.6. Declare or pay any dividend, make any other distribution or
payment or set aside any amount for payment with respect to any
shares of their capital stock or directly or indirectly, redeem,
purchase or otherwise acquire any shares of their capital stock
or make any commitment relating thereto; provided, however, CFC
may, so long as CFC maintains the Minimum Equity:
6.3.6.1. pay a cash dividend to its shareholders for July, 2003
in an amount not to exceed $310,000 (the "July Dividend");
6.3.6.2. pay a cash dividend to its shareholders for August, 2003
in an amount not to exceed $310,000 (the "August Dividend");
6.3.6.3. pay a dividend in kind, not later than the day before
the Closing, by (A) the distribution of the issued and
outstanding capital stock of C.S.B. Corporation by Bank to
CFC, (B) the dissolution of C.S.B. Corporation, and (C) the
distribution of the CSB Limited Partnership Interest to the
shareholders of CFC;
6.3.6.4. if the Merger is not consummated by September 1, 2003,
pay a cash dividend equal to a percentage of net income
determined in accordance with generally accepted accounting
principles consistently applied, where for this purpose only
"net income" shall be determined without deductions for the
Cash Closing Bonuses or the Vested Payments, ("Net Income")
for the period commencing on September 1, 2003 and ending on
the day prior to Closing, as follows: for the first thirty
(30) days following September 1, 2003, seventy-five percent
of Net Income; for the period commencing on the thirty first
(31st) day and ending on the sixty first (61st) day
following September 1, 2003, eighty-five percent of Net
Income; and for the period commencing on the sixty-second
day following September 1, 2003 and each day thereafter
until Closing, one hundred percent (100%) of Net Income
("Post September 1st Dividends"); and,
6.3.6.5. cause Bank to pay dividends to CFC in amounts necessary
to cover, but not to exceed, the July Dividend, the August
Dividend and any Post September 1st Dividends.
6.3.7. Except as set forth in Exhibit 6.3.7, make any (a) increase in
the compensation payable or to become payable to any of their
directors, officers or employees (including, without limitation,
any bonus or incentive payment or agreement) other than normal
annual increases consistent with prior practice, (b) make or
enter into any written employment contract or any bonus, stock
option, profit sharing, pension, retirement or other similar
payment or arrangement, or (c) make any payment to any person,
except in the usual and ordinary course of business or except as
required by an existing agreement set forth in the Exhibits
hereto; provided, however:
6.3.7.1. The Bank may and shall, effective not later than the day
before the effective date of the Closing, pay:
6.3.7.1.1. cash bonuses (the "Cash Closing Bonuses") not
exceeding seven hundred seventy five thousand dollars
($775,000) in the aggregate to the employees of CFC,
other than the senior officers of Bank (the
"Executives") who have signed BOKF Employment
Agreements, as CFC shall in its discretion determine;
and,
6.3.7.1.2. Vested Payments aggregating not more than two
million one hundred fifty thousand dollars
($2,150,000), plus the required 14.3% gross-up, to the
Colorado State Bank and Trust Executive Deferred
Compensation Plan dated July 13, 1998 or such other
deferred compensation plan as may be agreed between
BOKF and the Executives (the "Deferred Plan") for the
benefit of the Executives, as required by the BOKF
Employment Agreements, including such amendments to the
Deferred Plan (such as the admission of ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ as a participant therein) as may be necessary to
effect the BOKF Employment Agreements.
6.3.7.2. The Bank may pay cash bonuses to its five outside
directors, not exceeding $30,000 each or $100,000 in the
aggregate ("Outside Director Payments").
6.3.7.3. CFC and the Bank may pay liabilities to affiliates and
shareholders accrued as of March 31, 2003 and thereafter
incurred in the ordinary course of business or contemplated
by this Agreement;
6.3.7.4. The Bank may fund the Colorado State Bank & Trust 401(k)
Plan and the Colorado State Bank & Trust Pension Plan as
required or permitted by such plans (including but not
limited to the required 14.3% mandatory matching of the Cash
Closing Bonuses), for the period from January 1, 2003
through the day prior to Closing, at rates and with
allocations not more generous than historical rates and
allocations (and shall be permitted to make any amendments
to such plans required to allow such partial-year
contributions); and,
6.3.7.5. The Bank may pay accrued bonuses to officers and
employees, pro-rated for the period between January 1, 2003
and the day prior to Closing, in accordance with the CFC
Bonus Plan in existence as of March 1, 2003.
6.3.8. Make any material change in their banking, safe deposit or
power of attorney arrangements;
6.3.9. Enter into any trust, escrow, agency and similar trust company
agreements, purchase orders and contracts for goods and services,
except in the ordinary course of business consistent with past
practices;
6.3.10. Enter into any agreement resulting in the imposition of any
mortgage or pledge of their assets or the creation of any lien,
charge or encumbrance on any of their assets;
6.3.11. Incur any material obligation or liability, absolute or
contingent, except in the ordinary course of business or pursuant
to existing contracts described in this Merger Agreement;
6.3.12. Take any action which would prevent compliance with any of the
conditions of this Merger Agreement; or,
6.3.13. Pre-pay long term indebtedness.
6.4. Vote for Merger and Waiver of Right to Dissent. Each of the Principal
Shareholders (i) shall vote her, his or its shares of CFC Common Stock
in favor of the Merger and approval of compensation pursuant to
Section 6.14, (ii) hereby grants to the Chairman and the President of
the Bank, and each of them individually, with full power of
substitution, a proxy to vote his, her or its shares of CFC Common
Stock in favor of the Merger and such compensation, at any meeting of
the shareholders of CFC (including any adjournment thereof) called to
consider such matters, and (iii) shall use her, his or its best
efforts to cause the Merger and such compensation to be approved by
the directors and shareholders of CFC and Bank in accordance with
applicable law and consummated in accordance with the terms of this
Merger Agreement.
6.5. Regulatory Approval. BOKF shall diligently file and pursue (A) all
regulatory applications required in order to consummate the Merger,
including but not limited to the necessary applications for prior
approval of the Board of Governors of the Federal Reserve System and
certification from the Colorado Department of Regulatory Agencies,
Division of Banking as to compliance with Section 11-6.4-103 of the
Colorado Banking Code of 1957 and (B) thereafter promptly file any
required supplements or amendments thereto. All applications,
supplements, and amendments shall be substantially complete when
filed. BOKF shall promptly deliver to CFC and its counsel a copy of
all such filings, as filed. Although all such filings shall be the
responsibility of BOKF, BOKF shall nevertheless advise and consult
with CFC on an ongoing basis with respect to the filings and all
matters and events related thereto. BOKF shall inform and make
available to CFC from time to time all matters relating to the filings
and the regulatory approvals. BOKF shall diligently proceed with
reasonable deliberate speed to obtain all such approvals. If any
regulatory application required to be filed by BOKF should be finally
denied or disapproved by the respective regulatory authority, then
BOKF shall immediately give notice to CFC and this Merger Agreement
shall thereupon terminate. However, it is understood that a request
for additional information or undertaking by the applicant, as a
condition for approval, shall not be deemed to be a denial or
disapproval so long as the applicant can reasonably be expected to
provide the requested information or undertaking. In the event an
application is denied pending an appeal, petition for review, or
similar such act on the part of the applicant, then the application
will be deemed denied unless the applicant promptly and diligently
prepares and files such appeal and continues the appellate process for
the purposes of getting the necessary approval.
