THE XXXXX-COLLEGE STATION
FINANCIAL HOLDING COMPANY
3,700 UNITS
Each Unit Consisting of
$1,000 Principal Amount of ___% Debentures
due ________, 2002
and
Nine Warrants to Purchase One Share of
Common Stock Each
--------------
BEST EFFORTS SELLING AGREEMENT
--------------
___________, 1997
THE XXXXX-COLLEGE STATION
FINANCIAL HOLDING COMPANY
3,700 UNITS
BEST EFFORTS SELLING AGREEMENT
_____________, 1997
Xxxxxx & Xxxxxx Incorporated
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
SECTION 1. Introduction. Subject to and on the terms and conditions
hereinafter provided, The Xxxxx-College Station Financial Holding Company, a
Delaware corporation (the "Company"), proposes to offer and sell to the public
through Xxxxxx & Xxxxxx Incorporated (the "Marketing Agent") 3,400 Units
minimum/3,700 Units maximum (the "Units"), at a price of $1,000.00 per Unit,
each Unit consisting of $1,000 principal amount of the Company's __% Debentures
due ___________, 2002 (the "Debentures") and nine warrants (the "Warrants"),
each such warrant entitling the holder to purchase one share of the Company's
authorized but unissued Common Stock, par value $.01 per share ("Common Stock"),
at a price of $10.00 per share. Concurrently with the offering of the Units, the
Company is offering, directly and without the participation of the Marketing
Agent, 150,00 shares minimum/200,000 shares maximum of Common Stock at a price
of $10.00 per share. The Units, the Debentures, the Warrants and the Common
Stock are fully described in the Registration Statement hereinafter referred to.
SECTION 2. Representations and Warranties of the Company. The Company
represents and warrants to the Representative that:
(a) A registration statement on Form S-1 (File No. 333-28179)
including a preliminary prospectus with respect to the Units being offered
through the Marketing Agent and a preliminary prospectus relating to the Common
Stock being offered directly by the Company has been prepared and filed with the
Securities and Exchange Commission (the "Commission") by the Company in
conformity with the requirements of the Securities Act
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of 1933, as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Securities Act"; except as otherwise provided, all
references herein to specific rules are rules promulgated under the Securities
Act); and the Company has so prepared and has filed such amendments thereto, if
any, and such amended preliminary prospectuses as may have been required to the
date hereof. There have been or will promptly be delivered to the Marketing
Agent two signed copies of such registration statement and amendments, including
the exhibits filed therewith, and such number of conformed copies of such
registration statement and amendments (but without exhibits) and of the related
preliminary prospectus or prospectuses and final forms of prospectus as the
Marketing Agent may reasonably request.
Such registration statement (including the prospectus relating
to the Units included therein, as amended, and the prospectus related to the
Common Stock included therein, as amended) on file with the Commission at the
time the registration statement became or becomes effective, is hereinafter
called the "Registration Statement." The prospectus relating to the Units
included in the Registration Statement, as amended, at the time the Registration
Statement became or becomes effective is hereinafter referred to as the
"Prospectus," except that if the prospectus relating to the offering of the
Units first filed by the Company pursuant to Rule 424(b) differs from the
Prospectus, the term "Prospectus" shall mean the Prospectus first filed by the
Company pursuant to Rule 424(b). The prospectus relating to the Common Stock
included in the Registration Statement, as amended, at the time the Registration
Statement became or becomes effective is hereinafter referred to as the "Common
Stock Prospectus," except that if the prospectus relating to the offering of
Common Stock first filed by the Company pursuant to Rule 424(b) differs from the
Common Stock Prospectus, the term "Common Stock Prospectus" shall mean the
Common Stock Prospectus first filed by the Company pursuant to Rule 424(b). The
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the Commission thereunder are hereinafter collectively referred to as the
"Exchange Act".
(b) The Commission has not issued any order preventing or suspending
the use of any preliminary prospectus, and each preliminary prospectus has
conformed in all material respects with the requirements of the Securities Act
and, as of its date, has not included any untrue statement of a material fact or
omitted to state a material fact necessary to make the statements therein not
misleading in the light of the circumstances under which they were made. When
the Registration Statement became or becomes effective, and at each Closing Date
(as hereinafter defined), the Registration Statement, the Prospectus, the Common
Stock Prospectus and any amendments or supplements thereto, in all material
respects conformed or in all material respects will conform to the requirements
of the Securities Act. Neither the Registration Statement nor any amendment
thereto included or will include any untrue statement of a material fact or
omitted or will omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. Neither the
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Prospectus or the Common Stock Prospectus nor any supplement thereto included or
will include any untrue statement of a material fact or omitted or will omit to
state a material fact necessary to make the statements therein not misleading in
the light of the circumstances in which they were or are made. Notwithstanding
the foregoing, however, the Company makes no representation or warranty as to
information contained in or omitted from any preliminary prospectus, the
Registration Statement, the Prospectus, the Common Stock Prospectus or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by or on behalf of the Marketing Agent
specifically for use in the preparation thereof. As of the date hereof and the
Closing Date, the Indenture dated __________, 1997 (the "Indenture") between the
Company and _________________, as Trustee, complied and will comply in all
material respects with the requirements of the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act")
(c) The Company and each of its direct and indirect
subsidiaries and First Federal Savings Bank, Bryan Texas ("First Federal") and
each of its direct and indirect subsidiaries have been duly organized and are
validly existing as corporations or thrift institutions in good standing under
the laws of their respective jurisdictions of organization, with full power and
authority to own or lease their properties and conduct their businesses as
described in the Prospectus. The only subsidiaries of the Company and First
Federal are those listed on Exhibit 21 of the Registration Statement. The
Company, First Federal and each of the subsidiaries of each of them are duly
qualified to do business as foreign corporations under the corporation law of,
and are in good standing as such in, each jurisdiction in which they own or
lease substantial properties, have an office, or in which substantial business
is conducted and such qualification is required except in any such case where
the failure to so qualify or be in good standing would not have a material
adverse effect on the condition (financial or otherwise), earnings, affairs,
business or prospects of the Company and its subsidiaries or First Federal and
its subsidiaries, as the case may be, taken as a whole ("Material Adverse
Effect"); and no proceeding of which the Company has knowledge has been
instituted in any such jurisdiction, revoking, limiting or curtailing, or
seeking to revoke, limit or curtail, such power and authority or qualification.
(d) First Federal has an authorized and outstanding
capitalization, and the Company has a pro forma authorized and outstanding
capitalization, as set forth in the Prospectus under the caption
"Capitalization". The Units, the Debentures, the Warrants and the Common Stock
conform in all material respects to the respective descriptions thereof
contained in the Prospectus. All of the issued and outstanding shares of Common
Stock have been duly authorized and validly issued and are fully paid and
non-assessable and free of preemptive or other similar rights, and there are no
options, agreements, contracts or other rights in existence to acquire from the
Company any shares of Common Stock, except as set forth in the Prospectus. There
are no holders of any securities of the Company having rights to the
registration thereof. All of the issued and outstanding shares of capital stock
of First
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Federal have been duly authorized and validly issued and are fully paid and
nonassessable. Each of the Company and First Federal, directly or indirectly,
owns of record and beneficially, free and clear of any liens, claims,
encumbrances or rights of others, all of the issued and outstanding shares of
each of its respective subsidiaries, except as referred to in the Prospectus.
Except as described in the Prospectus, there are no options, agreements,
contracts or other rights in existence to purchase or acquire from the Company,
First Federal or any subsidiary of either of them any issued and outstanding
shares of the capital stock thereof.
(e) The shares of Common Stock issuable upon exercise of the
Warrants included as part of the Units (the "Shares") to be sold by the Company
pursuant to this Agreement have been duly authorized and, when issued and paid
for in accordance with this Agreement, will be validly issued, fully paid and
non-assessable; the Shares are not subject to the preemptive rights of any
stockholder of the Company; the holders of the Shares will not be subject to
personal liability solely by reason of being such holders; and all corporate
actions required to be taken for the authorization, issuance and sale of the
Shares have been validly and sufficiently taken.
