Exhibit 2
APRIL 20, 2006
CASCADE BANCORP
0000 XX XXXX XXXXXX
P.O. BOX 369
BEND, OREGON 97709
RE: MERGER
This Investor Representation Letter (the "Letter") is rendered and delivered in
accordance with Section 2.4(a) of that certain Agreement of Merger, dated as of
December 27, 2005 (as amended, modified or supplemented in accordance with the
terms thereof, the "Merger Agreement"), by and among F&M Holding Company, an
Idaho corporation and a registered bank holding company, Cascade Bancorp, an
Oregon corporation and a registered bank holding company (the "Corporation"),
F&M Acquisition Corporation (formerly known as Igloo Acquisition Corporation),
an Oregon corporation and a wholly-owned subsidiary of the Corporation, and
Xxxxx X. Xxxxxx. Capitalized terms used in but not otherwise defined in this
Letter shall have the meanings given to such terms in the Merger Agreement.
In connection with the transactions contemplated by the Merger Agreement and
specifically in connection with the issuance of the Merger Shares (the
"Securities") thereunder, the undersigned (the "Investor") hereby represents,
warrants and acknowledges as follows:
1. The Securities are being issued in connection with the transactions
contemplated by the Merger Agreement and the issuance of the Securities is
subject to all of the terms and conditions set forth in the Merger Agreement;
2. Investor is resident in the jurisdiction set forth below on the signature
page hereof;
3. The Securities have not been registered under the Securities Act of 1933,
as amended (the "Securities Act") or any state securities laws, the Securities
are being issued under an exemption from registration under the Securities Act
for offers and sales of securities to accredited investors, the Securities are
deemed to be "restricted securities" under the Securities Act and, accordingly,
the Securities may not be transferred without subsequent registration or the
availability of an exemption from registration under the Securities Act;
4. Investor is an accredited investor, as such term is defined in Appendix A
attached hereto, and is acquiring the Securities for Investor's own account and
not with a view to any resale, distribution or other disposition of the
Securities in violation of the Securities Act;
5. As a result on the restrictions on transferability set forth above, the
Securities are not readily transferable and, accordingly, may have to be held
for an indefinite period of time;
6. Except as contemplated or permitted by the Merger Agreement or the
Shareholders Agreement, dated as of December 27, 2005, among the Corporation,
Xxxxx X. Xxxxxx and the persons listed on Schedule A thereto ("the "Shareholders
Agreement"), Investor is investing in
the Securities for investment for his or its own account and not with a view to,
or offer or sale in connection with, any distribution thereof;
7. Investor has such knowledge and experience in financial and business
matters that Investor is capable of evaluating the merits and risks of an
investment in the Corporation and the Securities and is able to bear the
economic risk of loss of Investor's investment in the Securities;
8. Investor further represents and acknowledges that Investor has been solely
responsible for Investor's own "due diligence" investigation of the Corporation,
the terms and conditions of the Merger and Merger Agreement and the transactions
contemplated thereby, including the issuance of the Securities, for Investor's
own analysis of the merits and risks of the investment in the Securities, and
for Investor's own analysis of the fairness and desirability of the terms of
such investment, provided, however, that nothing in this representation and
acknowledgment shall affect any of Investor's rights under the Merger Agreement
or the Shareholders Agreement;
9. Investor has not entered into the Merger Agreement and is not delivering
this Letter as a result of any general solicitation or general advertising (as
those terms are used in Regulation D under the Securities Act), including
advertisements, articles, notices or other communications published in any
newspaper, magazine or similar media or broadcast over radio or television, or
any seminar or meeting whose attendees have been invited by general solicitation
or general advertising;
10. Investor will not offer, sell or otherwise transfer the Securities unless
such securities are registered under the Securities Act or an exemption from
such registration requirements is available and understands that upon the
original issuance thereof, and until such time as the same is no longer required
under applicable requirements of the Securities Act as evidenced by a legal
opinion of counsel to the Investor, any certificates representing the
Securities, and all securities issued in exchange therefor or in substitution
thereof will bear and be subject to the terms of the following legend:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED WITH
THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AS EVIDENCED BY A
LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
CORPORATION";
11. No securities commission or similar regulatory authority has reviewed or
passed on the merits of the Securities and any representation to the contrary is
a criminal offense;
12. If a corporation, partnership, unincorporated association or other
entity, Investor has the legal capacity to enter into and be bound by this
Letter and all necessary approvals of directors, shareholders or otherwise have
been given and obtained;
13. If an individual, Investor is of the full age of majority and is legally
competent to execute this Letter and take all action pursuant hereto;
14. If required by applicable securities legislation, regulations, rules,
policies or orders or by any securities commission, stock exchange or other
regulatory authority, Investor will execute, deliver, file and otherwise assist
the Corporation in filing, such reports, undertakings and other documents with
respect to the issuance of the Securities;
15. The covenants, representations and warranties contained herein will
survive the Closing.
Dated effective the date first set forth above.
The Corporation Investor
Cascade Bancorp
By /s/ Xxxxxxxx X. Xxxx /s/ Xxxxx X. Xxxxxx
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Xxxxxxxx X. Xxxx, President Xxxxx X. Xxxxxx
APPENDIX A
DEFINITION OF U.S. ACCREDITED INVESTOR
"Accredited Investor" means any person which comes within any of the following
categories:
(1) Any bank as defined in Section 3(a)(2) of the United States Securities Act
of 1933 (the "U.S. Securities Act") or any savings and loan association or
other institution as defined in Section 3(a)(5)(A) of the U.S. Securities
Act whether acting in its individual or fiduciary capacity; any broker
dealer registered pursuant to Section 15 of the U.S. Securities Exchange
Act of 1934 or any insurance company as defined in Section 2(13) of the
U.S. Securities Act; any investment company registered under the Investment
Company Act of 1940 or a business development company as defined in Section
2(a)(48) of that Act; any Small Business Investment Company licensed by the
U.S. Small Business Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958; any plan established and maintained by a
state, its political subdivisions, or any agency or instrumentality of a
state or its political subdivisions, for the benefit of its employees if
such plan has total assets in excess of US$5,000,000; any employee benefit
plan within the meaning of the Employee Retirement Income Security Act of
1974 if the investment decision is made by a plan fiduciary, as defined in
Section 3(21) of such Act, which is either a bank, savings and loan
association, insurance company, or registered investment adviser, or if the
employee benefit plan has total assets in excess of US$5,000,000, or, if a
self-directed plan, with investment decisions made solely by persons that
are U.S. Accredited Investors;
(2) Any private business development company as defined in Section 202(a)(22)
of the Investment Advisers Act of 1940;
(3) Any organization described in Section 501(c)(3) of the Internal Revenue
Code, corporation, Massachusetts or similar business trust, or partnership,
not formed for the specific purpose of acquiring the securities offered,
with total assets in excess of US$5,000,000;
(4) Any natural person whose individual net worth, or joint net worth with that
person's spouse, at the time of his purchase exceeds US$1,000,000;
(5) Any natural person who had an individual income in excess of US$200,000 in
each of the two most recent years or joint income with that person's spouse
in excess of US$300,000 in each of those years and has a reasonable
expectation of reaching the same income level in the current year;
(6) Any trust with total assets in excess of US$5,000,000, not formed for the
specific purpose of acquiring the securities offered, whose purchase is
directed by a sophisticated person (being defined as a person who has such
knowledge and experience in financial and business matters that he or she
is capable of evaluating the merits and risks of the prospective
investment); or
(7) Any entity in which all of the equity owners are U.S. Accredited Investors.