6.6. Confidentiality. Prior to the Closing, BOKF shall keep all information
disclosed to BOKF (its employees, counsel, accountants, and other
authorized representatives) by CFC or Bank (or their representatives)
respecting the business and financial condition of CFC and Bank
confidential and shall make no use of such information except to
conduct the investigation contemplated by Section 6.1, the application
contemplated by Section 6.5 and to consummate the transactions
contemplated hereby, and BOKF shall not use such information to obtain
a competitive advantage in connection with any customer of Bank. In
the event this Merger Agreement is terminated for any reason BOKF (its
agents, officers, directors, employees and counsel) shall (i) return
all copies of all information and documents obtained from CFC, Bank,
and their representatives, (ii) thereafter keep all such information
confidential and not make use of any such information to obtain a
competitive advantage in connection with any customer of Bank, and
(iii) shall not solicit for employment, whether directly or
indirectly, any of the employees, officers or directors of CFC or Bank
for a period of one year following such termination.
6.7. Disclosure. Neither BOKF nor CFC, nor any other party to this Merger
Agreement or their representative, shall make any public disclosure
concerning this Merger Agreement or the Merger contemplated herein
without the mutual consent of each of the other parties hereto to the
timing and content of the disclosure; provided, however, the parties
hereto may make any disclosure (i) necessary to maintain compliance
with applicable federal or state laws or regulations, (ii) required in
connection with the making of any application necessary to effect the
Merger, or (iii) as required for CFC to seek shareholder approval.
6.8. BOKF Prohibited Action Prior to Closing. From this date until the
Closing Date, BOKF shall not take any action which would prevent
compliance with any of the conditions of this Merger Agreement. BOKF
shall not, and shall cause its subsidiaries not to, make or agree to
make any acquisition, or take any other action, that adversely affects
its ability to consummate the transactions contemplated by this Merger
Agreement and will otherwise continue to conduct its business
operations and shall cause the operations of its subsidiaries to be
conducted in a manner consistent with past operating practices.
6.9. Employment Agreements. BOKF shall offer employment agreements to the
individuals listed on Exhibit 6.9 substantially comparable to the
terms and conditions heretofore offered by BOKF to the Executives
under the Employment Agreements.
6.10.Employment Benefits and Contracts. Following the Closing Date, BOKF
shall provide generally to officers and employees of Bank, who at or
after the Closing Date become or remain employees of BOKF or one of
its subsidiaries ("Continuing Employees"), employee benefits under
employee benefit plans (other than stock option or other plans
involving the potential issuance of BOKF Common Stock except as set
forth in this section), on terms and conditions which when taken as a
whole are substantially similar to those provided by BOKF to its
similarly situated officers and employees. Following the Closing:
6.10.1. For purposes of participation, vesting and determination of
rates of contribution (but not accrual of benefits) under such
employee benefit plans, (i) qualifying service under any
qualified pension plan of Bank shall be treated as qualified
service under BOKF's qualified defined benefit plans, (ii)
qualifying service under any qualified defined contribution plans
of Bank shall be treated as qualified service under BOKF's
qualified defined contribution plans, and (iii) qualifying
service under any other employee benefit plans of Bank shall be
treated as qualified service under any similar employee benefit
plans maintained by BOKF.
6.10.2. BOKF shall cause the BOKF welfare benefit plans that cover the
Continuing Employees after the Closing Date to (i) waive any
waiting period and restrictions and limitations for preexisting
conditions or insurability, and (ii) cause any deductible
payments made by the Continuing Employees under Bank's medical
benefit plan to be credited to such Continuing Employees under
the BOKF self-funded medical benefit plans, so as to reduce the
amount of any deductible payable by the Continuing Employees
under the BOKF self-insured medical plans. The continued coverage
of the Continuing Employees under the employee benefit plans
maintained by Bank and/or any Bank subsidiary immediately prior
to the Closing Date during a transition period shall be deemed to
provide the Continuing Employees with benefits that are no less
favorable than those offered to other employees of BOKF and its
subsidiaries. Unless otherwise modified in writing and except as
otherwise provided herein, BOKF also shall cause Bank and its
subsidiaries to honor all employment, severance, consulting and
other compensation contracts disclosed in Exhibit 4.15 hereto
between Bank and any current or former director, officer or
employee thereof, and all provisions for vested benefits or other
vested amounts earned or accrued through the Closing Date under
the Bank benefit plans.
6.10.3. CFC shall, by appropriate action of its board of directors and
otherwise, take all action necessary (i) to vest all Bank
employees fully in the Colorado State Bank & Trust 401(k) Plan
and the Colorado State Bank & Trust Pension Plan, contingent upon
and effective as of the Closing, and (ii) to terminate and roll
over such Plans into BOKF's analogous defined contribution plans
following the Closing. BOKF shall be responsible for the fees
related to the termination thereof.
6.10.4. BOKF shall continue the Colorado State Bank and Trust
Split-Dollar Agreements with certain senior executives of Bank
(the "Split-Dollar Agreements") subject to the following terms
and conditions:
6.10.4.1. The Bank shall not be required to continue any Policy
in effect to the extent the death benefit or cash surrender
value thereof exceeds the Employee Insurance Amount.
6.10.4.2. Paragraph 9 of each Split-Dollar Agreement is deleted.
6.10.4.3. Any officer who is unvested in his Split-Dollar
Agreement shall be vested therein as of the Closing.
▇.▇▇.▇▇ Solicitation. Prior to the Closing Date, unless this Merger
Agreement is sooner terminated, neither Bank nor CFC shall
directly or indirectly (i) solicit or encourage inquiries or
proposals with respect to the merger of Bank or CFC or the sale
of any of the shares of Bank or CFC or other material asset(s) of
CFC or Bank from any party other than BOKF or (ii) merge with any
party or sell any of the shares of CFC or Bank or material
asset(s) of CFC or Bank to any party except as set forth in this
Merger Agreement.
6.12.Section 280G Vote. CFC shall submit for approval, and use its
best efforts to obtain approval, by its shareholders such amounts
of any payments to employees as would be required to eliminate
any excess parachute under Section 280G of the Internal Revenue
Code assuming the provisions of Section 280G(b)(5)(A)(i) are not
applicable, which amounts shall be paid only if approved by the
CFC shareholders in a manner meeting the requirements of Section
280G(b)(5)(B) of the Internal Revenue Code and the rules and
regulations promulgated thereunder including Prop. Reg. Sec.
1,280G-1 Q/A 7.
7. Conditions Precedent to Closing by BOKF and Merger Corp. The obligation of
BOKF and Merger Corp to consummate and close this transaction is
conditioned upon each and all of the following:
7.1. The representations, warranties and covenants of CFC and Bank
shall be materially true at the Closing as though such
representations, warranties and covenants were also made at the
Closing.
7.2. The Federal Reserve Board shall have approved the Merger, or
issued a waiver of approval, in accordance with 12 U.S.C. Section
1842 and 12 C.F.R. Section 225. The Colorado Department of
Regulatory Agencies, Division of Banking, shall have certified as
to compliance of the Merger with Section 11-6.4-103 of the
Colorado Banking Code of 1957.
7.3. CFC, Bank, and Principal Shareholders shall have performed and
complied with, in all material respects, all of their obligations
under this Merger Agreement which are to be performed or complied
with by them prior to or on the Closing Date.
