**Exhibit 2.2**

 

**BRANCH PURCHASE ANDDEPOSIT ASSUMPTION AGREEMENT**

 

THIS BRANCHPURCHASE AND DEPOSIT ASSUMPTION AGREEMENT (the “Agreement”) is made and enteredinto as of this 30thday of January, 2004 (the“Agreement Date”), among the following parties (the “Parties”):

 

1)                                      MatrixCapital Bank, a federal savings bank organized under the laws of the UnitedStates of America (the “Seller”); and

 

2)                                      FIRSTBANK,a federal savings bank organized under the laws of the United States of America(“FIRSTBANK” or “Purchaser”).

 

**W I T N E S S E T H**

 

WHEREAS, Purchaser desires to purchasecertain of the assets and to assume certain of the deposit and otherliabilities of Seller’s branch office facilities located in Las Cruces, NewMexico and Seller desires to sell such assets and to have such liabilitiesassumed;

 

NOW THEREFORE, in consideration of the mutualpromises and conditions herein set forth, the parties hereto agree as follows:

 

**Section1**.  Definitions:  For the purpose of this Agreement, the termsdefined in this Section 1 shall have the meanings assigned to them herein:

 

“Adjustment Date” means the fifth BusinessDay after the end of the first full calendar month following the Closing Date.

 

“Branch or Branches” means (as the contextrequires) 1) the Branch Premises, 2) Seller’s core banking activities and theassets specifically described in this Agreement arising from, accounted for onthe books of, or relating most directly to, the Branch Premises asdistinguished from the operation of Seller’s other locations (whether or notrelated documents are maintained or accounting entries are made at the BranchPremises), or 3) both of the foregoing.

 

“Branch Premises” means (collectively orindividually, as the context requires) 1) Seller’s full-service bankingfacilities located at 277 E. Amador and Annex and 3090 Roadrunner Parkway, LasCruces, Dona Ana County, New Mexico and the lessor’s interest in the Leases atthe facilities more particularly described in Schedule 6.06, and 2) Seller’sAutomated Teller Machine located in leased facilities at Picacho Hills CountryClub, 6861 Via Campestra, Las Cruces, Dona Ana County, New Mexico.

 

“Business Day” means any day excludingSaturday, Sunday and any day which is a legal holiday under the laws of theState of New Mexico, or is a day on which banking institutions located in NewMexico are authorized or required by law or other governmental action to close.

 

“Deposit” or“Deposits” shall have the meaning set forth in Section 3(1) of the FederalDeposit Insurance Act, 12 U.S.C. 1813(1), including, without limitation, and asfurther defined

 

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in Section 3.01, all uncollected items included in the depositors’balances and credited on the books of the Seller at the Determination Date.

 

“DeterminationDate” means the Seller’s close of business on the last Business Day precedingthe Closing Date.  (The daily statementof Seller’s Branches reflecting the amounts of various assets and liabilitiesas of the close of business on the Determination Date on a full accrual basisshall determine with respect to certain items the exact balance beingtransferred to Purchaser, as more specifically set out below).

 

“Equipment”means those improvements, additions, alterations and installations constitutingall or a part of the Branch Premises, on and after the Agreement Date,including, without limitation, the automated teller machines presently in useat or in connection with the Branches, artwork, carpeting, furniture, shelving,and office supplies (other than office supplies with Seller’s name or trademark),all as more specifically described on Schedule 6.06.  As specified in Section 6.06, Schedule 6.06 hereto shall bedelivered by Seller to Purchaser on or before the 10th calendar dayfollowing the Agreement Date.

 

“Fixtures”means those improvements, additions, alterations and installations constitutingall or a part of the Branch Premises on and after the Agreement Date, all asmore specifically described on Schedule 6.06.

 

“Furniture”means those improvements, additions, alterations and installations constitutingall or a part of the Branch Premises on and after the Agreement Date, all asmore specifically described on Schedule 6.06.

 

“Leases” meansthe real property leases entered into between Seller and the tenants at theBranch Premises specifically described on Schedule 4.06.

 

“Loans” meansall of the loans included in the books and records of Seller which wereoriginated by the Branches.

 

‘TransferredLoan” is defined in Section 2.03.

 

“LoanDiscount” shall have the meaning set forth in Section 2.03.

 

“Real EstateProperties” means the real estate and improvements located in Las Cruces, NewMexico at 277 E. Amador and Annex and 3090 Roadrunner Parkway, all as morespecifically described in Exhibit A hereto.

 

“Contracts”have the meaning given them in Section 4.04.

 

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**Section 2.**Purchaseand Sale of Assets.

 

2.01  Assets to be Purchased – Purchase Price.  Subject to the terms and conditions providedhere, Seller agrees to sell to Purchaser, and Purchaser agrees to purchase theReal Estate Properties, the Leases, the Furniture, the Fixtures, the Equipment,the Contracts, Cash on Hand at the Branches, and the Transferred Loans(collectively, the “Assets”) as they exist on the Closing Date.  The total purchase price for the Assets,subject to adjustment on the Determination Date in accordance with Section5.03, shall be as follows (“Purchase Price”):

 
| **Assets**                                          |   | **Purchase  Price**                                       |
|-----------------------------------------------------|--------|-----------------------------------------------------------|
|                                                |   |                                                      |
| Leases and  Furniture,  Fixtures and Equipment |   | $                                                         | 227,000 |
|                                                |   |                                                      |
| Transferred  Loans                                  |   | As set forth  in Section 2.03.                            |
|                                                |   |                                                      |
| Cash on Hand                                        |   | Face amount                                               |
|                                                |   |                                                      |
| Real Estate                                         |   | As set forth  in Section 2.07                             |
|                                                |   |                                                      |
| Purchase  Premium                                   |   | Determined  pursuant to section 2.02                      |
|                                                |   |                                                      |
| Contracts                                           |   | Assumption  of the Contracts as specified in Section 3.05 |

 

2.02         Calculation of Purchase Premium.  The “Purchase Premium” shall be determinedby multiplying (A) the average of the daily total Deposits at the Branches(but, for purposes of determining the Purchase Premium only, excludingspecifically from the definition of Deposits any brokered deposits, municipal,state or public school deposits) during the twenty (20) calendar day periodimmediately preceding the Determination Date times (B) 6.5% (as stated in theletter of intent).

 

2.03         Purchase Price for Transferred Loanand Loan Discount.  The purchaseprice for each Transferred Loan (including, for purposes of this Agreement, theLoan Discount described below, the “Transferred Loan Purchase Price”) shall be(A) 100% of the unpaid principal balance of each such Transferred Loan on theDetermination Date plus (B) accrued and unpaid interest on such TransferredLoan through the Determination Date.; provided that, with respect to eachTransferred Loan, Seller shall provide Purchaser a discount (the “LoanDiscount”) equal to (A) .75% multiplied by (B) the unpaid principal balance ofeach such Transferred Loan as of the Determination Date.  In no event shall the Loan Discount withrespect to all of the Transferred Loans be greater than $170,000.  The Loan Discount is to cover prior GeneralValuation Allowance (GVA) for future losses established on the total of theTransferred Loans on the books of the Seller to meet the requirements ofGenerally Accepted Accounting Principles, and general and specific allowancerequirements.

 

2.04         Allocation of Purchase Price.  The Purchase Price shall be allocated to theAssets based upon the schedule set forth above.  Purchaser and Seller shall jointly participate in

 

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preparing Internal Revenue Service Form 8594 (“Asset AcquisitionStatement under Section 1060”) to be filed by Purchaser to reflect thisallocation.

 

2.05         Acquisition of Loans.  Purchaser has had the opportunity to make anextensive examination of the credit files containing documentation with respectto all of the Loans.  At least ten (10)Business Days prior to the Determination Date, Seller shall provide Purchaserwith a list of all Loans and Purchaser shall mark on such list all Loans whichPurchaser desires to exclude from the purchase on the Closing Date.  All Loans so included in the purchase arereferred to herein as the “Transferred Loans” and each is referred to herein asa “Transferred Loan.”  Thirty days afterthe Closing Date Purchaser may request Seller to repurchase any TransferredLoan.  Seller agrees to make suchrepurchase, by wire transfer within two (2) business days following receipt ofSeller’s request.  The repurchase pricefor each such repurchased Transferred Loan shall be equal to the TransferredLoan Purchase Price for the Transferred Loan in question.

 

2.06         Acquisition of Real Estate.  At Closing, Purchaser shall purchase fromSeller and Seller shall sell to Purchaser the Real Estate Properties.  The terms upon which such purchase and saleshall occur are set forth in Exhibit A hereto.

 

2.07.        Real Estate Purchase Price.  The purchase price for the Real EstateProperties shall be equal to the assessed value of the properties as determinedby the Dona Ana County Assessor for year 2002, plus a premium of three and onehalf percent (3.5%) of such assessed value, which equals an acquisition priceof:

 
| (1)   |   | $       | 2,215,521 |   |
|-------|--------|---------|-----------|--------|
| (2)   |   | 353,763 |      |
| Total |   | $       | 2,569,284 |   |

 

**Section 3**.  Assumption of Liabilities;  No Assumption of Other Liabilities.

 

3.01         Deposit Liabilities.  Seller agrees to assign to Purchaser, andPurchaser agrees to assume on the Determination Date all obligations andliabilities of Seller to be performed, satisfied, and discharged on and afterthe Determination Date with respect to Deposits carried on the books of theBranches and existing at the Determination Date and owed to the person,corporations and other entities (including Deposits held by IndividualRetirement Accounts) named as the respective depositors in the books of theBranches at the Determination Date, including, without limitation, (a) alldemand deposits, but excluding outstanding cashier’s checks, other officialchecks of Seller, and (b) all time and savings deposits, including accrued andunpaid interest thereon computed through the Determination Date, but excludingany brokered certificates of deposits of Seller (the items included in (a) and(b) above being collectively, the “Deposits”). The term “Deposits” shall notinclude deposit accounts, if any, that, by law or contract, cannot either betransferred by Seller or assumed by Purchaser. Seller also agrees to transfer to Purchaser all signature cards, depositcontracts, canceled checks and other records required to be retained related tothe Deposits in the possession of Seller.

 

3.02         Payment of Checks, Drafts andOrders.  Purchaser agrees to pay allproperly payable checks, drafts and withdrawal orders presented to it by mail,over its counters, or through clearing houses by depositors whose accounts arecarried on the books of the Branches, whether drawn on the check or draft formsprovided by Seller or by Purchaser, to the

 

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extent that the assumed balances of Deposits to the credit of therespective makers or drawers shall be sufficient to permit the payment thereof,and in all other respects to discharge, in the usual course of the bankingbusiness, the duties and obligations of Seller with respect to the balances dueand owing with respect to the Deposits.

