EXHIBIT 10.1
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VAIL BANKS, INC.
AND
CEDAREDGE FINANCIAL SERVICES, INC.
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STOCK PURCHASE AGREEMENT
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JULY 3, 1997
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TABLE OF CONTENTS
ARTICLE I STOCK PURCHASE.................................................. 1
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1.1 Stock Purchase.................................................. 1
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1.2 Agreements with Xxxxxxx X. and Xxxxx X. Xxxxx................... 1
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ARTICLE II CLOSING........................................................ 2
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ARTICLE III OTHER AGREEMENTS.............................................. 2
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3.1 Brokers; Finders' Fees; Commissions............................. 2
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3.2 Access, Information and Documents............................... 2
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3.3 Confidentiality................................................. 3
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3.4 Full Cooperation................................................ 3
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3.5 Expenses........................................................ 3
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3.6 Approvals and Consents.......................................... 3
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3.7 Publicity....................................................... 4
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3.8 Preservation of Goodwill........................................ 4
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3.9 Agreement as to Efforts to Consummate........................... 4
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3.10 Dividends....................................................... 4
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ARTICLE IV REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY....... 4
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4.1 Corporate and Financial......................................... 5
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4.1.1 Authority................................................ 5
4.1.2 Corporate Status......................................... 5
4.1.3 Capital Structure........................................ 5
4.1.4 Corporate Records........................................ 7
4.1.5 Tax Returns, Taxes....................................... 7
4.1.6 Financial Statements..................................... 8
4.1.7 Regulatory Reports....................................... 9
4.1.8 Accounts................................................. 9
4.1.9 Notes and Obligations.................................... 9
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4.1.10 Liabilities.............................................. 10
4.1.11 Absence of Changes....................................... 10
4.1.12 Litigation and Proceedings............................... 12
4.1.13 Cash Items............................................... 12
4.2 Business Operations............................................. 12
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4.2.1 Customers................................................ 12
4.2.2 Permits; Compliance with Law............................. 12
4.2.3 Environmental............................................ 13
4.2.4 Insurance................................................ 13
4.3 Properties and Assets........................................... 14
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4.3.1 Contracts and Commitments................................ 14
4.3.2 Licenses; Intellectual Property.......................... 14
4.3.3 Personal Property........................................ 14
4.3.4 Leases................................................... 15
4.3.5 Real Property............................................ 15
4.4 Employees and Benefits.......................................... 16
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4.4.1 Compensation Structure................................... 16
4.4.2 Directors or Officers of Other Corporations.............. 16
4.4.3 Employee Benefits........................................ 16
4.4.4 Labor-Related Matters.................................... 18
4.4.5 Related-Party Transactions............................... 18
4.5 Other Matters................................................... 18
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4.5.1 Approvals, Consents and Filings.......................... 19
4.5.2 Default.................................................. 19
4.5.3 Western.................................................. 19
4.5.4 Representations and Warranties........................... 19
ARTICLE V REPRESENTATIONS, WARRANTIES AND COVENANTS OF HOLDERS............ 19
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ARTICLE VI CONDUCT OF BUSINESS OF THE COMPANY OR WESTERN PENDING CLOSING.. 20
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ARTICLE VII REPRESENTATIONS AND WARRANTIES OF VAIL BANKS.................. 22
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7.1 Good Standing Vail Banks........................................ 22
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7.2 Authority....................................................... 22
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7.3 Default......................................................... 22
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7.4 Applications.................................................... 23
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7.5 Documents Received from Company and Western..................... 23
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7.6 Representations and Warranties.................................. 23
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ARTICLE VIII CONDITIONS TO OBLIGATIONS OF VAIL BANKS..................... 23
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8.1 Representations and Warranties.................................. 23
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8.2 Performance of Conditions and Agreements........................ 23
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8.3 Certificates, Resolutions, Opinion.............................. 23
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8.5 Regulatory Approvals............................................ 24
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8.6 Employment...................................................... 25
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ARTICLE IX CONDITIONS TO OBLIGATIONS OF THE COMPANY....................... 25
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9.1 Representations and Warranties.................................. 25
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9.2 Performance of Agreements Vail.................................. 25
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9.3 Certificates, Resolutions, Opinions............................. 25
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9.4 Regulatory Approvals............................................ 26
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ARTICLE X WARRANTIES, NOTICES, ETC........................................ 26
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10.1 Warranties...................................................... 26
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10.2 Survival of Representations..................................... 26
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10.3 Notice.......................................................... 27
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10.4 Entire Agreement................................................ 28
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10.5 Waiver; Amendment............................................... 28
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ARTICLE XI TERMINATION.................................................... 28
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11.1 Material Adverse Change of the Company or Western............... 28
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11.2 Noncompliance of the Company.................................... 29
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11.3 Noncompliance of Vail Banks.................................... 29
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11.4 Failure to Disclose............................................ 29
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11.5 Environmental Liability........................................ 29
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11.6 Adverse Proceedings............................................ 29
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11.7 Termination Date............................................... 29
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ARTICLE XII COUNTERPARTS, HEADINGS, ETC................................... 30
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ARTICLE XIII BINDING EFFECT............................................... 30
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ARTICLE XIV............................................................... 30
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STOCK PURCHASE AGREEMENT
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THIS STOCK PURCHASE AGREEMENT is made and entered into this 3rd day of
July, 1997 by and among VAIL BANKS, INC., a Colorado corporation (hereinafter
"Vail Banks"), WESTSTAR BANK, a Colorado bank (hereinafter
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"WestStar") [and unless the context otherwise requires, the term "Vail Banks"
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shall include both Vail Banks, Inc. and its wholly-owned subsidiary, WestStar
Bank], CEDAREDGE FINANCIAL SERVICES, INC., a Colorado corporation (hereinafter
the "Company"), WESTERN COMMUNITY BANK, a Colorado bank (hereinafter "Western")
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[and unless the context otherwise requires, the term the "Company" shall include
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Cedaredge Financial Services, Inc. and its wholly-owned subsidiary Western], and
Xxx X. Xxxxxx, Xxx X. Xxxxxx, Xxxxxxx X. Xxxxx, Xxxxx X. Xxxxx, the Xxxxxx X.
Xxxxxx Revocable Trust, Xxxxxx X. Xxxxxx, Trustee, Xxxxxxx X. Xxxxxxxx, Xxxxxxxx
X. Xxxxxxxx, Xxxxx Xxxxx, Xxxxxx X. Xxxxxx and Xxxx Xxxxxx, the shareholders of
the Company (the "Company Shareholders") [and Xxx X. Xxxxxx, Xxxxxxx X. Xxxxx,
Xxxxx X. Xxxxx and the Xxxxxx X. Xxxxxx Revocable Trust shall be referred to as
the Controlling Company Shareholders].
W I T N E S S E T H:
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WHEREAS, the Board of Directors of Vail Banks and the Company
Shareholders deem it to be in the best interests of each such corporation and
their respective shareholders that all of the issued and outstanding shares of
Common Stock, no par value, of the Company (the "Company Common Stock") be
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acquired by Vail Banks.
NOW, THEREFORE, in consideration of the premises and the mutual and
reciprocal representations, warranties, promises and covenants herein contained,
the parties hereto agree as follows:
ARTICLE I
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STOCK PURCHASE
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1.1 STOCK PURCHASE. Pursuant to the terms and conditions
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provided herein, on the Closing Date (hereinafter defined), Vail Banks shall
purchase all of the issued and outstanding shares of Company Common Stock (the
"Stock Purchase") from the Company Shareholders for a purchase price of
$3,250,000, payable as set forth on Exhibit 1.1, as adjusted pursuant to the
terms of this Agreement (the "Purchase Price"). Upon the terms and conditions
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of this Agreement, Vail Banks shall make available on or before the Closing Date
for delivery to (or to the order of) the Company Shareholders sufficient funds
to provide for the payment of the Purchase Price as provided in this Agreement.
1.2 AGREEMENTS WITH XXXXXXX X. AND XXXXX X. XXXXX.
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Contemporaneously with the Stock Purchase, WestStar and Xxxxxxx X. Xxxxx will
enter into an
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agreement substantially in the form as attached hereto as Exhibit E pursuant to
which Xxxxxxx X. Xxxxx agrees (1) to provide consulting services to WestStar and
(2) not to compete with Vail Banks in the business of Federal or State Chartered
Commercial Banking in certain Colorado counties, in exchange for five equal
annual payments totaling $425,000. In addition, WestStar and Xxxxx X. Xxxxx will
enter into an agreement substantially in the form attached hereto as Exhibit F
pursuant to which Xxxxx X. Xxxxx agrees not to compete with Vail Banks in the
business of Federal or State Chartered Commercial Banking in certain Colorado
counties in exchange for five equal annual payments totaling $125,000.
ARTICLE II
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CLOSING
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The transactions contemplated herein shall be consummated (the
"Closing") at such place and mutually agreed to by the parties hereto, on or
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before the fourteenth (14th) day, which day shall be by mutual agreement of the
parties (and if no mutual agreement can be reached then on the fourteenth (14th)
day), following receipt of, and compliance with the terms of, all approvals from
any and all governmental authorities or regulatory bodies having jurisdiction
over the transactions contemplated by this Agreement and the expiration of any
waiting or similar period required by applicable law, or at such other time and
place as may be mutually satisfactory to the parties hereto (the "Closing
Date").
ARTICLE III
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OTHER AGREEMENTS
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3.1 BROKERS; FINDERS' FEES; COMMISSIONS. Each party hereto
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represents and warrants to the other that no broker or finder has acted on its
behalf in connection with this Agreement or the transactions contemplated
hereby. Notwithstanding the preceding sentence, Vail Banks has entered into an
agreement with The Xxxxxxx Company pursuant to which Vail Banks will pay to The
Xxxxxxx Company a percentage fee based upon the value of assets purchased by
Vail Banks. Each party agrees to indemnify the other and hold and save the
other harmless from any claim or demand for commissions or other compensation by
any broker, finder or similar agent claiming to have been or having been
employed by or on behalf of such party.