7.4. CFC shall have delivered to BOKF an opinion of its counsel,
Ducker, Montgomery, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, P.C., or other counsel
reasonably acceptable to BOKF, dated the Closing Date, in form
and content customary for a transaction of this nature.
7.5. The shareholders of CFC shall have approved this Merger Agreement
in accordance with the Colorado Business Corporation Act.
7.6. Neither CFC taken as a whole nor Bank taken as a whole shall have
suffered any Material Adverse Change (as hereinafter defined) in
their financial conditions, assets, liabilities, businesses or
properties. For purposes of this Section 7.8, "Material Adverse
Change" shall mean any event resulting in a one-time charge to
Bank's loan loss reserve, or a reduction of Bank's Tier 1
capital, of One Million Dollars ($1,000,000) or more.
7.7. Holders of no more than ten percent (10%) of the CFC Common Stock
shall have dissented pursuant to ▇-▇▇▇-▇▇▇ et seq. of the
Colorado Business Corporation Act.
7.8. The shareholders of CFC shall have approved all excess parachute
payments within the meaning of Section 280G of the Internal
Revenue Code.
In the event any one or more of these conditions shall not have
been fulfilled prior to or at the Closing, BOKF and Merger Corp
may terminate this Merger Agreement by written notice to CFC, in
which event neither party shall have any further obligation or
liability to the other except the obligations of BOKF set forth
in Sections 5.4 and 6.6 and the obligations of CFC and Bank set
forth in Section 4.11. BOKF shall be entitled to waive compliance
with any one or more of the conditions, representations,
warranties or covenants in whole or in part.
8. Conditions Precedent to Closing by CFC and Bank. The obligation of CFC and
Bank to consummate and close this transaction are conditioned upon each and
all of the following:
8.1. The representations, warranties and covenants of BOKF and Merger
Corp made in this Merger Agreement shall be true at the Closing
as though such representations, warranties and covenants were
also made at the Closing.
8.2. BOKF and Merger Corp shall have performed and complied, in all
material respects, with all of their obligations under this
Merger Agreement which are to be performed or complied with by
them prior to or at the Closing.
8.3. BOKF shall have delivered to CFC an opinion of its counsel,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Tulsa, Oklahoma, or other counsel reasonably
acceptable to CFC, dated the Closing Date, in form and content
customary for a transaction of this nature.
8.4. The Federal Reserve Board shall have approved the Merger, or
issued a waiver of approval, in accordance with 12 U.S.C. Section
1842 and 12 C.F.R. Section 225.
8.5. The shareholders of CFC shall have approved this Merger Agreement
and the transactions contemplated hereby as required by the
Colorado Business Corporation Act.
8.6. The shareholders of CFC shall have approved all excess parachute
payments within the meaning of Section 280G of the Internal
Revenue Code.
8.7. CFC shall be entitled to waive compliance with any one or more of
the conditions, representations, warranties or covenants in whole
or in part. In the event any one or more of these conditions
shall not have been fulfilled prior to or at the Closing, CFC may
terminate this Merger Agreement by notice to BOKF, in which event
no party shall have any further obligation or liability to the
other, except the obligations of BOKF set forth in Section 6.6
and Section 5.4 and the obligations of CFC set forth in Section
4.11.
9. Closing. The Closing ("Closing" or "Closing Date") of the transactions
contemplated by this Merger Agreement shall take place not later than five
(5) business days following the first day on which (i) BOKF and Merger Corp
can lawfully consummate the Merger under 12 U.S.C. Section 1842, 12 C.F.R.
Section 225 and other applicable laws, rules and regulations and (ii) all
conditions precedent to the obligations of the parties set forth in Section
7 and Section 8 have been satisfied or waived; provided, however, in the
event such day is ten (10) or fewer calendar days preceding the first day
of the next calendar month, the Closing shall take place or otherwise be
effective at the opening of business on the first day of the next calendar
month. The Parties shall use their best efforts to cause the Closing to
occur on or before September 1, 2003. In any event, if the Closing Date
does not occur on or before December 31, 2003, then either BOKF or CFC may
by notice to the other, terminate this Merger Agreement. The Closing shall
be held at 10:00 a.m. on the Closing Date at the offices of Bank or at such
other time and place as BOKF and CFC may agree. At the Closing, BOKF,
Merger Corp, CFC, and Bank shall execute and deliver all of the documents
and take all other actions which are contemplated by the terms hereof.
9.1. Without limiting the generality of Section 9 of this Merger Agreement,
the following actions shall be taken at the Closing concurrently. CFC
shall:
9.1.1. Use commercially reasonable efforts to cause to be delivered to
Merger Corp certificates representing the CFC Common Stock;
9.1.2. Deliver the opinion of CFC's counsel pursuant to Section 7.4;
and,
9.1.3. Cause the employment agreements, plans and payments described
in Exhibit 4.15 to be terminated and discharged at no cost to CFC
and Bank.
9.2. Without limiting the generality of Section 9 of this Merger Agreement,
the following actions shall be taken at the Closing concurrently. BOKF
shall:
9.2.1. Pay, by corporate check, to each of the holders of CFC Common
Stock of record on the third business day preceding the Closing
(the "Record Date") ninety percent (90%) of the amounts to which
such holders are entitled pursuant to Section 2.7.1 (calculated
(i) on the assumption that CFC's shareholders equity as of
Closing equals CFC's shareholders equity determined as of the
most recent month end for which the books have been closed as of
the Closing, (ii) on the basis that Post-September 1st Dividends
are computed by extrapolation of CFC's average net income for the
most recent three months for which the books have been closed as
of the Closing, and (iii) on the basis of CFC's good faith
estimate of Transaction Costs) against delivery of duly endorsed
certificates representing shares of CFC Common Stock or lost
certificate affidavits and indemnification agreements in
customary form.
9.2.2. Establish the Escrows as provided in Sections10, 11, and 12
below.
9.2.3. Deliver the opinion of BOKF's counsel pursuant to Section 8.3.
9.2.4. Cause appropriate evidences of the Merger to be filed in
accordance with applicable law.
9.3. Following the Closing, the parties shall use their best efforts to
calculate as soon as practicable the exact amount of the Cash
Consideration, by determining Transaction Costs, the Equity Deficit
and dividend payments in accordance with Section 6.3.6. Not later than
the fifth (5th) business day following the date on which such
calculation is made, BOKF shall pay to the shareholders of CFC, by
corporate check, the amounts due at Closing under Section 2.7.1 less
the amounts paid in accordance with Section 9.2.1.
10. General Escrow. The General Escrow shall be established on the following
terms and conditions:
10.1.The escrow agent shall be Bank of Oklahoma, National Association
("Escrow Agent" or "BOk").
10.2.The General Escrow shall be governed by the standard form of escrow
agreement generally in use by the Escrow Agent (the "Escrow
Agreement") a copy of which is set forth as Exhibit 10.2.
10.3.BOKF shall deliver the General Escrow Amount to the Escrow Agent at
the Closing. The Escrow Agent shall invest the General Escrow Amount
in three month certificates of deposit issued by BOk on the terms and
conditions being offered by BOk to the public at the time of such
investment and shall thereafter renew such certificates of deposit
upon maturity as to the total amount remaining in the Escrow after
payment of any Allowed Claim (for like periods and on the terms and
conditions being offered by BOk to the public at the time of such
renewal). Interest on the certificates shall be added to the General
Escrow and deemed part of the General Escrow Amount.