 

3.03         Interest on Accounts Assumed.  Purchaser agrees to pay interest on allinterest bearing Deposits assumed by it in accordance with the terms thereof atthe declared rate established by Seller, subject to the individual contractsrelating to such Deposits and Purchaser’s right to change applicable interestrates as permitted or required by law.

 

3.04         Assumption of Leases.  Purchaser shall assume and fully dischargeas they become due all liabilities and obligations arising after theDetermination Date under the Leases.

 

3.05         Assumption of Contracts.  Purchaser shall assume and fully dischargeas they become due all liabilities and obligations arising after theDetermination Date under the Contracts.

 

3.06         No Other Liabilities Assumed.  Purchaser shall not assume any liabilitiesof Seller, or any kind or description, known or unknown, disclosed orundisclosed, except for the liabilities described in this Agreement.  Those liabilities and obligations of Sellerassumed by Purchaser under this Agreement are referred to herein as the“Assumed Obligations” or “Assumed Liabilities”.

 

**Section 4.**  Taxes; Pro-Rations and Reimbursements.

 

4.01         Sales Taxes.  Purchaser shall pay and remit all sales taxesor use taxes which, by law, become due and payable by reason of theconsummation of the transaction contemplated hereby.

 

4.02         Ad Valorem Taxes.  Ad valorem taxes and personal property taxesaccruing or assessed with respect to the Assets for the calendar year whichincludes the Closing Date shall be pro-rated between Purchaser and Seller as ofthe Closing Date.  If the amount of suchtaxes cannot be ascertained at Closing, such pro-ration shall be done on thebasis of taxes assessed for calendar year 2003.

 

4.03         Utilities.  The net actual payment necessary to pro-rateutility bills (including without limitation monthly statements for electricity,natural gas, water, sewer, trash collection and telephone) shall be made byPurchaser or Seller, as applicable, on the Adjustment Date, but with thepro-ration calculated as of the Closing Date.

 

4.04         Contracts.  All equipment, maintenance, supplies andmaterial, and service agreements relating to the Branches (“Contracts”) arelisted on Schedule 6.07.  Seller shallassign to Purchaser, as of the Closing Date, any of Seller’s rights under theContracts.

 

4.05                           Leases.  All payments under Leases shall be proratedas of Closing Date.

 

4.06         Rental Income.  Seller will assign all building leasesrelating to the Real Estate Properties to Purchaser.  All tenant deposits covering such items as first and last monthsrentals plus any damage deposits held in escrow will be assigned to thePurchaser.  Schedule of tenant leasesare detailed in Schedule 4.06.

 

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4.07         Safe Deposit Boxes.  Box income will be prorated to Purchaserbased on the Determination Date.

 

4.08                           Employees.

 

(a) On theClosing Date, Purchaser shall offer employment at the Branches to all employeesof Seller employed at the Branches at base wages and salaries no less favorablethan the wages and salaries currently being paid by Seller to suchemployees.  To the extent consistentwith Purchaser’s existing structure for comparable positions and comparableofficer titles and its current policies regarding officer titles, suchemployees shall be offered positions with responsibilities and officer titlescomparable to those they currently have with Seller.  All such employees accepting employment with Purchaser arehereafter called the “Continuing Employees”. Purchaser shall cause all Continuing Employees to have the same benefitsprovided by Purchaser generally to employees of Purchaser.  Continuing Employees will be provided withcredit for time served with respect to Purchaser’s employee Profit Sharing andEmployee Stock Ownership Plan.  Inaddition, Purchaser shall permit each Continuing Employee the option to obtainpast service credit for accrued vacation as of the Determination Date or toaccept payment from the Seller for such accrued vacation leave as of theDetermination Date (in which case, no past service credit shall be provided byPurchaser to the Continuing Employee). In the event that a Continuing Employeechooses to accept from Purchaser past service credit for his or her accruedvacation as of the Determination Date, then Seller shall pay to Purchaser theamount, plus applicable payroll taxes, that otherwise would have been payableto such Continuing Employee had he or she chose to be paid for such accruedvacation.

 

(b)           Seller agrees that it shall render toPurchaser commercially reasonable assistance in soliciting employees of theBranches to accept employment with Purchaser, including but not limited topermitting Purchaser to immediately contact and solicit such employees.  Purchaser acknowledges that Seller has madeno assurances to Purchaser with respect to such employees’ accepting positionswith Purchaser and incurs no liability to Purchaser in rendering the assistancereferred to herein.

 

(c)           Purchaser shall have no liability toany of Seller’s current employees for any accrued wages, sick leave, vacationtime, pension obligations or any other employee benefits.  Purchaser will have no liability and willnot assume obligations under any “employee benefit plan”, through the ClosingDate (as such term is defined in the Employee Retirement Security Act of 1974,as amended) of Seller or any other obligations (including, without limitation,severance obligations) of Seller to the employees of the Branches.  Seller will be responsible for fulfilling,and resolving any disputes concerning its liabilities or obligations(including, without limitation, severance obligations) to the employees at theBranches under any such employee benefit plan or otherwise.  All wages and salaries, workers’compensation payments, vacation pay and social security and unemployment taxesof employees of the Branches shall be paid by Seller for the period to andincluding the Determination Date. Seller affirms that there are no employment contracts with anyContinuing Employees in effect at Closing Date.

 

**Section 5.**              Closing.

 

5.01         Date of Closing.  The closing of the transactions contemplatedhereby (the “Closing”) shall take place at a mutually agreed time and place ona Business Day within 30 days following the satisfaction (or waiver, whenappropriate) of all conditions, including the receipt of all requiredregulatory approvals for the transactions provided for herein, and the

 

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expiration of any statutory waiting periods applicable thereto.  The date of Closing is referred to herein asthe “Closing Date”.  The effective timeof the Closing for the purpose of final calculation of balances of Assetstransferred, liabilities assumed, and Deposits and accrued interest thereonshall be as of Seller’s normal close of business on the DeterminationDate.  Purchaser shall take possessionof the Branch Premises and shall open branch offices at the Branch Premiseseffective at the normal closing of business on the Closing Date notwithstandingthe fact that the Closing may not be concluded until later that day.  Provided that the Closing is in factconsummated on the Closing Date, all banking transactions occurring (deposits,withdrawals, receipt of loan payments, accrual of interest, etc.) with respectto any Assets purchased or Deposits assumed shall be treated (as betweenPurchaser and Seller) as having occurred subsequently to the Closing and shallbecome part of the operations of the Purchaser.

 

5.02                           Actionsof Parties at Closing.  

 

(a)                                  AtClosing, Seller Shall:

 

(1)           Execute and deliver to Purchaser inrecordable form an assignment of the Leases together with any required consentsand any assignments reasonably necessary in order to evidence the sale toPurchaser, without recourse, of the Transferred Loans and any collateral relatingthereto;

 

(2)           Execute and deliver to Purchaser suchbills of sale, endorsements, assignments and other instruments of transfer asreasonably required in order to evidence ownership of the Assets in Purchaser,together with any required consents;

 

(3)           Deliver to Purchaser, all files,documents, papers, agreements and other records pertaining to the Assetstransferred and the Assumed Liabilities;

 

(4)                                  Deliverthe Cash on Hand to Purchaser;

 

(5)           Deliver physical possession of theBranch Premises to Purchaser, including delivery of keys, security codes, etc;

 

(6)           Pay to Purchaser by wire transfer insame day funds a sum of money equal to the amount of the Deposits assumed byPurchaser pursuant to Section 3 (including interest accrued through theDetermination Date) and execute, acknowledge and deliver to Purchaser allcertificates and other documents required to be delivered to Purchaser at theClosing pursuant to the terms of this Agreement.

 

(b)           At the Closing, Purchaser shall:

 

(1)           Pay to Seller the Purchase Price;

 

(2)           Execute, acknowledge and deliver toSeller such instruments and documents as reasonably required to evidencePurchaser’s assumption of the Assumed Liabilities

 

(3)           Execute, acknowledge and deliver toSeller all certificates and other documents required to be delivered to Sellerat the Closing pursuant to the terms of this Agreement.

 

5.03         Adjustment Date:  The payments which are required to be madeon the Closing Date shall be made pursuant to a preliminary settlementstatement agreed to by the parties, substantially in the form of Schedule 2.0hereto.  On the Adjustment Date, Sellerand Purchaser shall make an adjusting settlement between each other as of theDetermination Date with regard to pro-rations and other adjustments provided inthis Agreement and with regard to any errors, omissions or miscalculations withregard to amounts paid by either party on the Closing Date or subsequently;notwithstanding the foregoing, Purchaser and Seller shall make settlement witheach other as often as each Business Day, if necessary, in order to reimbursethe

 

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other party for cashier’s checks or customer checks presented to andpaid by one party but required to be paid by the other party pursuant to thisAgreement.

 

**Section 6**.  Representations and Warranties of Seller.  Seller represents and warrants to Purchaseras follows:

 

6.01         Organization of Seller.  Seller is a federal savings bank dulyorganized, validly existing under the laws of the United States and has allrequisite corporate power and authority and possesses all governmental andother permits, licenses, approvals and other authorizations to own or lease itsproperties and to carry on its business as now being conducted.  Seller is an insured bank as defined in theFederal Deposit Insurance Act and applicable regulations thereunder.

 

6.02         Authority; Binding Effect.  Seller has full right and authority to enterinto this Agreement and subject to receipt of any applicable regulatoryapprovals, to perform its obligations hereunder.  The execution and delivery of this Agreement and the consummationof the transactions contemplated hereby have been duly and validly authorizedby the Board of Directors of Seller and no other corporate acts or proceedingson the part of Seller are necessary to authorize this Agreement or thetransaction contemplated hereby; and this Agreement constitutes the valid andlegally binding obligation of Seller enforceable against Seller in accordancewith its terms.  The execution anddelivery of this Agreement, the consummation of the transactions contemplatedhereby and the compliance by Seller with any of the provisions hereof will notconflict with, result in a breach of, or entitle any party to terminate or calla default with respect to any contract or instrument to which the Seller andthe Assets or liabilities assumed hereunder are subject.

 

6.03         Financial Records.  All books and records of the Branches havebeen (and will be as of the Closing Date) kept in accordance with generallyaccepted accounting principles and in accordance with all applicable recordretention periods under federal or state law in all material respects and thefinancial records of the Seller as of November 30, 2003 present fairly in allmaterial respects the financial position of the Branches and are complete,current, and accurate in all material regards as of the date(s) so stated.

 

6.04         Liability and Obligations.  At the Agreement Date, the Branches had noobligation or liability, whether accrued, absolute, contingent or otherwise,which was material to the financial condition, business or obligations of theBranches or which when combined with all similar obligations or liabilities,would have been material, which has not been reflected in the Branches’financial records, or in the schedules referred to herein, nor does there exista set of circumstances resulting from transactions effected or events occurringwith respect to the Assets on or prior to the Agreement Date, or from anyaction omitted to be taken during such period which, to the knowledge ofSeller, could reasonably be expected to result in any such material obligationor liability, except as disclosed in the financial records or in the schedulesreferred to herein.