(f) The execution, delivery and performance by the Company of
this Agreement, the Indenture and the Escrow Agreement (as defined below) have
been duly authorized by all necessary corporate action on the part of the
Company and do not and will not violate any provision of the Company's
certificate of incorporation (as amended) or bylaws (as amended) and do not and
will not constitute or result in the breach of, or be in violation of, any of
the terms or provisions of or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or its subsidiaries under any material agreement,
franchise, license, indenture, lease, mortgage, deed of trust, or other
instrument to which the Company or any of its subsidiaries or is a party or by
which the Company, any of its subsidiaries or the property of any of them is
bound or affected, or any order, judgment or decree known to and applicable to
the Company, or any law, rule or regulation applicable to the Company or any
subsidiary of any government, governmental instrumentality, court or regulatory
body, administrative agency, or other governmental body having jurisdiction over
the Company or any of its subsidiaries or any of their respective properties, or
any order of any court or governmental agency or other regulatory authority
entered in any proceeding to which the Company or any of its subsidiaries was or
is now a party or by which it is bound. No consent, approval, authorization or
other order of or filing with, any court, regulatory body, administrative agency
or other governmental body is legally required for the execution and delivery of
this Agreement, the Indenture or the Escrow Agreement by the Company or the
consummation by the Company of the transactions contemplated herein or therein,
except as may be required under or by the Securities Act or the blue sky laws of
the various jurisdictions. This Agreement, the Indenture and the Escrow
Agreement have been duly authorized, executed
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and delivered by the Company and constitute the valid and binding obligations of
the Company enforceable against the Company in accordance with its terms except
insofar as (i) such enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium or other laws now or hereafter in effect relating to
creditors' rights generally; (ii) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding
thereafter may be brought; and (iii) such enforcement may be subject to any
limitations under applicable law which relate to the indemnification and
contribution provisions of this Agreement.
(g) Xxxxx, Xxxxxx and Company LLP, who have expressed their
opinion with respect to certain of the financial statements included in the
Registration Statement, are independent accountants within the meaning of the
Securities Act with respect to both the Company and First Federal.
(h) The consolidated financial statements, together with the
notes thereto, of First Federal included in the Registration Statement comply in
all material respects with the Securities Act and present fairly in all material
respects the consolidated financial position of First Federal, as of the dated
of such financial statements (including, without limitation, the allowance for
possible loan losses), and the consolidated results of operations and cash flows
of First Federal for the respective periods covered thereby, are in conformity
with generally accepted accounting principles consistently applied throughout
the periods involved, except as disclosed in the Prospectus; and no other
financial statements or schedules are required to be included in the
Registration Statement. The consolidated financial, statistical and numerical
information with respect to First Federal and its subsidiaries, and the
financial and statistical information with respect to First Federal, set forth
in the Prospectus are fairly presented in all material respects, were derived
from the consolidated financial statements or the books and records of First
Federal and its subsidiaries and are prepared on a basis consistent with the
audited financial statements of First Federal.
(i) The pro forma financial information of the Company and its
subsidiaries included in the Registration Statement presents fairly in all
material respects the information shown therein; has been compiled on a basis
consistent with that of the audited consolidated financial statements of First
Federal and its subsidiaries included in the Registration Statement; and has
been prepared in accordance with the Commission's rules and guidelines with
respect to pro forma financial statements. The assumptions used in the
preparation thereof are reasonable.
(j) Neither the Company nor any subsidiary thereof, nor First
Federal or any subsidiary thereof, is in violation of its certificate or
articles of incorporation, articles of
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association, or bylaws, in each case as amended, or in default under any consent
decree, formal agreement, memorandum of understanding or similar agreement, or
in default with respect to any provision of any lease, loan agreement,
franchise, license, permit or other contractual obligation to which it is a
party or by which it or any of its properties may be bound; there does not exist
any state of facts which constitutes an event of default by the Company or First
Federal or any subsidiary of either of them as defined in such documents or
which, with notice or lapse of time or both, would constitute such an event of
default, except for any such violation or default of the certificate or articles
of incorporation, articles of association, bylaws, consent decrees, formal
agreements, memoranda of understanding or similar agreements, or any lease, loan
agreement, franchise, license, permit or other contractual obligations referred
to in this subparagraph (j) which, either individually or in the aggregate,
would not have a Material Adverse Effect.
(k) Except as disclosed in the Prospectus, (A) there is no
action, suit or proceeding before or by any court or governmental or regulatory
agency or body, domestic or foreign, or any arbitrator or arbitration panel, now
pending or, to the knowledge of the Company, threatened against or affecting the
Company or any of its subsidiaries, or First Federal or any of its subsidiaries,
including without limitation proceedings relating to discrimination or
environmental matters, which would reasonably be expected to result in a
Material Adverse Effect, and (B) there is no decree, judgment, order or formal
agreement or memorandum of understanding of any kind in existence applicable to
the Company or any of its subsidiaries, or First Federal or any of its
subsidiaries, or any of their respective officers, employees or directors,
requiring or restraining the taking of any actions of any kind in connection
with the business of the Company and its subsidiaries or First Federal and its
subsidiaries.
(l) The Company is a thrift institution holding company duly
registered with Office of Thrift Supervision ("OTS"). First Federal is a
federally chartered thrift institution duly chartered and organized by authority
of the OTS. The deposit accounts of First Federal are insured by the Federal
Deposit Insurance Corporation through the Savings Association Insurance Fund to
the fullest extent permitted by law, and all premiums and assessments required
in connection therewith through the date hereof have been paid by First Federal.
Since January 1, 1992, each of the Company and First Federal has filed all
material reports and amendments thereto that they were required to file with the
Federal Reserve Board, the OTS or any other federal or state regulatory
authorities. Except as set forth in the Prospectus, there is no unresolved
material violation, criticism or exception by any governmental or regulatory
agency with respect to any report or statement relating to any examinations of
the Company or any of its subsidiaries or First Federal or any of its
subsidiaries. The conduct of the business of the Company and each of its
subsidiaries and First Federal and each of its subsidiaries is in compliance in
all respects with applicable federal, state, local and foreign laws and
regulations, and all formal agreements, memoranda
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of understanding and similar agreements with regulatory authorities, except
where the failure to be in compliance would not have a Material Adverse Effect.
Each of the Company and its subsidiaries and each of First Federal and its
subsidiaries own or possess or have obtained all governmental licenses, permits,
consents, orders, approvals and other authorizations necessary to lease or own,
as the case may be, and to operate their properties and to carry on their
businesses as presently conducted except where the failure to have any such
governmental licenses, permits, consents, orders, approvals and other
authorizations would not have a Material Adverse Effect. None of the Company and
its subsidiaries and First Federal and its subsidiaries has received any written
notice of proceedings related to revocation or modification of any such
licenses, permits, consents, orders, approvals or authorizations which singly or
in the aggregate, if the subject of an unfavorable ruling or finding, would
result in a Material Adverse Effect. Except as disclosed in the Prospectus,
neither of the Company or First Federal is currently a party or subject to any
agreement or memorandum with, or directive or order issued by, the Federal
Reserve Board, the OTS or any other federal or state regulatory authorities,
which imposes any material restrictions or requirements not generally applicable
to thrift holding companies or thrifts.
(m) Each of the Company and its subsidiaries and each of First
Federal and its subsidiaries have good and marketable title to all of the
properties and assets reflected as owned by them in the financial statements
hereinabove described (or described elsewhere in the Prospectus), subject to no
lien, mortgage, pledge, charge, encumbrance or title defect of any kind except
those, if any, reflected in such financial statements (or described elsewhere in
the Prospectus) or which are not material to the Company and its subsidiaries or
First Federal and its subsidiaries, as the case may be, taken as a whole. Each
of the Company and its subsidiaries and each of First Federal and its
subsidiaries hold their respective leased properties that are material to the
Company and its subsidiaries or First Federal and its subsidiaries,
respectively, taken as a whole under valid and binding leases.
(n) None of the Company and its subsidiaries and First Federal
and its subsidiaries has taken, and none of such entities will take, directly or
indirectly, any action designed to or which has constituted or which might
reasonably be expected to cause or result, under the Exchange Act or otherwise,
in stabilization or manipulation of the price of any security of the Company or
First Federal to facilitate the sale or resale of any such security.
(o) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as otherwise
stated or contemplated therein, there has not been (i) any material adverse
change in the condition (financial or otherwise), earnings, affairs, business or
prospects of the Company and its subsidiaries taken as a whole, or in the
condition (financial or otherwise), earnings, affairs, business or prospects of
First Federal and its subsidiaries taken as a whole, whether or not arising in
the
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ordinary course of business, (ii) any material transaction entered into, or any
material liability or obligation incurred, by the Company or its subsidiaries or
by First Federal or its subsidiaries other than in the ordinary course of
business, (iii) any change in the capital stock, or increase in the short-term
debt or long-term debt of the Company or its subsidiaries or of First Federal or
its subsidiaries, or (iv) any dividend or distribution of any kind declared,
paid or made by the Company or First Federal in respect of its capital stock.