▇▇.▇.▇▇ the event BOKF claims a breach of the representations and
warranties of CFC and Bank arising under this Merger Agreement (other
than a breach of ss.4.8.4, which shall be covered by Section 12
below), BOKF shall give notice of the claim (a "General Claim") to the
Shareholders Committee established in Section 13.
10.4.1. The notice shall identify the representations and warranties
which BOKF claims have been breached and describe in reasonable
detail the basis of the General Claim and set forth a good faith
reasonable estimate ("Good Faith Estimate") of the maximum amount
of damages claimed ("General Losses").
10.4.2. BOKF shall make no General Claim unless and until the
aggregate amount of all General Losses shall exceed $100,000 in
which event BOKF may make General Claims against the General
Escrow for all General Losses incurred without limitation.
Absent actual fraud by CFC, BOKF hereby waives all General Claims
in the aggregate in excess of the General Escrow Amount.
▇▇.▇.▇▇ the event BOKF makes one or more General Claim(s) prior to the
Claim Notice Deadline, the Escrow Agent shall continue to hold the
related aggregate Good Faith Estimates thereof until the date on which
the General Claim(s) is resolved by (i) the mutual agreement of the
Shareholders Committee and BOKF or (ii) a final adjudication
determining the merits of such General Claim(s), at which time the
Escrow Agent shall pay (a "Claim Payment") the Claim(s) as mutually
agreed or finally adjudicated (an "Allowed Claim").
10.6.The General Escrow Amount in excess of the total of all pending Good
Faith Estimates shall be distributed to the CFC Shareholders promptly
following the Claim Notice Deadline. The amounts of the General Escrow
set aside as Good Faith Estimates in excess of Allowed Claims shall be
distributed to the CFC Shareholders, at such times and from time to
time, as General Claims are resolved and satisfied as provided in
Section 10.5.
10.7.The General Escrow shall terminate at the later of the Claim Notice
Deadline or the date on which all timely noticed General Claims have
been resolved by mutual agreement or final adjudication and all
Allowed Claims, if any, shall have been paid to BOKF.
10.8.Upon termination of the General Escrow, the amount (if any) then
remaining in the General Escrow shall be delivered to the holders of
CFC Common Stock on the Record Date in accordance with their
respective interests (the "CFC Shareholders").
10.9.The rights of the CFC Shareholders to receive payments from the
Escrow shall not be assignable or transferable except by operation of
law or by intestacy or with the approval of BOKF (which approval shall
not be unreasonably withheld, delayed, or denied) and will not be
evidenced by any certificate or other evidence of ownership.
10.10. BOKF shall pay the fees and costs of the Escrow Agent with respect
to the General Escrow.
11. Credits Escrow. The Credits Escrow shall be established on the following
terms and conditions:
11.1. The escrow agent shall be the Escrow Agent.
11.2. The escrow agreement shall be in the form of the Escrow Agreement.
11.3.BOKF shall pay the Credits Escrow Amount into the Credits Escrow as
the original amount thereof.
11.4.The Credits Escrow shall be invested in the manner set forth in
Section 10.3.
11.5.BOKF shall cause Bank to use its best efforts to collect or make
recovery in respect of the following credits (each a "Credit" and
collectively, the "Credits"):
11.5.1. The Villas at Cherry Hills, LLC (principal amount deemed to be
$1,164,023);
11.5.2. Master Lease Inc. (principal amount deemed to be $2,631,178
plus any advances made after March 31, 2003 and prior to the date
of this Agreement plus any advances made after the date of this
Agreement pursuant to commitments existing as of the date of this
Agreement);
11.5.3. ▇▇▇▇▇▇▇▇ ▇▇▇▇ Office Park (principal amount deemed to be
$800,000); and,
11.5.4. ▇▇▇▇▇▇ ▇. ▇▇▇▇ (principal amount deemed to be $1,460,630 plus
any advances made after March 31, 2003 and prior to the date of
this Agreement plus any advances made after the date of this
Agreement pursuant to commitments existing as of the date of this
Agreement).
▇▇.▇.▇▇▇▇ shall initially pay all of the collection costs of the Credits.
▇▇.▇.▇▇ the event a loss of principal, interest accrued from and after
March 31, 2003, and/or collection costs incurred from and after March
31, 2003 is incurred on the Credits (a "Credits Loss"), the Credits
Loss shall be paid to Bank out of all funds held in the Credits Escrow
(whether loss of principal, interest, or inability to recover the
costs of collection).
▇▇.▇.▇▇ the event (i) Bank believes it is necessary to release and
discharge the indebtedness of a Credit in order to maximize the
collection of the Credit and (ii) there will be a Credits Loss on the
Credit:
11.8.1. Bank shall notify the Shareholders Committee as agent of the
CFC Shareholders of the particulars of the Credit (including the
principal and interest due on the Credit and the amount of the
Credits Loss);
11.8.2. Some or all of the CFC Shareholders shall have the right,
acting only through the Shareholders Committee, to purchase the
Credit from the Bank at a purchase price equal to the unpaid
principal and interest of the Credit less the Credits Loss,
provided the purchase price is paid to the Bank in cash within
thirty (30) business days of the notice by Bank to the
Shareholders Committee;
11.8.3. Upon payment of the purchase price, Bank shall assign the
Credit (including all notes and associated collateral) to the
Shareholders Committee (for the benefit of the purchasing CFC
Shareholders) without recourse; and,
11.8.4. In the event CFC Shareholders fail to pay timely the purchase
price to BOK, it shall be deemed that further collection efforts
in respect of the Credit are unwarranted.
▇▇.▇.▇▇ such time as further collection efforts in respect of a Credit are
determined to be unwarranted (as heretofore provided in Section
11.8.4), the amount of the Credits Loss in respect of the Credit shall
be paid to the Bank out of the Credits Escrow.
11.10. On the earlier of the fifth anniversary of the Closing or such time
as one of the following three events shall have occurred in respect of
all of the Credits, (i) the Credit has been paid with no Credits Loss,
(ii) the CFC Shareholders have purchased the Credit from the Bank or
(iii) further collection efforts in respect of the Credit are deemed
unwarranted in accordance with Section 11.8.4:
11.10.1. Any and all Credits Loss shall be paid to the Bank out of the
Credits Escrow and the balance in the Credits Escrow remaining
after payment of any and all Loss to the Bank shall be the Escrow
Balance; and,
11.10.2. The Escrow Balance shall be paid to the CFC Shareholders in
accordance with Section 2.7.2 of this Merger Agreement; and,
11.10.3. The Credits Escrow shall be closed.
11.11. In the event further collection efforts in respect of a Credit are
determined to be unwarranted in accordance with Section 11.8.4, the
Bank shall assign, to the extent of the Credits Loss and without
recourse, all notes representing the Credit to Shareholders.
11.12. The Escrow Agent shall distribute all income in respect of the
Credits Escrow Amount to the CFC Shareholders once each calendar
quarter; provided, however, income shall not be distributed to the
extent such distribution would reduce the Credits Escrow Amount below
Credits Losses that are claimed by BOKF but unresolved at such time.