 

6.05         Evidence of Indebtedness.  Each note or other instrument evidencing aTransferred Loan and any related security agreement or instruments (includingwithout limitation a guaranty or similar instrument) is (A) to the knowledge ofSeller, a legal, valid and binding obligation of the obligor named therein,enforceable against such obligor in accordance with its terms (subject, as toenforcement of remedies, to applicable bankruptcy, insolvency, reorganization,moratorium and similar laws from time to time in effect), (B) has not been

 

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participated out to another lender, and (C) all actions necessary toperfect any related security interest have been taken or will be taken bySeller in a timely manner.  To the bestknowledge of Seller, no Transferred Loan is subject to any defense, offset orcounterclaim and each Transferred Loan complies with all applicable laws andregulations known to Seller.  To theknowledge of Seller there are no valid claims for offset or other defense(including, but not limited to usury) by any such obligor based on any actionor omission of Seller.

 

6.06         Physical Properties.  Schedule 6.06, to be delivered by Seller toPurchaser within ten (10) calendar days following the execution of thisAgreement, provides an itemized list of all items of Furniture, Fixtures,Equipment, and other Assets owned by Seller and located at the Branches as ofthe Agreement Date, except those items, if any, of Furniture, Fixtures andEquipment listed in Schedule 6.06 which are not being acquired by Purchaser.Seller owns each such item free and clear of all liens, pledges, securityinterests, charges, burdens, encumbrances, options and adverse claims.  The operation of the property and businessof Seller at the Branches in the manner in which they were previously operatedor are now operated does not, to the knowledge of Seller, violate any existingor proposed environmental laws, zoning ordinances, building codes or municipalregulations in such a way as could, if such laws, ordinances or regulationswere enforced, result in any material impairment of the use of the Branches forthe purpose for which they are now operated. Seller is aware of no existing or contemplated condemnation proceedingsaffecting or relating to the Branch premises and Seller has paid or will pay infull all bills and invoices for labor and materials arising from the ownershipand operation of the Branch premises and such Branch premises shall be in goodoperating condition and free of all liens and claims.

 

6.07.        Agreements, Contracts andCommitments.  Schedule 6.07 to thisAgreement lists specifically all Contracts to which Seller is a party or bywhich Seller or any of the Assets is in any way affected or bound.  All such Contracts are legally valid andbinding and in full force and effect, and neither Seller nor, to the knowledgeof Seller, any other party is in default thereunder.  None of the rights of Seller thereunder will be impaired by theconsummation of the transactions contemplated hereby.

 

6.08.                        Taxes.

 

(a)           There are no tax liabilities ofSeller that could become payable by Purchaser as a result of the fact thatPurchaser will be the transferee of the Assets (except only ad valorem taxes,personal property taxes, real estate taxes, which are not yet due and payable,and which are to be prorated pursuant to Section 4.

 

(b)           With respect to all interest bearingaccounts assigned to Purchaser, the records of Seller transferred to Purchasercontain or will contain all information and documents (including withoutlimitation properly completed Forms W-9) necessary to comply in all materialrespects with all information reporting and tax withholding requirements underfederal and state laws, rules and regulations, and such records identify withspecificity all accounts subject to backup withholding under the InternalRevenue Code.

 

(c)           All federal, state, and localpayroll, withholding, property, sales, use and transfer taxes, if any, whichare due and payable by Seller relating to the operation of the Branches on orprior to the Closing Date shall be paid in full or Seller shall have madeappropriate provision for such payment in accordance with ordinary businesspractices.

 

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6.09         Compliance with Laws.  Seller is not in violation of any law,statute, rule, governmental regulation or order, or court decree or judgmentwhich violation would reasonably be expected to have a material adverse effecton the Assets, the liabilities to be assumed under this Agreement, or thebusiness and operations of the Branches.

 

6.10         Litigation or Other Proceedings.  There is no suit, action or legal,administrative, arbitration or other proceedings or governmental investigationpending or threatened, which would reasonably be expected to have a materialadverse financial effect on Seller, the Assets, the liabilities assumed or thebusiness and operations of the Branches.

 

6.11         Inchoate Claims.  Seller has no notice or knowledge of anyagreement, claim or controversy, relating to Seller either directly orindirectly, which would reasonably be expected to result in a suit, action,proceeding or other formal procedure against Seller relating to the Assets, theliabilities assumed, or the business and operations of the Branches, norknowledge of any circumstances which might give rise to such claim orcontroversy other than actions taken by Seller in the normal course of bankingbusiness.

 

6.12         Broker’s or Finder’s Fee.  There is no valid claim against Seller byany broker or other third party for any finder’s fee, brokerage commission orother similar payment related to the transactions contemplated hereby.

 

6.13         Insurance.  Seller has in full force and effect policiesof insurance and fidelity bonds of type and in amounts that are customary inthe banking industry for an institution of comparable size and Seller willcontinue all of such insurance and bonds in full force and effect and will giveall notices and present all claims thereunder in due and timely fashion up andto the Closing Date.

 

6.14         Accident and Claims.  There have been no accidents or similarevents relating to the Branches which have resulted, or may result, in claimsagainst Seller which are not either fully covered by insurance, or by reserves,or other provisions created, or made, for such claims.

 

6.15         Employment Agreements.  Seller is not a party to (i) any writtenemployment agreement, (ii) any oral or written management agreement relating tothe Real Estate Properties, or (iii) any oral employment agreement withpersonnel of the Branches which cannot be terminated at the election of Selleron not more than thirty (30) days notice.

 

6.16         Hazardous Substances.  The Branches and the use and operationof the Branches are in compliance with all federal, state or local laws,ordinances or regulations relating to industrial hygiene and to the bestknowledge of the Seller the environmental conditions on, under or about theBranches including without limitation air, soil, surface water and groundwaterconditions are in material compliance with all federal, state or local laws,ordinances or regulations relating to environmental conditions.  To the best knowledge of Seller, there areno environmental, health or safety conditions on, under or about the Branches,including without limitation the air, soil, surface water and groundwater thatwould materially interfere with the conduct of the business of the Branches ormaterially adversely affect the Branches, the Assets, or the assumedliabilities.  To the best of the knowledgeof Seller, neither Seller nor any third party, including, without limitation,Seller’s predecessors in title to the Branches, have used or installed anyunderground tanks or gas or oil wells, or used, generated, manufactured,treated,

 

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stored, placed, deposited, discharged, released or disposed of on,under or about the Branches or transported to or from the Branches anyHazardous Substances (as defined below). To the best knowledge of the Seller, the Branches have never been usedas a dump or landfill site, there are no asbestos-containing materials in theBranches or incorporated into the improvements in violation of applicable laws,there are and have been no polychlorinated biphenyl (“PCB”)-containingelectrical transformer fluorescent light fixture with ballasts or other PCBItem, as defined at 40 C.F.R. Section 761.3 or any PCB-containing fluid on theBranches, or to the best knowledge of the Seller are there or have there everbeen any investigations, notices or violations, requests for information orclaims of any kind asserted or threatened to be asserted by any person,including any federal, state or local governmental agency relating to thestorage, disposal, discharge or release of any Hazardous Substances.  For purposes of this Agreement, “HazardousSubstances” shall mean any flammable, explosive, radioactive material,hazardous waste, toxic substance or related material and any other substance ormaterial defined or designated as a hazardous or toxic substance, material orwaste by any federal, state or local law or environmental statute, regulationor ordinance presently in effect and shall include, without limitation, (i)those substances included within the definition of “hazardous substances”,“hazardous materials”, toxic substances”, “solid waste” in the ComprehensiveEnvironmental Response, Compensation, and Liability Act of 1980, as amended, 42U.S.C. Sections 9601, etseq. the Resource Conservation andRecovery Act of 1976, 42 U.S.C. Sections 6901 etseq., the ToxicSubstances Control Act, 15 U.S.C. Sections 2601 etseq., and theHazardous Materials Transportation Act, 49 U.S.C Sections 1801 etseq.,and in the regulations promulgated pursuant to said laws; (ii) those substanceslisted in the United States Department of Transportation Table (49 D.F.R.172.101 and amendments thereto) or by the Environmental Protection Agency (orany successor agency) as hazardous substances (40 C.F.R. Part 302 andamendments thereto); (iii) such other substances, materials and wastes whichare regulated under applicable local, state or federal law, or the UnitesStates government, or which are classified as hazardous or toxic under federal,state or local laws or regulations; (iv) any material, waste or substance whichis or contains (i) petroleum, (ii) asbestos or (iii) PCB, or which isdesignated as a “hazardous substance” pursuant to Section 311 of the ClearWater Act, 33 U.S.C Sections 1251 etseq. (33 U.S.C. §1321) orlisted pursuant to Section 307 of the Clean Water Act (33 U.S.C. §1317),provided, however, that the term shall not include those substances that are ofa character and quantity that are reasonably associated with the use of theReal Estate Properties as bank branches.

 

6.17         Deposits.  Attached hereto as Schedule 6.17 is a trueand accurate schedule of all Deposits (excluding brokered CDs, but includingIRA’s), and related information, which are domiciled at the Branches, preparedas of a date within 10 calendar days of the Agreement Date (which Scheduleshall be updated at and as of the Determination Date and, as updated, shall betrue and accurate as of such date).  TheDeposits are insured by the Savings Association Insurance Fund of the FederalDeposit Insurance Corporation to the fullest extent permitted by federallaw.  To the best knowledge of theSeller, the Deposits were solicited and currently exist in material compliancewith all applicable requirements of federal, state and local laws andregulations promulgated thereunder (for purposes of this clause, Deposit wouldnot be in material compliance if the non-compliance subjects the depositoryinstitution to any penalty or liability). The Deposits (i) are in all material respects genuine and enforceableobligations of Seller, except to the extent enforcement may be limited byapplicable bankruptcy, insolvency, reorganization or other similar lawsaffecting creditor’s rights generally and by general principles of equity and(ii) were acquired in the ordinary course of Seller.

 

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6.18                           TenantLeases.

 

(a)  The Leases are valid and binding obligationsof Seller, enforceable against Seller in accordance with their terms, subjectas to enforcement to bankruptcy, insolvency, reorganization, moratorium, lawsgoverning fraudulent conveyance or equitable subordination principles and otherlaws of general applicability relating to or affecting creditors’ rightsgenerally and to general principles of equity. To the best knowledge of Seller, the Leases are valid and bindingobligations of the lessees, enforceable against the lessees in accordance withtheir terms, subject as to enforcement to bankruptcy, insolvency,reorganization, moratorium, laws governing fraudulent conveyance or equitable subordinationprinciples and other laws of general applicability relating to or affectingcreditors’ rights generally and to general principles of equity.  To the best knowledge of Seller, the lesseesunder the Leases are not in default under, and no event has occurred which,with notice or the lapse of time or both would constitute a default by anylessee under the Leases.  Seller has notpreviously received notice of any event of default, or event or condition whichwith the giving of notice or lapse of time, or both, would constitute a defaultunder the Leases.  Seller has delivereda true and correct copy of the Leases to Purchaser.  The Leases are the only agreements between the Seller and therespective tenants thereunder relating to the Branch Premises.  The respective Leases represent the entireagreement between the respective tenants thereunder and the Seller with respectto the Branches.  All payments of rentor other monies required to be paid to the Seller pursuant to the Leases havebeen paid.  The terms of the Leasespermit the premises subject to the Leases to be used as commercial officesonly.  Lease summaries are detailedherein as Schedule 4.06.

 

(b)  Seller is not entitled to, and has made noagreements with the tenants under the Leases, or tenants’ agents, employees orrepresentatives, concerning free rent, or other type of rental concessionincluding, without limitation, lease support payments or lease buyouts.

 

6.19         FIRPTA.  Seller is not a “foreign person” within themeaning of the Internal Revenue Code §1445.

 

6.20         Closing Date.  Each representation and warranty made bySeller in this section shall be deemed to be made on and as of the date here ofand as of the Closing Date.

 

6.21         Representation Not Misleading.  No representation or warranty by the Sellercontained in this Agreement, nor in any exhibit or schedule furnished to thePurchaser by the Seller under and pursuant to, this Agreement contains or willcontain as of the date made and on the Closing Date any untrue statement of a materialfact or omits or will omit to state a material fact necessary to make thestatements contained herein or therein, in light of the circumstances underwhich it was or will be made, not misleading.

 

6.22         Consents and Approvals.  Except for any applicable regulatoryapprovals, no consents, approvals, filings or registrations with any thirdparty or public body or agency are required in connection with Seller’sconsummation of this transaction.

 

**Section 7.**              Representations and Warrantiesof Purchaser.  Purchaser representsand warrants to Seller as follows:

 

7.01         Organization of Purchaser.  Purchaser is a federal savings bank, dulyorganized, validly existing under the laws of the United States of America andhas all corporate power and authority and possesses all governmental and otherpermits, licenses, approvals and

 

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other authorizations to own or lease its properties and to carry on itsbusiness as now being conducted. Purchaser is an insured bank as defined in the Federal Deposit InsuranceAct and applicable regulations relating thereto.

 

7.02         Authority; Binding Effect.  Purchaser has full right and authority toenter into this Agreement and, subject only to obtaining regulatory approvals,to perform its obligations hereunder. The execution and delivery of this Agreement and the consummation of thetransactions contemplated hereby have been duly and validly authorized by theBoard of Directors of Purchaser; no other corporate acts or proceedings on thepart of Purchaser are necessary to authorize this Agreement or the transactionscontemplated hereby; and this Agreement constitutes the valid and legallybinding obligation of Purchaser enforceable against Purchaser in accordancewith its terms.  The execution anddelivery of this Agreement, the consummation of the transactions contemplatedhereby and the compliance by Purchaser with any of the provisions hereof willnot conflict with, result in a breach of, or entitle any party to terminate orcall a default with respect to any contract or instrument to which thePurchaser is subject.

 

7.03         Broker’s or Finder’s Fees.  Except for the fee to Bearing Point, Inc.,which shall be paid solely by Purchaser, there is no valid claim againstPurchaser by any broker or other third party for any finder’s fee, brokeragecommission or other similar payment related to the transactions contemplatedhereby.

 

7.04         Closing Date.  Each representation and warranty made byPurchaser in this Article 7 shall be deemed to be made on and as of the datehereof and as of the Closing Date.

 

7.05         Representation Not Misleading.  No representation or warranty by thePurchaser contained in this Agreement, nor in any exhibit or schedule furnishedto the Seller by the Purchaser under and pursuant to this Agreement contains orwill contain as of the date made and on the Closing Date any untrue statementof a material fact or omits or will omit to state a material fact necessary tomake the statements contained herein or therein, in light of the circumstancesunder which it was or will be made, not misleading.

 

7.06         Consents and Approvals.  Except for any applicable regulatoryapprovals, no consents, approvals, filings or registrations with any thirdparty or public body or agency are required in connection with Purchaser’sconsummation of this transaction.

 

7.07         Community Reinvestment Act.  At its most recent regulatory evaluation ofthe Purchaser’s performance under the Community Reinvestment Act (the “CRA”),the Purchaser’s record of performance was deemed to be “outstanding” or“satisfactory”, and no proceedings are pending or, to the knowledge of thePurchaser, threatened, that would result in a change in such evaluation.  Purchaser has not received any adversepublic comments with respect to its compliance under the CRA since the date ofits most recent regulatory evaluation of its performance under the CRA.

 

7.08         USA PATRIOT Act.  The Purchaser is in material compliance withthe applicable provisions of the Uniting and Strengthening America by ProvidingAppropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 andthe Bank Secrecy Act, and its implementing regulations.

 

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7.09         RegulatoryConditions.  To the Purchaser’sknowledge, no fact or condition exists with respect to the Purchaser whichPurchaser has reason to believe will prevent it from obtaining approval fromthe applicable governmental authorities of the transactions contemplatedherein.

 

7.10         Application Filings.  The Purchaser and Seller shall cause to befiled within 10 calendar days of the Agreement Date, those applicationsnecessary to obtain the approval from the applicable governmental authoritiesto complete the transactions contemplated herein.  Purchaser and Seller shall pay their own application filing fees.

 

**Section 8.**              Conduct and Transactions Priorto Closing Date.  Seller orPurchaser, as the case may be, covenant that, except as otherwise previouslyconsented to in writing by the other party not making such covenant between thedate of this Agreement and the Closing Date, such party will do or cause thefollowing to occur:

 

8.01.        Preservation of the Business ofSeller.  The business of Seller atthe Branches shall be conducted only in the ordinary course consistent withpast practices of the Seller.

 

8.02         Employee Compensation.  Except for (A) customary merit and gradeincreases, and (B) annual bonuses for 2003 performance that have not yet beenpaid, in each case made in the ordinary course by Seller and consistent withits past practices, no increase will be made in the compensation of theemployees at the Branches including, but not limited to, normal bonus, profitsharing and other compensation.

 

8.03         Relationship.  Seller shall use its commercially reasonableefforts to maintain and preserve its relationships with depositors, customers,and others having business relationships with the Branches.

 

8.04         Public Announcements; Purchaser’sRight to Communicate with Bank Customers. Neither the Purchaser nor Seller shall make any press release, publicannouncements, or disclosure to any person or entity not having a need to know,including announcements to employees or customers, concerning the transactionsprovided for in this Agreement without the prior consent of the other partyhereto, which consent shall not unreasonably be withheld, delayed, or denied,unless disclosure is required by law or regulation.  Purchaser shall also have the right to participate in preparingthe text of any written communication which the Seller may mail to itscustomers concerning the proposed transaction or the assumption of theirDeposits by the Purchaser.

 

8.05         Regulatory Approvals.  Purchaser, with the reasonable cooperationof the Seller, shall promptly prepare and file (but in any event no later than10 calendar days following the Agreement date) appropriate documents with TheOffice of Thrift Supervision, and any other regulatory agencies whose approvalor consent may be required and thereafter use its best efforts to obtain timelythe requisite, unconditional approvals for the transactions contemplated herebyfrom those agencies.

 

8.06         No Offers or Negotiations.  Neither Seller nor its affiliates will,directly or indirectly, negotiate, solicit, initiate or encourage submission ofproposals or offers from any other persons (including without limitation any ofits or their officers, directors, employees or significant stockholders)relating to any acquisition or purchase of any portion of the Assets or

 

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Assumed Liabilities.  Sellershall promptly cease and cause to be terminated any current negotiationsconducted with any parties other than Purchaser with respect to any suchacquisition.  Any consent heretoforegranted by Seller or its affiliates to permit persons to make any such proposal(other than consents given to Purchaser) shall immediately be withdrawn and nofurther consents, waivers or amendments shall be granted by Sellers.  The provisions and requirements of thisSection 8.06 shall immediately terminate upon any termination of this Agreementpursuant to Section 15.

 

8.07         IRA Accounts.  Prior to the Closing Date, Purchaser shalldesignate a successor trustee or custodian, which may be Purchaser, as to anyIRA constituting a liability to be assumed by Purchaser and for which Selleracts as trustee or custodian.  Sellerwill transfer the trusteeship or custodianship of all such IRAs to suchsuccessor trustee or custodian on the Closing Date.  Seller shall be responsible for all federal, state and localincome tax reporting for such accounts for the period ending on the ClosingDate, and the successor trustee or custodian shall be responsible for suchreporting thereafter.

 

8.08         Operational and Data ProcessingConversion Matters.  Seller shallcooperate with Purchaser’s reasonable requests in order to accommodate any andall requirements for Purchaser to convert the operations of the Branches frombranches of Seller to branches of Purchaser, including without limitation anyrequirements for the conversion of data processing to Purchaser’s systems.  Seller covenants that it will assistPurchaser with Purchaser’s reasonable requests following the Closing in theevent that Purchaser is unable to complete its requirements prior thereto.  If Purchaser believes it will be unable tocomplete conversion prior to Closing, Purchaser shall so notify Seller at least30 days prior to Closing.  In such event,Seller and Purchaser shall negotiate in good faith to reach a service agreementthat provides for Seller to continue to “service” the Deposits and TransferredLoans for an interim period of time and which provides for Seller to becompensated for providing such services at Seller’s fully-loaded costs not toexceed $5,000 per month.

 

8.09 Accessto Books and Records.  Seller shallfurnish Purchaser with such additional financial and other data and informationregarding the Assets and liabilities to be assumed as Purchaser reasonably mayrequest from time to time, including without limitation any informationrequired for inclusion in all government applications necessary to effect thetransaction contemplated hereby.  Uponreasonable notice, Seller shall permit officers and authorized representativesof Purchaser access to inspect the Branches during normal business hours or atsuch other time mutually agreed by both parties and permit Purchaser to make orcause to be made such reasonable investigation of information and materialrelating to the condition of the Branches, including, if any, general andsubsidiary ledgers, deposit records and other information concerning thebusiness, property and legal questions concerning the Branches as Purchaserreasonably deems necessary or advisable. Purchaser shall furnish Seller with such additional financial and otherdata and information regarding Purchaser as Seller reasonably may request fromtime to time, including without limitation any information required forinclusion in all government applications necessary to effect the transactioncontemplated hereby.

 

8.10         Operation of Branches pendingClosing.  Excluding loan commitmentsand deposits issued in the ordinary course of Seller, Seller shall not inrespect of the operations at the Branches enter into any contract agreement orcommitment which obligates the Purchaser for amounts in excess of $5,000without prior written approval from Purchaser, which shall not be unreasonablywithheld.

 

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**Section 9.**              Obligation of Parties After theClosing.  After the Closing Date,and in addition, and not by way of limiting any of the foregoing:

 

9.01                           BusinessRelationship.

 

(a)  For a period of twenty-four months after theClosing Date, Seller shall not cause, or attempt to cause or induce, directlyor indirectly, any person now or hereafter employed at the Branches toterminate such employment; nor cause, directly or indirectly, or attempt tocause, any customer or depositor whose name now or hereafter appears on thebooks and records of the Branches to withdraw her, his or its bankingaffiliation from the Branches; provided, however, the mere fact that Sellerhires any person formerly employed at the Branches or accepts banking businessfrom a former customer or depositor of the branches shall not be deemed toprove Seller’s breach under this subsection 9.01.

 

(b)  For a period of twelve months following theClosing Date, Seller shall not and shall cause it subsidiaries and affiliates,successors or assigns not to, and shall not enter into any agreement to, acquire,lease, purchase, own, operate or use any building, office or other facility orpremises located within Dona Ana County in the State of New Mexico for thepurpose of accepting deposits, cashing checks, making loans or conductinggeneral banking business.  Thisprovision shall not prohibit any acquirer of the Seller or any of itssubsidiaries or affiliates that currently maintains banking operations in DonaAna County from continuing such operations after any such acquisition.

 

9.02  Transit Items.  Each party shall exercise its best effortsto assist the other party in the adjustment and delivery of all overages andshortages of documentary and cash items in transit and items in collection asof the Determination Date, as the interest in such items of the respectiveparties hereto may then appear.

 

9.03  Indemnification.

 

(a)  Seller agrees to and does hereby indemnify,defend and hold Purchaser harmless from any loss, demand, obligation, cost,expense or liability (including reasonable attorney’s fees and expenses) (i)arising out of any actions, suits or other proceedings by third parties which(A) relate to the operations at the Branches on or prior to the DeterminationDate, (B) relate to any wrongful act, omission or negligence of Seller inregards to the operations of the Branches, the Assets or performance (or thefailure to fully perform or discharge any) of the Assumed Liabilities on orprior to the Determination Date, or (C) relate to any liabilities of the Selleror the Branches not specifically assumed by Purchaser hereunder or any assetsof the Seller or the Branches not acquired by Purchaser hereunder, or (ii)arising out of the inaccuracy of any representation or warranty made by Selleror any breach by Seller of its covenants or agreements contained herein or inany instrument, document or certificate delivered to Purchaser pursuant hereto.

 

(b)  Purchaser agrees to and does herebyindemnify, defend and hold Seller harmless from any loss, demand, obligation,costs, expense or liability (including reasonable attorney’s fees and expenses)(i) arising out of any actions, suits or other proceedings by third partieswhich (A) relate to the operations at the Branches subsequent to theDetermination Date, or (B) relate to any wrongful act, omission or negligenceof Purchaser relating to the operations of the Branches, the Assets or theperformance (or the failure to fully perform or discharge any) of the AssumedLiabilities subsequent to the Determination Date; or

 

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(ii) arising out of the inaccuracy of any representation or warrantymade by Purchaser or any breach by Purchaser of its covenants or agreementscontained herein or in any instrument, document or certificate delivered toSeller pursuant hereto.

 

(c)  Any claim from indemnification under thisSection 9.03 must be made by the party claiming a right to such indemnificationon or before the date that is twenty-four months from the Closing Date.

 

9.04  Tax Reporting.  Seller and Purchaser agree that each partyshall be solely responsible for providing to the Internal Revenue Service andto each depositor, other holder of a liability assumed or customer, to theextent required by law, Forms 1098, 1099 INT, 1099R and 5498 and otherapplicable reporting forms with respect to each of the liabilities assumed andAssets transferred for the period during which Seller or Purchaser, asapplicable, administers such liabilities or Assets during 2004.

 

**Section 10**.  Risk of Loss.  Pending the Determination Date, the risk ofloss in regard to the Assets shall be upon Seller.  After the Determination Date, the risk of loss in regard to theAssets shall be on Purchaser. Each party shall procure insurance, asappropriate, to cover such risks.

 

**Section 11**.  Conditions to Obligations of Parties.  The obligations of Purchaser and Seller toconsummate the transactions contemplated hereby shall be subject to thecondition that all orders, consents and approvals of regulatory agenciesnecessary in order for the transactions provided for in this Agreement to belawfully accomplished shall have been obtained in form and substance reasonablysatisfactory to the Purchaser and Seller.

 

**Section 12.**  Conditions to Obligations of Purchaser.  The obligations of Purchaser hereunder shallbe subject to the satisfaction on or prior to the Closing Date of each of thefollowing conditions, unless Purchaser shall have waived such condition inwriting.

 

12.01       Representations and Warranties ofSeller.  The representations andwarranties of Seller contained herein shall be true in all material respectswhen made and at the Closing Date with the same force and effect as though madeat and as of such time, and Seller shall have performed all obligations andcomplied with all covenants to be performed or complied with by it on or priorto the Closing Date.  Seller shall havedelivered to Purchaser a certificate dated as of the Closing Date to sucheffect. Seller also shall have delivered to Purchaser all documents,instruments and other items required to be delivered by Seller under Section5.02 hereof.

 

12.02       Litigation.  At the Closing Date, there shall not bepending or threatened any litigation in any court or any proceeding before orby any governmental department, agency or instrumentality in which it is soughtto restrain or prohibit or obtain damages in respect of the consummation of thetransactions contemplated hereby, to cause a divestment by Seller or Purchaserof any significant portion of its respective assets or to impose any limitationupon the exercise by Purchaser of its general banking powers subsequent toconsummation of the transactions contemplated hereby.

 

12.03       No Material Adverse Change.  There shall not have occurred any materialadverse change from Agreement Date to the Closing Date in the business of theBranches, the Assets, the Transferred Loans, the Deposits, or the other Assets;provided, however, in no event

 

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shall the resignation of any employee (or any adverse change resultingprimarily from the resignation of an employee) be deemed a material adversechange for the purpose of this paragraph.

 

12.04       Lease Agreements.  The consents under the Leases to theassignment by Seller of the Leases to Purchaser shall have been obtainedwithout the imposition of conditions Purchaser deems in its reasonablediscretion to be unduly burdensome or unreasonable.  Such consents shall be in form and substance satisfactory toPurchaser in the exercise of its reasonable discretion, and shall include therespective representation and warranty to Purchaser that each respective Leaseis a valid and binding obligation.

 

**Section 13.**            Conditions to Obligations ofSeller.  The obligations of Sellerhereunder shall be subject to the satisfaction on or prior to the Closing Dateof the following conditions, unless waived in writing by Seller:

 

13.01       Representations and Warranties ofPurchaser.  The representations andwarranties of Purchaser hereunder shall be true in all material respects whenmade and at the Closing Date with the same force and effect as though made atand as of such time, and Purchaser shall have performed all obligations andcomplied with all covenants required under this Agreement to be performed orcomplied with by it on or prior to the Closing Date.  Purchaser shall have delivered to Seller a certificate dated asof the Closing Date to such effect. Purchaser shall have delivered to Purchaserall documents, instruments and other items required to be delivered byPurchaser under Section 5.02 hereof.

 

13.02       Litigation.  At the Closing Date, there shall not bepending or threatened any litigation in any court or any proceeding before orby any governmental department, agency or instrumentality in which it is soughtto restrain or prohibit or obtain damages in respect of the consummation of thetransactions contemplated hereby, to cause a divestment by Seller or Purchaserof any significant portion of its respective assets or to impose any limitationupon the exercise by Purchaser of its general banking powers subsequent toconsummation of the transactions contemplated hereby.

 

13.03       No Material Adverse Change.  There shall not have occurred any materialadverse change from Agreement Date to the Closing Date in the business orfinancial condition of Purchaser.

 

13.04       Lease Agreements.  The consents under the Leases to theassignment by Seller of the Leases to Purchaser shall have been obtainedwithout the imposition of conditions Purchaser deems in its reasonablediscretion to be unduly burdensome or unreasonable.  Such consents shall be in form and substance satisfactory toPurchaser in the exercise of its reasonable discretion, and shall include therespective representation and warranty to Purchaser that each respective Leaseis a valid and binding obligation.

 

**Section 14.**            Notice to Depositors.  Seller agrees that Purchaser shall, in theform of a letter mutually acceptable to Seller and Purchaser or as otherwiserequired by law, give notice to depositors of its assumption of the Deposits atthe Branches.

 

**Section 15.**            Termination of Agreement.  This Agreement may be terminated at any timeprior to the Closing under the following conditions:

 

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(a)                                  Bythe consent in writing of the Purchaser and Seller;

 

(b)           By the Purchaser in writing if any ofthe conditions precedent to the obligations of the Purchaser contained inSection 12 of this Agreement or the conditions of the obligations of theparties contained in Section 11 of this Agreement shall not have been satisfiedprior to June 1, 2004.

 

(c)           By the Seller in writing if any ofthe conditions precedent to the obligations of the Seller contained in Section13 of this Agreement or the conditions to the obligations of the partiescontained in Section 11 of this Agreement shall not have been satisfied priorto June 1, 2004.

 

(d)           By Purchaser in writing due to abreach by Seller of any of its representations, warranties or covenants oragreements contained herein, which breach remains uncured for more than 10 daysfollowing notice of such breach by Purchaser.

 

(e)           By Seller in writing due to a breachby Purchaser of any of its representations, warranties or covenants oragreements contained herein, which breach remains uncured for more than 10 daysfollowing notice of such breach by Purchaser.

 

In the event of the terminationof this Agreement pursuant to the provisions of this section, this Agreementshall be of no further force and effect, and no party hereto shall have anyliability or further obligation to the other party to this Agreement.  Notwithstanding the foregoing, no partyshall be relieved by such termination for any liability that accrued due to anymaterial breach of this Agreement prior to such termination.

 

**Section 16.**            Miscellaneous.

 

16.01       Expenses.  Whether or not the transactions contemplatedherein shall be consummated, Purchaser and Seller each shall pay their ownexpenses incident to, preparing for, entering into and carrying into effect theterms of this Agreement.