(p) There are no contracts or other documents required to be
described in the Registration Statement or to be filed as exhibits to the
Registration Statement by the Securities Act which have not been described or
filed as required. The contracts so described in the Prospectus are in full
force and effect on the date hereof; and none of the Company and its
subsidiaries and First Federal and its subsidiaries, and, to the knowledge of
the Company, any other party, is in breach of or default under any of such
contracts.
(q) The Company together with its subsidiaries, and First
Federal together with its subsidiaries, own and possess sufficient right, title
and interest in and to, or have duly licensed from third parties the right to
use, all trademarks, trade names, copyrights and other proprietary rights
("Trade Rights") material to the business of the Company and its subsidiaries,
or First Federal and its subsidiaries, in each case taken as a whole. None of
the Company or any of its subsidiaries or First Federal or any of its
subsidiaries has received any written notice of infringement, misappropriation
or conflict from any third party as to such material Trade Rights which has not
been resolved or disposed of, and none of the Company or any of its
subsidiaries, or First Federal or any of its subsidiaries, has infringed,
misappropriated or otherwise conflicted with material Trade Rights of any third
parties, which infringement, misappropriation or conflict would have a Material
Adverse Effect.
(r) All offers and sales of equity securities prior to the
date hereof by the Company or any of its subsidiaries or by First Federal or its
subsidiaries were at all relevant times either exempt from the registration
requirements of the Securities Act and the registration requirements of all
applicable state securities or blue sky laws, or were duly registered in
accordance with the provisions thereof.
(s) Each of the Company and its subsidiaries and each of First
Federal and its subsidiaries has timely filed all necessary federal and state
income and franchise tax returns required to be filed through the date hereof
and have paid all taxes shown as due thereon, and there is no tax deficiency
that has been, or to the knowledge of the Company would reasonably be expected
to be, asserted against the Company or any of its subsidiaries or any of their
properties or assets, or against First Federal or its subsidiaries or any of
their properties or assets, that would reasonably be expected to have a Material
Adverse Effect.
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(t) Neither the Company nor any of its subsidiaries (and
neither First Federal nor its subsidiaries) is, or intends to conduct its
business in a manner in which it would become, an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.
(u) Except as disclosed in the Prospectus, no labor dispute
with the employees of the Company or any of its subsidiaries, or with the
employees of First Federal and its subsidiaries, is pending or, to the knowledge
of the Company, threatened that would reasonably be expected to have a Material
Adverse Effect. Each employee benefit plan within the meaning of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), for which the
Company or any of its subsidiaries, or First Federal or any of its subsidiaries,
acts as sponsor within the meaning of ERISA is and has been in all material
respects operated and administered in accordance with the provisions of ERISA
and applicable law. The present value of all benefits vested under each employee
benefit plan which is subject to Title IV of ERISA did not exceed, as of the end
of the most recent plan year, the value of the assets of the plan allocable to
such vested or accrued benefits, and no such plan or any trust created
thereunder has incurred any "accumulated funding deficiency" within the meaning
of the Internal Revenue Code of 1986, as amended, and the rules and regulations
thereunder (collectively, the "Code") since the effective date of ERISA. No
employee benefit plan or any trust created thereunder or any trustee fiduciary
or administrator thereof has engaged in a "prohibited transaction" within the
meaning of the Code or ERISA or violated any of the fiduciary standards of
ERISA, and there has been no "reportable event" within the meaning of ERISA with
respect to any such plan.
(v) Each of the Company and its subsidiaries, and each First
Federal and its subsidiaries, (A) makes and keeps books, records and accounts
which, in reasonable detail and in all material respects, accurately and fairly
reflect its transactions and dispositions of its assets and (B) maintains a
system of internal accounting controls sufficient to provide reasonable
assurance that (1) transactions are executed in accordance with management's
general or specific authorizations, (2) transactions are recorded as necessary
(i) to permit the preparation of financial statements in conformity with
generally accepted accounting principles consistently applied or any other
criteria applicable to such statements and (ii) to maintain accountability for
assets, (3) access to assets is permitted only in accordance with management's
general or specific authorizations and (4) the recorded accountability for
assets is compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(w) Except as disclosed in the Prospectus, neither the Company
nor any of its subsidiaries, nor First Federal or any of its subsidiaries, (A)
is presently engaged in negotiations for the acquisition of all or a portion of
the stock or other equity interest or all or a portion of the assets of any
person (including without limitation any company,
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corporation, partnership, limited liability company, partnership, joint venture
or sole proprietorship), (B) has any agreements or understandings with respect
to the acquisition of all or a portion of the stock or other equity interest or
all or portion of the assets of any specific person, and (C) has received any
inquiries, offers or solicitations that would result in the consummation of any
acquisition of the Company or any of its subsidiaries or First Federal or any of
its subsidiaries.
(x) Except as disclosed in the Prospectus, (A) no extension of
credit made by First Federal to an executive officer, director, or affiliate of
the Company or First Federal is (1) delinquent, past due, on non-accrual status
or non-performing, (2) identified as a potential problem loan on any internal
"watch list" or (3) constitutes a loan that was a renewal of a loan that was at
the time of renewal delinquent, past due, on non-accrual status or
non-performing; and (B) all extensions of credit to any director or executive
officer or any member of their immediate family (1) were made in the ordinary
course of business, (2) were made on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for comparable
transactions with other persons, and (3) did not involve more than the normal
risk of collectibility or present other unfavorable features.
(y) The execution, delivery and performance of the Agreement
and Plan of Merger dated ____________, 1997 between the Company, New First
Federal Savings Bank, a federally chartered capital stock thrift institution
("New First Federal"), and First Federal and the transactions contemplated
thereby (the "Merger Agreement"), (A) have been duly authorized by the Boards of
Directors of the Company, New First Federal and First Federal, (B) do not and
will not violate any provision of the certificate of incorporation (as amended)
or bylaws (as amended) of the Company, New First Federal or First Federal,
respectively, (C) do not and will not constitute or result in the breach of, or
be in violation of, any of the terms or provisions of or constitute a default
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company, New First Federal or
First Federal under any (i) material agreement, franchise, license, indenture,
lease, mortgage, deed of trust, or other instrument to which any of them is a
party or by which any of them or their respective properties may be bound or
affected, (ii) order, judgment or decree applicable to the Company, New First
Federal or First Federal, respectively, (iii) law, rule or regulation of any
government, governmental instrumentality, court or regulatory body,
administrative agency, or other governmental body applicable to or having
jurisdiction over the Company, New First Federal or First Federal or any of
their respective properties, or (iv) order of any court or governmental agency
or other regulatory authority entered in any proceeding to which the Company,
New First Federal or First Federal was or is now a party or by which any of them
is bound. No consent, approval, authorization or other order of or filing with
any court, regulatory body, administrative agency or other governmental body is
legally required for the execution, delivery and performance of the Merger
Agreement, except as have been made or obtained as required.
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The Merger Agreement has been executed and delivered by the Company, New First
Federal and First Federal and, subject to the approval of the shareholders of
First Federal, constitutes a valid and binding obligation of the Company, New
First Federal and First Federal enforceable against each of them in accordance
with its terms, except insofar as (Y) such agreement may be subject to
bankruptcy, insolvency, reorganization, moratorium or other laws relating to
creditors' rights generally, and (Z) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding
thereafter may be brought.
(z) As of the date hereof First Federal has, and as of each
Closing Date First Federal will have, filed all reports, registrations and
statements, together with any required amendments thereto, that it was or will
be required to file with the Commission under the Exchange Act, or with the OTS,
the FDIC and any state securities or financial institution regulatory agency
(the "First Federal Reports"). As of their respective dates, the First Federal
Reports complied in all material respects with all of the rules and regulations
promulgated by the Commission, the OTS, the FDIC and applicable state securities
or financial institution regulatory agencies, as the case may be, and did not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(aa) The Company has filed a registration statement on Form
S-1 (Registration No. 333-28205) with the Commission with respect to the
issuance of shares of Common Stock in the Merger, which registration statement
contains the proxy statement of First Federal relating to the Merger, and such
registration statement has been declared effective by the Commission. Such
registration statement in the form in which it was declared effective, and the
proxy statement with respect to the Merger contained in such registration
statement at the time the registration statement was declared effective and when
such proxy statement is mailed to the stockholders of First Federal and as
amended or supplemented at the time of the meeting of the stockholders of First
Federal, is referred to herein as the "Merger Registration Statement". The
Merger Registration Statement complies as to form in all material respects with
the requirements of the Securities Act and the Exchange Act. Neither the Merger
Registration Statement nor any amendment or supplement thereto included or will
include any untrue statement of material fact or omitted or will omit any
material fact required to be stated therein or necessary to make the statements
therein not misleading. All documents filed or to be filed by the Company, First
Federal or New First Federal in connection with the Merger complied or will
comply as to form in all material respects with the requirements of applicable
law.