12. Tax Escrow. The Tax Escrow shall be established on the following terms and
conditions:
12.1. The escrow agent shall be the Escrow Agent.
12.2. The escrow agreement shall be in the form of the Escrow Agreement;
12.3.BOKF shall deliver the Tax Escrow Amount to the Escrow Agent at the
Closing.
12.4.The Escrow Agent shall invest the Tax Escrow Amount in accordance
with the written directions of the Shareholders Committee, subject to
approval by BOKF which approval shall not be unreasonably withheld,
delayed or denied.
12.5.The Escrow Agent shall distribute all income in respect of the Tax
Escrow Amount to the CFC Shareholders once each calendar quarter;
provided, however, income shall not be distributed to the extent such
distribution would reduce the Tax Escrow Amount below the Minimum
Required Tax Escrow Amount (a "Tax Escrow Deficiency"). All income in
respect of the Tax Escrow Amount shall be added to the Tax Escrow
Amount to the extent required to eliminate any Tax Escrow Deficiency.
12.6.The Escrow Agent shall distribute on April 1, 2004, April 1, 2005,
April 1, 2006, and April 1, 2007 (each a "Principal Distribution
Date") all of the principal amount of the Tax Escrow Amount and any
undistributed income in respect thereof in excess of the Minimum
Required Tax Escrow Amount to the CFC Shareholders.
12.7.The Escrow Agent shall distribute all of the principal amount of the
Tax Escrow Amount and any undistributed income in respect thereof to
the CFC Shareholders in the event and at such time as:
12.7.1. CFC shall have delivered to BOKF an unqualified and unlimited
opinion of the law firm of Lentz, Evans, and King or other
mutually acceptable law or accounting firm in form and substance
acceptable to BOKF (provided such acceptance is not unreasonably
withheld, delayed, or denied) that CFC qualified on January 1,
1997 for, and has at all times since properly maintained, its S
corporation status under the Internal Revenue Code; or,
12.7.2. CFC shall have obtained relief under the provisions of Section
1362(f) [Inadvertent Invalid Elections or Terminations] and/or by
seeking application of the applicable automatic relief
provisions, in either case in form and substance acceptable to
BOKF in BOKF's discretion provided only such discretion is
exercised in good faith.
12.8.The Minimum Required Tax Escrow Amount shall be the greater of:
12.8.1. an amount equal to:
12.8.1.1. At all times prior to April 1, 2004, $10,075,000;
12.8.1.2. At all times after April 1, 2004 and prior to April 1,
2005, $6,700,000;
12.8.1.3. At all times after April 1, 2005 and prior to April 1,
2006, $3,525,000;
12.8.1.4. At all times after April 1, 2006 and prior to April 1,
2007, $1,550,000; and,
12.8.1.5. At all times after April 1, 2007, zero;
or,
12.8.2. an amount equal to the tax claimed to be due by the Internal
Revenue Service or other applicable taxing authority with
jurisdiction ("Tax Authority") plus penalty and interest.
▇▇.▇.▇▇ the event BOKF claims a breach of any of the representations and
warranties set forth in Subsection 4.8.4 by virtue of any notice from
a Tax Authority, BOKF shall give notice of the claim (a "Tax Claim"),
including a copy of the relevant notice from the Tax Authority, to the
Shareholders Committee. The notice shall set forth the amount claimed
to be due plus interest and penalties.
12.10. In the event BOKF makes a Tax Claim, the Escrow Agent shall continue
to hold the Minimum Required Tax Escrow Amount until the date on which
the Tax Claim is resolved by (i) the mutual agreement of the
Shareholders Committee and BOKF or (ii) a final adjudication
determining the merits of such Tax Claim, at which time the Escrow
Agent shall pay (a "Tax Claim Payment") the Tax Claim as mutually
agreed or finally adjudicated (an "Allowed Tax Claim").
12.11. The Shareholders Committee shall have the right to defend, at the
cost of the CFC Shareholders, any claim made by the Internal Revenue
Service that is the basis of a Tax Claim by BOKF.
12.12. The Tax Escrow shall terminate at the later of the date on which all
Tax Claims have been resolved by mutual agreement or final
adjudication, and all Allowed Tax Claims shall have been paid to BOKF.
12.13. Upon termination of the Tax Escrow, that part of the Tax Escrow
Amount remaining in the Tax Escrow (if any) shall be delivered to the
CFC Shareholders.
12.14. The rights of the CFC Shareholders to receive payments from the Tax
Escrow shall not be assignable or transferable except by operation of
law or by intestacy or with the approval of BOKF (which approval shall
not be unreasonably withheld, delayed, or denied) and will not be
evidenced by any certificate or other evidence of ownership.
12.15. BOKF shall pay the fees and costs of the Escrow Agent with respect
to the Tax Escrow.
12.16. BOKF shall provide written directions to the Escrow Agent, from time
to time, consistent with the requirements of this Section on which the
Escrow Agent may act to make the distributions provided in this
Section.
13. Shareholders Committee.
13.1.Effective as of and automatically by virtue of the Closing, there
shall be (and hereby is) established a committee (the "Shareholders
Committee") consisting of three individuals ("Representatives"). The
Shareholders Committee shall meet on such date(s) and at such time(s)
as any Representative may request from time to time following the
Closing, on not less than three (3) days' prior written notice to each
Representative. Notices of meetings may but need not specify the
business to be conducted at the meeting. Each meeting of the
Representatives shall be held in the downtown Denver area or such
other location as the Representatives may unanimously agree. Each
Representative shall be entitled to attend each meeting by telephonic
connection where each Representative may hear each other
Representative. The attendance of at least two Representatives at a
meeting duly called shall constitute a quorum for the transaction of
business at the meeting. All actions of the Shareholders Committee may
and shall be made either (i) by majority vote of a quorum at a
meeting, duly called, or (ii) by unanimous written consent of all
Representatives then in office. The resignation, death, disability or
other event precluding a Representative from serving as such shall not
preclude action by the other two Representatives then in office.
▇▇.▇.▇▇▇ Representative may and shall be appointed (and may be removed and
replaced for any reason) from time to time by the persons and entities
who, immediately prior to the Closing, held a majority of all CFC
shares held by members and affiliates of members of the ▇▇▇▇▇▇▇
family. The initial appointee as Representative of the ▇▇▇▇▇▇▇ family
is ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
▇▇.▇.▇▇▇ Representative may and shall be appointed (and may be removed and
replaced for any reason) from time to time by the persons and entities
who, immediately prior to the Closing, held a majority of all CFC
shares held by members and affiliates of members of the ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ families. The initial appointee as
Representative of the ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ families is
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇.
▇▇.▇.▇▇▇ Representative may and shall be appointed (and may be removed and
replaced for any reason) from time to time by the persons and entities
who, immediately prior to the Closing, held a majority of all CFC
Common Stock held by all shareholders who were neither members nor
affiliates of members of any of the Allison, Kintzele, ▇▇▇▇▇▇▇▇▇ or
▇▇▇▇▇▇▇▇ families. The initial appointee as such at-large
Representative is ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ III.
