EXHIBIT "A"
MERGER AGREEMENT
THIS MERGER AGREEMENT (this "Agreement") is made this ___ day of
_________________, 1998, by and between CWB MERGER CORP, a California
Corporation (hereinafter referred to as "CWB Merger Corp"), and PALOMAR SAVINGS
& LOAN ASSOCIATION, a California savings and loan association (hereinafter
referred to as "Palomar"), with reference to the following:
RECITALS
--------
WHEREAS, Palomar is a California savings and loan association duly
organized, validly existing and in good standing under the laws of the State of
California;
WHEREAS, CWB Merger Corp is a California corporation established as a
wholly-owned subsidiary of Community West Bancorp ("Community West") and is duly
organized, validly existing and in good standing under the laws of the State of
California.
WHEREAS, Community West and Palomar have entered into that certain
Agreement and Plan of Reorganization dated __________________, 1998 (the
"Acquisition Agreement") providing for the acquisition of Palomar by Community
West through the merger of Palomar with CWB Merger Corp under the charter and
title of Palomar (the "Merger");
WHEREAS, both CWB Merger Corp and Palomar wish to complete the acquisition
by consummating the Merger; and
WHEREAS, the Board of Directors of each of Community West and Palomar has
approved this Agreement and has authorized its execution and delivery and the
sole shareholder of CWB Merger Corp and the shareholders of Community West and
Palomar have approved this Agreement and the transactions contemplated hereby;
NOW, THEREFORE, in consideration of the mutual covenants, conditions and
agreements set forth herein, the parties hereto hereby agree as follows:
AGREEMENT
---------
SECTION 1. SURVIVING BANK. At the Effective Time of the Merger (as that
---------- ---------------
term is defined in the Acquisition Agreement), CWB Merger Corp and Palomar shall
be merged under the charter of Palomar (the "Surviving Association").
SECTION 2. CLOSING. The closing of the transactions contemplated hereby
---------- -------
(the "Closing") shall take place at the offices of Community West, 0000
Xxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxx 00000, on the date fixed therefor pursuant
to Section 2.1 of the Acquisition Agreement.
SECTION 3. NAME. The name of the Surviving Association shall be "Palomar
---------- ----
Savings & Loan Association."
SECTION 4. BUSINESS; OFFICES. The business of the Surviving Association
---------- ------------------
shall be that of a savings and loan association. This business shall be
conducted by the Surviving Association at its main office located at 000 Xxxx
Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000, and at its legally established
branches and loan production offices.
SECTION 5. CAPITAL. The capital account of the Surviving Association at
---------- -------
the Effective Time of the Merger shall be equal to the combined capital accounts
of Palomar and CWB Merger Corp, adjusted, however, for normal earnings and
expenses up to the Effective Time of the Merger. The authorized capitalization
of the Surviving Association shall be 1,500,000 shares of common stock, par
value $4.00 per share.
SECTION 6. ASSETS; LIABILITIES. All assets of each of Palomar and CWB
---------- --------------------
Merger Corp, as they exist immediately prior to the Effective Time of the
Merger, shall pass to and vest in the Surviving Association without any
conveyance or other transfer. The Surviving Association shall be responsible
for all of the liabilities of every kind and description of each of CWB Merger
Corp and Palomar existing as of the Effective Time of the Merger.
SECTION 7. OUTSTANDING STOCK. At the Effective Time of the Merger, each
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share of the common stock, $4.00 par value, of Palomar (the "Palomar Stock")
issued and outstanding immediately prior to the Effective Time of the Merger,
except for Dissenting Palomar Shares (as defined in Section 1.3 of the
Acquisition Agreement), on and after the Effective Time of the Merger, pursuant
to the Acquisition Agreement and the Agreement and without any further action on
the part of Palomar or the holders of Palomar Stock, automatically shall be
canceled and cease to be an issued and outstanding share of Palomar Stock and
shall be converted into the right to receive that number of newly issued shares
of common stock, no par value, of Community West, equal to the whole and
fractional number resulting from dividing the Palomar Per Share Value by the
Community West Per Share Value; plus cash in lieu of fraction interests as
specified in Section 1.5 of the Agreement. For purposes of this Agreement, the
term Community West Per Share Value shall mean the average of the "bid" and
"ask" of Community West Stock as quoted in the NASDAQ National Market System for
the thirty (30) trading days immediately preceding the Closing (as that term is
defined in Section 2.1 of the Acquisition Agreement). For purposes of this
Agreement, the term Palomar Per Share Value shall mean the product of the
following equation: [2.2] x [a b] where "a"is the Palomar Total Shareholders
Equity as of the last day of the calendar month immediately preceding the
Closing as determined in accordance with generally accepted accounting
principles as in effect in the United States, consistently applied (without
giving effect to the payment of finders'fee occurring after the Closing), and
where "b" is the number of shares of Palomar Stock outstanding immediately prior
to the Closing. Certificates formerly evidencing shares of Palomar Stock shall
be surrendered for exchange to the Transfer Agent (as defined in Section 1.6 of
the Acquisition Agreement) in accordance with Section 1.6 of the Acquisition
Agreement.
SECTION 8. DIVIDEND. Neither CWB Merger Corp nor Palomar shall declare or
--------- --------
pay any dividend to its shareholders between the date of this Agreement and the
Effective Time of the Merger, or dispose of any of its assets in any other
manner except in the normal course of business and for adequate value.
SECTION 9. BOARD OF DIRECTORS; OFFICERS. The persons serving as the Board
--------- ----------------------------
of Directors of Palomar immediately prior to the Effective Time of the Merger at
and after the Effective Time of the Merger shall become and be the Board of
Directors of the Surviving Association, and such persons shall serve as the
directors of the Surviving Association until such time as their successors have
been elected and qualified; provided however, that at the Effective Time of the
Merger, one additional person designated by the Board of Directors of Community
West in its sole and absolute discretion shall be appointed to the Board of
Directors of Palomar. The executive officers of Palomar immediately prior to
the Effective Time of the Merger at and after the Effective Time of the Merger
shall become and be the executive officers of the Surviving Association, and
such persons shall serve until they resign or are replaced or terminated by the
Board of Directors of the Surviving Association.
SECTION 10. ARTICLES OF ASSOCIATION AND BYLAWS OF SURVIVING ASSOCIATION.
----------- ------------------------------------------------------------
The Articles of Incorporation and Bylaws of Palomar as in effect immediately
prior to the Effective Time of the Merger, copies of which are attached hereto
as Exhibits "A" and "B," respectively, shall be the Articles of Incorporation
and Bylaws of the Surviving Association.
SECTION 11. CONDITIONS. The obligations of the parties to proceed with
----------- ----------
the Closing are subject to the satisfaction or waiver at or prior to the Closing
of all of the conditions to the Merger set forth herein and in the Acquisition
Agreement.
SECTION 12. TERMINATION. This Agreement may be terminated at any time
----------- -----------
prior to the Closing:
(a) by the written agreement of CWB Merger Corp, Community West and
Palomar;
(b) by CWB Merger Corp or Palomar if the Closing shall not have been
consummated on or before December 31, 1998, or such other date, if any, upon
which CWB Merger Corp, Community West and Palomar may agree in writing; or
(c) automatically in the event the Acquisition Agreement is terminated
in accordance with its terms.