 

16.02       Notices.  Any notice or communication required or permitted to be madehereunder shall be in writing, and shall be deemed to have been made ifpersonally delivered in return for a receipt, or if mailed, by registered or certifiedmail, return receipt requested, to the parties at the addresses shownbelow.  The date of personal deliveryshall be the date of giving notice or if mailed in the manner prescribed above,notice shall be deemed to have been given three business days after themailing.

 
| If to Purchaser: |   | FIRSTBANK                             |
|------------------|--------|---------------------------------------|
|             |   | Mr. Don  Padgett, President           |
|             |   | 5210 Eubank  NE                       |
|             |   | Albuquerque,  NM 87111                |
|             |   | (505)  343-9310 - Telephone           |
|             |   | (505)  343-9314 - Facsimile           |
|             |   |                                  |
| with a copy  to: |   | Mr. James K.  LeValley                |
|             |   | Quarles  & Brady Streich Lang LLP |

 

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|             |   | Renaissance  One                    |
|------------------|--------|-------------------------------------|
|             |   | Two N  Central Avenue               |
|             |   | Phoenix, AZ  85004-2391             |
|             |   | (602)  229-5260 - Telephone         |
|             |   | (602)  420-5056 - Facsimile         |
|             |   | E-Mail –  jlevalle@quarles.com |
|             |   |                                |
| with a copy  to  |   | Mr. Charles  Moore                  |
|             |   | Keleher  & McLeod, P.A.         |
|             |   | PO Drawer AA                        |
|             |   | Albuquerque,  NM 87103              |
|             |   | (505)  346-9110 Telephone           |
|             |   | (505)  346-1345 Facsimile           |
|             |   |                                |
| If to  Seller:   |   | Matrix  Capital Bank                |
|             |   | D. Mark  Spencer                    |
|             |   | President                           |
|             |   | 700 17th  Street, Suite 100         |
|             |   | Denver , CO  80202                  |
|             |   | (720)-932-4204  – Telephone    |
|             |   | (720)-946-1122  – Facsimile    |
|             |   | with a copy  to: T. Allen McConnell |
|             |   | General  Counsel                    |
|             |   |                                |
| with a copy  to: |   | T. Allen  McConnell                 |
|             |   | General  Counsel                    |
|             |   | 700 17th  Street, Suite 2100        |
|             |   | Denver, CO  80202                   |
|             |   | (720)  932-4208 – Telephone    |
|             |   | (720)  946-1171 - Facsimile         |

 

16.03       Entire Agreement.  This Agreement, including all exhibits,schedules and documents delivered in connection therewith, and theConfidentiality Agreement dated October 23, 2003 (the “Documents”) sets forththe entire understanding of the parties hereto and supersedes all prioragreements and understanding, whether oral or written.  This Agreement shall not be modified oramended except by written agreement of all parties hereto.  Any reference herein to the Agreement shallbe deemed to include the Documents.

 

16.04       Binding Effect.  This Agreement shall be binding upon andinure to the benefit of each of the parties hereto, their respective legalrepresentatives, successors and assigns; provided, however, that no assignmentof this Agreement or any rights or obligations hereunder may be made by anyparty hereto without the prior written consent of the other party and noassignment by any party hereunder shall relieve said party of any of itsobligations or duties hereunder.

 

16.05       Further Assurances.  Each of the parties hereto agrees to executeand deliver such further agreements, assurances, instruments and documents atany time reasonably

 

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requested by another party as are necessary or desirable in order toconsummate the transactions contemplated by this Agreement.

 

16.06       Survival of Representations andWarranties.  All representations andwarranties contained in this Agreement shall survive the execution and deliveryhereof for a period of twenty-four months.

 

16.07       Construction.  This Agreement shall be construed andinterpreted in accordance with the laws of the State of New Mexico applicableto contracts made and performed entirely therein.

 

16.08       Section Headings.  The section headings contained in thisAgreement are for convenience and reference only and shall not in any wayaffect the meaning or interpretation of this Agreement.

 

16.09       Counterparts.  This Agreement may be executed in any numberof identical counterparts, each of which shall be deemed an original for allpurposes, but all of which taken together shall form but one Agreement.  This Agreement may be executed and deliveredby facsimile transmission of a counterpart signature page hereof.

 

16.10       Attorney Fees.  In any action brought by a party hereto toenforce the obligations of any other party hereto, each party shall beresponsible for its own litigation costs and attorney’s fees and expenses(including court costs, reasonable fees of accountants and experts, and otherexpenses incidental to the litigation).

 

IN WITNESSWHEREOF, the parties have caused this Agreement to be executed by their dulyauthorized officers as of the day and year first above written.

 
| PURCHASER: | FIRSTBANK            |
|------------|----------------------|
|       |                 |
|       |                 |
|       | By:                  | /s/ Don K.  Padgett, President |   |
|       |                 |   |   |
| Attest:    | /s/ Kathy  Allenberg |   |   |   |   |
|       | Corporate  Secretary |   |   |   |
|            |                      |  |  |  |  |

 
| SELLER  | MATRIX  CAPITAL BANK |
|---------|----------------------|
|    |                 |
|    |                 |
|    | By:                  | /s/ D. Mark  Spencer, President |   |
|    |                 |   |   |
| Attest: | /s/ Pat  Howard      |   |   |   |   |
|    | Secretary            |   |   |   |
|         |                      |  |  |  |  |

 

21

----

 

**SCHEDULE 4.06**

 

RENT ROLL

Matrix Capital Bank and Annex

 
| **Unit #**         |   | **Sq Ft.** |   | **Lease Date** |   | **Termination  Date** |   |
|--------------------|--------|------------|--------|----------------|--------|-----------------------|--------|
| **TOWER**          |   |       |   |           |   |                  |   |
| 100                |   | 7,433      |   | N/A            |   | N/A                   |   |
| 101                |   | 1,408      |   | 11/12/02       |   | 10/31/07              |   |
| 200/205            |   | 6,119      |   | 01/01/03       |   | 2/28/04               |   |
| 201                |   | 940        |   | Vacant         |   |                  |   |
| 204                |   | 1,433      |   | 07/01/03       |   | 06/30/04              |   |
| 301A/B             |   | 585        |   | 02/01/02       |   | Month to month        |   |
| 301C/D             |   | 398        |   | 01/01/04       |   | 12/31/03              |   |
| 304                |   | 5,180      |   | Vacant         |   |                  |   |
| 305                |   | 519        |   | 02/01/02       |   | 01/31/07              |   |
| 308                |   | 528        |   | 01/01/04       |   | 12/31/04              |   |
| 309                |   | 1,344      |   | 12/01/01       |   | 11/30/04              |   |
| **Total**          |   | 25,897     |   |           |   |                  |   |
|               |   |       |   |           |   |                  |   |
| **ANNEX**          |   |       |   |           |   |                  |   |
| A                  |   | 629        |   | N/A            |   | N/A                   |   |
| AA                 |   | 1,576      |   | N/A            |   | N/A                   |   |
| C                  |   | 1,369      |   | 01/01/03       |   | 06/30/05              |   |
| D                  |   | 703        |   | N/A            |   | N/A                   |   |
| F                  |   | 1,406      |   |           |   |                  |   |
| G                  |   | 1,625      |   | 01/01/03       |   | 12/31/03              |   |
| H                  |   | 1,345      |   | N/A            |   |                  |   |
| **Total Annex**    |   | 8,662      |   |           |   |                  |   |
|               |   |       |   |           |   |                  |   |
| **Total Building** |   | 34,560     |   |           |   |                  |   |

 

22

----

 

**SCHEDULE 6.06**

 

FURNITURE, FIXTURES, EQUIPMENT& LEASE HELD IMPROVEMENTS PURCHASED

 

AMADOR FACILITY

 
| **ASSET DESCRIPTION**                         |   | **TYPE**                  |   | **BOOK VALUE  PURCHASE PRICE** |
|-----------------------------------------------|--------|---------------------------|--------|--------------------------------|
| SMART 2/DH  PCI ARRAY                         |   | Computer  Hardware        |   | $                              | — |
| Video  Conferencing System Las Cruces         |   | Office  Equipment         |   |                           |
| GMC YUKON  2001 Green                         |   | Office  Equipment         |   |                           |
| F&F  Board Room Art 4 PCS Robert Carlson  |   | Furniture  & Fixtures |   |                           |
| F&F  Board Room 12 chairs green leather   |   | Furniture  & Fixtures |   |                           |
| Equip-Drive-up  Camera                        |   | Office  Equipment         |   |                           |
| Executive  Conference Desk                    |   | Furniture  & Fixtures |   |                           |
| Kneespace  Credenza                           |   | Furniture  & Fixtures |   |                           |
| High back  chair with chrome base             |   | Furniture  & Fixtures |   |                           |
| Lateral File                                  |   | Furniture  & Fixtures |   |                           |
| Bookcase  wire mesh doors for G. Lenzo        |   | Furniture  & Fixtures |   |                           |
| F&F  Board Room Cigar Chair/Ottoman       |   | Furniture  & Fixtures |   |                           |
| Lamp Table                                    |   | Furniture  & Fixtures |   |                           |
| Lamp Table                                    |   | Furniture  & Fixtures |   |                           |
| Arm Chair  Chesepeake                         |   | Furniture  & Fixtures |   |                           |
| Arm Chair  Chesepeake                         |   | Furniture  & Fixtures |   |                           |
| Arm Chair  Chesepeake                         |   | Furniture  & Fixtures |   |                           |
| Arm Chair  Chesepeake                         |   | Furniture  & Fixtures |   |                           |
| F&F 3  paintings                          |   | Furniture  & Fixtures |   |                           |
| F&F  Board room Universal Server          |   | Furniture  & Fixtures |   |                           |
| F&-Shelving  Unit for LN Files            |   | Furniture  & Fixtures |   |                           |
| Equip-ATM  Picacho                            |   | Office  Equipment         |   |                           |
| Equip-Alarm  & Camera-ATM Picacho         |   | Office  Equipment         |   |                           |
| Equip-ATM  Pacacho FUJITSU                    |   | Office  Equipment         |   |                           |
| F&F  Cubicles Main Branch                 |   | Furniture  & Fixtures |   |                           |
| Dell  Notebook C810 13GHZ P3                  |   | Computer  Hardware        |   |                           |
| VECTRA  VE18DTP3 600E 13.5 GB                 |   | Computer  Hardware        |   |                           |
| CPQ 2HD’s                                |   | Computer  Hardware        |   |                           |
| Computer-Dell  Inspirion Laptop               |   | Computer  Hardware        |   |                           |
| Aeron Chair                                   |   | Furniture  & Fixtures |   |                           |
| Equip                                         |   | Office  Equipment         |   |                           |
| Drive-up  Unit W/2 Lanes                      |   | Office  Equipment         |   |                           |
| F&F                                       |   | Furniture  & Fixtures |   |                           |
| F&F  Teller Seating 3 chairs              |   | Furniture  & Fixtures |   |                           |
| F&F-6  Legal Size Drawer Cabinets         |   | Furniture  & Fixtures |   |                           |
| F&F-6  Conference Chairs                  |   | Furniture  & Fixtures |   |                           |
| F&F-2  Posture Sterno Chairs              |   | Furniture  & Fixtures |   |                           |
| F&F  Wooden Aerial Bench                  |   | Furniture  & Fixtures |   |                           |
| F&F 4  Wooden Aerial Chairs New Accounts  |   | Furniture  & Fixtures |   |                           |
| F&F-4  Whitnel Wooden Chairs Waiting Area |   | Furniture  & Fixtures |   |                           |
| F&F-  Coffee Table East Mesa              |   | Furniture  & Fixtures |   |                           |
| F&F-furniture  E. Mesa                    |   | Furniture  & Fixtures |   |                           |

 

23

----

 
| Equip-Undercounter                       |   | Office  Equipment             |   |   |
|------------------------------------------|--------|-------------------------------|--------|--------|
| Equip-Surveillance  System               |   | Office  Equipment             |   |   |
| Equip-Diebold  Deal Drawer               |   | Office  Equipment             |   |   |
| Night  Depository                        |   | Office  Equipment             |   |   |
| Equip-ATM                                |   | Office  Equipment             |   |   |
| Equip-Refurbished  Cash Vault            |   | Office  Equipment             |   |   |
| Equip-15 Porta  Vault                    |   | Office  Equipment             |   |   |
| Equip-Fax E.  Mesa                       |   | Office  Equipment             |   |   |
| Comp-HDWATM  Circuit DSU E. Mesa         |   | Computer  Hardware (inactive) |   |   |
| F&F-Refinish  Desks                  |   | Furniture  & Fixtures     |   |   |
| Equip-Phone  System E. Mesa              |   | Office  Equipment             |   |   |
| Comp-HDWLASER  Printer E. Mesa           |   | Computer  Hardware (inactive) |   |   |
| Comp-HDWSERVER  E. Mesa                  |   | Computer  Hardware (inactive) |   |   |
| Comp-HDWCABLING  E. Mesa                 |   | Computer  Hardware (inactive) |   |   |
| Comp-HDWCABLING  E. Mesa                 |   | Computer  Hardware (inactive) |   |   |
| Equip-Alarm  System                      |   | Office  Equipment             |   |   |
| Comp-HDWCISCO  Router E. Mesa            |   | Computer  Hardware            |   |   |
| Lobby  Cubicle Customer Service          |   | Furniture  & Fixtures     |   |   |
| Lobby  Cubicles Customer Service         |   | Furniture  & Fixtures     |   |   |
| Coin Counter  Main Lobby                 |   | Office  Equipment             |   |   |
| HP Switches  for LC                      |   | Computer  Hardware            |   |   |
| Teller  Pedestal W/Trays                 |   | Furniture  & Fixtures     |   |   |
| File Server  LC                          |   | Computer  Hardware            |   |   |
| COMPAQ  Proliant DL380 P3 Rembrandt Loan |   | Computer  Hardware            |   |   |
| Printers                                 |   | Computer  Hardware            |   |   |
| Gary  Lenzo/Computer                     |   | Computer  Hardware            |   |   |
| Router LC                                |   | Computer  Hardware            |   |   |
| HP Computer  Equipment Las Cruces        |   | Computer  Hardware            |   |   |
| HP Switches  PWR SVP                     |   | Computer  Hardware            |   |   |
| SONY VAIO  PCV LX700 P3 64GB 20GB        |   | Computer  Hardware            |   |   |
| SONY VAIO  PCV LX700 P3 64MD 20GBHD/CD   |   | Computer  Hardware            |   |   |
| Dell  Optiplex                           |   | Computer  Hardware            |   |   |
| Dell  Optiplex                           |   | Computer  Hardware            |   |   |
| Dell  Dimension                          |   | Computer  Hardware            |   |   |
| Dell  Dimension                          |   | Computer  Hardware            |   |   |
| Dell  Dimension                          |   | Computer  Hardware            |   |   |
| Dell  Dimension                          |   | Computer  Hardware            |   |   |
| Currency  Counter                        |   | Office  Equipment             |   |   |
| Equip-Audio  System Drive-up Windows     |   | Office  Equipment             |   |   |
| Audio  System-Drive-up                   |   | Office  Equipment             |   |   |
| Modular  Router                          |   | Computer  Hardware            |   |   |
| SAVIN 9220  Copier East Mesa             |   | Office  Equipment             |   |   |
| FORM Printer                             |   | Computer  Hardware            |   |   |
| DELL  Optiplex                           |   | Computer  Hardware            |   |   |
| DELL  Optiplex                           |   | Computer  Hardware            |   |   |
| DELL  Optiplex                           |   | Computer Hardware             |   |   |
| Comp-HDW-COMPAQ/Server  East Mesa        |   | Computer  Hardware            |   |   |
| MAGNER  Sorter/Counter                   |   | Office  Equipment             |   |   |
| Proof  Imaging Equip                     |   | Office  Equipment             |   |   |
| SAVIN  FAX/Print                         |   | Office  Equipment             |   |   |

 

24

----

 
| MICROFICHE  MACHINE                           |   | Office  Equipment         |   |   |
|-----------------------------------------------|--------|---------------------------|--------|--------|
| File Server                                   |   | Computer  Hardware        |   |   |
| CPQ 256 MB  Registered SD RAM RIMM            |   | Computer  Hardware        |   |   |
| HARD DRIVE  COMPONENT UPGRANDES               |   | Computer  Hardware        |   |   |
| HP Switches  for LC                           |   | Computer  Hardware        |   |   |
| CPQ Desktop  Kirk/LC                          |   | Computer  Hardware        |   |   |
| FAX Machine  – Main                      |   | Office  Equipment         |   |   |
| NOVELL  Network Components                    |   | Computer  Hardware        |   |   |
| Comp-HDW  Printer                             |   | Computer  Hardware        |   |   |
| F&F-Carpet  Mortgage Dept.                |   | Leasehold  Improvements   |   |   |
| XEROX Work  Center PRO765                     |   | Office  Equipment         |   |   |
| INSPIRON  2500 12.1 SVGA                      |   | Computer Hardware         |   |   |
| Laser Jet HP  4000                            |   | Office  Equipment         |   |   |
| DELL  Dimension                               |   | Computer  Hardware        |   |   |
| F&F –  Door                          |   | Furniture  & Fixtures |   |   |
| Comp-Soft –  HMDA Relief software        |   | Computer  Software        |   |   |
| HP E-PC CO  7933 20GB 128 Las Cruces          |   | Computer  Hardware        |   |   |
| Cubicle Main  Lobby Com Lending               |   | Furniture  & Fixtures |   |   |
| Cubicle Main  Lobby Com Lend                  |   | Furniture  & Fixtures |   |   |
| HP E-PC C10  20GB 128MB                       |   | Computer  Hardware        |   |   |
| WIN FAST  2.3A Moody’s Risk Mgt Services |   | Computer  Software        |   |   |
| HP Vectra  VL400                              |   | Computer  Hardware        |   |   |
| HP Vectra  VL400                              |   | Computer  Hardware        |   |   |
| Cubicle Maon  Lobby Cons Lend                 |   | Furniture  & Fixtures |   |   |
| F&F-Exec  Desk W/Hutch                    |   | Furniture  & Fixtures |   |   |
| EQUIP                                         |   | Office  Equipment         |   |   |
| Alarm System                                  |   | Office  Equipment         |   |   |
| DELL  Optiplex                                |   | Computer  Hardware        |   |   |
| Equip                                         |   | Office  Equipment         |   |   |
| Shredder                                      |   | Office  Equipment         |   |   |
| OFFICE  BLDG-SLIM LINE ATM BLDG               |   | Commercial  Property      |   |   |
|                                          |   |                      |   | $      | 227,000 |

 

25

----

 

**SCHEDULE 6.07**

 

**CONTRACTS**

[Patis verifying and updating]

 
| **Person with whom  Contract is made**               |   | **Name of  contract**                   |   | **Date of  contract** |   | **Expiration  Date**                              |   | **Amount of  Payment Per Year  Amount of  (indicate which)** |
|------------------------------------------------------|--------|-----------------------------------------|--------|-----------------------|--------|---------------------------------------------------|--------|--------------------------------------------------------------|
|                                                 |   |                                    |   |                  |   |                                              |   |                                                         |
| **CREDIT CARD  MERCHANT APPLICATION AND AGREEMENTS** |   |                                    |
| Sun Bowl Inc.                                        |   | Credit Card  Agree                      |   | 11-18-96              |   | 15 day notice                                     |   | Unknown - No back side to the Agreement                      |
| RG River Resort                                      |   | Credit Card  Agree                      |   | 09-29-98              |   | 15 day notice                                     |   | Unknown – Bank N/S                                      |
| Cultural Society of  Mesilla Valley  - 150 |   | Credit Card  Agree                      |   | 06-29-99              |   | 15 day notice                                     |   | Unknown                                                      |
| Pace Management                                      |   | Credit Card  Agree                      |   | 04-12-00              |   | 15 day notice                                     |   | Unknown                                                      |
| Las Cruces Symphony                                  |   | Credit Card  Agree                      |   | 07-06-00              |   | 15 day notice                                     |   | Unknown – Bank N/S                                      |
| Veteran Home Lns Inc                                 |   | Credit Card  Agree                      |   | 08-26-00              |   | 15 day notice                                     |   | Unknown                                                      |
| Affordable Plumbing                                  |   | Credit Card  Agree                      |   | 09-05-00              |   | 15 day notice                                     |   | Unknown                                                      |
| Pro Source Supply                                    |   | Credit Card  Agree                      |   | 01-22-01              |   | 15 day notice                                     |   | Unknown                                                      |
| Lanelle’s of Las Cruces                         |   | Credit Card  Agree                      |   | 01-23-01              |   | 15 day notice                                     |   | Unknown –  Not signed Bank or Merchant                  |
| Guillermo Hernandez,  D.O.                      |   | Credit Card  Agree                      |   | 05-13-02              |   | 15 day notice                                     |   | Unknown                                                      |
|                                                 |   |                                    |   |                  |   |                                              |   |                                                         |
| **LICENSE AGREEMENT**                                |   |                                    |   |                  |   |                                              |
| CALYX                                                |   | POINT@ S/W  LIC                         |   | 12-18-97              |   | **???**                                           |   | $910 - 10 Computers                                          |
| RMS Info. Services                                   |   | Mkt.  Agreement                         |   | 06-01-94              |   | Yrly – Auto  9-1-95 - 30 d/not  b/anniv |   | DA S&L - $63 p/m  -  $756 p/y                       |
| Paul Brilliant                                       |   | Business  Development Rep.              |   | 2000                  |   | Immediately  with notice either party        |   | $1,000 plus  p/m – pd qtrly                             |
|                                                 |   |                                    |   |                  |   |                                              |   |                                                         |
| **SERVICE/ MAINTENANCE CONTRACTS**                   |   |                                    |   |                  |   |                                              |
| Knight Security                                      |   | School Courier Agree                    |   | 01-07-02              |   | 5 working days notice                             |   | $9.75 p/hour - Main                                          |
| Knight Security                                      |   | School Courier Agree                    |   | 01-07-02              |   | 5 working days notice                             |   | $9.75 p/hour - Mesa                                          |
| Knight Security                                      |   | Patrol Agreement                        |   | 01-07-02              |   | 5 working days notice                             |   | $100 p/m - Main                                              |
| Knight Security                                      |   | Patrol Agreement                        |   | 01-07-02              |   | 5 working days notice                             |   | $100 p/m - Mesa                                              |
| Knight Security                                      |   | Security Agreement                      |   | 01-07-02              |   | 5 working days notice                             |   | $9.75 p/hour - Main                                          |
| Knight Security                                      |   | Security Agreement  Church deposit |   | 01-07-02              |   | 5 working days notice                             |   | $40 p/m                                                      |
| Knight Security                                      |   | Security Agreement                      |   | 01-07-02              |   | 5 working days notice                             |   | $9.75 p/hour - Mesa                                          |

 

26

----

 
| Fisource, Inc.                          |   | ATM Software Maintenance  (Fujitsus)          |   | 12-01-97 |   | 1  yr, 1 yr auto renew., notice to cancel 60 dys prior to renew. |   | $235.66 X 2 ATM’s  ($471.32 annually)  **PREPAID** |
|-----------------------------------------|--------|-----------------------------------------------|--------|----------|--------|------------------------------------------------------------------|--------|-------------------------------------------------------------------|
| Fisource, Inc.                          |   | ATM 2nd line  (3), Pneumatics (both branches, |   | 12-01-97 |   | 1  yr, 1 yr auto renew., notice to cancel 60 dys prior to renew. |   | $10,861.46 annually  **PREPAID**                             |
| B&K System Technologies, Inc.       |   | Maintenance on NCR 7731  (proof)              |   | 05-01-00 |   | 06-14-04                                                         |   | $1958.00 annually  **PREPAID**                               |
| Soto Enterprises d/b/a Miracle Delivery |   | Armored car/cask transport                    |   | 09-01-03 |   | 12 months, then 30 days notice                                   |   | Per use fees apply per  schedule, no fixed payment required       |
| Distribution Management Corp.           |   | Cash Letter Delivery to El  Paso Fed.         |   | 11-13-00 |   | 30 days notice                                                   |   | $12.50 per day, as  services are used                             |
| Steinborn Inc. Realtors                 |   | Leasing Brokerage  agreement on Amador        |   | 09-05-02 |   | 10-31-04                                                         |   | None, based on signed  leases, payable at signing                 |
| Norstan Communications                  |   | Telephone System Maint.                       |   | 01-06-02 |   | 01-06-03  (expired)                                         |   | $6,284.48                                                         |
| Telstar Comm                            |   | Alarm Monitoring                              |   | 08-29-97 |   | 08-29-98 – mtm 30 d/n                                       |   | Mesa - $32 p/m                                                    |
| Image Ideas                             |   | Savin Copier 9965DP                           |   | 12-01-99 |   | Term  not on Bank Docs                                           |   | $2,583 + p/y billed  quarterly                                    |
| SW Professional S                       |   | Janitorial  Services                          |   | 12-01-00 |   | 30 day notice                                                    |   | $3,174  Amador & Mesa                                         |
| Envir Systems Cont                      |   | HVAC - Controls                               |   | 07-23-01 |   | None                                                             |   | $489 - No Annex                                                   |
| Go Direct Mailing                       |   | Mail  Processing                              |   | 01-31-00 |   | 01-31-01 Annual Auto – 30 d/notice                          |   | $3,000 p/mo plus - Bank  N/S                                      |
| DIEBOLD                                 |   | Alarm Ser  Panel                              |   | 04-01-97 |   | 12-01-94  60 day notice                                     |   | DA S&L  $134 p/y                                              |
| ThyssenKrupp Elevator                   |   | Elevator (2)                                  |   | 01-01-03 |   | 01-01-08 - noncancelable                                         |   | $900 p/q                                                          |
| Burnham Ins. GP.                        |   | SI Insurance                                  |   | 03-15-01 |   | 30 day notice                                                    |   | Instl Repos $1,500=$50,000                                        |
|                                    |   |                                          |   |     |   |                                                             |   |                                                              |
| **ADVERTISING AGENCY AGREEMENT**        |   |                                          |   |     |   |                                                             |
| Perrault & Assoc                    |   | Client/Agency  Agreement                 |   | 07-01-99 |   | mtm 1-1-00 30 d/notice                                           |   | $1,500 p/m  plus cost plus 15%  ????                         |
|                                    |   |                                          |   |     |   |                                                             |   |                                                              |
| **LEASE AGREEMENTS**                    |   |                                          |   |     |   |                                                             |
| Pitney B Credit Corp                    |   | Inserting  System                             |   | 03-18-00 |   | 08-20-04                                                         |   | $1,350 p/q - $5,400 p/y                                           |
| Picacho Hills Country Club              |   | Ground lease  for ATM                         |   | 05-01-02 |   | 5 years w/3 year mutual option                                   |   | $150/quarter paid in advance                                      |
| Aquaperfect, Inc.                       |   | 3 water  coolers                              |   | 06-06-03 |   | 36 months                                                        |   | $124.85/month                                                     |

 

27

----

 
| **STORAGE RENTAL**                           |   |                           |   |      |   |                                            |   |                                      |
|----------------------------------------------|--------|--------------------------------|--------|-----------|--------|-------------------------------------------------|--------|-------------------------------------------|
| RMS, Inc.                                    |   | Record  Storage                |   | 05-17-02  |   | Continues  until 60 day notice                  |   | Priced per  container, approx $500/month  |
| Holiday Storage                              |   | 10’ x 10’  Stor Unit |   | 08-31-99  |   | 10  days - Dep +                                |   | $48 p/m                                   |
|                                         |   |                           |   |      |   |                                            |   |                                      |
| **COLLECTION AGREEMENT**                     |   |                           |   |      |   |                                            |
| Collectrite                                  |   | Collection  Agreement          |   | 12-21-00  |   | 12-21-02 – Annual Renewal                  |   | 30% of accts  placed for collection.      |
| **SERVICE/ MAINTENANCE CONTRACTS CONTINUED** |   |                           |   |      |
| Telstar Comm                                 |   | Alarm Monitoring               |   | 08-29-97  |   | 08-29-98 – mtm 30 d/n                      |   | Mesa - $32 p/m                            |
| Image Ideas                                  |   | Savin Copier 9965DP            |   | 12-01-99  |   | Term  not on Bank Docs                          |   | $2,583 + p/y billed  quarterly            |
| Copy Machines Inc                            |   | Lanier Copier HIK003566        |   | 07-22-98  |   | 07-21-99  – Annual – unless 30 notice |   | $515 p/m                                  |
| SW Professional S                            |   | Janitorial  Services           |   | 12-01-00  |   | 30 day notice                                   |   | $3,174  Amador & Mesa                 |
| Envir Systems Cont                           |   | HVAC -  Controls               |   | 07-23-01  |   | None                                            |   | $489 - No Annex                           |
| Go Direct Mailing                            |   | Mail Processing                |   | 01-31-00  |   | 01-31-01 Annual Auto – 30 d/notice         |   | $3,000 p/mo plus - Bank  N/S              |
| Pitney B Credit Corp                         |   | Inserting  System              |   | 03-18-00  |   | 08-20-04                                        |   | $1,350 p/q - $5,400 p/y                   |
| DIEBOLD                                      |   | Alarm Ser  Panel               |   | 04-01-97  |   | 12-01-94  60 day notice                    |   | DA S&L  $134 p/y                      |
| ThyssenKrupp Elevator                        |   | Elevator (2)                   |   | 01-01-03  |   | 01-01-08 - noncancelable                        |   | $900 p/q                                  |
| Burnham Ins. GP.                             |   | SI Insurance                   |   | 03-15-01  |   | 30 day notice                                   |   | Instl Repos $1,500=$50,000                |
|                                         |   |                           |   |      |   |                                            |   |                                      |
| **ADVERTISING AGENCY AGREEMENT**             |   |                           |   |      |
| Perrault & Assoc                         |   | Client/Agency  Agreement  |   | 07-01-99  |   | mtm 1-1-00 30 d/notice                          |   | $1,500 p/m  plus cost plus 15%  ???? |
|                                         |   |                           |   |      |   |                                            |   |                                      |
| **COCA-COLA MACHINE**                        |   |                           |   |      |   |                                            |
| **???**                                      |   | **???**                        |   | **To Be** |   | **Furnished**                                   |   | **By PAT HOWARD**                         |
|                                         |   |                           |   |      |   |                                            |   |                                      |
| **STORAGE RENTAL**                           |   |                           |   |      |   |                                            |
| Holiday Storage                              |   | 10’ x 10’  Stor Unit |   | 08-31-99  |   | 10  days – Dep +                           |   | $48 p/m                                   |
|                                         |   |                           |   |      |   |                                            |   |                                      |
| **COLLECTION AGGREEMENT**                    |   |                           |   |      |   |                                            |
| Collectrite                                  |   | Collection  Agreement          |   | 12-21-00  |   | 12-21-02  – Annual Renewal                 |   | 30% of accts  placed for collection.      |
|                                         |   |                           |   |      |   |                                            |   |                                      |
| **HOLD HARMLESS  AGREEMENT**                 |   |                           |   |      |   |                                            |   |                                      |
| Dr. **???**  **TO BE  FUR BY PAT H.**   |   | Monitoring  Equip              |   | 01-05-00  |   | None                                            |   | No Income or  Expense to Bank             |
|                                         |   |                           |   |      |   |                                            |   |                                      |
| **SUGGESTIONS  ???**                    |   |                           |   |      |   |                                            |
| Armored car                                  |   | Looking –  Have           |   | **To Be** |   | **Furnished**                                   |   | **By PAT HOWARD**                         |
| ATM – Maintaince                        |   | Fisource, CC, M&M          |   | **To Be** |   | **Furnished**                                   |   | **By PAT HOWARD**                         |
| Landscaping                                  |   | None                           |   |      |   |                                            |   |                                      |
| Signs                                        |   | None                           |   |      |   |                                            |   |                                      |
| Data Processing                              |   | N/A                            |   |      |   |                                            |   |                                      |
| Alarms – Main                           |   | Diebold  above                 |   |      |   |                                            |   |                                      |
| ATM – Cash Handling                     |   | None                           |   |      |   |                                            |   |                                      |

 

28

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| Credit Life      |   | None |   |   |   |   |   |   |
|------------------|--------|------|--------|--------|--------|--------|--------|--------|
| HVAC – Mesa |   | None |   |   |   |   |   |   |

 

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