13.5.With one and only one exception, following the Closing, the
Shareholders Committee shall have complete power and authority on
behalf and as agent of all CFC Shareholders (not merely the Principal
Shareholders) to make such decisions and take such actions as the
Shareholders Committee may deem prudent, necessary or advisable from
time to time with respect to matters arising under or related to this
Agreement. By way of example only, the Shareholders Committee shall
have the right on behalf of all CFC shareholders (i) to compromise any
General Claim, (ii) to settle any alleged Credits Loss, (iii) to
administer any Credit assigned to the CFC Shareholders pursuant to
ss.11.11 above, and/or (iv) to amend the Agreement following the
Closing. The one exception to the foregoing is that, absent a
shareholder's specific written consent to the contrary, the
Shareholders Committee shall have no power or authority to commit any
CFC Shareholder to any contract, payment, contribution, expense or
liability beyond such shareholder's then-current interest in the
Escrows.
▇▇.▇.▇▇ connection with his role on the Shareholders Committee, each
Representative shall have liability to the CFC Shareholders only for
his or her gross negligence or intentional misconduct. For the
avoidance of doubt, each Representative is hereby exonerated and
released from and against any liability for his ordinary negligence.
Each Representative shall be reimbursed and indemnified from the
Escrows, subordinate to BOK's interests therein, with respect to all
claims, liabilities and expenses incurred in connection with his role
as Representative for actions and omissions not in violation of the
foregoing standard.
▇▇.▇.▇▇ virtue of the Closing, each CFC shareholder hereby appoints the
Shareholders Committee (as it may be constituted from time to time) as
his/her/its attorney-in-fact, to execute and deliver on the
shareholder's behalf such documents as the Shareholders Committee may
deem expedient to fulfill its duties under this Section 13. Such
appointment is coupled with an interest and therefore shall be
irrevocable for the duration of all three Escrows.
13.8.The Shareholders Committee shall keep BOK apprised of the identities
of the Representatives from time to time. BOK shall be entitled to
rely without further inquiry on any writing signed by two or more
Representatives with respect to any of the foregoing matters.
14. Break-Up Fee. CFC shall pay BOKF or BOKF shall pay CFC a break-up fee as
follows:
▇▇.▇.▇▇ the event BOKF is not in default of any material obligation of BOKF
under this Agreement and the Merger is not consummated because the
Board of Directors of CFC and/or shareholders of CFC approve an
alternative transaction (whether or not submitted by the Board of
Directors to the CFC shareholders for approval and whether or not such
alternative transaction is consummated) then, CFC shall pay BOKF in
United States funds immediately available in Tulsa, Oklahoma, on or
before the fifth Tulsa business day following the date on which the
Board of Directors and/or shareholders of CFC approve such an
alternative proposal, Two Million Dollars ($2,000,000). CFC agrees
that (i) the damages incurred by BOKF in any such event would be
substantial, but (ii) such damages could be difficult to quantify;
accordingly, (iii) such amount constitutes a reasonable estimate of
such damages.
▇▇.▇.▇▇ the event CFC and Bank are not in default of any material
obligation of CFC and/or Bank under this Agreement and the Merger is
not consummated because of a failure of one or more of the conditions
precedent set forth in Sections 8.1, 8.2, or 8.3 or a breach of the
obligation of BOKF to consummate the Merger, BOKF shall pay CFC in
United States funds immediately available in Denver, Colorado, on or
before the fifth Denver business day following the date on which the
Merger failed to close due to the failure of one or more of the
conditions precedent described above, Two Million Dollars
($2,000,000). BOKF agrees that (i) the damages incurred by CFC in any
such event would be substantial, but (ii) such damages could be
difficult to quantify; accordingly, (iii) such amount constitutes a
reasonable estimate of such damages.
15. Miscellaneous Provisions. The following miscellaneous provisions shall
apply to this Agreement:
15.1.All notices or advices required or permitted to be given by or
pursuant to this Agreement, shall be given in writing. All such
notices and advices shall be (i) delivered personally, (ii) delivered
by facsimile (iii) delivered by email (iv) delivered by U.S.
Registered or Certified Mail, Return Receipt Requested mail, or (v)
delivered for overnight delivery by a nationally recognized overnight
courier service. Such notices and advices shall be deemed to have been
given (i) the first business day following the date of delivery if
delivered personally, by facsimile or by email, (ii) on the third
business day following the date of mailing if mailed by U.S.
Registered or Certified Mail, Return Receipt Requested, or (iii) on
the date of receipt if delivered for overnight delivery by a
nationally recognized overnight courier service. All such notices and
advices and all other communications related to this Agreement shall
be given as follows:
BOKF and Merger Corp:
▇▇▇▇▇ ▇▇▇▇▇▇, Senior Vice President
BOK FINANCIAL CORPORATION
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ - Facsimile
▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇.▇▇▇
and
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Secretary and General Counsel to
BOK Financial Corporation
Old City Hall
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ - Facsimile
▇▇▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇
CFC and Bank:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Chairman of the Board
Colorado Funding Company
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(303) 864- 7219 - Facsimile
▇▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇▇.▇▇▇
and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Ducker, Montgomery, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, P.C.
One Civic Center Plaza
Suite 1400, ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ - Facsimile
▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
or to such other address as the party may have furnished to
the other parties in accordance herewith, except that notice
of change of addresses shall be effective only upon receipt.
15.2.This Agreement shall be subject to, and interpreted by and in
accordance with, the laws (excluding conflict of law provisions) of
the State of Oklahoma.
15.3.This Agreement is the entire agreement of the parties respecting the
subject matter hereof. There are no other agreements, representations
or warranties, whether oral or written, respecting the subject matter
hereof.
▇▇.▇.▇▇ course of prior dealings involving any of the parties hereto and
no usage of trade shall be relevant or advisable to interpret,
supplement, explain or vary any of the terms of this Agreement, except
as expressly provided herein.
15.5.This Agreement, and all the provisions of this Agreement, shall be
deemed drafted by all of the parties hereto.
15.6.This Agreement shall not be interpreted strictly for or against any
party, but solely in accordance with the fair meaning of the
provisions hereof to effectuate the purposes and interest of this
Agreement.
15.7.Each party hereto has entered into this Agreement based solely upon
the agreements, representations and warranties expressly set forth
herein and upon his own knowledge and investigation. Neither party has
relied upon any representation or warranty of any other party hereto
except any such representations or warranties as are expressly set
forth herein.
15.8.Each of the persons signing below on behalf of a party hereto
represents and warrants that he or she has full requisite power and
authority to execute and deliver this Agreement on behalf of the
parties for whom he or she is signing and to bind such party to the
terms and conditions of this Agreement.
15.9.This Agreement may be executed in counterparts, each of which shall
be deemed an original. This Agreement shall become effective only when
all of the parties hereto shall have executed the original or
counterpart hereof. This agreement may be executed and delivered by a
facsimile transmission of a counterpart signature page hereof.
15.10. In any action brought by a party hereto to enforce the obligations
of any other party hereto, the prevailing party shall be entitled to
collect from the opposing party to such action such party's reasonable
litigation costs and attorneys fees and expenses (including court
costs, reasonable fees of accountants and experts, and other expenses
incidental to the litigation).
15.11. This Agreement shall be binding upon and shall inure to the benefit
of the parties and their respective successors and assigns.
15.12. This is not a third party beneficiary contract except as otherwise
expressly stated herein. No person or entity other than a party
signing this Agreement shall have any rights under this Agreement
except as otherwise expressly stated herein.
15.13. This Agreement may be amended or modified only in a writing which
specifically references this Agreement.