3.2 ACCESS, INFORMATION AND DOCUMENTS. The Company shall
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permit, and shall cause Western to permit, Vail Banks and its authorized
representatives full access during normal business hours from and after the date
hereof and prior to the Closing Date to all of the Company's and Western
properties, books, contracts, commitments and records and the Company shall
furnish, and shall cause Western to furnish, Vail Banks and its authorized
representatives such information concerning the Company's and Western's affairs
as Vail Banks may reasonably request. The Company shall require, and shall cause
Western to require, its personnel to assist Vail Banks in making any such
investigation of the Company or Western and shall cause the counsel,
accountants, employees and other representatives of the Company and Western to
be available to
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Vail Banks for such purposes. During such investigation, Vail Banks and its
authorized representatives shall have the right to make copies of such records,
files, tax returns and other materials as they may deem advisable and shall
advise the Company or Western of those items of which copies are made.
3.3 CONFIDENTIALITY. Prior to consummation of the Stock
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Purchase, the parties to this Agreement will provide each other with information
which may be deemed by the party providing the information to be confidential or
proprietary. Each party agrees that it will hold confidential and protect all
information provided to it by the other party to this Agreement and use such
information only in connection with the consummation of the Stock Purchase,
except that the obligations contained in this Section 3.3 shall not in any way
restrict the rights of any party or person to use information that (i) was known
to such party prior to the disclosure by the other party; (ii) is or becomes
generally available to the public other than by breach of this Agreement; (iii)
otherwise becomes lawfully available to a party to this Agreement on a non-
confidential basis from a third party who is not under an obligation of
confidence to the other party to this Agreement; or (iv) is required to be
disclosed pursuant to any state or federal law. If this Agreement is terminated
prior to consummation of the Stock Purchase, each party agrees to return all
documents and other material, and any copies thereof, whether or not
confidential, provided to it by or on behalf of the other party to this
Agreement. Each party shall insure that its officers, directors, investment
advisors, attorneys and other representatives who are given access to such
information are bound by and will use the information only in accordance with
the foregoing restrictions. The provisions of this Section 3.3 shall survive
any termination of this Agreement.
3.4 FULL COOPERATION. The parties shall cooperate fully with each
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other and with their respective agents, representatives, counsel and accountants
in connection with any acts or actions required to be taken as part of their
respective obligations under this Agreement, including cooperation in the filing
of all applications and other requests for consents and approvals with respect
to the transactions contemplated hereby.
3.5 EXPENSES. All of the expenses incurred by either Vail Banks,
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the Company or the Company Shareholders in connection with the authorization,
preparation, execution and performance of this Agreement, including, without
limitation, all fees and expenses of its agents, representatives, counsel and
accountants and the fees and expenses related to filing regulatory applications
with state and federal authorities in connection with the transactions
contemplated hereby, shall be paid by Vail Banks or the Company, as the case may
be; provided, however, that the Company Shareholders shall pay all of the
expenses incurred by them or the Company in connection with the sale of the
Company Common Stock to Vail Banks in excess of $25,000.
3.6 APPROVALS AND CONSENTS. Each party hereto represents and
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warrants to and covenants with the others that it will, and will cause its
officers, directors, employees and agents to use its and their best efforts to
obtain as soon as is reasonably practicable all approvals and consents of state
and federal departments or agencies required or deemed necessary for
consummation of the transactions contemplated by this Agreement. Provided,
however, that Vail
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Banks shall have primary responsibility for preparation, filing and prosecution
of all applications associated with such approvals and consents.
3.7 PUBLICITY. All press releases and other announcements
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respecting the subject matter of this Agreement to any person shall be made only
at the direction of Vail Banks.
3.8 PRESERVATION OF GOODWILL. Each party hereto shall use its
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reasonable best efforts to preserve its business organization and the business
organization of its subsidiaries, to keep available the services of its present
employees and of the present employees of its subsidiaries, and to preserve the
goodwill of customers and others having business relations with such party or
its subsidiaries.
3.9 AGREEMENT AS TO EFFORTS TO CONSUMMATE. Subject to the terms
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and conditions of this Agreement, the parties agree to use all reasonable
efforts to take, or cause to be taken, all actions, and to do or cause to be
done all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective on a timely basis the transactions
contemplated by this Agreement.
3.10 DIVIDENDS. Except with prior written approval of Vail
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Banks, neither the Company nor Western shall (i) declare prior to Closing a
dividend or other distribution on its Common Stock or (ii) issue, sell,
repurchase, acquire or redeem any of its Common Stock; provided, however, that
Western may declare dividends and the Company may make distributions for the
sole purpose of servicing the Company's debt on the Notes.
ARTICLE IV
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REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY
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To induce Vail Banks to enter into and perform this Agreement, except
as otherwise disclosed in Exhibits to this Agreement, with each such Exhibit
being numbered to correspond to the section of this Article IV to which it
relates, the Controlling Company Shareholders and the Company represent covenant
and agree as follows, which representations, warranties, covenants and
agreements are being made as of the date hereof and shall be deemed to be made
again as of the Closing:
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4.1 CORPORATE AND FINANCIAL.
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4.1.1 AUTHORITY. (a) Subject to the approval of various
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state and federal regulatory authorities, the Company has full power and
authority to make, execute and perform this Agreement and to consummate the
transactions contemplated hereby and thereby, and no further action is necessary
on the part of the Company to authorize its consummation of the transactions
contemplated hereby and thereby. Other than such regulatory approvals, no
further corporate action is necessary on the part of the Company to consummate
the transactions contemplated hereby. This Agreement constitutes the valid and
binding obligations of the Company Shareholders and the Company, and is
enforceable in accordance with its terms, except as limited by the laws
affecting creditors' rights generally and by the discretion of courts to compel
specific performance.
(b) Subject to the approval of the various state and federal
regulators, the execution, delivery and performance of this Agreement and the
other transactions contemplated or required in connection herewith will not,
with or without the giving of notice or the passage of time, or both, (i)
violate any provision of federal or state law applicable to the Company or
Western, the violation of which could be expected to have an adverse effect on
the business, operations, properties, assets, financial condition or prospects
of the Company or Western; (ii) violate any provision of the articles of
incorporation or charter, as the case may be, or bylaws of the Company or
Western; (iii) conflict with or result in a breach of any provision of, or
termination of, or constitute a default under any instrument, license, agreement
or commitment to which the Company or Western is a party, which, singly or in
the aggregate, could be expected to have an adverse effect on the business,
operations, properties, assets, financial condition or prospects of the Company
or Western; or (iv) constitute a violation of any order, judgment or decree to
which the Company or Western is a party, or by which the Company or Western or
any of their respective assets or properties are bound.
4.1.2 CORPORATE STATUS.
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(a) THE COMPANY. The Company is a corporation duly organized, validly
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existing and in good standing under the laws of the state of Colorado and has no
direct or indirect subsidiaries other than Western. The Company has all
requisite corporate power and authority and is entitled to own or lease its
properties and assets and to carry on its business as and in the places where
such properties or assets are now owned, leased or operated and such business is
conducted.
(b) WESTERN. Western is a bank duly organized, validly existing and
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in good standing under the laws of the State of Colorado. Western has all
requisite corporate power and authority and is entitled to own and lease its
properties and assets and to carry on its business as and in the places where
such properties or assets are now owned, leased or operated and such business is
conducted.
4.1.3 CAPITAL STRUCTURE.
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(a) The Company. (i) The Company has an authorized capital stock
consisting solely of 100,000 shares, no par value, common stock, of which 29,340
shares of common stock are issued and outstanding as of the date hereof. All of
the outstanding capital stock of the Company is duly and validly issued, fully
paid and non-assessable and was offered, issued and sold in compliance with all
applicable federal and state securities laws. No person has any right of
rescission or claim for damages under federal or state securities laws with
respect to the issuance of any shares of capital stock of the Company previously
issued. None of the capital stock of the Company has been issued in violation
of any preemptive or other rights of its shareholders.
(ii) The Company has outstanding Series I Subordinated Notes (the
"Notes") due March 1, 2003, with a total par amount of $1,600,099, which are
convertible into Company Common Stock upon the occurrence of certain events.
With the exception of the Notes, the Company does not have outstanding any
securities which are either by their terms or by contract convertible or
exchangeable into capital stock of the Company, or any other securities or debt
of the Company, or any preemptive or similar rights to subscribe for or to
purchase, or any options or warrants or agreements or understandings for the
purchase or the issuance (contingent or otherwise) of, or any calls, commitments
or claims of any character relating to, its capital stock or securities
convertible into its capital stock. The Company is not subject to any
obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire, or to register, any shares of its capital stock.
(iii) There is no agreement, arrangement or understanding to which the
Company is a party restricting or otherwise relating to the transfer of any
shares of capital stock of the Company.
(iv) All shares of Company Common Stock or other capital stock, or any
other securities or debt, of the Company, which have been purchased or redeemed
by the Company have been purchased or redeemed in accordance with all applicable
federal, state and local laws, rules, and regulations, including, without
limitation, all federal and state securities laws and rules and regulations of
any securities exchange or system on which such stock, securities or debt are,
or at such time were, traded, and no such purchase or redemption has resulted or
will with the giving of notice or lapse of time, or both, result in a default or
acceleration of the maturity of, or otherwise modify, any agreement, note,
mortgage, bond, security agreement, loan agreement or other contract or
commitment of the Company.
(b) WESTERN. (i) Western has an authorized capital stock consisting
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solely of 18,000 shares, $10 par value, common stock, of which 18,000 shares of
common stock are issued and outstanding as of the date hereof and of which the
Company owns 18,000 shares, or 100% of the issued and outstanding common stock.
All of the outstanding capital stock of Western is duly and validly issued,
fully paid and non-assessable and was offered, issued and sold in compliance
with all applicable federal and state securities laws. No person has any right
of rescission or claim for damages under federal or state securities laws with
respect to the
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issuance of any shares of capital stock of Western previously issued. None of
the capital stock of Western has been issued in violation of any preemptive or
other rights of its shareholders.
(ii) Western does not have outstanding any securities which are either
by their terms or by contract convertible or exchangeable into capital stock of
Western, or any other securities or debt of Western, or any preemptive or
similar rights to subscribe for or to purchase, or any options or warrants or
agreements or understandings for the purchase or the issuance (contingent or
otherwise) of, or any calls, commitments or claims of any character relating to,
its capital stock or securities convertible into its capital stock. Western is
not subject to any obligation (contingent or otherwise) to repurchase or
otherwise acquire or retire, or to register, any shares of its capital stock.
(iii) There is no agreement, arrangement or understanding to which
either Western or the Company is a party restricting or otherwise relating to
the transfer of any shares of capital stock of Western.
(iv) All shares of Western Common Stock or other capital stock, or any
other securities or debt, of Western, which have been purchased or redeemed by
Western have been purchased or redeemed in accordance with all applicable
federal, state and local laws, rules, and regulations, including, without
limitation, all federal and state securities laws and rules and regulations of
any securities exchange or system on which such stock, securities or debt are,
or at such time were, traded, and no such purchase or redemption has resulted or
will, with the giving of notice or lapse of time, or both, result in a default
or acceleration of the maturity of, or otherwise modify, any agreement, note,
mortgage, bond, security agreement, loan agreement or other contract or
commitment of Western.
4.1.4 CORPORATE RECORDS. The stock records and minute books
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of the Company and Western, as applicable, whether previously or in the future
furnished or made available to Vail Banks by the Company and Western, fully and
accurately reflect all issuances, transfers and redemptions of the common stock
of the Company or Western, as applicable, correctly show the record addresses
and the number of shares of such stock issued and outstanding on the date hereof
held by the shareholders of the Company or Western, correctly show all corporate
action taken by the directors and shareholders of the Company or Western
(including actions taken by consent without a meeting), and contain true and
correct copies or originals of their respective articles of incorporation or
charter, as the case may be, and all amendments thereto, bylaws, as amended and
currently in force, and the minutes of all meetings or consent actions of their
respective directors and shareholders. No resolutions, regulations or bylaws
have been passed, enacted, consented to or adopted by the respective directors
or shareholders of the Company or Western except those contained in the minute
books. All corporate records of the Company and Western have been maintained in
accordance with all applicable statutory requirements and are complete and
accurate.
4.1.5 TAX RETURNS, TAXES. (a) The Company and Western have
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duly filed or will file when due (i) all
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required federal and state tax returns and reports, and (ii) all required
returns and reports of other governmental units having jurisdiction with respect
to taxes imposed upon their respective incomes, properties, revenues,
franchises, operations or other assets or taxes imposed which might create a
lien or encumbrance on any of such assets or affect adversely their respective
businesses or operations. Such returns or reports are, and when filed will be,
true, complete and correct, and the Company and Western have paid, or will pay
with respect to returns or reports related to their respective businesses not
yet filed because not yet due, to the extent such taxes or other governmental
charges have become due, all taxes and other governmental charges including all
applicable interest and penalties, set forth in such returns or reports related
to their respective businesses. All federal, state and local taxes and other
governmental charges paid or payable by the Company or Western have been paid,
or have been accrued or reserved on their respective books in accordance with
generally accepted accounting principles applied on a basis consistent with
prior periods. Adequate reserves for the payment of taxes have been established
on the books of the Company and Western for all periods through the date hereof,
whether or not due and payable and whether or not disputed. Until the Closing
Date, the Company and Western shall continue to reserve sufficient funds for the
payment of expected tax liabilities in accordance with generally accepted
accounting principles applied on a basis consistent with prior periods. Neither
the Company nor Western has received any notice of a tax deficiency or
assessment of additional taxes of any kind and, to the knowledge of officers of
the Company or Western (collectively "Management"), there is no threatened claim
against either the Company or Western, or any basis for any such claim, for
payment of any additional federal, state, local or foreign taxes for any period
prior to the date of this Agreement in excess of the accruals or reserves with
respect to any such claim shown in the 1996 Financial Statements (as defined
below) or disclosed in the notes with respect thereto. There are no waivers or
agreements by either the Company or Western for the extension of time for the
assessment of any taxes. With the exception of a currently ongoing audit by the
Internal Revenue Service of the federal income tax returns of the Company and
Western for the 1995 taxable year, the federal income tax returns of the Company
or Western have not been examined by the Internal Revenue Service for any period
since January 1, 1988. To the extent that any taxes, penalties or interest are
assessed against Western prior to Closing as a result of such audit, the
Purchase Price shall be reduced by the total amount of such taxes, penalties and
interest, and, if assessed after Closing, the Shareholders shall indemnify Vail
Banks or WestStar, as the case may be, for any amounts paid. Any expenses
associated with the audit incurred by Western or the Company prior to the
Closing shall not reduce the Purchase Price and shall be paid by Western or the
Company, as the case may be, and any such expenses incurred after the Closing
shall be paid by Vail Banks or WestStar as the case may be.
(b) Proper and accurate amounts have been withheld by the Company and
Western from their employees for all periods in full and complete compliance
with the tax withholding provisions of applicable federal, state and local tax
laws, and proper and accurate federal, state and local tax returns have been
filed by the Company and Western for all periods for which returns were due with
respect to withholding, social security and unemployment taxes, and the amounts
shown thereon to be due and payable have been paid in full.
4.1.6 FINANCIAL STATEMENTS. The Company has delivered to
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Vail Banks true, correct and complete copies of (i) the financial statements of
the Company for the years
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ended December 31, 1995 and 1996, as compiled by the Company's outside
accountants, including balance sheets, statements of income, statements of
shareholders' equity, statements of cash flows and related notes, and for
Western a Directors Examination dated November 30, 1995, and Financial
Statements and Accountant's Compilation Report dated October 31, 1996 (the
Company's financial statements for the year ended December 31, 1996 and
Western's financial statements dated October 31, 1996 collectively being
referred to as the "1996 Financial Statements") and (ii) unaudited financial
statements of each of the Company and Western for the period ended March 31,
1997, including a balance sheet, statement of income and related notes. All of
such financial statements have been prepared in accordance with generally
accepted accounting principles consistently applied or generally accepted
regulatory principles consistently applied, as the case may be, and truthfully
reflect the assets, liabilities and financial condition of the Company and
Western as of the dates indicated therein and the results of its operations for
the respective periods then ended. The Company will provide prior to Closing
audited balance sheets for each of the Company and Western for the period ended
December 31, 1996 which shall be prepared by either Dalby, Wendland, P.C. or
another accounting firm as selected by Vail Banks no later than July 15, 1997.
4.1.7 REGULATORY REPORTS. The Company has delivered to Vail
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Banks for review and inspection all Forms FRY6 filed by the Company with the
Board of Governors of the Federal Reserve System (the "Federal Reserve") for the
three years ended December 31, 1996 and through the date of this Agreement,
together with all other reports filed by the Company or Western for the same
period with the Division of Banking of the Department of Regulatory Agencies of
the State of Colorado (the "Division of Banking"), and other applicable
regulatory agencies, and in the case of the CALL reports for periods ended
December 31, 1996 and March 31, 1997, the amended reports (collectively, the
"Reports"). All of such Reports, as amended, have been prepared in accordance
with applicable rules and regulations applied on a basis consistent with prior
periods and contain in all material respects all information required to be
presented therein in accordance with such rules and regulations.
4.1.8 ACCOUNTS. Exhibit 4.1.8 contains a list of each
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and every bank and other institution in which the Company or Western maintains
an account or safety deposit box, the account numbers and the names of all
persons who are presently authorized to draw thereon, have access thereto or
give instructions regarding distribution of funds or assets therein.
4.1.9 NOTES AND OBLIGATIONS. (a) Except as provided for in
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the loss reserve described in subsection (b) below, all notes receivable or
other obligations owned by the Company or Western or due to either of them shown
in the 1996 Financial Statements and any such notes receivable and obligations
on the date hereof and on the Closing Date are, and will be, genuine, legal,
valid and collectible obligations of the respective makers thereof and are not
and will not be subject to any offset or counterclaim. Except as set forth in
Exhibit 4.1.9(a) or in subsection (b) below, all such notes and obligations are
evidenced by written agreements, true and correct copies of which will be made
available to Vail Banks for examination prior to the Closing Date. All such
notes and obligations were entered into by either the Company or Western, as the
case may be, in the ordinary course of business and in substantial compliance
with all applicable laws and regulations.
9
(b) The Company has established a loss reserve in its 1996 Financial
Statements and will continue to maintain appropriate loan loss reserves which
will be adequate to cover anticipated losses which might result from such items
as the insolvency or default of borrowers or obligors on such loans or
obligations, defects in the notes or evidences of obligation (including losses
of original notes or instruments), offsets or counterclaims properly chargeable
to such reserve, or the availability of legal or equitable defenses which might
preclude or limit the ability of the Company or Western, as the case may be, to
enforce the note or obligation, and the representations set forth in subsection
(a) above are qualified in their entirety by the aggregate of such loss reserve.
4.1.10 LIABILITIES. Neither the Company nor Western has any debt,
-----------
liability or obligation of any kind required to be shown pursuant to generally
accepted accounting principles on the consolidated balance sheet of the Company,
whether accrued, absolute, known or unknown, contingent or otherwise, including,
but not limited to, (a) liability or obligation on account of any federal, state
or local taxes or penalty, or interest or fines with respect to such taxes, (b)
liability arising from or by virtue of the distribution, delivery or other
transfer or disposition of goods, personal property or services of any type,
kind or variety, (c) unfunded liabilities with respect to any pension, profit
sharing or employee stock ownership plan, whether operated by the Company or
Western or any other entity covering employees of the Company or Western, or (d)
environmental liability, except those reflected in the 1996 Financial
Statements. On the Closing Date, the Company shall have no indebtedness of any
nature whatsoever, except those reflected in the 1996 Financial Statements, and
Western shall have no indebtedness resulting from the borrowing of any funds,
property or services, except those reflected in the 1996 Financial Statements;
provided, however, that this Section 4.1.10 shall not apply to the purchase of
Federal Funds in the ordinary course of business.
4.1.11 ABSENCE OF CHANGES. Except as specifically provided for in this
------------------
Agreement, since December 31, 1996:
(a) there have been no changes in the business, assets, properties,
liabilities, results of operations or financial condition of the Company or
Western, or in any of their respective relationships with customers, employees,
lessors or others, other than changes in the ordinary course of business, none
of which individually or in the aggregate has had or which Management believes
will have a material adverse effect on such businesses, assets, liabilities,
results of operations, financial conditions or properties;
(b) there has been no material damage, destruction or loss to the
assets, properties or business of the Company or Western, whether or not covered
by insurance, which has had or which Management believes may have an adverse
effect thereon;
(c) the businesses of the Company and Western have been operated in
the ordinary course, and not otherwise;
10
(d) the properties and assets of the Company and Western used in their
respective businesses have been maintained in good order, repair and condition,
ordinary wear and tear excepted;
(e) the respective books, accounts and records of the Company and
Western have been maintained in the usual, regular and ordinary manner;
(f) there has been no declaration, setting aside or payment of any
dividend or other distribution on or in respect of the capital stock of the
Company or Western, except for dividends paid by Western to the Company solely
for the Company's payments of interest due on the Notes;
(g) except as disclosed to Vail Banks, there has been no increase in
the compensation or in the rate of compensation or commissions payable by the
Company and/or Western to any of their directors or executive officers, or to
any of their employees, or any increase in any payment of or commitment to pay
any bonus, profit sharing or other extraordinary compensation to any of their
employees;
(h) there have been no changes in the articles of incorporation or
charter, as the case may be, or bylaws of the Company or Western;
(i) there has been no labor dispute, unfair labor practice charge or
employment discrimination charge, nor, to the knowledge of Management, any
organizational effort by any union, or institution or threatened institution of
any effort, complaint or other proceeding in connection therewith, involving the
Company or Western, or affecting their respective operations;
(j) there has been no issuance, sale, repurchase, acquisition or
redemption by the Company or Western of any of their respective capital stock,
bonds, notes, debt or other securities or any modification or amendment of the
rights of the holders of any outstanding capital stock, bonds, notes, debt or
other securities thereof;
(k) there has been no mortgage, lien or other encumbrance or security
interest (other than liens for current taxes not yet due or purchase money
security interests or pledges to secure public deposits or federal funds
purchased arising in the ordinary course of business) created on or in
(including without limitation, any deposit for security consisting of) any asset
or assets of the Company or Western or assumed by either of them with respect to
any of their assets;
(l) there has been no indebtedness or other liability or obligation
(whether absolute, accrued, contingent or otherwise) incurred by the Company or
Western which would be required to be reflected on a balance sheet of the
Company or Western prepared as of the date hereof in accordance with generally
accepted accounting principles applied on a consistent basis, except as incurred
in the ordinary course of business;
11
(m) no obligation or liability of either the Company or Western has
been discharged or satisfied, other than in the ordinary course of business;
(n) there have been no sales, transfers or other dispositions of any
asset or assets of either the Company or Western, other than sales in the
ordinary course of business; and
(o) there has been no amendment, termination or waiver of any right of
either the Company or Western under any contract or agreement or governmental
license, permit or permission which has had or may have an adverse effect on
either of their businesses or properties.
4.1.12 LITIGATION AND PROCEEDINGS. There are no actions,
--------------------------
decrees, suits, counterclaims, claims, proceedings or governmental actions or
investigations pending or, to the knowledge of Management, threatened against,
by or affecting either the Company or Western, or any officer, director,
employee or agent in such person's capacity as an officer, director, employee or
agent of either the Company or Western or relating to the business or affairs of
either the Company or Western, in any court or before any arbitrator or
governmental agency, and no judgment, award, order or decree of any nature has
been rendered against or with respect thereto by any agency, arbitrator, court,
commission or other authority, nor does either the Company or Western have any
unasserted contingent liabilities which might have an adverse effect on either
of their assets or on the operation of their respective businesses or which
might prevent or impede the consummation of the transactions contemplated by
this Agreement.
4.1.13 CASH ITEMS. Except as set forth on Exhibit 4.1.13,
----------
there is no cash item on Western's balance sheet which has remained unreconciled
for a period of thirty (30) days. All other cash items on Western's balance
sheet occurred in the normal course of business and neither the Company nor
Western anticipate that any such item cannot be reconciled in the normal course
of business or contains significant loss content.
4.2 BUSINESS OPERATIONS.
-------------------
4.2.1 CUSTOMERS. Management has no knowledge of any
---------
presently existing facts which could reasonably be expected to result in the
loss of any material borrower or depositor of Western or in the inability of
Western to collect amounts due therefrom or to return funds deposited thereby.
4.2.2 PERMITS; COMPLIANCE WITH LAW. (a) The Company and
----------------------------
Western have all permits, licenses, approvals, authorizations and registrations
under all federal, state, local and foreign laws required for them to carry on
their respective businesses as presently conducted, and all of such permits,
licenses, approvals, authorizations and registrations are in full force and
effect, and no suspension or cancellation of any of them is pending or, to the
knowledge of Management, threatened.
12
(b) The Company and Western have complied materially with all laws,
regulations, and orders applicable to them or their businesses.
(c) No notice or warning from any governmental authority with respect
to any failure or alleged failure of the Company or Western to comply in any
respect with any law, regulation or order has been received, nor is any such
notice or warning proposed or, to the knowledge of Management, threatened.
4.2.3 ENVIRONMENTAL. (a) The Company and Western:
-------------
(i) with the exception of certain environmental concerns regarding (A)
real property in Cowdrey, Colorado owned by Western on which a grocery store is
currently located and (B) certain property in Cedaredge, Colorado which is
adjacent to an street adjacent to the property on which the offices of Cedaredge
are located, have not caused or permitted, and have no knowledge of, the
generation, manufacture, use, or handling or the release or presence of any
hazardous substances on, in, under or from any properties or facilities
currently owned or leased by the Company or Western or adjacent to any
properties so owned or leased; and
(ii) have complied with, and have kept all records and made all
filings required by, applicable federal, state and local laws, regulations,
orders, permits and licenses relating to the generation, manufacture, use,
handling, release or presence of any hazardous substance on, in, under or from
any properties or facilities currently owned or leased by the Company or
Western.
(iii) Neither the Company nor Western nor any of their officers,
directors, employees or agents, in the course of their employment by the Company
or Western, has directly or indirectly given advice with respect to, or
participated in any respect, directly or indirectly, in, the management or
operation of any entity or concern whose business relates in any way to the
generation, storage, handling, disposal, transfer, production or processing of
hazardous substances, nor has the Company or Western foreclosed on any property
on which there is a threatened release of any hazardous substances or on which
there has been such a release and full remediation has not been completed, or
any property on which contained (non-released) hazardous substances or solid
wastes are located.
(iv) Neither the Company nor Western, nor any of their officers,
directors, employees, and agents, are aware of, have been told of, or have
observed, the presence of any hazardous substance or solid waste on, in, under,
or around property on which the Company or Western holds a legal or security
interest, in violation of, or creating liability under, federal, state or local
environmental statutes, regulations, or ordinances.
4.2.4 INSURANCE. Management believes that its policies of
---------
insurance and bonds currently in effect provide adequate coverage to insure the
properties and businesses of the Company and Western and the activities of their
officers, directors and employees against such
13
risks and in such amounts as are prudent and customary. Such policies and bonds
are, and will be maintained through the Closing Date, in full force and effect.
All terms, obligations and provisions of each of such policies and bonds have
been complied with, all premiums due thereon have been paid, and no notice of
cancellation with respect thereto has been received. The Company or Western will
not as of the Closing Date have any liability for premiums or for retrospective
premium adjustments for any period prior to the Closing Date. The Company and
Western have previously made available to Vail Banks a true, correct and
complete copy of each insurance policy and bond in effect since January 1, 1991
with respect to the business and affairs of the Company and Western and
information regarding all pending claims under all such policies or bonds.
4.3 PROPERTIES AND ASSETS.
---------------------
4.3.1 CONTRACTS AND COMMITMENTS. Exhibit 4.3.1 contains a
-------------------------
list identifying and briefly describing all written contracts, purchase orders,
agreements, security deeds, guaranties or commitments to which the Company or
Western is a party, or by which they may be bound, involving the payment or
receipt, actual or contingent, of more than $25,000 or having a term or
requiring performance over a period of more than ninety (90) days, other than
agreements, contracts, security deeds, guaranties or commitments made in the
ordinary course of the Company's business and other agreements pursuant to which
the Company has received a security interest. Except as set forth in Exhibit
4.3.1, each such contract, agreement, guaranty and commitment of the Company and
Western is in full force and effect and is valid and enforceable in accordance
with its terms, and constitutes a legal and binding obligation of the respective
parties thereto and is not the subject of any notice of default, termination,
partial termination or of any ongoing, pending, completed or threatened
investigation, inquiry or other proceeding or action that will give rise to any
notice of default, termination or partial termination. The Company and Western
have complied with the provisions of such contracts, agreements, guaranties and
commitments. A true and complete copy of each such document has been made
available to Vail Banks for examination.
4.3.2 LICENSES; INTELLECTUAL PROPERTY. The Company and
-------------------------------
Western have all patents, trademarks, trade names, service marks, copyrights,
trade secrets and know-how reasonably necessary to conduct their businesses as
presently conducted and neither the Company nor Western is a party, either as
licensor or licensee, to any agreement for any patent, process, trademark,
service xxxx, trade name, copyright, trade secret or other confidential
information, and there are no rights of third parties with respect to any
trademark, service xxxx, trade secrets, confidential information, trade name,
patent, patent application, copyright, invention, device or process owned or
used by the Company or Western or presently expected to be used by either of
them in the future. All patents, copyrights, trademarks, service marks, trade
names, and applications therefor or registrations thereof, owned or used by the
Company or Western, have been disclosed to Vail. The Company and Western have
complied with all applicable laws relating to the filing or registration of
"fictitious names" or trade names.
4.3.3 PERSONAL PROPERTY. The Company and Western each have
-----------------
good and marketable title to all of their respective personalty, tangible and
intangible, reflected in the
14
1996 Financial Statements (except as since sold or otherwise disposed of by
either of them in the ordinary course of business), free and clear of all
encumbrances, liens or charges of any kind or character except (i) those
referred to in the notes to the 1996 Financial Statements as securing specified
liabilities (with respect to which no default exists or, to the knowledge of
Management, is claimed to exist), (ii) those described in Exhibit 4.3.3 and
(iii) liens for taxes not due and payable.
4.3.4 LEASES. (a) All leases pursuant to which either the
------
Company or Western is lessor or lessee (the "Leases") of any real or personal
property are valid and enforceable in accordance with their terms; there is not,
under any of such Leases any default or, to the knowledge of Management, any
claimed default by the Company or Western, as the case may be, or event of
default or event which with notice or lapse of time, or both would constitute a
default by the Company or Western, as the case may be, and in respect of which
adequate steps have not been taken to prevent a default on either of their parts
from occurring.
(b) Except as set forth in Exhibit 4.3.4(b), there are no contractual
obligations, agreements in principle or present plans for either the Company or
Western to enter into new leases of real property or to renew or amend existing
Leases prior to the Closing Date.
(c) The copies of the Leases heretofore furnished or made available by
the Company and Western to Vail Banks are true, correct and complete, and the
Leases have not been modified in any respect other than pursuant to amendments,
copies of which have been concurrently delivered or made available to Vail
Banks, and are in full force and effect in accordance with their terms.
(d) Except as set forth in Exhibit 4.3.4(d), no rent has been paid in
advance and no security deposit has been paid, nor is any brokerage commission
payable, by or to the Company or Western with respect to any Lease.
4.3.5 REAL PROPERTY. (a) The Company and Western have good
-------------
and marketable title to the real property reflected in the 1996 Financial
Statements (the "Realty"), and the titles to the Realty are covered by title
insurance policies providing coverage in the amount of the original purchase
price.
(b) Except as set forth in Exhibit 4.3.5(b), the interests of the
Company or Western in the Realty and in and under each of the Leases are free
and clear of any and all liens and encumbrances except for liens for current
taxes not yet due, and are subject to no present claim, contest, dispute, action
or, to the knowledge of Management, threatened action at law or in equity.
(c) The present and past use and operations of, and improvements upon,
the Realty and all real properties leased by the Company and Western (the
"Leased Properties") are in material compliance with all applicable building,
fire, zoning and other applicable laws, ordinances and regulations, including
the Americans with Disabilities Act, and
15
with all deed restrictions of record, no notice of any violation or alleged
violation thereof has been received, and to the knowledge of Management, there
are no proposed changes therein that would affect the Realty, the Leased
Properties or their uses.
(d) Management is not aware of any proposed or pending change in the
zoning of, or of any proposed or pending condemnation proceeding with respect
to, any of the Realty or the Leased Properties which may adversely affect the
Realty or the Leased Properties or the current or currently contemplated use
thereof.
(e) The buildings and structures owned, leased or used by the Company
and Western are, taken as a whole, in good operating order (except for ordinary
wear and tear), usable in the ordinary course of business, and are sufficient
and adequate to carry on the businesses and affairs of the Company and Western
as presently conducted.
4.4 EMPLOYEES AND BENEFITS.
----------------------
4.4.1 COMPENSATION STRUCTURE. The Company has delivered to
----------------------
Vail Banks:
(a) a true and complete list of the names, titles, responsibilities
and compensation arrangements of each person whose earned compensation
(including without limitation all salary, wages, bonuses and fringe benefits,
other than those fringe benefits made available to all employees on a non-
discriminatory basis), regardless of whether actually payable in such year, from
the Company and Western for the current fiscal year. For purposes of this
Section 4.4.1(a), compensation shall include any amounts which are or could be
owed to any person in payment of accrued vacation time, sick leave, or as a
result of any other incentive plan currently or previously in effect with
respect to such person.
(b) copies of all written agreements, correspondence (other than
outstanding offers of employment to prospective employees whose compensation
levels will not exceed $25,000 in cash), memoranda and other written materials
currently in effect which have been provided to such employees relating to their
compensation.
4.4.2 DIRECTORS OR OFFICERS OF OTHER CORPORATIONS. Except as
-------------------------------------------
set forth in Exhibit 4.4.2, no director, officer, or employee of the Company or
Western serves, or in the past five years has served, as a director or officer
of any other corporation (other than the Company or Western) on behalf of or as
a designee of the Company or any of its subsidiaries.
4.4.3 EMPLOYEE BENEFITS. (a) Except as set forth in Exhibit
-----------------
4.4.3(a), neither the Company nor Western has or maintains a pension plan,
profit sharing plan, group insurance plan, employee welfare benefit plan (as
such term is defined in Section 3(l) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA')), severance plan, bonus plan, stock option
plan or deferred compensation plan for any of its current or former employees.
16
(b) Each "employee benefit plan" as defined in Section 3(3) of ERISA,
maintained by or on behalf of the Company or Western (including any plans which
are "multiemployer plans" under Section 3(37)(A) of ERISA ("Multiemployer
Plans") and any defined benefit plan (as defined in Section 3(35) of ERISA)
terminated by the Company or Western within the five plan-years ending
immediately before the Closing Date), which covers or covered any employees of
the Company, Western, or any subsidiary or of any predecessors thereof (each a
"Plan"), is listed in Exhibit 4.4.3(b), and copies of all the Plans and Plan
trusts (if applicable), Summary Plan Descriptions, Actuarial Reports and
valuations (if any), and Annual Reports (and attachments thereto) on Form 5500,
5500-C or 5500-R, as the case may be (if required pursuant to ERISA), for the
most recent three years with respect to the Plans, Internal Revenue Service
determination letters and any other related documents requested by Vail Banks or
its counsel have been, or prior to the Closing Date will be, provided to Vail
Banks.
(c) With respect to each Plan: no litigation or administrative or
other proceeding is pending or, to the knowledge of Management, threatened; each
Plan has been restated or amended so as to comply with all applicable
requirements of law, including all applicable requirements of ERISA, the
Internal Revenue Code of 1986, as amended (the "Code"), and the regulations
promulgated thereunder by the Internal Revenue Service and the United States
Department of Labor. Neither the Plan nor any trustee, administrator or
fiduciary thereof has at any time been involved in any transaction relating to
the Plan which would constitute a breach of fiduciary duty under ERISA or a
"prohibited transaction" within the meaning of Section 406 of ERISA or Section
4975 of the Code, unless such transaction is specifically permitted under
Sections 407 or 408 of ERISA, Section 4975 of the Code or a class or
administrative exemption issued by the Department of Labor.
(d) Each Plan has been administered in compliance in all material
respects with applicable law and the terms of the Plan.
(e) Except for obligations under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended ("COBRA"), neither the Company nor
Western has any obligation to provide, or material liability for, health care,
life insurance or other benefits after termination of active employment. As of
the Closing Date, the Company and Western will have provided adequate reserves,
or insurance or qualified trust funds, for all claims incurred through the
Closing Date, including adequate reserves to provide for any post-retirement
health care, life insurance or other benefits with respect to periods of
employment prior to the Closing Date, based on an actuarial valuation
satisfactory to the actuaries of the Company and Western representing a
projection of claims expected to be incurred for such retirees during their
period of coverage under such Plan.
(f) To the knowledge of Management, no fact or circumstance exists
which could constitute grounds in the future for the Pension Benefit Guaranty
Corporation ("PBGC") (or any successor to the PBGC) to take any action
whatsoever under Section 4042 of ERISA in connection with any plan which an
Affiliate (as defined below) of the
17
Company maintains within the meaning of Section 4062 or 4064 of ERISA, and, in
either case, PBGC has not previously taken any such action which has, or
reasonably might, result in any liability of an Affiliate or the Company to the
PBGC, which would have an adverse effect on the business of the Company. The
term "Affiliate" for purposes of this Section means any trade or business
(whether incorporated or unincorporated) which is a member of a group described
in Sections 414(b) or 414(c) of the Code of which the Company is also a member.
(g) Only current and former employees of the Company or Western
participate in any Plan.
4.4.4 LABOR-RELATED MATTERS. Neither the Company nor Western
---------------------
is, and neither the Company nor Western has been, a party to any collective
bargaining agreement or agreement of any kind with any union or labor
organization or to any agreement with any of its employees which is not
terminable at will or upon ninety (90) days notice at the election of, and
without cost or penalty to, the Company or Western. Neither the Company nor
Western has received at any time in the past five (5) years, any demand for
recognition from any union, and no attempt has been made, or will have been made
as of the Closing Date, to organize any of their employees. The Company has
complied with all obligations under the National Labor Relations Act, as
amended, the Age Discrimination in Employment Act, as amended, and all other
federal, state and local labor laws and regulations applicable to employees. To
the knowledge of Management, there are no unfair labor practice charges pending
or threatened against the Company or Western, and there are, and in the past
three (3) years there have been, no charges, complaints, claims or proceedings,
or slowdowns or strikes pending or threatened against, or involving, as the case
may be, the Company or Western with respect to any alleged violation of any
legal duty (including but not limited to any wage and hour claims, employment
discrimination claims or claims arising out of any employment relationship) by
the Company or Western as to any of their employees or as to any person seeking
employment therefrom, and no such violations exist.
4.4.5 RELATED-PARTY TRANSACTIONS. Except for (a) loans and
--------------------------
extensions of credit made on substantially the same terms, including interest
rates and collateral, as those prevailing at the time for comparable
transactions by the Company or Western with other persons who are not affiliated
with the Company or Western, and which do not involve more than the normal risk
of repayment or present other unfavorable features, (b) deposits, all of which
are on terms and conditions identical to those made available to all customers
of Western at the time such deposits were entered into, and (c) transactions
specifically described in Exhibit 4.4.5, there are no contracts with or
commitments to present or former 5% or greater shareholders, directors,
officers, or employees of the Company or Western involving the expenditure after
December 31, 1996 of more than $60,000 as to any one individual, including with
respect to any business directly or indirectly controlled by any such person, or
$100,000 for all such contracts or commitments in the aggregate for all such
individuals (other than contracts or commitments relating to services to be
performed by any officer, director or employee as a currently-employed employee
of the Company or Western).
4.5 OTHER MATTERS.
-------------
18
4.5.1 APPROVALS, CONSENTS AND FILINGS. Except for the
-------------------------------
approval of the Federal Reserve, the Federal Deposit Insurance Corporation (the
"FDIC"), the Division of Banking, the Company Shareholders and Bank
Shareholders, neither the execution and delivery of this Agreement by the
Company nor the consummation of the transactions contemplated hereby, will (a)
require any consent, approval, authorization or permit of, or filing with or
notification to, any governmental or regulatory authority, or (b) violate any
order, writ, injunction, decree, statute, rule or regulation applicable to the
Company or Western, or any of their respective assets.
4.5.2 DEFAULT. (a) Except for those consents described in
-------
or set forth pursuant to Section 4.5.1 above, neither the execution of this
Agreement nor the consummation of the transactions contemplated herein or
therein (i) constitutes a breach of or default under any contract or commitment
to which the Company or Western is a party or by which the Company or Western or
their properties or assets are bound, (ii) does or will result in the creation
or imposition of any security interest, lien, encumbrance, charge, equity or
restriction of any nature whatsoever in favor of any third party upon any assets
of the Company or Western, or (iii) constitutes an event permitting termination
of any agreement or the acceleration of any indebtedness of the Company or
Western.
(b) Neither the Company nor Western is in default under its articles
of incorporation or charter, as the case may be, or bylaws or under any term or
provision of any security deed, mortgage, indenture or security agreement or of
any other contract or instrument to which the Company or Western is a party or
by which either of them or any of their property is bound.
4.5.3 WESTERN. The Company owns or controls 100% of the
-------
issued and outstanding shares of the Common Stock of Western.
4.5.4 REPRESENTATIONS AND WARRANTIES. No material
------------------------------
representation or warranty contained in this Article IV or in any written
statement delivered by or at the direction of the Company or Western pursuant
hereto or in connection with the transactions contemplated hereby contains or
shall contain any untrue statement, nor shall such representations and
warranties taken as a whole omit any statement necessary in order to make any
statement not misleading. Copies of all documents furnished to Vail Banks in
connection with this Agreement or pursuant hereto are true, correct and
complete.
ARTICLE V
---------
REPRESENTATIONS, WARRANTIES AND
-------------------------------
COVENANTS OF COMPANY SHAREHOLDER
--------------------------------
Each Company Shareholder (as listed on Exhibit C) represents,
warrants, covenants and agrees as follows, which representations, warranties,
covenants and agreements are being made as of the date hereof and shall be
deemed to be made again as of the Closing:
19
5.1 TITLE. Company Shareholder has good and marketable title to
-----
the Company Common Stock owned by such Company Shareholder (as listed on Exhibit
C) free and clear of any and all claims, liens, charges and encumbrances.
5.2 CONSENT. Holder's entry into this Agreement constitutes
-------
Holder' consent to this Agreement.
ARTICLE VI
----------
CONDUCT OF BUSINESS OF THE COMPANY
----------------------------------
OR WESTERN PENDING CLOSING
--------------------------
During the period from the date of this Agreement and continuing until
the Closing Date, or the earlier termination of this Agreement pursuant to
Article XI hereof, the Controlling Company Shareholders and Company agree
(except as expressly contemplated by this Agreement or to the extent that Vail
Banks shall otherwise consent in advance in writing) that:
(a) ORDINARY COURSE. Except in specific contemplation of the
---------------
transactions contemplated by this Agreement, the Company and Western shall carry
on their businesses in the usual, regular and ordinary course in the same manner
as heretofore conducted, without the creation of any indebtedness for borrowed
money (other than deposit and similar accounts and customary credit arrangements
between banks in the ordinary course of business), and, to the extent consistent
with such businesses, use their best efforts to preserve intact their present
business organizations, keep available the services of their present officers
and employees and preserve their relationships with representatives, customers,
suppliers, personnel and others having business dealings with the Company and
Western.
(b) DIVIDENDS; CHANGES IN STOCK. Except upon the prior written
---------------------------
approval of Vail Banks, neither the Company nor Western shall or shall propose
to (i) declare or pay any dividends on, or make other distributions in respect
of, any of their capital stock, (ii) split, combine or reclassify any of their
capital stock or issue, authorize or propose the issuance of any other
securities in respect of, in lieu of or in substitution for shares of capital
stock of the Company and Western, or (iii) repurchase or otherwise acquire any
shares of their capital stock; provided, however, that Western may declare
dividends and the Company may make distributions for the sole purpose of
servicing the Company's debt on the Notes.
(c) ISSUANCE OF SECURITIES. The Company and Western shall not sell,
----------------------
issue, authorize or propose the sale or issuance of, or purchase or propose the
purchase of, any shares of their capital stock or any class of securities
convertible into, or rights, warrants or options to acquire, any such shares or
other convertible securities or enter into any agreement with respect to the
foregoing.
20
(d) GOVERNING DOCUMENTS; COMPLIANCE WITH LAW. The Company and
----------------------------------------
Western shall not amend their articles of incorporation or charter, as the case
may be, or bylaws. The Company and Western shall each maintain their corporate
existence and powers and fully comply with all federal, state and local laws
with respect to their operations and the conduct of their businesses.
(e) NO ACQUISITIONS. The Company and Western shall not acquire by
---------------
merging or consolidating with, or by purchasing a substantial portion of the
assets of, or by any other manner, any business or any corporation, partnership,
association or other entity or division thereof or otherwise acquire or agree to
acquire any assets which are material, individually or in the aggregate, to
them.
(f) NO DISPOSITIONS. The Company and Western shall not sell, lease
---------------
or otherwise dispose of any of their assets except for sales, leases and other
dispositions in the ordinary course of business consistent with prior practice.
(g) MAINTENANCE OF PROPERTIES. The Company and Western shall
-------------------------
maintain their properties and assets in satisfactory condition and repair for
the purposes intended, ordinary wear and tear and damage by fire or other
casualty excepted.
(h) BENEFIT PLANS, ETC. The Company and Western shall not enter into
------------------
or amend any bonus, incentive compensation, deferred compensation, profit
sharing, retirement, pension, group insurance, stock option, stock purchase or
other benefit plan or any union, employment or consulting agreement except as
required by law or regulations and shall not accelerate the exercisability of
any options, warrants or rights to purchase securities of the Company and
Western pursuant to any benefit plan.
(i) BOOKS AND RECORDS. The books and records of the Company and
-----------------
Western shall be maintained in the usual, regular and ordinary course on a basis
consistent with prior years.
(j) INCREASE IN COMPENSATION. The Company and Western shall not
------------------------
grant to any officer, employee or agent any increase in compensation or in
severance or termination pay, or enter into any employment agreement, except as
may be required under employment, termination or other agreements in effect on
the date of this Agreement and which are described in the attached Exhibits.
(k) PAYMENT OF DEBT. The Company and Western shall not pay any claim
---------------
or discharge or satisfy any lien or encumbrance or pay any obligation or
liability other than in the ordinary course of business or as required by the
terms of any written instrument evidencing or governing the same, a copy of
which has been heretofore made available to Vail Banks.
(l) OTHER ACTIONS. The Company and Western shall not take any action
-------------
that would or could reasonably be expected to result in any of the
representations and
21
warranties of the Company and Western set forth in this Agreement becoming
untrue at any time on or prior to the Closing Date.
(m) MAINTENANCE OF INSURANCE. The Company and Western shall maintain
------------------------
and keep or cause to be maintained and kept in full force and effect all of the
insurance referred to in Section 4.2.4 hereof or other insurance equivalent
thereto.
(n) INVESTMENT PORTFOLIO. The Company and Western shall only invest
--------------------
funds of the Company or Western in securities of the government of the United
States, Repurchase Agreements secured by securities of the government of the
United States, federal funds, or deposits insured by the FDIC; provided,
further, that no such investment by the Company or Western shall have a stated
maturity of greater than thirty (30) days.
(o) BANKING RELATIONSHIPS. No change will be made in the banking and
---------------------
safe deposit arrangements referred to in Section 4.1.8 hereof.
(p) ADVICE OF CHANGES. The Company and Western shall promptly advise
-----------------
Vail Banks orally and in writing of any change or event having, or which
Management of the Company and Western believes could have, a material adverse
effect on the assets, liabilities, business, operations or financial condition
of the Company or Western.
ARTICLE VII
-----------
REPRESENTATIONS AND WARRANTIES OF VAIL BANKS
--------------------------------------------
To induce the Company to enter into and perform this Agreement, Vail
Banks represents, warrants, covenants and agrees as follows, which
representations, warranties, covenants and agreements are being made as of the
date hereof and shall be deemed to be made again as of the Closing:
7.1 GOOD STANDING. Vail Banks is a business corporation duly
-------------
organized, validly existing and in good standing under the laws of the State of
Colorado and is entitled to own or lease its properties and to carry on its
business as now conducted.
7.2 AUTHORITY. Subject to approval of the Federal Reserve, and the
---------
Division of Banking, Vail Banks has full corporate power and authority to make,
execute and perform this Agreement and the transactions contemplated hereby and
the execution, delivery and performance of this Agreement by Vail Banks have
been duly authorized by all necessary corporate action of Vail Banks.
7.3 DEFAULT. Neither the execution and delivery of this Agreement
-------
nor performance by Vail Banks in compliance with its terms will result in a
breach of the terms or conditions of, or constitute a default under, the
articles of incorporation or bylaws of Vail Banks or of any mortgage, note,
bond, indenture, agreement, license or other instrument or obligation to
22
which it is a party or by which it or any of its properties or assets may be
bound or, to the knowledge of management of Vail Banks, affected.
7.4 APPLICATIONS. Vail Banks shall prepare and file, or shall
------------
cause to be prepared and filed, all regulatory applications as may be required
in order to consummate the transactions contemplated by this Agreement. Vail
Banks shall file within sixty (60) days of the date hereof all original
applications for regulatory approval with any and all governmental authorities,
bodies or agencies having jurisdiction over the transactions contemplated by
this Agreement, including, but not limited to, the Federal Reserve, FDIC and the
Division of Banking.
7.5 DOCUMENTS RECEIVED FROM COMPANY AND WESTERN. Vail Banks has
-------------------------------------------
received either a copy or original of each document listed on the attached
Exhibit D.
7.6 REPRESENTATIONS AND WARRANTIES. No representation or
------------------------------
warranty contained in this Article VII contains or will contain any untrue
statement, nor shall such representations and warranties taken as a whole omit
any statement necessary in order to make any statement therein not misleading.
ARTICLE VIII
------------
CONDITIONS TO OBLIGATIONS OF
----------------------------
VAIL BANKS
----------
All of the obligations of Vail Banks under this Agreement are subject
to the fulfillment prior to or at the Closing Date of each of the following
conditions, any one or more of which may be waived by Vail Banks:
8.1 REPRESENTATIONS AND WARRANTIES. The representations and
------------------------------
warranties of the Company contained herein or in any certificate, schedule or
other document delivered pursuant to the provisions hereof, or in connection
herewith, shall be true in all material respects as of the date when made and,
except where otherwise expressly provided herein, shall be deemed to be made
again at and as of the Closing Date and shall be true in all material respects
at and as of such time, except (i) for those representations and warranties
confined to a specific date, which shall be true and correct as of such date, or
(ii) as a result of changes or events expressly permitted or contemplated
herein.
8.2 PERFORMANCE OF CONDITIONS AND AGREEMENTS. The Shareholders and
----------------------------------------
the Company shall have performed and complied in all material respects with all
agreements and conditions required by this Agreement to be performed or complied
with by it prior to or on the Closing Date.
8.3 CERTIFICATES, RESOLUTIONS, OPINION. The Shareholders or the
----------------------------------
Company shall have delivered, or cause Western to deliver, to Vail Banks:
23
(a) a certificate executed by the Shareholders or the
President or Chairman of the Company, dated as of the Closing Date,
and certifying in such detail as Vail Banks may reasonably request to
the fulfillment of the conditions specified in Sections 8.1 and 8.2
hereof;
(b) certificates executed by the Secretary of State of the
State of Colorado, dated not more than five (5) business days prior to
the Closing Date, of the valid existence of the Company and Western,
respectively, under the laws of Colorado;
(c) evidence that the Company and Western have filed all
corporate tax returns required by the laws of the State of Colorado,
and have paid all taxes shown thereon to be due; and
(d) an opinion from counsel of the Company acceptable to Vail
Banks and its counsel, dated the Closing Date, in the form attached as
Exhibit A.
8.4 ACCOUNTANTS' LETTER. The Company shall provide to Vail Banks a
-------------------
letter from Dalby, Wendland, P.C. or another accounting firm selected by Vail
Banks prior to July 15, 1997 dated the Closing Date, to the effect that: At the
request of the Company they have carried out procedures to a specified date not
more than five business days prior to the Closing Date, which procedures did not
constitute an examination in accordance with generally accepted auditing
standards, of the financial statements of the Company, as follows: (a) read the
unaudited balance sheets and statements of income of the Company and Western
from December 31, 1996 through the date of the most recent monthly financial
statements available in the ordinary course of business; (b) read the minutes of
the meetings of shareholders and Board of Directors of the Company and
Western from December 31, 1996 to said date not more than five business days
prior to the Closing Date; and (c) consulted with certain officers and employees
of the Company and Western responsible for financial and accounting matters and,
based on such procedures, nothing has come to their attention which would cause
them to believe that (i) such unaudited interim balance sheets and statements of
income are not fairly presented in conformity with generally accepted accounting
principles applied on a basis consistent with that of the 1996 Financial
Statements, (ii) as of said date not more than five business days prior to the
Closing Date the shareholders' equity, long-term debt, reserve for possible loan
losses and total assets of the Company, in each case as compared with the
amounts shown in the 1996 Financial Statements, are not different except as set
forth in such letter, or (iii) for the period from December 31, 1996 to said
date not more than five business days prior to the Closing Date, the net
interest income, total and per share amounts of consolidated income (before
extraordinary items) and net income of the Company, as compared with the
corresponding portion of the preceding 12-month period, are not different except
as set forth in such letter.
8.5 REGULATORY APPROVALS. Vail Banks shall have received from any
--------------------
and all governmental authorities, bodies or agencies having jurisdiction over
the transactions contemplated by this Agreement, including, but not limited to,
the Federal Reserve, FDIC and the Division of
24
Banking, all such consents, authorizations and approvals as are necessary for
the consummation thereof and all applicable waiting or similar periods required
by law shall have expired.
8.6 EMPLOYMENT. All written employment, termination, consulting or
----------
similar agreements entered into by the Company or Western shall have been
effectively terminated with no remaining liabilities, duties or obligations on
the part of the Company or Western under said agreements.
ARTICLE IX
----------
CONDITIONS TO OBLIGATIONS OF THE COMPANY
----------------------------------------
All of the obligations of the Company under this Agreement are subject
to the fulfillment prior to or at the Closing Date of each of the following
conditions, any one or more of which may be waived by the Company:
9.1 REPRESENTATIONS AND WARRANTIES. The representations and
------------------------------
warranties of Vail Banks contained herein or in any certificate, schedule or
other document delivered pursuant to the provisions hereof, or in connection
herewith, shall be true in all material respects as of the date when made and
shall be deemed to be made again at and as of the Closing Date and shall be true
in all material respects at and as of such time.
9.2 PERFORMANCE OF AGREEMENTS. Vail Banks shall have performed and
-------------------------
complied in all material respects with all agreements and conditions required by
this Agreement to be performed or complied with by it prior to or at the Closing
Date.
9.3 CERTIFICATES, RESOLUTIONS, OPINIONS. Vail Banks shall have
-----------------------------------
delivered to the Company:
(a) a certificate executed by the President of Vail Banks,
dated the Closing Date, certifying in such detail as the Company may
reasonably request to the fulfillment of the conditions specified in
Sections 8.1 and 8.2 hereof;
(b) duly adopted resolutions of the Board of Directors of
Vail Banks, certified by the Secretary or an Assistant Secretary
thereof, dated the Closing Date, authorizing and approving (i) the
execution of this Agreement and the consummation of the transactions
contemplated herein in accordance with their respective terms, and
(ii) all other necessary and proper corporate action to enable Vail
Banks to comply with the terms hereof;
(c) an opinion of Xxxxxxxxxx Xxxxxxxx LLP, counsel for Vail
Banks, dated the Closing Date, in the form attached as Exhibit B.
25
(d) certificates executed by the Secretary of State of the
State of Colorado, dated not more than five (5) business days prior to
the Closing Date, of the valid existence of Vail Banks under the laws
of Colorado.
9.4 REGULATORY APPROVALS. Any and all governmental authorities,
--------------------
bodies or agencies having jurisdiction over the transactions contemplated by
this Agreement, including, but not limited to, the Federal Reserve, the FDIC and
the Division of Banking, shall have granted all such consents, authorizations
and approvals as are necessary for the consummation thereof, and all applicable
waiting or similar periods required by law shall have expired.
ARTICLE X
---------
WARRANTIES, NOTICES, ETC.
-------------------------
10.1 WARRANTIES. All statements contained in any certificate or other
----------
instrument delivered by or on behalf of the Company pursuant to Article VII or
Vail Banks pursuant to Article VIII hereto or in connection with the
transactions contemplated hereby shall be deemed representations and warranties
hereunder by the delivering party.
10.2 SURVIVAL OF REPRESENTATIONS. All representations, warranties,
---------------------------
covenants, and agreements made by any party hereto in or pursuant to this
Agreement or in any instrument, exhibit or certificate delivered pursuant hereto
shall be deemed to have been material and to have been relied upon by the party
to which made, but, except as set forth hereafter or specifically stated in this
Agreement, such representations, warranties, covenants, and agreements shall
expire and be of no further force and effect upon the consummation of the Stock
Purchase; provided, however, that the following shall survive consummation of
the Stock Purchase and the transactions contemplated hereby:
(a) the opinions of counsel referred to in Sections 8.3(d)
and 9.3(c) of this Agreement;
(b) the opinion of accountants referred to in Section 8.4 of
this Agreement;
(c) any intentional misrepresentation of any material fact
made by any party hereto in or pursuant to this Agreement or in any
instrument, document or certificate delivered pursuant hereto, which
shall survive for a period of two (2) years from the consummation of
the Stock Purchase; and
(d) the covenant with respect to the Confidentiality of
certain information contained in Section 3.5 of this Agreement.
The Controlling Company Shareholders shall be liable for any liability under
Section 10.2(c) hereof arising out of a breach of any representation, warranty,
covenant or agreement delivered by or on
26
behalf of the Company or the Controlling Company Shareholders; provided,
however, that the total amount of any such liability shall not exceed the amount
of the Purchase Price and each Controlling Company Shareholder shall be
personally liable for that percentage of the total liability which the number of
shares of Company Common Stock owned by such Controlling Company Shareholder as
set forth on Exhibit C bears to the total number of Company Common Shares owned
by all Controlling Company Shareholders as set forth on Exhibit C; and provided
further that the Controlling Company Shareholders shall be liable only to the
extent any such liability is in excess of any applicable insurance coverage.
10.3 NOTICE. All notices, requests, demands and other communications
------
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given if delivered or mailed, first class, certified mail, postage
prepaid or transmitted by facsimile to each of the parties hereto at the
respective addresses set forth below (or at such other address either party may
have theretofore notified the other party in writing):
(a) To the Company
prior to Closing: Xx. Xxxxxxx Xxxxx
000 Xxxxx Xxxxx Xxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
(b) To the Company
after Closing: Xx. Xxx Xxxxxx
000 Xxxx Xxxxxx Xxxx
Xxxxx Xxxxx, Xxxxxxxx 00000
Mr. Xxxxxx Xxxxxx
P. O. Xxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Xx. Xxxxxxx Xxxxx
000 X.X. 0xx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
With copies to: Hall & Xxxxx, L.L.C.
0000 00xx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attn.: C. Xxxx Xxxxx, Esq.
Fax: 303/000-0000
(c) To Vail Banks: Vail Banks, Inc.
000 X. Xxxxxxxx Xxxx, Xxxxx 000
Xxxx, Xxxxxxxx 00000
Attn.: X.X. Xxxxxxx, Xx.
Fax: 970/000-0000
27
With copies to: Xxxxxxxxxx Xxxxxxxx LLP
Suite 2800
0000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attn.: R. Xxxxxxxxx Xxxxxxxxx, Xx.
Fax: 404/000-0000
10.4 ENTIRE AGREEMENT. This Agreement supersedes all prior
----------------
discussions and agreements by and between Vail Banks and the Company with
respect to the Stock Purchase and the other matters with respect thereto, and
the Agreement contains the sole and entire agreement between the parties hereto
with respect to the transactions contemplated herein.
10.5 WAIVER; AMENDMENT. Prior to or on the Closing Date, Vail Banks,
-----------------
acting through its Board of Directors, Chairman or President, shall have the
right to waive any default in the performance of any term of this Agreement by
the Company, to waive or extend the time for the fulfillment by the Company of
any and all of its obligations under this Agreement, and to waive any or all of
the conditions precedent to the obligations of Vail Banks under this Agreement,
except any condition which, if not satisfied, would result in the violation of
any law or applicable governmental regulation. Prior to or on the Closing Date,
the Company, acting through its Board of Directors or Chairman, shall have the
right to waive any default in the performance of any term of this Agreement by
Vail Banks, to waive or extend the time for the fulfillment by Vail Banks of any
and all of its obligations under this Agreement, and to waive any or all of the
conditions precedent to the obligations of the Company under this Agreement,
except any condition which, if not satisfied, would result in the violation of
any law or applicable governmental regulation. This Agreement may be amended by
a subsequent writing signed by the parties hereto upon the approval of the
Boards of Directors of each of the parties hereto; provided, however, that the
provisions of Sections 8.5 and 9.4 requiring regulatory approval shall not be
amended by the parties hereto without such approval.
ARTICLE XI
----------
TERMINATION
-----------
This Agreement may be terminated at any time prior to or on the
Closing Date upon written notice to the other party hereto as follows, and, upon
any such termination of this Agreement no party hereto shall have any liability
to the other party, except that the provisions of Sections 3.3 and 3.5 hereof
shall survive the termination of this Agreement for any reason.
11.1 MATERIAL ADVERSE CHANGE OF THE COMPANY OR WESTERN. By Vail
-------------------------------------------------
Banks, if, after the date hereof, a material adverse change in the financial
condition or business of the Company or Western shall have occurred or the
Company or Western shall have suffered a material loss or damage to any of its
properties or assets, which change, loss or damage materially affects or impairs
the ability of either the Company or Western to conduct its business. A
material
28
adverse change shall be found to exist if Western fails to maintain any
of the following: (a) a CAMEL rating of 2 or better; (b) a satisfactory or
better CRA rating; or (c) a satisfactory or better compliance rating.
11.2 NONCOMPLIANCE OF THE COMPANY. By Vail Banks, if the terms,
----------------------------
covenants or conditions of this Agreement to be complied with or performed by
the Company at or before the Closing shall not have been complied with or
performed in all material respects and such noncompliance or non-performance
shall not have been waived by Vail Banks.
11.3 NONCOMPLIANCE OF VAIL BANKS. By the Company, if the terms,
---------------------------
covenants or conditions of this Agreement to be complied with or performed by
Vail Banks at or before the Closing shall not have been complied with or
performed in all material respects and such noncompliance or non-performance
shall not have been waived by the Company.
11.4 FAILURE TO DISCLOSE. By Vail Banks, if it learns of any fact or
-------------------
condition not disclosed in this Agreement, the attached Exhibits or the 1996
Financial Statements and which was required to be disclosed by the Company
pursuant to the provisions of this Agreement at or prior to the date of
execution hereof with respect to the business, properties, assets or earnings of
the Company or Western which materially and adversely affects such business,
properties, assets or earnings or the ownership, value or continuance thereof.
11.5 ENVIRONMENTAL LIABILITY. By Vail Banks, if it learns of any
-----------------------
potential liability of the Company arising from noncompliance with any federal,
state or local environmental law by the Company, or any potential liability of
the Company arising from any environmental condition of the properties or assets
of the Company, including any properties or assets in which the Company holds a
security interest.
11.6 ADVERSE PROCEEDINGS. By either party, if any action, suit or
-------------------
proceeding shall have been instituted or threatened against either party to this
Agreement to restrain or prohibit, or to obtain substantial damages in respect
of, this Agreement or the consummation of the transactions contemplated herein,
which, in the good faith opinion of such party, makes consummation of the
transactions herein contemplated inadvisable.
11.7 TERMINATION DATE. By either party, if all consents,
----------------
authorizations and approvals of any and all governmental authorities, bodies or
agencies having jurisdiction over the transactions contemplated by this
Agreement necessary for the consummation of such transactions have not been
granted on or before December 31, 1997; provided, however, that in the event
application has been made for all such consents, authorizations and approvals
and on December 31, 1997 any required consent, authorization or approval has not
been received or compliance with any such consent, authorization or approval
which has been received has not been completed then the Termination Date shall
be March 31, 1998.
ARTICLE XII
-----------
29
COUNTERPARTS, HEADINGS, ETC.
----------------------------
This Agreement may be executed simultaneously in any number of
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument. The headings herein set out are for
convenience of reference only and shall not be deemed a part of this Agreement.
ARTICLE XIII
------------
BINDING EFFECT
--------------
This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and assigns; provided,
however, that this Agreement may not be assigned by any party without the prior
written consent of the others.
ARTICLE XIV
-----------
GOVERNING LAW
-------------
The validity and effect of this Agreement and the rights and
obligations of the parties hereto shall be governed by and construed and
enforced in accordance with the laws of the State of Colorado.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized corporate officers and their corporate seals
to be affixed hereto all as of the day and year first above written.
VAIL BANKS, INC.
By: /s/ X.X. Xxxxxxx, Xx.
-----------------------
Chairman
(CORPORATE SEAL)
Attest:
/s/ X. X. Xxxxxxxxx, Xx.
--------------------------
Assistant Secretary
30
CEDAREDGE FINANCIAL
SERVICES, INC.
By: /s/ Xxx X. Xxxxxx
------------------
President
(CORPORATE SEAL)
Attest:
/s/ Xxxxx X. Xxxxx
------------------
Secretary
COMPANY SHAREHOLDERS:
/s/ Xxx X. Xxxxxx
-----------------
/s/ Xxxxxxx X. Xxxxx
--------------------
/s/ Xxxxx X. Xxxxx
------------------
Xxxxxx X. Xxxxxx Revocable Trust
/s/ Xxxxxx X. Xxxxxx, Trustee
-----------------------------
31
The following persons have executed this Agreement solely in order to
confirm such person's contractual obligation to deliver their Company Common
Stock to Vail Banks and make the representations, warranties and covenants
contained in Article V of the Agreement.
/s/ Xxx X. Xxxxxx
-----------------
/s/ Xxxxxxx X. Xxxxxxxx
-----------------------
/s/ Xxxxxxxx X. Xxxxxxxx
------------------------
/s/ Xxxxx Xxxxx
---------------
/s/ Xxxxxx X. Xxxxxx
--------------------
/s/ Xxxx Xxxxxx
---------------
32
INDEX TO EXHIBITS
-----------------
Exhibit A Opinion of Counsel for Cedaredge
Exhibit B Opinion of Counsel for Vail Banks
Exhibit C List of Cedaredge Shareholders and Number of Shares Owned
Exhibit D Documents Received from Company and Western
Exhibit E Form of Consulting Agreement
33