(bb) No holder of securities of the Company has any right to
require the registration of such securities (i) pursuant to the Registration
Statement or (ii) as a result of
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the filing of the Registration Statement or the offering of the Units. Neither
the Company nor any subsidiary is a party to or otherwise bound by any agreement
or instrument conferring on any person the right to registration of any
securities of the Company under the Securities Act.
(cc) The Company will apply the net proceeds from the sale of the
Units for the purposes set forth in the Prospectus under the caption "Use of
Proceeds."
SECTION 3. Offering and Sale of Units. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company hereby appoints the Marketing
Agent as its exclusive agent to effect sales of the Units for the account of the
Company at the offering price of $1,000.00 per Unit and upon the other terms and
conditions set forth herein and in the Prospectus, and the Marketing Agent
agrees to use its best efforts as such agent to sell the Units during the term
of this Agreement on the terms and conditions set forth herein and in the
Prospectus.
As compensation for the Marketing Agent's services hereunder, the
Company will, at the Closing (as hereinafter defined), pay to the Marketing
Agent a commission of $70.00 per Unit (i. e., 7% percent of the gross proceeds
of the offering) resulting from the sale of Units pursuant to the offering
contemplated herein. The Marketing Agent's appointment shall commence on the
date of the execution of this Agreement, and shall continue for a period (such
period, including any extension thereof as hereinafter provided, being herein
called the "Offering Period") of ___ days from the effective date (the
"Effective Date") of the Registration Statement (and for a period of up to ___
additional days if extended by agreement of the Company and the Marketing
Agent), unless all of the Units have previously been subscribed for. The
offering will terminate and all amounts paid by applicants to purchase Units
will be promptly returned to them with interest as provided in the Prospectus
and the Escrow Agreement (as hereinafter defined) if subscriptions for at least
3,400 Units (the "Minimum Subscription") have not been received within the
Offering Period or if this Agreement shall be terminated as provided herein
prior to the expiration of the Offering Period.
The Marketing Agent hereby acknowledges that it is a party to the
Escrow Agreement (the "Escrow Agreement") of even date herewith between the
Marketing Agent, The First National Bank of Bryan, Texas, as Escrow Agent, and
the Company, a copy of which is attached hereto as Exhibit A. The Marketing
Agent will promptly upon receipt, and in any event by noon, Central time, on the
next business day, deliver to the Escrow Agent all cash and checks received by
the Marketing Agent from applicants to purchase Units. Such cash or checks will
be accompanied by one executed copy of a Subscription Application pursuant to
which applications to purchase Units are made, properly completed and executed
and in the form of Exhibit A to the Prospectus ("Subscription Application"). All
such cash or
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checks and executed copies of Subscription Application are to be deposited by
the Escrow Agent, pursuant to the Escrow Agreement, in the escrow account (the
"Escrow Account") established by the Company with the Escrow Agent. All checks
received by the Marketing Agent from applicants to purchase Units shall be made
payable to "The First National Bank of Bryan, Texas -- Escrow Agent for the
Xxxxx-College Station Financial Holding Company". The Marketing Agent will
promptly deliver to the Company one photocopy of each Subscription Application
deposited in the Escrow Account. Promptly after receipt of a Subscription
Application and the funds therefor by the Escrow Agent and delivery of a copy of
the Subscription Application, the Company will mail an interim receipt, in the
form annexed to the Escrow Agreement as Exhibit A, to each such applicant to
purchase for the amount deposited in the Escrow Account on behalf of such
applicant to purchase. Any entity selected by the Marketing Agent to process
orders for Units on behalf of applicants to purchase may deliver cash or checks
and Subscription Applications received from such applicants directly to the
Escrow Agent and deliver a photocopy of Subscription Applications so received
directly to the Company.
It is understood that the Marketing Agent shall have the right to
refuse to forward to the Escrow Agent any Subscription Application, and in such
event the Marketing Agent shall promptly remit all funds received by the
Marketing Agent to the person on whose behalf such funds were submitted to the
Marketing Agent.
SECTION 4. Closing. Subject to the prior termination of the offering as
provided herein, the receipt and acceptance of Subscription Applications with
respect to the Minimum Subscription and the satisfaction of the other conditions
specified herein and in the Prospectus, there shall be a closing (the "First
Closing") at such time and place as may be agreed by the Company and the
Marketing Agent, but not later than ten business days after the receipt of the
Minimum Subscription (the "First Closing Date"). The First Closing shall include
the following: (i) satisfaction of the conditions set forth in Section 7; (ii)
payment for the Units to the Company by release of funds from the Escrow Account
and delivery to the Company of properly completed and executed Subscription
Applications for each purchaser; (iii) delivery by the Company of Debentures and
Warrants included in the Units purchased by each purchaser; (iv) payment of
interest earned on amounts held in the Escrow Account to respective purchasers
as set forth in the Escrow Agreement; and (v) payment by the Company to the
Marketing Agent, out of the funds held in the Escrow Account, of the commission
referred to in Section 3 for each Unit sold. The Debentures and Warrants to be
delivered at the Closing will be in definitive form in such denominations and
registered in such names as the Marketing Agent shall request and will be made
available at the above office for checking and packaging at least one full
business day prior to the Closing Date.
In the event not all of the Units are sold at the First Closing and the
Offering Period has not terminated, the Marketing Agent may continue to offer
the Units for sale until the
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end of the Offering Period on the same terms and in the same manner as described
above. If additional Subscription Applications are received and accepted
subsequent to the First Closing, a final Closing (the "Final Closing") will be
held within ten days of the first to occur of (i) the end of the Offering
Period, (ii)the date on which the Company and the Marketing Agent agree in
writing that the offering of the Units shall be discontinued, or (iii) the date
on which Subscription Applications for all unsold Units are received and
accepted.
Nothwithstanding the foregoing, but subject to the receipt and
acceptance of Subscription Applications with respect to the Minimum Subscription
and the satisfaction of the other conditions specified herein and in the
Prospectus, the Company and the Marketing Agent may mutually agree to hold only
one closing. The terms "First Closing Date" and "Final Closing Date," and the
terms "First Closing" and "Final Closing" and are sometimes referred to herein
as the "Closing" and the "Closing Date," respectively.
SECTION 5. Covenants of the Company. The Company covenants and agrees
with the Marketing Agent that:
(a) The Company will use its best efforts to cause the
Registration Statement to become effective. The Company will advise the
Marketing Agent promptly of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement (and make every
reasonable effort to obtain the withdrawal of such order as early as possible)
or of the institution of any proceedings for that purpose, or of any
notification of the suspension of qualification of the Units for sale in any
jurisdiction or the initiation or to its knowledge threatening of any
proceedings for that purpose, and will also advise the Marketing Agent promptly
of any request of the Commission for amendment or supplement of the Registration
Statement, of any preliminary prospectus or of the Prospectus, or for additional
information, and will not file any amendment or supplement to the Registration
Statement, to any preliminary prospectus or to the Prospectus of which the
Marketing Agent has not been furnished with a copy prior to such filing or to
which the Marketing Agent reasonably objects.
(b) If at any time when a prospectus relating to the Units is
required to be delivered under the Securities Act, any event occurs as a result
of which the Prospectus, including any amendments or supplements, would include
an untrue statement of a material fact, or omit to state any material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading, or if
it is necessary at any time to amend the Prospectus, including any amendments or
supplements thereto and including any revised prospectus which the Company
proposes for use by the Representative in connection with the offering of the
Units which differs from the prospectus on file with the Commission at the time
of effectiveness of the Registration Statement, whether or not such revised
prospectus is required to be filed
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pursuant to Rule 424(b) to comply with the Securities Act, the Company promptly
will advise the Marketing Agent thereof and will promptly prepare and, if
required pursuant to Rule 424(b), file with the Commission an amendment or
supplement which will correct such statement or omission or an amendment which
will effect such compliance.
(c) Neither the Company nor any of its Subsidiaries will,
prior to the Closing Date, incur any material liability or obligation, direct or
contingent, or enter into any material transaction, other than in the ordinary
course of business, except as contemplated by the Prospectus.
(d) The Company will not declare or pay any dividend or make
any other distribution upon the Common Stock payable to shareholders of record
on a date prior to the Closing Date, except as contemplated by the Prospectus.
(e) Not later than 90 days after the close of the period
covered thereby, the Company will make generally available to its security
holders an earnings statement (which need not be audited) covering a period of
at least 12 months beginning after the effective date of the Registration
Statement, which will satisfy the provisions of the last paragraph of Section
11(a) of the Securities Act and Rule 158 thereunder.
(f) During such period as a prospectus is required by law to
be delivered in connection with offers and sales of the Units by an underwriter
or dealer, the Company will furnish to the Marketing Agent at its expense (and
consents to the use thereof), subject to the provisions of subsection (b) of
this Section 5, copies of the Registration Statement, the Prospectus, each
preliminary prospectus and all amendments and supplements to any such documents
in each case as soon as available and in such quantities as the Marketing Agent
may reasonably request, for the purposes contemplated by the Securities Act.
(g) The Company will cooperate with the Marketing Agent in
qualifying or registering the Units for sale under the blue sky laws of such
jurisdictions as the Marketing Agent shall designate and will continue such
qualifications in effect so long as reasonably required for the distribution of
the Units. The Company shall not be required to qualify as a foreign corporation
or to file a general consent to service of process in any such jurisdiction
where it is not currently qualified or where it would be subject to taxation as
a foreign corporation.
(h) During the period of three years after the Closing Date,
the Company will furnish to the Marketing Agent a copy (i) as soon as
practicable after the filing thereof, of each report filed by the Company with
the Commission, any securities exchange or the National Association of
Securities Dealers, Inc. ("NASD") and (ii) as soon as available, of each report
of the Company mailed to any class of its securityholders.
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(i) The Company will use the net proceeds received by it from
the sale of the Units in the manner specified in the Prospectus under the
caption "Use of Proceeds."
(j) The Company will comply with all of the provisions of each
undertaking contained in the Registration Statement.
SECTION 6. Payment of Expenses. (a) The Company will pay, or reimburse
if paid by the Marketing Agent, whether or not the transactions contemplated
hereby are consummated or this Agreement is terminated, all costs and expenses
incident to the performance by the Company of its obligations under this
Agreement, including, without limiting the generality of the foregoing, (i)
preparation, printing, filing and distribution (including postage, air freight
charges and charges for counting and packaging) of the Registration Statement,
each preliminary prospectus, the Prospectus, each amendment and/or supplement to
any of the foregoing, the Indenture, the Escrow Agreement and this Agreement;
(ii) the furnishing to the Marketing Agent and dealers as provided herein of
copies of the foregoing materials (provided, however, that any such copies
furnished by the Company more than nine months after the first date upon which
the Units are offered to the public shall be at the expense of the Marketing
Agent or dealer so requesting as provided in paragraphs 5(b) above); (iii) the
registrations or qualifications referred to in paragraph 5(g) above (including
reasonable fees and disbursements of counsel in connection therewith) and
expenses of printing and delivering to the Marketing Agent copies of the
preliminary and final Blue Sky memoranda; (iv) the review of the terms of the
public offering of the Units by the NASD (including the filing fees paid to the
NASD in connection therewith); (v) the performance by the Company of its other
obligations under this Agreement, including the fees of the Company's counsel
and accountants; (vi) the issuance of the Units and the preparation and printing
of the Debentures and the Warrants including any stamp taxes payable in
connection with the original issuance of the Units; (vii) the fees of the Escrow
Agent and any other fees or expenses incurred pursuant to the Escrow Agreement;
(viii) the furnishing to the Marketing Agent of copies of all reports and
information required by Section 5(h) above, including costs of shipping and
mailing, and (ix) the fees and disbursements of legal counsel for the Marketing
Agent, not to exceed $60,000. It is understood however, that the Company shall
not be required to pay or to reimburse the Marketing Agent for costs or expenses
that the Marketing Agent may incur, except as provided in this Section 6 and
Section 8 hereof.
(b) If the Closing does not occur because (i) this Agreement
is terminated by the Marketing Agent in accordance with the provisions of
Section 10(i) hereof, (ii) any condition of the Marketing Agent's obligations
hereunder is not satisfied, or (iii) of any refusal, inability or failure on the
part of the Company to perform any agreement herein or to comply with any
provision hereof , the Company agrees to reimburse the Marketing Agent upon
demand for all out-of-pocket expenses (including reasonable fees and
disbursements
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of counsel) that shall have been reasonably incurred by the Marketing Agent in
connection with this Agreement.
SECTION 7. Conditions of the Obligations of the Marketing Agent. The
obligations of the Marketing Agent to use its best efforts to sell the Units as
provided herein and the consummation of the sale of the Units at the Closing
shall be subject to the accuracy in all material respects of the representations
and warranties on the part of the Company herein set forth as of the date hereof
and as of the Closing Date, to the accuracy of the statements of the Company
made pursuant to the provisions hereof, to the performance in all material
respects by the Company of its obligations hereunder, and to the following
additional conditions:
(a) The Registration Statement shall have become effective
either prior to the execution of this Agreement or not later than 5:00 P.M.,
Eastern Time, on __________, 1997 or such later time as shall have been
consented to by the Marketing Agent; and prior to the Closing Date no stop order
suspending the effectiveness of the Registration Statement shall have been
issued and no proceedings for that purpose shall have been instituted or shall
be pending or, to the knowledge of the Company or the Marketing Agent shall be
contemplated by the Commission.
(b) The Units shall have been qualified for sale under the
blue sky laws of such states as shall have been specified by the Marketing
Agent.
(c) The validity and form of the certificates representing
Shares and the Debentures and the Warrants, the execution and delivery of this
Agreement and all corporate proceedings and other legal matters incident thereto
shall have been approved by counsel for the Marketing Agent.
(d) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred any material adverse change, or any
development that would involve a material adverse change, in or affecting the
business or properties of the Company and its subsidiaries, or First Federal and
its subsidiaries, in each case taken as a whole, whether or not arising in the
ordinary course of business, which, in the reasonable judgment of the Marketing
Agent, makes it impractical to proceed with the public offering or sale of the
Units as contemplated hereby or to attempt to enforce contracts for the purchase
of the Units.
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(e) There shall have been furnished to the Marketing Agent on
the Closing Date:
(i) An opinion of Xxxxxx, Xxxxxxxx & Xxxx, L.L.P.,
counsel for the Company and First Federal, addressed to the Marketing
Agent and dated the Closing Date to the effect that:
(1) The Company is validly existing as a
corporation in good standing under the laws of the State of
Delaware with full corporate power and authority to own or
lease its properties and conduct its business as described in
the Prospectus; the Company is a thrift holding company duly
registered with the OTS. First Federal is a federally
chartered capital stock thrift institution chartered and
organized by authority of the OTS and validly existing and in
good standing under the laws of the United States of America.
Each subsidiary of the Company or First Federal is validly
existing as a corporation in good standing under the laws of
its state of incorporation with full corporate power and
authority to own or lease its properties and conduct its
business as described in the Prospectus. The Company, First
Federal and each of the subsidiaries of each of them are duly
qualified to do business as foreign corporations under the
corporation law of, and are in good standing as such in, each
jurisdiction in which they own or lease substantial
properties, have an office, or in which substantial business
is conducted and such qualification is required except in any
such case where the failure to so qualify or be in good
standing would not have a Material Adverse Effect.
(2) The Company has an authorized
capitalization as set forth in the Prospectus, and the Units,
Debentures, Warrants and Shares conform, in all material
respects, to the description thereof contained in the
Prospectus.
(3) No consent, approval, authorization or
other order of or filing with, any court, regulatory body,
administrative agency or other governmental body is legally
required for the execution, delivery and performance of this
Agreement, the Indenture and the Escrow Agreement by the
Company, except as may be required under or by the Securities
Act or the blue sky laws of the various jurisdictions.
(4) This Agreement, the Indenture and the
Escrow Agreement have been duly and validly authorized and
executed by the Company and constitute valid and binding
obligations of the Company except only insofar as (i) such
agreements may be subject to bankruptcy,
-18-
insolvency, reorganization, moratorium or other laws relating
to creditors' rights generally, (ii) the remedy of specific
performance and injunctive and other equitable relief may be
subject to equitable defenses, and (iii) such enforcement may
be subject to any limitations under applicable federal
securities laws relating to indemnification and contribution.
(5) The Registration Statement has become
effective under the Securities Act, and, to the best knowledge
of such counsel, no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings
for that purpose have been instituted or are pending or
contemplated by the Commission under the Securities Act, and
the Registration Statement, the Prospectus and each amendment
or supplement thereto (except for the financial statements,
notes thereto and related schedules and other financial,
statistical or accounting data included therein as to which
such counsel need express no opinion) complies as to form in
all material respects with the requirements of the Securities
Act. The Indenture complies as to form in all material
respects with, and has been duly qualified under, the Trust
Indenture Act.
(6) There are no contracts or documents
required to be described in the Registration Statement or
Prospectus or to be filed as exhibits to the Registration
Statement which are not described or filed, as required, and
such contracts and documents as are summarized in the
Registration Statement or Prospectus are fairly summarized in
all material respects; and there are no statutes or
regulations or any legal or governmental proceedings pending
or, to the knowledge of such counsel threatened, required to
be described in the Prospectus which are not described as
required.
(7) All of the issued and outstanding shares
of the Company's capital stock have been duly authorized and
validly issued and are fully paid and non-assessable and free
of preemptive or other similar rights under the Delaware
General Corporation Law ("DGCL") and to such counsel's
knowledge there are no options, agreements, contracts or other
rights in existence to acquire from the Company any shares of
Common Stock, except as set forth in the Prospectus. Except as
set forth in the Prospectus, to such counsel's knowledge there
are no holders of any securities of the Company having rights
to the registration thereof under the Registration Statement
or by reason of the filing of the Registration Statement. All
of the capital stock of New First Federal has been duly
authorized and validly issued and is fully paid and
non-assessable. All of the
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outstanding capital stock of First Federal has been duly
authorized and validly issued and is fully paid and
nonassessable. Each of the Company and its subsidiaries,
directly or indirectly, owns of record, free and clear of any
liens, claims, encumbrances, shareholders agreements, voting
agreements or any other agreements affecting the Company's
right to vote, hypothecate or otherwise dispose of, all of the
issued and outstanding shares of each of its subsidiaries,
except as described in the Prospectus. To such counsel's
knowledge, there are no options, agreements, contracts or
other rights in existence to purchase or acquire from the
Company, First Federal or any subsidiaries of either of them
any issued and outstanding shares of any such subsidiary.
(8) The Shares issuable upon exercise of the
Warrants have been duly authorized and, when issued and paid
for upon due exercise of the Warrants, will be validly issued,
fully paid and non-assessable; the holders of the Shares will
not be subject to personal liability under the DGCL solely by
reason of being such holders; and the Shares are not subject
under the DGCL to the preemptive rights of any shareholder of
the Company.
(9) The statements in the Prospectus under
the captions "Risk Factors," "Business," "Regulation,"
"Federal Income Tax Considerations," "Restrictions on
Acquisitions of Stock and Related Takeover Defensive
Provisions," and "Description of Debentures," "Description of
the Units," "Description of the Warrants," and "The Offering,"
insofar as they constitute a summary of certain laws or
documents referred to therein, provide an accurate summary of
such laws and documents, are correct in all material respects.
(10) To the best of such counsel's
knowledge, none of the Company, First Federal and their
subsidiaries is in violation of its respective charter or
bylaws. To the best of such counsel's knowledge, none of the
Company, First Federal and their subsidiaries is in breach of
or otherwise in default in the performance of any material
obligation, agreement or condition contained in any bond,
debenture, note, indenture, loan agreement or any other
material contract, lease or other instrument to which it is
subject or by which any of them may be bound, or to which any
of the material property or assets of the Company, First
Federal or any of their subsidiaries is subject.
(11) The execution, delivery and performance
by the Company of this Agreement, the Indenture and the Escrow
Agreement have been duly authorized by all necessary corporate
action and do not and will
-20-
not violate any provision of the Company's certificate of
incorporation (as amended) or bylaws (as amended) and do not
and will not result in the breach of, or violate, any of the
terms or provisions of or constitute a default under, or
result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or its
subsidiaries under any material agreement, franchise, license,
indenture, lease, mortgage, deed of trust, or other instrument
known to such counsel to which the Company or any of its
subsidiaries is a party or by which the Company, any of its
subsidiaries or the property of any of them may be bound or
affected, or any law, order, judgment, decree, rule or
regulation applicable to the Company or any of its
subsidiaries of any government, governmental instrumentality,
court or regulatory body, administrative agency or other
governmental body having jurisdiction over the Company or any
of its subsidiaries or any of their respective properties, or
any order of any court or governmental agency or other
regulatory authority entered in any proceeding to which the
Company or any of its subsidiary was or is now a party or by
which it is bound.
(12) There is no material legal proceeding
pending or, to such counsel's knowledge, threatened against
the Company or any of its subsidiaries except as disclosed in
the Prospectus.
(13) Neither the Company nor any of its
subsidiaries is an "investment company" or an entity
"controlled by an investment company" within the meaning of
the Investment Company Act of 1940, as amended.
(14) To such counsel's knowledge, except as
have been heretofore waived, there are no persons with
registration or similar rights to have any securities of the
Company registered pursuant to the Registration Statement.
(15) The Merger Agreement and the
transactions contemplated thereby have been duly and validly
authorized by all necessary corporate action on the part of
the Company. The Merger Agreement has been executed and
delivered by the Company and the other parties thereto and
constitutes a valid and binding obligation of the Company
(assuming the due authorization, execution and delivery
thereof by the other parties thereto) enforceable against the
Company in accordance with its terms, except insofar as (i)
such agreement may be subject to bankruptcy, insolvency,
reorganization, moratorium or other laws relating to
creditors' rights generally, and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief
may be subject to equitable defenses and to the
-21-
discretion of the court before which any proceeding thereafter
may be brought. The transactions contemplated by the Merger
Agreement, including without limitation, the merger of New
First Federal with and into First Federal, have been
consummated.
(16) The Merger Registration Statement
complies as to form in all material respects with the
requirements of the Securities Act and the Exchange Act.
In rendering such opinion, such counsel may
rely, provided that the opinion shall state that you and they
are entitled to so rely, as to factual matters on certificates
of the officers and employees of, and accountants for, the
Company. Such opinion may contain such other qualifications
and assumptions as are reasonably acceptable to counsel for
the Marketing Agent.
In addition, counsel shall state that (a) in
connection with the Registration Statement and the Prospectus,
they have participated in conferences with officers and other
representatives of the Company, representatives of the
independent public accountants for the Company, and
representatives of the Marketing Agent and its counsel, at
which the contents of the Registration Statement, the
Prospectus and related matters were discussed, and (b) in
connection with the Merger Registration Statement, they have
participated in conferences with officers and other
representatives of the Company and representatives of the
independent public accountants for the Company, at which the
contents of the Merger Registration Statement, and related
matters were discussed. Such counsel may also state that,
although such counsel is not passing upon, and does not assume
any responsibility for, the accuracy, completeness or fairness
of the statements contained in the Registration Statement, the
Prospectus or the Merger Registration Statement and has not
made any independent check or verification thereof, on the
basis of the foregoing (relying as to facts upon which
determinations of materiality are made to a large extent upon
the statements of officers and other representatives of the
Company), no facts have come to such counsel's attention that
have led them to believe that the Registration Statement or
the Merger Registration Statement (other than financial
statements, the notes thereto and related schedules and other
financial, statistical and accounting data included therein or
omitted therefrom, as to which such counsel need express no
belief), as amended or supplemented, if applicable, at the
time such Registration Statement or any post-effective
amendment became effective (and, as to the Merger Registration
Statement, at the time the proxy
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statement contained therein was mailed to stockholders of
First Federal and as amended or supplemented at the time of
such meeting), contained an untrue statement of a material
fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading or that the Prospectus (other than financial
statements, the notes thereto and related schedules and other
financial, statistical and accounting data included therein or
omitted therefrom, as to which such counsel need express no
view) as amended or supplemented, if applicable, as of its
date and the Closing Date, contained an untrue statement of a
material fact or omitted to state a material fact necessary to
make the statements therein not misleading in the light of the
circumstances under which they were made.
(ii) Such opinion or opinions of Xxxxxxxxx &
Xxxxxxxxx, L.L.P., counsel for the Marketing Agent, dated the Closing
Date as the Marketing Agent may reasonably require.
(iii) A certificate of the Company executed by the
chief executive officer and the principal financial officer of the
Company, dated the Closing Date to the effect that:
(1) the representations and warranties of
the Company set forth in Section 2 of this Agreement are true
and correct, in all material respects, as of the date of this
Agreement and as of the Closing Date, and the Company has
complied, in all material respects, with all the agreements
and satisfied all the conditions on its part to be performed
or satisfied at or prior to the Closing Date; and
(2) the Commission has not issued an order
preventing or suspending the use of the Prospectus or any
preliminary prospectus filed as part of the Registration
Statement or any amendment thereto; no stop order suspending
the effectiveness of the Registration Statement has been
issued; and to the best knowledge of the respective signers,
no proceedings for that purpose have been instituted or are
pending or contemplated under the Securities Act.
The delivery of the certificate provided for
in this subsection shall be and constitute a representation
and warranty of the Company as to the facts required in the
immediately foregoing paragraphs (1) and (2) of this
subsection to be set forth in said certificate.
-23-
(iv) At the time this Agreement is executed and also
on the Closing Date there shall be delivered to the Marketing Agent
letters addressed to the Marketing Agent and the Board of Directors of
the Company from Xxxxx, Xxxxxx and Company, LLP, independent
accountants, the first one to be dated the date of this Agreement and
the second one to be dated the Closing Date to the effect set forth in
Exhibit B.
(v) All conditions to the consummation of the
transactions shall have been satisfied in a manner satisfactory to the
Marketing Agent in its reasonable discretion.
(vi) The transactions contemplated by the Merger
Agreement, including without limitation the merger of New First Federal
with and into First Federal, shall have been consummated.
(vii) The Company's public offering of at least
1,500,000 shares of Common Stock shall have been consummated.
(viii) The Marketing Agent shall have received such
further certificates and documents as it may reasonably request.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are reasonably satisfactory
to the Marketing Agent and to Xxxxxxxxx & Xxxxxxxxx, L.L.P., counsel for the
Marketing Agent. The Company shall furnish the Marketing Agent with such
manually signed or conformed copies of such opinions, certificates, letters and
documents as the Marketing Agent reasonably requests.
If any condition to the Marketing Agent's obligations hereunder to be
satisfied prior to or at the Closing Date is not so satisfied, this Agreement at
the Marketing Agent's election will terminate upon notification to the Company
without liability on the part of the Marketing Agent or the Company, except for
the expenses to be paid or reimbursed by the Company pursuant to Section 6
hereof and except to the extent provided in Section 8 hereof.
Section 8. Indemnification. (a) The Company agrees to indemnify and
hold harmless the Marketing Agent and each person, if any, who controls the
Marketing Agent within the meaning of the Securities Act or the Exchange Act,
from and against any and all losses, claims, damages, liabilities and expenses
whatsoever (including but not limited to reasonable attorneys' fees and any and
all expenses reasonably incurred in investigating, preparing or defending
against any litigation, commenced or threatened, or any claim whatsoever, any
and all amounts paid in settlement of any claim or litigation), joint or
several, to which they or any of them may become subject under the Securities
Act, the
-24-
Exchange Act or otherwise, insofar as such losses, claims, damages, liabilities
and expenses arise out of or are based upon any untrue statement of a material
fact contained in any preliminary prospectus or the Registration Statement or
the Prospectus or in any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or arise out of or are based in whole or in part on any inaccuracy
in the representations and warranties of the Company contained herein or any
failure of the Company to perform its respective obligations hereunder or under
law, except insofar as such losses, claims, damages, liabilities or expenses
arise out of or are based upon any such untrue statement or omission or
allegation thereof which has been made therein or omitted therefrom in reliance
upon and in conformity with information furnished in writing to the Company by
or on behalf of the Marketing Agent expressly for use therein; provided,
however, that the indemnification contained in this paragraph with respect to
any preliminary prospectus shall not inure to the benefit of the Marketing Agent
(or of any person controlling the Marketing Agent) with respect to any action or
claim arising from the sale of the Units brought by any person who purchased
Units to the extent it is determined by a court of competent jurisdiction in a
final non-appealable decision that (i) a copy of the Prospectus (as amended or
supplemented if any amendment or supplements thereto shall have been furnished
to the Marketing Agent prior to the written confirmation of the sale involved)
shall not have been given or sent to such person by or on behalf of the
Marketing Agent with or prior to the written confirmation of the sale involved
and (ii) the untrue statement or omission of a material fact contained in such
preliminary prospectus was corrected in the Prospectus (as amended or
supplemented if amended or supplemented as aforesaid). In addition to its other
obligations under this Section 8(a), the Company agrees that, as an interim
measure during the pendency of any such claim, action, investigation, inquiry or
other proceeding arising out of or based upon any statement or omission, or any
alleged statement or omission, described in this Section 8(a), it will promptly
reimburse the Marketing Agent for all reasonable legal expenses as they are
incurred in connection with investigating or defending such claim, action,
investigation, inquiry or other proceeding. To the extent that any such interim
reimbursement payment is held by a court of competent jurisdiction to have been
improper, each recipient thereof will promptly return it to the Company.
(b) The Marketing Agent agrees to indemnify and hold harmless
the Company, each of its directors, each of its officers who sign the
Registration Statement and each person controlling the Company within the
meaning of the Securities Act and the Exchange Act, to the same extent as the
foregoing indemnity from the Company to the Marketing Agent, but only with
respect to information relating to the Marketing Agent furnished in writing to
the Company by or on behalf of the Marketing Agent expressly for use in the
Registration Statement, the Prospectus or any preliminary prospectus, or any
amendment thereof or supplement thereto. The Company acknowledges that for
purposes
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of this Section 8 the statement contained in Prospectus in the penultimate
paragraph under the caption "The Offering -- Subscription Procedures" is the
only information furnished in writing to the Company for inclusion in the
Registration Statement, the Prospectus or any preliminary prospectus.
(c) If any action or claim shall be brought against any
indemnified party under this Section 8, such indemnified party will, if a claim
in respect thereof is to be made against an indemnifying party under this
Section 8, promptly notify the indemnifying party in writing of the commencement
thereof. No indemnification shall be available to any party who shall fail to
give notice as provided in this Section 8(c) if the party to whom notice was not
given was unaware of the proceeding to which such notice would have related and
was prejudiced by the failure to give such notice, but otherwise the omission so
to notify the indemnifying party will not relieve it from any liability that it
may have to an indemnified party under this Section 8. In case any such action
is brought against an indemnified party, and it notifies the indemnifying party
of the commencement thereof, the indemnifying party will be entitled to
participate therein, and to the extent that it may elect by written notice
delivered to the indemnified party promptly after receiving the aforesaid notice
from such indemnified party, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party. Upon receipt of notice from
the indemnifying party to such indemnified party of its election to assume the
defense of such action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party under Section 8
for any legal or other expenses subsequently incurred by such indemnified party
in connection with the defense thereof unless (i) the indemnifying party has
agreed in writing to pay such fees and expenses, (ii) the indemnifying party
shall not have employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
commencement of the action or (iii) the named parties to any such action
(including any impleaded party) include such indemnified party and the
indemnifying party and such indemnified party shall have been advised in writing
by counsel having experience in securities litigation that there may be one or
more legal defenses available to it which are different from or additional to
those available to the indemnifying party (in which case if such indemnified
party notifies the indemnifying party, the indemnifying party shall, in
connection with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
not more than one separate firm of attorneys for all such indemnified parties)
and which, in the opinion of such counsel, would make it impractical to have
common representation. The indemnifying party shall not be liable for any
settlement of any such action effected without its written consent, but if
settled with its written consent, or if there shall be a final judgment for the
plaintiff in any such action and the time for filing all appeals has expired,
the indemnifying party agrees to indemnify and hold harmless any indemnified
party and any such controlling person from and against any loss or liability by
reason of such settlement or judgment.
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(d) (i) If the indemnification provided for in this Section 8
is unavailable as a matter of law to an indemnified party in respect of any
losses, claims, damages, liabilities or expenses referred to therein, then the
indemnifying party, in lieu of indemnifying such indemnified party thereunder,
shall contribute to the amount paid or payable by the indemnified party as a
result of such losses, claims, damages, liabilities or expenses (A) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Marketing Agent from the offering of the Units or (B) if the
allocation provided by clause (A) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (A) above but also the relative fault of the Company and
of the Marketing Agent in connection with the statements or omissions which
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The respective relative benefits
received by the Company and the Marketing Agent shall be deemed to be in the
same proportion, in the case of the Company, as the total price paid to the
Company for the Units (net of commissions paid to the Marketing Agent but before
deducting expenses), and, in the case of the Marketing Agent, as the commissions
received by it, bears to the total of such amounts paid to the Company and
received by the Marketing Agent as commissions in each case as contemplated by
the Prospectus. The relative fault of the Company and of the Marketing Agent
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or by
the Marketing Agent and the party's relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omissions.
(ii) The Company and the Marketing Agent agree that it would
not be just and equitable if contribution pursuant to this Section 8(d) were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in subsection
(d)(i). The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities and expenses referred to in subsection
(d)(i) shall be deemed to include, subject to the limitations set forth in this
Section 8(d), any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 8(d), the Marketing
Agent shall not be required to contribute any amount in excess of the amount of
the total commissions received by the Marketing Agent in connection with the
Units distributed to the public. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11 (f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(e) The indemnity and contribution agreements contained in
this Section 8 and the representations and warranties of the Company set forth
in this Agreement shall
-27-
remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of the Marketing Agent or any person
controlling the Marketing Agent, the Company or its directors or officers (or
any person controlling any such person), (ii) the sale of any Debentures or
Warrants and payment therefor, and (iii) any termination of this Agreement. A
successor or assign of the Marketing Agent, the Company or its directors or
officers and their legal and personal representatives (or of any person
controlling the Marketing Agent or the Company) shall be entitled to the
benefits of the indemnity, contribution and reimbursement agreements contained
in this Section 8.
SECTION 9. Effective Date. This Agreement shall become effective
immediately upon the execution and delivery thereof.
SECTION 10. Termination. Without limiting the right to terminate this
Agreement pursuant to any other provision hereof, this Agreement may also be
terminated by the Marketing Agent in its absolute discretion, without liability
on its part to the Company, by notice given to the Company if prior to the
Closing Date, as the case may be, (i) there has been, since the date of this
Agreement or since the respective dates as of which information is given in the
Prospectus any material adverse change in the condition, financial or otherwise,
or the earnings, business affairs or business prospects of the Company and its
subsidiaries, or First Federal and its subsidiaries, considered as a whole,
whether or not arising in the ordinary course of business, the effect of which
is such as to make it, in the good faith judgment of the Marketing Agent,
impracticable or inadvisable to market the Units or to enforce contracts for the
purchase of the Units; or (ii) trading in securities generally on the New York
Stock Exchange, the American Stock Exchange or the National Association of
Securities Dealers Automated Quotation System shall have been suspended, or if
there is a significant decline in the value of securities generally on such
exchanges or such market, or minimum or maximum prices for trading shall have
been fixed, or maximum ranges for prices for securities generally shall have
been required on either of such exchanges or on such market, by the exchanges,
market or by order of the Commission or any other governmental authority having
jurisdiction; or (iii) a general moratorium on savings bank, savings and loan
association or commercial banking activities in the United States or in the
State of New York or the State of Texas shall have been declared by either
federal or state authorities; or (iv) there shall have occurred any outbreak or
escalation of hostilities or other international or domestic calamity, crisis or
change in political, financial or economic conditions the effect of which on the
financial markets of the United States is such as to make it, in your good faith
judgment, impracticable or inadvisable to market the Units or to enforce
contracts for the purchase of Units. Notice of such cancellation shall be given
to the Company by telegraph, telephone or facsimile but shall be subsequently
confirmed by letter.
SECTION 11. Representations and Indemnities to Survive Delivery. The
respective indemnities, agreements, representations, warranties and other
statements of the Company
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and the Marketing Agent set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any termination of this Agreement
or investigation made by or on behalf of the Marketing Agent or the Company or
any of its or their partners, officers or directors or any controlling person,
and will survive delivery of and payment for the Units sold hereunder.
SECTION 12. Notices. All communications hereunder will be in writing
and, if sent to the Marketing Agent will be mailed, delivered or telegraphed and
confirmed to Xxxxxx & Xxxxxx Incorporated, 000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx,
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, with a copy to Xxxxxxxxx & Xxxxxxxxx, L.L.P.,
000 Xxxxxxxxx Xx., Xxxxx 0000, Xxxxxxx, Xxxxx 00000, Attention: Xxxx X.
Xxxxxxxx; if sent to the Company will be mailed, delivered or telegraphed and
confirmed to the Company at 0000 Xxxxx Xxxxxx, Xxxxx, Xxxxx 00000, with a copy
to Silver, Xxxxxxxx & Xxxx, L.L.P., 0000 Xxx Xxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X.
00000-0000, Attention: Xxxx X. Xxxxxxxxxx.
SECTION 13. Successors. This Agreement will inure to the benefit of and
be binding upon the parties hereto and their respective successors, personal
representative and assigns, and to the benefit of the officers and directors and
controlling persons referred to in Section 8, and no other person will have any
right or obligation hereunder. The term "successors" shall not include any
purchaser of the Units as such from the Marketing Agent merely by reason of such
purchase.
SECTION 14. Partial Unenforceability. If any section, paragraph or
provision of this Agreement is for any reason determined to be invalid or
unenforceable, such determination shall not affect the validity or
enforceability of any other section, paragraph or provision hereof.
SECTION 15. Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California.
The Marketing Agent's execution and delivery of this Agreement
will confirm that the foregoing is in accordance with the Marketing Agent's
understanding of the agreement of the Marketing Agent and the Company, and, upon
such execution and delivery, this Agreement will become a binding agreement
among the Company and the Marketing Agent, all in accordance with its terms.
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Very truly yours,
THE XXXXX-COLLEGE STATION
FINANCIAL HOLDING COMPANY
By:
---------------------------
X. Xxxxxxx Xxxxxxx
President
The foregoing Agreement is hereby confirmed and accepted as of the date First
above written.
XXXXXX & XXXXXX INCORPORATED
By:
-----------------------------
-----------------------
Partner
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EXHIBIT B
Comfort Letter of Xxxxx, Xxxxxx and Company LLP
(1) They are independent public accountants with respect to the Company
and its subsidiaries and First Federal within the meaning of the Securities Act.
(2) In their opinion the consolidated financial statements and any
supplementary financial information and schedules (and all pro forma financial
information) of the Company and its subsidiaries or First Federal and its
subsidiaries included in the Registration Statement comply as to form in all
material respects with the applicable accounting requirements of the Securities
Act.
(3) On the basis of specified procedures (but not an examination in
accordance with generally accepted auditing standards), including inquiries of
certain officers of the Company and its subsidiaries or First Federal and its
subsidiaries responsible for financial and accounting matters as to transactions
and events subsequent to September 30, 1996, a reading of minutes of meetings of
the shareholders and directors of the Company and its subsidiaries and First
Federal and its subsidiaries since September 30, 1996, a reading of the latest
available interim unaudited consolidated financial statements of the Company and
its subsidiaries and First Federal and its subsidiaries (with an indication of
the date thereof) and other procedures as specified in such letter, nothing came
to their attention which caused them to believe that (i) the unaudited
consolidated financial statements of the Company and its subsidiaries and First
Federal and its subsidiaries included in the Registration Statement do not
comply as to form in all material respects with the applicable accounting
requirements of the Securities Act or that such unaudited financial statements
are not fairly presented in accordance with generally accepted accounting
principles, and (ii) at a specified date not more than five days prior to the
date thereof in the case of the first letter and not more than two business days
prior to the date thereof in the case of the second letter, there was any change
in the capital stock or long-term debt or short-term debt (other than normal
payments) of the Company and its subsidiaries or First Federal and its
subsidiaries on a consolidated basis or any decrease in consolidated
shareholders' equity as compared with amounts shown on the latest unaudited
balance sheet of the Company or First Federal included in the Registration
Statement or for the period from the date of such balance sheet to a date not
more than five days prior to the date thereof in the case of the first letter
and not more than two business days prior to the date thereof in the case of the
second letter, there were any decreases, as compared with the corresponding
period of the prior year, in consolidated net interest income, consolidated
noninterest income or in
-31-
the total or per share amounts of net earnings, except, in all instances, for
changes or decreases which the Prospectus discloses have occurred or may occur
or which are set forth in such letter.
(4) They have carried out specified procedures, which have been agreed
to by the Marketing Agent with respect to certain information in the Prospectus
specified by the Marketing Agent and on the basis of such procedures, they have
found such information to be in agreement with the general accounting records of
the Company and its subsidiaries or First Federal and its subsidiaries.
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