15.14. This Agreement may not be assigned by any party hereto.
15.15. A party to this Agreement may decide or fail to require full or
timely performance of any obligation arising under this Agreement. The
decision or failure of a party hereto to require full or timely
performance of any obligation arising under this Agreement (whether on
a single occasion or on multiple occasions) shall not be deemed a
waiver of any such obligation. No such decisions or failures shall
give rise to any claim of estoppel, laches, course of dealing,
amendment of this Agreement by course of dealing, or other defense of
any nature to any obligation arising hereunder.
15.16. The repudiation, breach, or failure to perform any obligation
arising under this Agreement by a party after reasonable notice
thereof shall be deemed a repudiation, breach, and failure to perform
all of such party's obligations arising under this Agreement.
15.17. Time is of the essence with respect to each obligation arising under
this Agreement. The failure to timely perform an obligation arising
hereunder shall be deemed a failure to perform the obligation.
15.18. All actions taken and documents delivered at the Closing shall be
deemed to have been taken and executed simultaneously and no action
shall be deemed taken nor any document delivered until all have been
taken and delivered.
15.19. Any information delivered by way of exhibit or schedule in
connection with this agreement shall be deemed delivered for the
purpose of any other exhibit or schedule which calls for such
information.
15.20. In the event of a breach of an obligation to pay under this Merger
Agreement, the breaching party agrees to pay the non-breaching party
interest on the unpaid amount beginning on the date of default at a
per annum rate of U.S. National Prime plus two percent (2%),
compounded annually.
Dated and effective the date first set forth above.
COLORADO FUNDING COMPANY COLORADO STATE BANK AND TRUST
By: ____________________________ By: _____________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
BOK FINANCIAL CORPORATION BOK MERGER CORPORATION
NUMBER ELEVEN
By___________________________ By: _____________________
Title: Title:
Counterpart Signature Page
to
Merger Agreement dated July 8, 2003
PRINCIPAL SHAREHOLDER:
----------------------------------------------
[Print Exact Name of Shareholder of Record]
By: __________________________
Signature
Title: ______________________________________
[if signing on behalf of a trust or other entity]
EXHIBIT 4.3
to
MERGER AGREEMENT
Options
1. CFC is party to a Stock Option Agreement with ▇▇▇▇▇ ▇▇▇▇▇▇ dated June
20, 2003, under which ▇▇. ▇▇▇▇▇▇ has the right to purchase up to 880
shares of authorized and unissued CFC Common Stock. Pursuant to his
Employment Agreement, such option shall be cancelled effective as of
immediately prior to the Closing.
* * * * *
EXHIBIT 4.6.3
to
MERGER AGREEMENT
Material Liabilities
1. Obligations under Settlement Agreement and Release ("Settlement
Agreement") entered into on July, 2001 between Colorado State Bank and
Trust and Brookfield CSSB Inc., a Colorado corporation and Colorado
State Bank Building Ltd., a Colorado limited partnership and signed on
the following dates: July 25, 2001 by Brookfield; July 27, 2001 by
Colorado State Building; and July 30, 2001 by Colorado State Bank.
* * * * *
EXHIBIT 4.7
to
MERGER AGREEMENT
Conduct of Business Exceptions
1. Settlement Agreement, referenced in Exhibit 4.6.3.
* * * * *
EXHIBIT 4.9
to
MERGER AGREEMENT
Material Contracts and Commitments
1. Bank of New York/Global Custody - Trust
2. Metavante trust accounting system.
3. ▇▇▇▇▇ Business Solutions - trust statements.
4. Fast Tax - trust tax processing.
5. ▇▇▇▇▇▇▇▇ Corporation - bank data processing.
6. Lease for offices at ▇▇▇▇ ▇▇▇▇▇▇▇▇.
7. Lease for Cherry Creek branch office.
8. ▇▇▇▇▇▇-American - check printing.
9. Trinity Leasing - lease receipts servicing.
10. Techniflex - services proof equipment.
* * * * *
EXHIBIT 4.10
to
MERGER AGREEMENT
Litigation
1. Case No. 2003-CV-3023, Pierce v. Colorado State Bank & Trust.
* * * * *
EXHIBIT 4.14
to
MERGER AGREEMENT
Encumbrances
1. All of the loans constituting assets of the Bank are pledges as
collateral for the Bank's obligation to repay advances from the Federal
Home Loan Board.
2. The Bank has pledged certain securities as collateral for its deposit
obligations to Colorado state and local municipalities, agencies and
districts, as required by law.
* * * * *
EXHIBIT 4.15
to
MERGER AGREEMENT
Employee Contracts and Benefit Plans
1. Employment Agreement between the Bank and ▇▇▇▇▇ ▇▇▇▇▇▇ dated June
20, 2003.
2. Oral employment agreement between the Bank and ▇▇▇ ▇▇▇▇▇▇▇▇
(alleged by ▇▇. ▇▇▇▇▇▇▇▇).
3. Bank Pension Plan.
4. Bank 401(k) Plan.
5. Bank Executive Bonus Plan
6. Bank Deferred Compensation Plan.
7. Bank Split-Dollar Life Insurance Plan.
8. Bank Service Awards Plan.
9. Bank Sales Incentive Plans: - Trust - Commercial - Consumer
10. Bank Sick Leave / Cash Option Plan.
11. Bank Health / Medical / Disability Plans.
12. Bank Life Insurance Plan.
13. Bank Tuition Reimbursement Plan.
* * * * *
EXHIBIT 4.22
to
MERGER AGREEMENT
Exceptions to Ordinary Course since 1/1/03
1. See minutes of Loan Committee meetings from the following dates, which
reflect loans in excess of thresholds set forth in ss.6.3.1.1:
January 9, 2003
January 16, 2003
January 23, 2003
January 30, 2003
February 6, 2003
February 13, 2003
February 21, 2003
February 26, 2003
▇▇▇▇▇ ▇, ▇▇▇▇
▇▇▇▇▇ 13, 2003
March 20, 2003
March 23, 2003
April 3, 2003
April 10, 2003
April 17, 2003
April 24, 2003
May 1, 2003
May 8, 2003
May 15, 2003
May 19, 2003
May 22, 2003
May 29, 2003
June 5, 2003
June 13, 2003
June 19, 2003
June 26, 2003
July 2, 2003
(Minutes of the Loan Committee were provided to the BOKF due diligence
team, at their on-site review, for the meetings from January 9, 2003
through May 8, 2003.)
2. ▇▇. ▇▇▇▇▇▇▇▇▇'▇ company car was replaced with a new car at a price
of approximately $27,500.
3.