SECTION 13. APPROVALS. This Agreement has been approved and/or ratified
----------- ---------
and confirmed by the affirmative vote of shareholders of Palomar owning at least
a majority of its capital stock outstanding, and by the sole shareholder of CWB
Merger Corp, by written consent or at a meeting held on the call of the Board of
Directors; and the Merger shall become effective on such date and at such time
as an executed copy of this Agreement, together with all requisite certificates
as required by applicable California law, bearing the endorsement of the
California Commissioner of Financial Institutions (the "Commissioner") as
required by California Financial Code Section 5758 and certified by the
California Secretary of State is filed with the Commissioner (the "Effective
Time of the Merger").
WITNESS the signatures of CWB Merger Corp and Palomar, this ____ day of
___________, 1998, each set by its President and attested to by its Cashier or
Secretary, pursuant to a resolution of their Boards of Directors, acting by a
majority.
CWB MERGER CORP
By:
Xxxxxxxxx X. Xxxxx
President and
Chief Executive Officer
Attest:
---------------------
Xxxxxx Xxxxxx
Secretary
PALOMAR SAVINGS & LOAN ASSOCIATION
By:
Xxxxx X. Xxxx
President and
Chief Executive Officer
Attest:
---------------------
Secretary
EXHIBIT "B-1"
SHAREHOLDER AGREEMENT
THIS SHAREHOLDER AGREEMENT (this "Shareholder Agreement"), is made as
of this ____ day of April, 1998, by and among Community West Bancshares, a
California corporation ("Community West"), and the shareholder of Palomar
Savings & Loan Association, a California state chartered savings and loan
association ("Palomar") whose name is set forth under "Shareholder" on the
signature page hereof (the "Shareholder"). Community West is contemporaneously
herewith entering into agreements with other shareholders of Palomar, which
agreements are identical in all respects hereto, except as to (a) the number of
shares of Palomar's common stock, $4.00 par value (the "Palomar Common Stock")
owned by such other shareholders, and (b) the name and address of the other
shareholders. The Shareholder and such other persons shall hereinafter be
referred to as to the Shareholders and this Agreement and such other agreements
as "Shareholder Agreements." This Shareholder Agreement is made with reference
to the following:
RECITALS
--------
WHEREAS, that certain Agreement and Plan of Reorganization (the
"Agreement"), dated as of April __, 1998, entered into by and among Community
West and Palomar, provides for the acquisition by Community West of one hundred
percent (100%) of the Palomar Common Stock, through the merger (the "Merger") of
Palomar with a merger corporation which shall be a wholly-owned subsidiary of
Community West ("CWB Merger Corp"); and
WHEREAS, as a condition precedent to the obligations of Community West and
Palomar under the Agreement, the Shareholder and all the Shareholders shall have
entered into Shareholder Agreements concurrent with the execution of the
Agreement in accordance with the terms, conditions, and provisions thereof;
NOW, THEREFORE, in order to effectuate the transactions set forth above and
in consideration of the mutual covenants, conditions, agreements,
representations and warranties contained herein and in the Agreement, and
intending to be legally bound, the parties hereto agree as follows:
AGREEMENT
---------
ARTICLE I
COVENANTS OF SHAREHOLDER
------------------------
1.1 VOTE OF SHAREHOLDERS. At the meeting of shareholders of Palomar
-----------------------
referred to in Section 7.1 of the Agreement (the "Meeting"), the Shareholder
shall vote or cause to be voted the shares of Palomar Common Stock indicated as
owned or controlled by such Shareholder on Schedule I attached hereto, and any
other shares of Palomar Common Stock now owned or hereafter acquired or
controlled by such Shareholder, in favor of, and to approve the principal terms
of, the Merger and any other matter contemplated by the Agreement which requires
the approval of the shareholders of Palomar.
1.2 OTHER CONTRACTS. From and after the date of this Shareholder
-----------------
Agreement, the Shareholder shall not enter into or become subject to any
agreement or commitment which would restrict or in any way impair the obligation
of the Shareholder to comply with all the terms of this Shareholder Agreement,
including, without limitation, any other agreement to sell, transfer or
otherwise dispose of the Shareholder shares of Palomar Common Stock.
1.3 UPDATING INFORMATION. In the event that the Shareholder shall
----------------------
discover that any representation or warranty made herein by him/her was false or
misleading in any material respect when made or that any event has occurred such
that any representation or warranty of the Shareholder made herein would, if
made at and as of the time of the occurrence of such event, or thereafter, be
incorrect in any material respect, the Shareholder shall deliver to Community
West a statement specifying that it is delivered pursuant to this Section 1.3
and stating in reasonable detail the facts with respect thereto. Delivery of
any such statement shall not limit any rights which Community West may otherwise
have under this Shareholder Agreement.
1.4 AGREEMENT TO RECOMMEND. The Shareholder agrees that, upon the
-------------------------
execution of this Shareholder Agreement, he/she shall at all times use his/her
best efforts in order to obtain the approval of the shareholders of Palomar of
the principal terms of the Merger and any other matter contemplated by the
Agreement which requires approval of the shareholders of Palomar and shall
recommend the approval of such matters by the shareholders of Palomar at the
Meeting.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
------------------------------
OF SHAREHOLDER
--------------
2.1 REPRESENTATIONS AND WARRANTIES OF DIRECTOR. The Shareholder
----------------------------------------------
represents and warrants to, and agrees with, Community West as follows:
(a) CAPACITY. The Shareholder has all requisite capacity to enter
--------
into and to perform the Shareholder's obligations under this Shareholder
Agreement.
(b) AGREEMENT. The Shareholder has received a copy of the
---------
Agreement and has had the opportunity to review and to consider the terms and
conditions contained in this Shareholder Agreement and in the Agreement and to
confer with his or her counsel concerning said terms and conditions.
(c) BINDING AGREEMENT. This Shareholder Agreement has been duly
------------------
executed and delivered by such Shareholder and constitutes a valid and legally
binding agreement of such Shareholder.
(d) OWNERSHIP OF SHARES, ETC. Schedule I hereto correctly sets
---------------------------
forth the number of shares of Palomar Common Stock owned by the Shareholder or
with respect to which such Shareholder has sole or shared voting power, and the
Shareholder has good and marketable title to all such shares of Palomar Common
Stock free and clear of any liens, security interests, charges or other
encumbrances of any kind or nature except as set forth on Schedule I.
(e) RELATIONSHIP WITH PALOMAR. The Shareholder is a director or
---------------------------
executive officer of Palomar.
(f) NON-CONTRAVENTION. The execution and delivery of this
-----------------
Agreement by the Shareholder does not, and the performance by the Shareholder of
the Shareholder's obligations hereunder and the consummation by the Shareholder
of the transactions contemplated hereby will not, violate or conflict with or
constitute a default under any agreement, instrument, contract or other
obligation or any order, arbitration award, judgment or decree to which the
Shareholder is a party or by which the Shareholder is bound, or any statute,
rule or regulation to which the Shareholder or any of the Shareholder's property
is subject.
ARTICLE III
DISCLOSURE AND TRADING
----------------------
The Shareholder hereby covenants and agrees that upon receipt of the
disclosure of a Strategic Transaction Proposal or a Community West Acquisition
Transaction (as those terms are defined in the Agreement), Shareholder shall
maintain the confidentiality of all non-public information regarding the
Strategic Transaction Proposal or the Community West Acquisition Transaction to
the same extent required by the parties to any such transaction under the terms
of any confidentiality agreement to which those parties are bound and to refrain
from trading in securities of Community West, Palomar, any subsidiary thereof or
any other party to the Strategic Transaction Proposal or Community West
Acquisition Transaction until the earlier of: (i) full public disclosure of such
non-public information has been made and trading in the subject securities would
not be a violation of applicable securities laws, or (ii) the Strategic
Transaction Proposal or Community West Acquisition Transaction has been
terminated or has expired by its terms and disclosure of such non-public
information is permitted under the terms of any agreement regarding the
transaction and trading in the subject securities would not be a violation of
applicable securities laws.
ARTICLE IV
TERMINATION
-----------
TERMINATION. This Shareholder Agreement shall automatically terminate and
-----------
be of no further force or effect if the Agreement is terminated in accordance
with the terms thereof, except as to any breach of this Shareholder Agreement by
the Shareholder occurring prior to the date of such termination. The
representations and warranties set forth in Article II and the covenants and
agreements of Articles III and V hereof shall survive the termination of this
Shareholder Agreement and the Closing.
ARTICLE V
MISCELLANEOUS
-------------
5.1 EXPENSES. Each party hereto shall pay its own costs and expenses
--------
in connection with this Shareholder Agreement and the transactions covered and
contemplated hereby; provided, however, that nothing contained herein shall
preclude the payment of the Shareholder's expenses in connection with the
negotiation and documentation of this Shareholder's Agreement by Palomar.
5.2 NOTICES, ETC. All communications required or permitted to be
-------------
given hereunder shall be in writing and shall be deemed to have been duly given
to the appropriate parties if delivered in person (professional carrier
acceptable) or by United States mail, certified and with return receipt
requested, or otherwise actually delivered:
(a) If to the Shareholder, to the address set forth on Schedule I
attached hereto.
With a copy to:
Palomar Savings & Loan Association
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xx. Xxxxx X. Xxxx
With a copy to: Xxxxx, Xxxxxxxx & Xxxx, LLP
000 Xxxx X Xxxxxx, Xxxxx 0000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxx X. Xxxxxxxxxxx, Esq.
(b) If to Community West
Community West Bancshares
0000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxxxx X. Xxxxx
President and Chief Executive Officer
With a copy to: Horgan, Rosen, Beckham & Coren, LLP
00000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxx, Professional Corporation
FAX: (000) 000-0000
or such other address as any party may have furnished in writing to the other
parties.
5.3 ENTIRE AND SOLE AGREEMENT. The making, execution and delivery of
---------------------------
this Shareholder Agreement by the parties hereto have not been induced by any
representations, statements, warranties or agreements other than those expressed
herein and in the Agreement. This Shareholder Agreement and the Agreement
embody the entire understanding of the parties, and there are no further or
other agreements or understandings, whether written or oral, in effect among the
parties relating to the subject matter hereof, unless expressly referred to by
reference herein.
5.4 SUCCESSORS AND ASSIGNS. Except as otherwise provided in this
------------------------
Shareholder Agreement, all covenants and agreements of the parties contained in
this Shareholder Agreement shall be binding upon and inure to the benefit of the
respective successors and assigns of the parties hereto.
5.5 GOVERNING LAW. This Shareholder Agreement shall be construed and
--------------
enforced in accordance with and governed by the laws of the State of California.
Each party hereto hereby submits to the jurisdiction of the courts of the County
of Santa Xxxxxxx for the purpose of any suit, action or other proceeding arising
out of such party's obligations under or with respect to this Agreement.
5.6 COUNTERPARTS. This Shareholder Agreement may be executed
------------
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
5.7 AMENDMENT, SUPPLEMENT AND WAIVER. This Shareholder Agreement may
----------------------------------
be amended or supplemented, and compliance with the provisions hereof may be
waived only by an instrument in writing signed by the party against which
enforcement of such amendment, supplement or waiver of compliance is sought.
5.8 HEADINGS. The headings in this Shareholder Agreement are for
--------
purposes of reference only and shall not limit or otherwise affect the meaning
hereof.
5.9 SPECIFIC PERFORMANCE. It is recognized and agreed that monetary
---------------------
damages will not compensate the parties hereto for nonperformance by any party.
Accordingly, each party agrees that his or her obligation shall be enforceable
by a court order requiring specific performance.
5.10 SEVERAL OBLIGATIONS. All duties and obligations of the
--------------------
Shareholder executing this Shareholder Agreement shall be several and not joint
with the duties and obligations of other Shareholders executing similar
Shareholder Agreements with Community West.
IN WITNESS WHEREOF, the parties hereto have caused this Shareholder
Agreement to be duly executed as of the date first above written.
SHAREHOLDER COMMUNITY WEST BANCSHARES
_____________________________ By: ________________________________
(Name) Xxxxxxxxx X. Xxxxx
Its: President and Chief Executive Officer
_____________________________
(Signature)
SCHEDULE I
NAME OF SHAREHOLDER: ______________________________
ADDRESS OF SHAREHOLDER: ______________________________
______________________________
______________________________
CERTIFICATE NUMBER NUMBER OF SHARES REGISTERED OWNER(S)
------------------- ------------------ --------------------
DESCRIBE ANY LIENS:
--------------------
EXHIBIT "B-2"
SHAREHOLDER AGREEMENT
THIS SHAREHOLDER AGREEMENT (this "Shareholder Agreement"), is made as
of this ____ day of April, 1998, by and among Palomar Savings & Loan
Association, a California state chartered savings and loan association
("Palomar") and the shareholder of Community West Bancshares, a California
corporation ("Community West") whose name is set forth under "Shareholder" on
the signature page hereof (the "Shareholder"). Palomar is contemporaneously
herewith entering into agreements with other shareholders of Community West,
which agreements are identical in all respects hereto, except as to (a) the
number of shares of Community West's common stock, no par value (the "Community
West Stock") owned by such other shareholders, and (b) the name and address of
the other shareholders. The Shareholder and such other persons shall
hereinafter be referred to as to the Shareholders and this Agreement and such
other agreements as "Shareholder Agreements." This Shareholder Agreement is
made with reference to the following:
RECITALS
--------
WHEREAS, that certain Agreement and Plan of Reorganization (the
"Agreement"), dated as of April __, 1998, entered into by and among Community
West and Palomar, provides for the acquisition by Community West of one hundred
percent (100%) of the Palomar Common Stock, through the merger (the "Merger") of
Palomar with a merger corporation which shall be a wholly-owned subsidiary of
Community West ("CWB Merger Corp"); and
WHEREAS, as a condition precedent to the obligations of Community West and
Palomar under the Agreement, the Shareholder and all the Shareholders shall have
entered into Shareholder Agreements concurrent with the execution of the
Agreement in accordance with the terms, conditions, and provisions thereof;
NOW, THEREFORE, in order to effectuate the transactions set forth above and
in consideration of the mutual covenants, conditions, agreements,
representations and warranties contained herein and in the Agreement, and
intending to be legally bound, the parties hereto agree as follows:
AGREEMENT
---------
ARTICLE I
COVENANTS OF SHAREHOLDER
------------------------
1.1 VOTE OF SHAREHOLDERS. At the meeting of shareholders of Community
----------------------
West referred to in Section 7.1 of the Agreement (the "Meeting"), the
Shareholder shall vote or cause to be voted the shares of Community West Stock
indicated as owned or controlled by such Shareholder on Schedule I attached
hereto, and any other shares of Community West Stock now owned or hereafter
acquired or controlled by such Shareholder, in favor of, and to approve the
principal terms of, the Merger and any other matter contemplated by the
Agreement which requires the approval of the shareholders of Community West.
1.2 OTHER CONTRACTS. From and after the date of this Shareholder
-----------------
Agreement, the Shareholder shall not enter into or become subject to any
agreement or commitment which would restrict or in any way impair the obligation
of the Shareholder to comply with all the terms of this Shareholder Agreement,
including, without limitation, any other agreement to sell, transfer or
otherwise dispose of the Shareholder shares of Community West Stock.
1.3 UPDATING INFORMATION. In the event that the Shareholder shall
----------------------
discover that any representation or warranty made herein by him/her was false or
misleading in any material respect when made or that any event has occurred such
that any representation or warranty of the Shareholder made herein would, if
made at and as of the time of the occurrence of such event, or thereafter, be
incorrect in any material respect, the Shareholder shall deliver to Palomar a
statement specifying that it is delivered pursuant to this Section 1.3 and
stating in reasonable detail the facts with respect thereto. Delivery of any
such statement shall not limit any rights which Palomar may otherwise have under
this Shareholder Agreement.
1.4 AGREEMENT TO RECOMMEND. The Shareholder agrees that, upon the
-------------------------
execution of this Shareholder Agreement, he/she shall at all times use his/her
best efforts in order to obtain the approval of the shareholders of Community
West of the principal terms of the Merger and any other matter contemplated by
the Agreement which requires approval of the shareholders of Community West and
shall recommend the approval of such matters by the shareholders of Community
West at the Meeting.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
------------------------------
OF SHAREHOLDER
--------------
2.1 REPRESENTATIONS AND WARRANTIES OF DIRECTOR. The Shareholder
----------------------------------------------
represents and warrants to, and agrees with, Palomar as follows:
(a) CAPACITY. The Shareholder has all requisite capacity to enter
--------
into and to perform the Shareholder's obligations under this Shareholder
Agreement.
(b) AGREEMENT. The Shareholder has received a copy of the
---------
Agreement and has had the opportunity to review and to consider the terms and
conditions contained in this Shareholder Agreement and in the Agreement and to
confer with his or her counsel concerning said terms and conditions.
(c) BINDING AGREEMENT. This Shareholder Agreement has been duly
------------------
executed and delivered by such Shareholder and constitutes a valid and legally
binding agreement of such Shareholder.
(d) OWNERSHIP OF SHARES, ETC. Schedule I hereto correctly sets
---------------------------
forth the number of shares of Community West Stock owned by the Shareholder or
with respect to which such Shareholder has sole or shared voting power, and the
Shareholder has good and marketable title to all such shares of Community West
Stock free and clear of any liens, security interests, charges or other
encumbrances of any kind or nature except as set forth on Schedule I.
(e) RELATIONSHIP WITH COMMUNITY WEST. The Shareholder is a
-----------------------------------
director or executive officer of Community West.
(f) NON-CONTRAVENTION. The execution and delivery of this
-----------------
Agreement by the Shareholder does not, and the performance by the Shareholder of
the Shareholder's obligations hereunder and the consummation by the Shareholder
of the transactions contemplated hereby will not, violate or conflict with or
constitute a default under any agreement, instrument, contract or other
obligation or any order, arbitration award, judgment or decree to which the
Shareholder is a party or by which the Shareholder is bound, or any statute,
rule or regulation to which the Shareholder or any of the Shareholder's property
is subject.
ARTICLE III
DISCLOSURE AND TRADING
----------------------
The Shareholder hereby covenants and agrees that upon receipt of the
disclosure of a Strategic Transaction Proposal or a Community West Acquisition
Transaction (as those terms are defined in the Agreement), Shareholder shall
maintain the confidentiality of all non-public information regarding the
Strategic Transaction Proposal or the Community West Acquisition Transaction to
the same extent required by the parties to any such transaction under the terms
of any confidentiality agreement to which those parties are bound and to refrain
from trading in securities of Community West, Palomar, any subsidiary thereof or
any other party to the Strategic Transaction Proposal or Community West
Acquisition Transaction until the earlier of: (i) full public disclosure of such
non-public information has been made and trading in the subject securities would
not be a violation of applicable securities laws, or (ii) the Strategic
Transaction Proposal or Community West Acquisition Transaction has been
terminated or has expired by its terms and disclosure of such non-public
information is permitted under the terms of any agreement regarding the
transaction and trading in the subject securities would not be a violation of
applicable securities laws.
ARTICLE IV
TERMINATION
-----------
TERMINATION. This Shareholder Agreement shall automatically terminate and
-----------
be of no further force or effect if the Agreement is terminated in accordance
with the terms thereof, except as to any breach of this Shareholder Agreement by
the Shareholder occurring prior to the date of such termination. The
representations and warranties set forth in Article II and the covenants and
agreements of Articles III and V hereof shall survive the termination of this
Shareholder Agreement and the Closing.
ARTICLE V
MISCELLANEOUS
-------------
5.1 EXPENSES. Each party hereto shall pay its own costs and expenses
--------
in connection with this Shareholder Agreement and the transactions covered and
contemplated hereby; provided, however, that nothing contained herein shall
preclude the payment of the Shareholder's expenses in connection with the
negotiation and documentation of this Shareholder's Agreement by Community West.
5.2 NOTICES, ETC. All communications required or permitted to be
-------------
given hereunder shall be in writing and shall be deemed to have been duly given
to the appropriate parties if delivered in person (professional carrier
acceptable) or by United States mail, certified and with return receipt
requested, or otherwise actually delivered:
(a) If to the Shareholder, to the address set forth on Schedule I
attached hereto.
With a copy to:
Community West Bancshares
0000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxxxx X. Xxxxx
President and Chief Executive Officer
With a copy to: Horgan, Rosen, Beckham & Coren, LLP
00000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxx, Professional Corporation
FAX: (000) 000-0000
(b) If to Palomar
Palomar Savings & Loan Association
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xx. Xxxxx X. Xxxx
With a copy to: Xxxxx, Xxxxxxxx & Xxxx, LLP
000 Xxxx X Xxxxxx, Xxxxx 0000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxx X. Xxxxxxxxxxx, Esq.
or such other address as any party may have furnished in writing to the other
parties.
5.3 ENTIRE AND SOLE AGREEMENT. The making, execution and delivery of
---------------------------
this Shareholder Agreement by the parties hereto have not been induced by any
representations, statements, warranties or agreements other than those expressed
herein and in the Agreement. This Shareholder Agreement and the Agreement
embody the entire understanding of the parties, and there are no further or
other agreements or understandings, whether written or oral, in effect among the
parties relating to the subject matter hereof, unless expressly referred to by
reference herein.
5.4 SUCCESSORS AND ASSIGNS. Except as otherwise provided in this
------------------------
Shareholder Agreement, all covenants and agreements of the parties contained in
this Shareholder Agreement shall be binding upon and inure to the benefit of the
respective successors and assigns of the parties hereto.
5.5 GOVERNING LAW. This Shareholder Agreement shall be construed and
--------------
enforced in accordance with and governed by the laws of the State of California.
Each party hereto hereby submits to the jurisdiction of the courts of the County
of Santa Xxxxxxx for the purpose of any suit, action or other proceeding arising
out of such party's obligations under or with respect to this Agreement.
5.6 COUNTERPARTS. This Shareholder Agreement may be executed
------------
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
5.7 AMENDMENT, SUPPLEMENT AND WAIVER. This Shareholder Agreement may
----------------------------------
be amended or supplemented, and compliance with the provisions hereof may be
waived only by an instrument in writing signed by the party against which
enforcement of such amendment, supplement or waiver of compliance is sought.
5.8 HEADINGS. The headings in this Shareholder Agreement are for
--------
purposes of reference only and shall not limit or otherwise affect the meaning
hereof.
5.9 SPECIFIC PERFORMANCE. It is recognized and agreed that monetary
---------------------
damages will not compensate the parties hereto for nonperformance by any party.
Accordingly, each party agrees that his or her obligation shall be enforceable
by a court order requiring specific performance.
5.10 SEVERAL OBLIGATIONS. All duties and obligations of the
--------------------
Shareholder executing this Shareholder Agreement shall be several and not joint
with the duties and obligations of other Shareholders executing similar
Shareholder Agreements with Palomar.
IN WITNESS WHEREOF, the parties hereto have caused this Shareholder
Agreement to be duly executed as of the date first above written.
SHAREHOLDER PALOMAR SAVINGS & LOAN ASSOCIATION
_____________________________ By: ________________________________
(Name) Xxxxx X. Xxxx
Its: President and Chief Executive Officer
_____________________________
(Signature)
SCHEDULE I
NAME OF DIRECTOR: __________________________
ADDRESS OF DIRECTOR: __________________________
__________________________
__________________________
CERTIFICATE NUMBER NUMBER OF SHARES REGISTERED OWNER(S)
------------------- ------------------ --------------------
DESCRIBE ANY LIENS:
--------------------
EXHIBIT "C"
AFFILIATES LETTER
Community West Bancshares
0000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxxxxxx X. Xxxxx
President and Chief Executive Officer
Ladies and Gentlemen:
I have been advised that I may be an "affiliate," as defined in Rule 145
under the Securities Act of 1933 (the "Act"), of Palomar Savings & Loan
Association ("Palomar") at the time of the merger (the "Merger") of Palomar and
Community West Bancshares pursuant to which Palomar will become a wholly-owned
subsidiary of Community West Bancshares ("Community West"). In the Merger, I
will acquire shares (the "Shares") of the common stock of Community West in
exchange for my shares of common stock of Palomar ("Palomar Stock").
I represent and agree as follows:
1. I have carefully read this letter and, to the extent I felt necessary,
I have discussed it with legal counsel.
2. The Shares are being acquired by me in good faith for investment, for
my own account, and not with a view to distributing, the Shares to others or
otherwise reselling the Shares.
3. I will not make any sale or other disposition of the Shares in
violation of the Act or related rules and regulations. In this connection, I
understand that the issuance of the Shares to me has been or will be registered
under the Act, but that such registration will not cover resales by affiliates.
Accordingly, the Shares must be held by me indefinitely unless: (i) the Shares
have been registered under the Act for sale by me; (ii) a sale of the Shares is
made in conformity with the volume and other applicable limitations of paragraph
(d) of Rule 145; or (iii) another exemption from registration is available.
4. I understand that Community West is under no obligation to register
the sale or other disposition of the Shares by me or on my behalf or to take any
other action to qualify sale of the Shares for any exemption for registration.
5. I also understand that stop transfer instructions will be given to
Community West's transfer agent with respect to the Shares and that there will
be placed on the certificates for the Shares a legend stating in substance:
Community West Bancshares
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED IN A
TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, APPLIES AND MAY ONLY BE SOLD OR OTHERWISE TRANSFERRED IN
COMPLIANCE WITH THE REQUIREMENTS OF RULE 145 OR PURSUANT TO A REGISTRATION
STATEMENT UNDER THAT ACT OR AN EXEMPTION FROM SUCH REGISTRATION.
6. I agree that commencing on the date of the Effective Time of the
Merger (as that term is defined in that certain Agreement and Plan of
Reorganization dated April __, 1998 by and between Palomar and Community West)
and until the time that financial results covering at least 30 days of
post-Merger combined operations of Palomar and Community West have been
published, I will not sell, transfer or otherwise dispose of any interest in the
shares owned by me or any of the Shares that I receive as a result of the Merger
or reduce my interest in or my risk relating to any of such Shares. I
understand that Community West will publish such financial results as soon as
reasonably practicable following the close of the first calendar quarter after
the Merger.
7. I know of no plan (written or oral) pursuant to which holders of
shares of the outstanding Palomar Stock intend to sell or otherwise dispose of
more than 50%, in the aggregate, of their interest in such shares, either by a
sale or other disposition of Palomar Stock before the Merger, by the exercise of
dissenters' rights in the Merger or by a sale or other disposition of the Shares
to be received by them as a result of the Merger.
8. I understand and agree that Community West will rely upon the
foregoing representations and warranties in issuing the Shares to me and I
hereby agree to indemnify Community West and hold it and its officers,
directors, employees, agents and representatives harmless from and against all
liabilities, costs, or expenses (including reasonable attorneys' fees) arising
as a result of a sale or disposition of any of the Shares in violation of any of
the restrictions described above.
9. I understand that so long as I am an "affiliate" of Community West
within the meaning of the Act, any shares of Community West's common stock I may
acquire in the future, separate and apart from the Shares described above,
whether or not such shares are previously registered with the Securities and
Exchange Commission, will also be subject to restriction on resale. Moreover, I
understand that under various circumstances, including the case where I acquire
shares of Community West's common stock which have not previously been
registered with the Securities and Exchange Commission, I will be required to
hold such shares for a minimum of one year before I can sell the shares in the
trading market. I also understand that legends reflecting all restrictions on
Community West common stock which I may acquire will be placed on all
certificates representing such shares, and that stop transfer orders will be
placed with Community West's transfer agent prohibiting transfers by me in
violation of such restrictions.
Very truly yours,
Dated:____________, 1998 _____________________________
Signature
_____________________________
Type or Print Name
EXHIBIT D-1
___________, 1998
Board of Directors
Palomar Savings & Loan Association
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Re: Merger of Community West Bancshares and
--------------------------------------------
Palomar Savings & Loans Association
---------------------------------------
Ladies and Gentlemen:
We have acted as counsel for Community West Bancshares ("Community West")
with respect to the proposed merger with Palomar Savings & Loan Association
("Palomar") pursuant to the Agreement and Plan of Reorganization dated as of
April ___, 1998, by and between Community West and Palomar (the "Agreement").
This opinion is rendered to you pursuant to Section 8.8 of the Agreement. Terms
used in this opinion will have the same meaning as in the Agreement.
In our capacity as counsel for Community West we have examined originals or
certified, conformed, or photostatic copies, the authenticity of which have been
established to our satisfaction, of such agreements, certificates, and other
documents as we have deemed relevant and necessary for the basis for the
opinions expressed in this letter. In all such examinations, we have assumed
the genuineness of all signatures on originals and certified copies and the
conformity to the originals or certified documents of all copies submitted to us
as conformed or photostatic copies. We have not independently verified the
actions described in minutes, certificates, or documents, but we have assumed
they correctly reflect the actions described therein. As to various questions
of fact material to our opinion, to the extent noted herein, we have relied upon
the certificates or representations of Community West or its officers.
While we believe that the opinions set forth below will accurately reflect
the state of relevant law, the opinions involve mixed questions of fact and law
or matters as to which there is no clear precedent. Furthermore, both statutory
law and interpretations thereof are subject to change from
Board of Directors
Palomar Savings & Loan Association
time to time. Accordingly, we cannot assure you that, in the event of any of
the issues dealt with in this opinion as set forth below are litigated, our
position would be sustained by the courts.
On the basis of the foregoing and in reliance thereon, and on such other
matters as we deem relevant in these circumstances, we are of the opinion that,
as of the date hereof:
1. Community West is a corporation duly organized, validly existing and in
good standing under the laws of the State of California, and is entitled to own
or lease its properties and to conduct its business in the places where such
properties are now owned or leased or such business is now conducted. Community
West and it wholly-owned subsidiary, Goleta National Bank ("GNB") have adequate
charter, franchise, permit and license rights to enable them to conduct their
business as presently conducted and the power and authority to enter into and
perform its obligations under the Agreement.
2. The Agreement and the Merger Agreement referred to in the Agreement (the
"Merger Agreement") have been duly authorized and validly executed and delivered
by Community West and CWB Merger Corp and (assuming each has been duly
authorized, executed and delivered by Palomar) constitute the valid and binding
agreements of Community West and CWB Merger Corp except as may be limited by
bankruptcy, insolvency or reorganization laws or other laws pertaining to the
rights of creditors generally.
3. The execution, delivery, and performance of the Agreement and Merger
Agreement and the consummation of the transactions contemplated therein will not
result in a breach or violation of, constitute a material default in, result in
the acceleration of any obligation of, or result in the creation of any lien
under or pursuant to, any term or provision of Community West's Articles of
Incorporation or Bylaws, or any statute, rule or regulation.
4. The execution, delivery, and performance of the Agreement and Merger
Agreement and the consummation of the transactions contemplated therein will not
result in a breach or violation of, constitute a material default in, result in
the acceleration of any obligation of, or result in the creation of any lien
under or pursuant to, any material mortgage, lien, lease, agreement, instrument,
judgement, decree, order, arbitration award, writ or injunction applicable to
Community West and will not violate or conflict with any other material
restriction of any kind or character applicable to Community West, except as to
those agreements reflected in schedules to the Agreement.
Board of Directors
Palomar Savings & Loan Association
5. Community West is authorized by its Articles of Incorporation to issue
20,000,000 shares of Common Stock, no par value, of which as of the date hereof
there were ____________ shares issued and outstanding, all of which are duly
authorized, validly issued and outstanding, fully paid and nonassessable.
Community West has no other authorized or outstanding series or classes of
capital stock or other securities, or outstanding options, warrants or rights to
acquire unissued securities, other than as reflected in schedules to the
Agreement.
6. Community West and CWB Merger Corp have the corporate power to execute
and deliver the Agreement and to consummate the transactions to be performed by
them thereunder; to the best of our knowledge, all corporate and shareholder
action required by law to authorize such execution and delivery of the Agreement
and the Merger Agreement and the consummation of the transactions contemplated
therein by Community West and CWB Merger Corp have been duly and validly taken
by Community West and CWB Merger Corp; and subject to approval by all
appropriate regulatory agencies, upon the filing of an executed copy of the
Merger Agreement with the California Secretary of State and the California
Commissioner of Financial Institutions, the Merger contemplated in the Agreement
will be effective in accordance with the terms of the Agreement.
7. To the best of our knowledge without any independent investigation, there
are no material suits, proceedings, governmental investigations, or labor
disputes pending or threatened in writing against or relating to Community West,
its properties or business, as of this date, except as reflected in schedules to
the Agreement.
8. Although we have necessarily assumed the correctness and completeness of
the statements made by Community West in the Proxy Statement and take no
responsibility therefor, we have no reason to believe that the information
regarding Community West and Community West Stock in the Proxy Statement
including all of the amendments and supplements thereto, as of the date thereof,
and as of the Community West Meeting Date, contained any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein which was necessary to make the statements therein not materially
misleading and, to the best of our knowledge, between the Community West Mailing
Date and the date hereof, we have no reason to believe that any event or
occurrence or fact arose or came to light which should have been, but was not,
appropriately disclosed (except we express no opinion or belief as to financial
statements or other statistical data or as to any other information supplied by
Community West).
Board of Directors
Palomar Savings & Loan Association
The foregoing opinions are further limited by and subject to the following:
9. This opinion relates only to matters of federal law and to the laws
of the State of California, without reference to the conflict of laws, and we do
not purport to express any opinions on the laws of any other jurisdiction.
10. This opinion letter is governed by, and shall be interpreted in
accordance with, the Legal Opinion Accord (the "Accord") of the ABA Section of
Business Law (1991). As a consequence, it is subject to a number of
qualifications, exceptions, definitions, limitations on coverage and other
limitations, all as more particularly described in the Accord, and this opinion
letter should be read in conjunction therewith. The law covered by the opinions
expressed herein is limited to the federal law of the United States and the law
of the State of California. This opinion letter is also governed by, and shall
be interpreted in accordance with, the "California Provisions" and the
"California Generic Exception" as defined in the Business Law Section of the
---------------------------
California State Bar Report on the Third-Party Legal Opinion Report of the ABA
--------------------------------------------------------------------------------
Section of Business Law (dated May 1992), and is therefore subject to a number
------------------------------------------
of additional qualifications, exceptions, and understandings all as more
particularly described in the California Provisions and California Generic
Exception, and this opinion letter should also be read in conjunction therewith.
We assume no obligation to advise you of any changes in the foregoing
subsequent to the delivery of this opinion. This opinion has been prepared
solely for your use in connection with the consummation of the transactions
contemplated by the Agreement and shall not be quoted in whole or in part or
otherwise be referred to, nor be filed with or furnished to any person or entity
without the prior written consent of this firm.
Respectfully submitted,
HORGAN, ROSEN, BECKHAM & COREN, L.L.P.
EXHIBIT "D-2"
__________, 1998
Board of Directors
Community West Bancshares
0000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Re: Merger of Community West Bancshares and
--------------------------------------------
Palomar Savings & Loans Association
---------------------------------------
Ladies and Gentlemen:
We have acted as counsel for Palomar Savings & Loan Association ("Palomar")
with respect to the proposed merger with Community West Bancshares ("Community
West") pursuant to the Agreement and Plan of Reorganization dated as of April
___, 1998, by and between Community West and Palomar (the "Agreement"). This
opinion is rendered to you pursuant to Section 9.7 of the Agreement. Terms used
in this opinion will have the same meaning as in the Agreement.
In our capacity as counsel for Palomar we have examined originals or
certified, conformed, or photostatic copies, the authenticity of which have been
established to our satisfaction, of such agreements, certificates, and other
documents as we have deemed relevant and necessary for the basis for the
opinions expressed in this letter. In all such examinations, we have assumed
the genuineness of all signatures on originals and certified copies and the
conformity to the originals or certified documents of all copies submitted to us
as conformed or photostatic copies. We have not independently verified the
actions described in minutes, certificates, or documents, but we have assumed
they correctly reflect the actions described therein. As to various questions
of fact material to our opinion, to the extent noted herein, we have relied upon
the certificates or representations of Palomar or its officers.
While we believe that the opinions set forth below will accurately reflect
the state of relevant law, the opinions involve mixed questions of fact and law
or matters as to which there is no clear precedent. Furthermore, both statutory
law and interpretations thereof are subject to change from
Board of Directors
Community West Bancshares
time to time. Accordingly, we cannot assure you that, in the event of any of
the issues dealt with in this opinion as set forth below are litigated, our
position would be sustained by the courts.
On the basis of the foregoing and in reliance thereon, and on such other
matters as we deem relevant in these circumstances, we are of the opinion that,
as of the date hereof:
1. Palomar is a corporation duly organized, validly existing and in good
standing under the laws of the State of California, and is entitled to own or
lease its properties and to conduct its business in the places where such
properties are now owned or leased or such business is now conducted. Palomar
has adequate charter, franchise, permit and license rights to enable it to
conduct its business as presently conducted and the power and authority to enter
into and perform its obligations under the Agreement. The nature of Palomar's
operations and the business transacted by it as of the date hereof make
licensing and qualification in any other state or jurisdiction other than
California unnecessary.
2. The Agreement and the Merger Agreement referred to in the Agreement (the
"Merger Agreement") have been duly authorized and validly executed and delivered
by Palomar and (assuming each has been duly authorized, executed and delivered
by Community West) constitute the valid and binding agreements of Palomar except
as may be limited by bankruptcy, insolvency or reorganization laws or other laws
pertaining to the rights of creditors generally.
3. The execution, delivery, and performance of the Agreement and Merger
Agreement and the consummation of the transactions contemplated therein will not
result in a breach or violation of, constitute a material default in, result in
the acceleration of any obligation of, or result in the creation of any lien
under or pursuant to, any term or provision of Palomar's Articles of
Incorporation or Bylaws, or any statute, rule or regulation.
4. The execution, delivery, and performance of the Agreement and Merger
Agreement and the consummation of the transactions contemplated therein will not
result in a breach or violation of, constitute a material default in, result in
the acceleration of any obligation of, or result in the creation of any lien
under or pursuant to, any material mortgage, lien, lease, agreement, instrument,
judgement, decree, order, arbitration award, writ or injunction applicable to
Palomar and will not violate or conflict with any other material restriction of
any kind or character applicable to Palomar, except as to those agreements
reflected in schedules to the Agreement.
Board of Directors
Community West Bancshares
5. Palomar is authorized by its Articles of Incorporation to issue
20,000,000 shares of Common Stock, no par value, of which as of the date hereof
there were ____________ shares issued and outstanding, all of which are duly
authorized, validly issued and outstanding, fully paid and nonassessable.
Palomar has no other authorized or outstanding series or classes of capital
stock or other securities, or outstanding options, warrants or rights to acquire
unissued securities, other than as reflected in schedules to the Agreement.
6. Palomar has the corporate power to execute and deliver the Agreement and
to consummate the transactions to be performed by it thereunder; to the best of
our knowledge, all corporate and shareholder action required by law to authorize
such execution and delivery of the Agreement and the Merger Agreement and the
consummation of the transactions contemplated therein by Palomar have been duly
and validly taken by Palomar and subject to approval by all appropriate
regulatory agencies, upon the filing of an executed copy of the Merger Agreement
with the California Secretary of State and the California Commissioner of
Financial Institutions, the Merger contemplated in the Agreement will be
effective in accordance with the terms of the Agreement.
7. To the best of our knowledge without any independent investigation, there
are no material suits, proceedings, governmental investigations, or labor
disputes pending or threatened in writing against or relating to Palomar, its
properties or business, as of this date, except as reflected in schedules to the
Agreement.
8. Although we have necessarily assumed the correctness and completeness of
the statements made by Palomar in the Proxy Statement and take no responsibility
therefor, we have no reason to believe that the information regarding Palomar
and Palomar Stock in the Proxy Statement including all of the amendments and
supplements thereto, as of the date thereof, and as of the Palomar Meeting Date,
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein which was necessary to make the
statements therein not materially misleading and, to the best of our knowledge,
between the Palomar Mailing Date and the date hereof, we have no reason to
believe that any event or occurrence or fact arose or came to light which should
have been, but was not, appropriately disclosed (except we express no opinion or
belief as to financial statements or other statistical data or as to any other
information supplied by Palomar).
Board of Directors
Community West Bancshares
The foregoing opinions are further limited by and subject to the following:
11. This opinion relates only to matters of federal law and to the laws
of the State of California, without reference to the conflict of laws, and we do
not purport to express any opinions on the laws of any other jurisdiction.
12. This opinion letter is governed by, and shall be interpreted in
accordance with, the Legal Opinion Accord (the "Accord") of the ABA Section of
Business Law (1991). As a consequence, it is subject to a number of
qualifications, exceptions, definitions, limitations on coverage and other
limitations, all as more particularly described in the Accord, and this opinion
letter should be read in conjunction therewith. The law covered by the opinions
expressed herein is limited to the federal law of the United States and the law
of the State of California. This opinion letter is also governed by, and shall
be interpreted in accordance with, the "California Provisions" and the
"California Generic Exception" as defined in the Business Law Section of the
---------------------------
California State Bar Report on the Third-Party Legal Opinion Report of the ABA
--------------------------------------------------------------------------------
Section of Business Law (dated May 1992), and is therefore subject to a number
------------------------------------------
of additional qualifications, exceptions, and understandings all as more
particularly described in the California Provisions and California Generic
Exception, and this opinion letter should also be read in conjunction therewith.
We assume no obligation to advise you of any changes in the foregoing
subsequent to the delivery of this opinion. This opinion has been prepared
solely for your use in connection with the consummation of the transactions
contemplated by the Agreement and shall not be quoted in whole or in part or
otherwise be referred to, nor be filed with or furnished to any person or entity
without the prior written consent of this firm.
Respectfully submitted,
XXXXX, XXXXXXXX & XXXX, LLP
EXHIBIT "2.2"
MERGER AGREEMENT
THIS MERGER AGREEMENT (this "Agreement") is made this 1st day of December,
1998, by and between CWB MERGER CORP, a California Corporation (hereinafter
referred to as "CWB Merger Corp"), and PALOMAR SAVINGS & LOAN ASSOCIATION, a
California savings and loan association (hereinafter referred to as "Palomar"),
with reference to the following:
RECITALS
--------
WHEREAS, Palomar is a California savings and loan association duly
organized, validly existing and in good standing under the laws of the State of
California;
WHEREAS, CWB Merger Corp is a California corporation established as a
wholly-owned subsidiary of Community West Bancshares ("Community West") and is
duly organized, validly existing and in good standing under the laws of the
State of California.
WHEREAS, Community West and Palomar have entered into that certain
Agreement and Plan of Reorganization dated April 23, 1998 (the "Acquisition
Agreement") providing for the acquisition of Palomar by Community West through
the merger of Palomar with CWB Merger Corp under the charter and title of
Palomar (the "Merger");
WHEREAS, both CWB Merger Corp and Palomar wish to complete the acquisition
by consummating the Merger; and
WHEREAS, the Board of Directors of each of Community West and Palomar has
approved this Agreement and has authorized its execution and delivery and the
sole shareholder of CWB Merger Corp and the shareholders of Community West and
Palomar have approved this Agreement and the transactions contemplated hereby;
NOW, THEREFORE, in consideration of the mutual covenants, conditions and
agreements set forth herein, the parties hereto hereby agree as follows:
AGREEMENT
---------
SECTION 1. SURVIVING BANK. At the Effective Time of the Merger (as that
---------- ---------------
term is defined in the Acquisition Agreement), CWB Merger Corp and Palomar shall
be merged under the charter of Palomar (the "Surviving Association").
SECTION 2. CLOSING. The closing of the transactions contemplated hereby
---------- -------
(the "Closing") shall take place at the offices of Community West, 0000
Xxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxx 00000, on the date fixed therefor pursuant
to Section 2.1 of the Acquisition Agreement.
SECTION 3. NAME. The name of the Surviving Association shall be "Palomar
---------- ----
Savings & Loan Association."
SECTION 4. BUSINESS; OFFICES. The business of the Surviving Association
---------- ------------------
shall be that of a savings and loan association. This business shall be
conducted by the Surviving Association at its main office located at 000 Xxxx
Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000, and at its legally established
branches and loan production offices.
SECTION 5. CAPITAL. The capital account of the Surviving Association at
---------- -------
the Effective Time of the Merger shall be equal to the combined capital accounts
of Palomar and CWB Merger Corp, adjusted, however, for normal earnings and
expenses up to the Effective Time of the Merger. The authorized capitalization
of the Surviving Association shall be 1,500,000 shares of common stock, par
value $4.00 per share.
SECTION 6. ASSETS; LIABILITIES. All assets of each of Palomar and CWB
---------- --------------------
Merger Corp, as they exist immediately prior to the Effective Time of the
Merger, shall pass to and vest in the Surviving Association without any
conveyance or other transfer. The Surviving Association shall be responsible
for all of the liabilities of every kind and description of each of CWB Merger
Corp and Palomar existing as of the Effective Time of the Merger.
SECTION 7. OUTSTANDING STOCK. At the Effective Time of the Merger, each
---------- ------------------
share of the common stock, $4.00 par value, of Palomar (the "Palomar Stock")
issued and outstanding immediately prior to the Effective Time of the Merger,
except for Dissenting Palomar Shares (as defined in Section 1.3 of the
Acquisition Agreement), on and after the Effective Time of the Merger, pursuant
to the Acquisition Agreement and the Agreement and without any further action on
the part of Palomar or the holders of Palomar Stock, automatically shall be
canceled and cease to be an issued and outstanding share of Palomar Stock and
shall be converted into the right to receive that number of newly issued shares
of common stock, no par value, of Community West, equal to the whole and
fractional number resulting from dividing the Palomar Per Share Value by the
Community West Per Share Value; plus cash in lieu of fraction interests as
specified in Section 1.5 of the Acquisition Agreement. For purposes of this
Agreement, the term Community West Per Share Value shall mean the average of the
"bid" and "ask" of Community West Stock as quoted in the NASDAQ National Market
System for the thirty (30) trading days immediately preceding the Closing (as
that term is defined in Section 2.1 of the Acquisition Agreement). For purposes
of this Agreement, the term Palomar Per Share Value shall mean the product of
the following equation: [2.2] x [a b] where "a"is the Palomar Total
Shareholders Equity as of the last day of the calendar month immediately
preceding the Closing as determined in accordance with generally accepted
accounting principles as in effect in the United States, consistently applied
(without giving effect to the payment of finders' fee occurring after the
Closing), and where "b" is the number of shares of Palomar Stock outstanding
immediately prior to the Closing. Certificates formerly evidencing shares of
Palomar Stock shall be surrendered for exchange to the Transfer Agent (as
defined in Section 1.6 of the Acquisition Agreement) in accordance with Section
1.6 of the Acquisition Agreement.
Each share of the common stock, no par value, of CWB Merger Corp issued and
outstanding immediately prior to the Effective Time of the Merger, on and after
the Effective Time of the Merger, shall be converted into one share of common
stock of the Surviving Association.
SECTION 8. DIVIDEND. Neither CWB Merger Corp nor Palomar shall declare or
--------- --------
pay any dividend to its shareholders between the date of this Agreement and the
Effective Time of the Merger, or dispose of any of its assets in any other
manner except in the normal course of business and for adequate value.
SECTION 9. BOARD OF DIRECTORS; OFFICERS. The persons serving as the Board
--------- ----------------------------
of Directors of Palomar immediately prior to the Effective Time of the Merger at
and after the Effective Time of the Merger shall become and be the Board of
Directors of the Surviving Association, and such persons shall serve as the
directors of the Surviving Association until such time as their successors have
been elected and qualified; provided however, that at the Effective Time of the
Merger, one additional person designated by the Board of Directors of Community
West in its sole and absolute discretion shall be appointed to the Board of
Directors of Palomar. The executive officers of Palomar immediately prior to
the Effective Time of the Merger at and after the Effective Time of the Merger
shall become and be the executive officers of the Surviving Association, and
such persons shall serve until they resign or are replaced or terminated by the
Board of Directors of the Surviving Association.
SECTION 10. ARTICLES OF ASSOCIATION AND BYLAWS OF SURVIVING ASSOCIATION.
----------- ------------------------------------------------------------
The Articles of Incorporation and Bylaws of Palomar as in effect immediately
prior to the Effective Time of the Merger, copies of which are attached hereto
as Exhibits "A" and "B," respectively, shall be the Articles of Incorporation
and Bylaws of the Surviving Association.
SECTION 11. CONDITIONS. The obligations of the parties to proceed with
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the Closing are subject to the satisfaction or waiver at or prior to the Closing
of all of the conditions to the Merger set forth herein and in the Acquisition
Agreement.
SECTION 12. TERMINATION. This Agreement may be terminated at any time
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prior to the Closing:
(a) by the written agreement of CWB Merger Corp, Community West and
Palomar;
(b) by CWB Merger Corp or Palomar if the Closing shall not have been
consummated on or before December 31, 1998, or such other date, if any, upon
which CWB Merger Corp, Community West and Palomar may agree in writing; or
(c) automatically in the event the Acquisition Agreement is terminated
in accordance with its terms.
SECTION 13. APPROVALS. This Agreement has been approved and/or ratified
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and confirmed by the affirmative vote of shareholders of Palomar owning at least
a majority of its capital stock outstanding, and by the sole shareholder of CWB
Merger Corp, by written consent or at a meeting held on the call of the Board of
Directors; and the Merger shall become effective on such date and at such time
as an executed copy of this Agreement, together with all requisite certificates
as required by applicable California law, bearing the endorsement of the
California Commissioner of Financial Institutions (the "Commissioner") as
required by California Financial Code Section 5758 is filed with the California
Secretary of State (the "Effective Time of the Merger").
WITNESS the signatures of CWB Merger Corp and Palomar, this 1st day of
December, 1998, each set by its President and attested to by its Cashier or
Secretary, pursuant to a resolution of their Boards of Directors, acting by a
majority.
CWB MERGER CORP
By: /s/ Xxxxxxxxx X. Xxxxx
---------------------------
Xxxxxxxxx X. Xxxxx
President and
Chief Executive Officer
/s/ Xxxxxx Xxxxxx
--------------------
Xxxxxx Xxxxxx
Secretary
PALOMAR SAVINGS & LOAN ASSOCIATION
By: /s/ Xxxxx X. Xxxx
----------------------
Xxxxx X. Xxxx
President and
Chief Executive Officer
/s/ Xxxxxx X. Xxxxxxx
-------------------------
Xxxxxx X. Xxxxxxx
Secretary