Non-annual or promotional increases
Date Old Salary New Salary
--------------------------------------------------
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ 05/12/03 $94,680 $100,020
▇▇▇▇▇▇, ▇▇▇▇▇▇ 04/14/03 $77,280 $87,300
▇▇▇▇, ▇▇▇▇▇▇▇ 05/12/03 $78,780 $85,020
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ 04/14/03 $76,920 $86,940
▇▇▇▇▇▇, ▇▇▇▇▇ 06/23/03 $115,560 $125,040
-----------------------------------------------------------------------------
2002 Management Bonus Paid in 2003
▇▇▇▇▇, ▇▇▇▇▇ 04/11/03 $21,000 Deferred
▇▇▇▇▇, ▇▇▇▇ 04/11/03 $13,504
▇▇▇▇▇▇, ▇▇▇▇ 04/11/03 $12,485
▇▇▇▇▇▇▇▇, ▇▇▇ 04/11/03 $25,603 Deferred $12,801.50
▇▇▇▇▇▇▇▇▇,J ohn 04/11/03 $42,312 Deferred
▇▇▇▇▇▇, ▇▇▇▇▇ 04/11/03 $14,513 Deferred
Other
Le, ▇▇▇▇▇ 06/11/03 $ 1,500 Record gross tax fee income
▇▇▇▇▇▇▇, ▇▇▇▇▇ 05/21/03 $ 1,000 Client retention
* * * * *
EXHIBIT 6.9
to
MERGER AGREEMENT
Offeree Employees
▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇
Rice
▇▇▇▇▇▇▇▇▇▇
▇▇▇▇
Radcliffe
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
* * * * *
EXHIBIT 10.2
to
MERGER AGREEMENT
Form of Escrow Agreement
ESCROW AGREEMENT
The undersigned have deposited in escrow with Bank of Oklahoma, N.A., as Escrow
Agent (herein called Escrow Agent), that property specifically described in
Exhibit "A" attached hereto and made a part hereof (referred to below as the
subject matter of the Escrow).
The Escrow Agent is hereby authorized and directed to deliver the subject matter
of the escrow only (i) to the undersigned against their joint receipt, or (ii)
to any of the undersigned upon written direction of each other of the
undersigned, or (iii) in accordance with the written instructions of all of the
undersigned.
Where directions or instructions from more than one of the undersigned are
required, such directions or instructions may be given by separate instruments
of similar tenor. Any of the undersigned may act hereunder through an agent or
attorney-in-fact, provided satisfactory written evidence of authority is first
furnished to the Escrow Agent.
The undersigned agree that the following provisions shall control with respect
to the rights, duties, liabilities, privileges and immunities of the Escrow
Agent:
(a) Sections 10, 11 and 12 of the Merger Agreement dated July 8, 2003
are incorporated herein by this reference ("Sections 10, 11 and 12"). The Escrow
Agent is not a party to, and is not bound by, or charged with notice of, any
other portions of such Merger Agreement or any other agreement out of which this
escrow may arise.
(b) The Escrow Agent acts hereunder as a depository only, and is not
responsible or liable in any manner whatever for the sufficiency, correctness,
genuineness or validity of the subject matter of the escrow, or any part
thereof, or for the identity or authority of any person executing or depositing
it.
(c) In the event the Escrow Agent becomes involved in litigation in
connection with the escrow, the undersigned jointly and severally agree to
indemnify and save the Escrow Agent harmless from all loss, cost damage,
expenses and attorney's fees suffered or incurred by the Escrow Agent as a
result thereof. In addition, Escrow Agent is hereby authorized to deposit with
the clerk of the court in which the litigation is pending, any and all
securities, funds or other property held by it pursuant hereto, less its fees,
expenses and advances, and thereupon shall stand fully relieved and discharged
of any further duties. Also, in the event the Escrow Agent is threatened with
litigation by reason of this Agreement, it is hereby authorized to file an
interpleader action in any court of competent jurisdiction and to deposit with
the clerk of such court, any funds, securities, or other property held by it,
less its fees, expenses and advances and thereupon shall stand fully relieved
and discharged of any further duties. The obligations of the undersigned under
this paragraph shall be performable at the Office of the Escrow Agent in Tulsa,
Oklahoma.
(d) The Escrow Agent shall be protected in acting upon any written
notice, request, waiver, consent, certificate, receipt, authorization, power of
attorney or other paper or document which the Escrow Agent in good faith
believes to be genuine and what it purports to be.
(e) The Escrow Agent shall not be liable for anything which it may do
or refrain from doing in connection herewith, except its own gross negligence or
willful misconduct.
(f) The Escrow Agent may advise with legal counsel in the event of any
dispute or question as to the construction of any of the provisions hereof or
its duties hereunder, and it shall incur no liability and shall be fully
protected in acting in accordance with the opinion and instructions of such
counsel.
(g) In the event any disagreement between any of the parties to this
agreement, or between them or either or any of them and any other person,
resulting in adverse claims or demands being made in connection with the subject
matter of the escrow, or in the event that the Escrow Agent, in good faith, be
in doubt as to what action it should take hereunder, the Escrow Agent may, at
its option, refuse to comply with any claims or demands on it, or refuse to take
any other action hereunder, so long as such disagreement continue or such doubt
exist, and in any such event, the Escrow Agent shall not be or become liable in
any way or to any person for its failure or refusal to act, and the Escrow Agent
shall be entitled to continue so to refrain from acting until (i) the rights of
all parties shall have been fully and finally adjudicated by a court of
competent jurisdiction, or (ii) all differences shall have been adjusted and all
doubt resolved by agreement among all of the interested persons, and the Escrow
Agent shall have been notified thereof in writing signed by all such persons.
The rights of the Escrow Agent under this paragraph are cumulative of all other
rights which it may have by law or otherwise.
(h) The Escrow Agent may, in its sole discretion, resign and terminate
its position hereunder at any time following 60 days written notice to the
parties subject to the Escrow Agreement herein. Any such resignation shall
terminate all obligations and duties of the Escrow Agent hereunder. On the
effective date of such resignation, the Escrow Agent shall deliver this Escrow
Agreement together with any and all related instruments or documents to any
successor Escrow Agent agreeable to the parties, subject to this Escrow
Agreement herein.
(i) During the entire term of this Agreement, unless otherwise directed
by the parties hereto, all funds held by the Escrow Agent shall be invested as
provided in Sections 10, 11 and 12. All interest derived from investing funds
held in escrow shall accrue to the Escrow Account and/or be distributed as set
forth in Sections 10, 11 and 12.
(j) This Agreement may be executed in one or more counterparts, any one
of which may be considered an original.
(k) A fee in the amount of $ .00 for the normal services of the Escrow
Agent shall be paid by BOKF upon delivery of the assets to the Escrow Agent.
(l) All notices, requests, claims, demands and other communications
hereunder shall be in writing and shall be given or made (and shall be deemed to
have been duly given or made upon receipt) by delivery in person, by courier
service, by cable, by telecopy, by telegram, by telex or by registered or
certified mail (postage prepaid, return receipt requested) to the respective
parties at the following addresses (or at such other address for a party as
shall be specified in a notice given in accordance with this section).
(a) to : CFC Shareholders Committee
(b) to : BOK Financial Corporation
(c) to Escrow Agent:
Bank of Oklahoma, N.A.
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Executed this day of , 2003.
Witness: Ex-Shareholders of Colorado Funding Company
By: The Shareholders Committee, per ss.13 of
Merger Agreement
By: ___________________________
Representative
By: ___________________________
Representative
Witness:
Taxpayer I.D. No.
By:
Bank of Oklahoma, N.A., as Escrow Agent, hereby acknowledges receipt of the
subject matter of the escrow as described in the foregoing escrow agreement and
hereby accepts same and agrees to perform its duties subject to the terms and
conditions described therein.
Bank of Oklahoma, N.A.
as Escrow Agent
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Vice President & Trust Officer
ESCROW AGREEMENT
EXHIBIT A
Description of escrow subject matter:
ESCROW AGREEMENT
EXHIBIT B
[Names, addresses, and taxpayer identification numbers of CFC Shareholders]: