AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER ("Agreement"), is made and entered
into by and among FIRST FEDERAL SAVINGS BANK, a federally-chartered capital
stock thrift institution ("First Federal"), NEW FIRST FEDERAL SAVINGS BANK, a
federally-chartered capital stock thrift institution in the process of
organization ("New Bank"), the sole stockholder of the Holding Company, J.
Xxxxxxx Xxxxxxx (the "Holding Company Stockholder") and THE XXXXX-COLLEGE
STATION FINANCIAL HOLDING COMPANY, a Delaware business corporation (the "Holding
Company"), effective as of the date executed by all of the parties.
WITNESSETH:
WHEREAS, First Federal is a capital stock thrift institution duly
organized and existing under the laws of the United States of America and having
its principal office in Bryan, Texas, with authorized capital stock consisting
of three million shares of common stock, par value $.01 per share ("First
Federal Common Stock"), of which 239,612 shares are issued and outstanding, and
one million shares of serial preferred stock (First Federal Preferred Stock), of
which 87,263 shares are issued and outstanding;
WHEREAS, New Bank is a capital stock thrift institution in the process
of organization under the laws of the United States of America, which is
proposed to be a subsidiary of the Holding Company and to have authorized
capital stock consisting of one million shares of common stock, par value $.01
per share ("New Bank Stock");
WHEREAS, the Holding Company is a capital stock corporation duly
organized and existing under the laws of Delaware, with authorized capital stock
consisting of three million shares of common stock, par value $.01 per share
("Holding Company Common Stock") of which one share is issued and outstanding,
and one million shares serial preferred stock, of which no shares are issued and
outstanding;
WHEREAS, the Holding Company has issued one share of its common stock
to the Holding Company Stockholder in return for $10.00 cash consideration;
WHEREAS, the Holding Company proposes to purchase one share of the
common stock of New Bank for $10.00;
WHEREAS, it is the desire of the parties to this Agreement to adopt a
plan of reorganization providing for the formation of a thrift institution
holding company; and
WHEREAS, a majority of the respective Boards of Directors of First
Federal, New Bank, and the Holding Company have approved and authorized the
execution of this Agreement pursuant to which the plan of reorganization,
including the merger of New Bank into First Federal, will be implemented;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, and in order to prescribe the plan of
reorganization and merger, including its terms and conditions, the mode of
carrying the same into effect, the manner and basis of stockholders of First
Federal exchanging their First Federal Common Stock for Holding Company Common
Stock or selling their First Federal Common Stock and such other details and
provisions as are deemed necessary or proper, the parties hereby agree as
follows:
ARTICLE I
MERGER AND REORGANIZATION
1.1 Subject to the conditions hereinafter set forth, New Bank shall be
merged into First Federal under the Charter of First Federal at the Effective
Date (as defined in Article XI hereof) of the merger (the "Merger"). The Merger
shall be effected pursuant to the provisions of, and with the effect provided
in, the applicable provisions of the laws of the United States of America and
the Rules and Regulations of the Office of Thrift Supervision.
1.2 On the Effective Date, the resulting thrift institution in the
Merger shall be First Federal (hereinafter referred to as the "Surviving
Institution" whenever reference is made to it as of the Effective Date of the
Merger or thereafter) which will continue to operate as a thrift institution
under its present name as "First Federal Savings Bank." The Charter and Bylaws
of First Federal in effect on the Effective Date shall be the Charter and Bylaws
of the Surviving Institution. The established offices and facilities of First
Federal immediately prior to the Merger shall become the established offices and
facilities of the Surviving Institution. The locations of the home office and
any other offices of the Surviving Institution are set forth in Schedule A
attached hereto.
1.3 On the Effective Date of the Merger, New Bank shall cease to exist
separately and shall be merged with and into First Federal in accordance with
the provisions of this Agreement and Plan of Merger and in accordance with the
provisions of applicable laws, rules and regulations, and all of the assets and
property of every kind and character, real, personal and mixed, tangible and
intangible, choses in action, rights and credits then owned by New Bank or which
would inure to it, shall immediately, by operation of law and without any
conveyance or transfer and without any further act or deed, be vested in and
become the property of the Surviving Institution, which shall have, hold and
enjoy the same in its own right as fully and to the same extent as the same were
possessed, held and enjoyed by New Bank prior to such Merger. The Surviving
Institution shall be deemed to be and shall be a continuation of the entity and
identity of New Bank and First Federal and all of the rights and obligations of
New Bank and First Federal shall remain unimpaired and the Surviving
Institution, on the Effective Date of such Merger, shall succeed to all such
rights and obligations and the duties and liabilities connected therewith on
such Effective Date.
1.4 On the Effective Date of the Merger, there will be no holders of
deposit accounts, transaction accounts, savings accounts or certificates of
deposit issued by New Bank. Holders of deposit accounts, transaction accounts,
savings accounts or certificates of deposit of First Federal as of the Effective
Date of the Merger shall continue to be holders of the same interest of the
Surviving Institution without change as to withdrawal value or other rights. No
existing
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deposit account, transaction account, savings account or certificate of deposit
holder shall have any of his rights impaired by virtue of the Merger
contemplated hereby.
1.5 The directors and officers of the Surviving Institution on the
Effective Date shall be those persons who are directors and officers,
respectively, of First Federal immediately before the Effective Date.
Information with respect to the directors of the Surviving Institution is set
forth in Schedule B attached hereto. The committees of the Board of Directors of
the Surviving Institution on the Effective Date shall be the same as, and shall
be composed of the same persons who were serving on, committees appointed by the
Board of Directors of First Federal as they exist immediately before the
Effective Date. The committees, if any, of officers of the Surviving Institution
on the Effective Date shall be the same as, and shall be composed of the same
officers who were serving on, the committees of officers of First Federal as
they exist immediately before the Effective Date.
1.6 Except as expressly prohibited by applicable laws, all corporate
acts, plans, policies, applications, agreements, orders, registrations,
licenses, approvals and authorizations of First Federal and New Bank, their
respective stockholders, Boards of Directors, committees elected or appointed by
their Boards of Directors, and their respective officers and agents, which were
valid and effective immediately before the Effective Date, shall be taken for
all purposes at and after the Effective Date as the acts, plans and policies,
applications, agreements, orders, registrations, licenses, approvals and
authorizations of the Surviving Institution and shall be as effective and
binding thereon as the same were with respect to First Federal and New Bank
immediately before the Effective Date.
ARTICLE II
CONVERSION, EXCHANGE AND CANCELLATION OF SHARES
2.1 Conversion of First Federal Common Stock. At the Effective Date, by
virtue of the Merger and without any action on the part of the holder thereof,
the Holding Company, First Federal or any other party to the Agreement, First
Federal Common Stock issued and outstanding immediately prior to the Effective
Date shall cease to be outstanding and shall, subject to the provisions of
Sections 2.2 and 2.3 hereof, be converted into and become the right to receive
either:
(a) such number of shares of Holding Company Common
Stock equal to the product of 2.5 multiplied by the number
of shares of First Federal Common Stock to be converted
("Stock Distribution");
(b) an amount in cash equal to $24.07 per share (the
"Cash Distribution"),
as the holder thereof shall elect or be deemed to have elected as provided in
Section 2.2 of this Agreement (the aggregate of the Cash Distributions and the
Stock Distributions payable or issuable pursuant to the Merger is sometimes
hereinafter referred to as the "Merger Consideration"); provided, however, that
any shares of First Federal Common Stock held by First Federal, other than in a
fiduciary capacity or as a result of debts previously contracted, shall be
cancelled and shall not be exchanged for the Merger Consideration.
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2.2 Election Procedures.
(a) An election form and other appropriate and customary
transmittal materials (which shall specify that delivery shall be effected, and
risk of loss and title to the certificates theretofore representing First
Federal Common Stock shall pass, only upon proper delivery of such certificates
to the exchange agent designated by Holding Company, or to the Holding Company
in its capacity as exchange agent, as determined by the Holding Company (the
"Exchange Agent"), in such form as First Federal and the Holding Company shall
mutually agree ("Election Form") shall be mailed approximately 25 days prior to
the anticipated Effective Date or on such other date as First Federal and the
Holding Company shall mutually agree (the "Mailing Date") to each holder of
record of First Federal Common Stock as of five business days prior to the
Mailing Date ("Election Form Record Date").
(b) Each Election Form shall specify the amount of Merger
Consideration receivable for each share of First Federal Common Stock in the
Cash Distribution and the Stock Distribution and shall permit a holder to elect
to receive, as provided in Section 2.2 of this Agreement, (i) the Stock
Distribution for all of his shares (in which case, such holder's shares shall be
deemed to be and shall be referred to herein as "Stock Election Shares"), (ii)
the Cash Distribution for certain designated shares (in which case, such
holder's shares so designated shall be deemed to be and shall be referred to
herein as "Cash Election Shares") with the remaining shares being converted to
the Stock Distribution as Stock Election Shares, or (iii) the Cash Distribution
for all of his shares.
(c) Any shares of First Federal Common Stock with respect to
which the holder thereof shall not, as of the Election Deadline (as defined
below), have made an election to receive either the Cash Distribution or the
Stock Distribution (such holder's shares being deemed to be and shall be
referred to herein as "No Election Shares") by submission to the Exchange Agent
of an effective, properly completed Election Form shall be deemed to be Cash
Election Shares. Any holder of 1% or more of First Federal Common Stock
(determined as of the Effective Date) that shall not, on or before the Election
Deadline, have delivered to the Exchange Agent a tax certification confirming
his present intention not to sell, exchange, or otherwise dispose of any Holding
Company Common Stock (a "Tax Certification") received in the Merger shall be
deemed to have made a timely election to receive the Cash Distribution for all
of his shares, and all shares of First Federal Common Stock held by such holder
shall be deemed to be Cash Election Shares for all purposes of this Agreement,
including Section 2.1. (The parties acknowledge that the foregoing sentence will
preclude a holder that acquires additional shares of First Federal Common Stock
and becomes a holder of 1% or more of such shares after the Election Deadline
from receiving the Stock Distribution.) "Election Deadline" means 5:00 p.m.,
local time, on the 20th day following the Mailing Date, or such other time and
date as the Holding Company and First Federal shall mutually agree.
(d) First Federal shall promptly make available one or more Election
Forms as may be reasonably requested by all persons who become holders (or
beneficial owners) of First Federal Common Stock between the Election Form
Record Date and close of business on the business day prior to the Election
Deadline, and First Federal shall provide to the Exchange Agent all information
reasonably necessary for it to perform as specified herein.
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(e) Any such election shall have been properly made only if the
Exchange Agent shall have actually received a properly completed Election Form
by the Election Deadline. An Election Form shall be deemed properly completed
only if accompanied by one or more certificates (or customary affidavits and
indemnification regarding the loss or destruction of such certificates or the
guaranteed delivery of such certificates) representing all shares of First
Federal Common Stock covered by such Election Form, together with duly executed
transmittal materials included in the Election Form and in the case of holders
of 1% or more of the outstanding First Federal Common Stock, a Tax Certification
if any such holder elects the Stock Distribution, in whole or in part. Any
Election Form may be revoked or changed by the person submitting such Election
Form at or prior to the Election Deadline. In the event an Election Form is
revoked prior to the Election Deadline, the shares of First Federal Common Stock
represented by such Election Form shall become No Election Shares and First
Federal shall cause the certificates representing First Federal Common Stock to
be promptly returned without charge to the person submitting the Election Form
upon written request to that effect from the person who submitted the Election
Form. Subject to the terms of this Agreement and of the Election Form, the
Exchange Agent shall have reasonable discretion to determine whether any
election, revocation or change has been properly or timely made and to disregard
immaterial defects in the Election Forms, and any good faith decisions of the
Exchange Agent regarding such matters shall be binding and conclusive. Neither
the Holding Company nor the Exchange Agent shall be under any obligation to
notify any person of any defect in an Election Form.
(f) Allocation Procedures. Within ten business days after the Effective
Date, or as soon thereafter as practicable, the Holding Company shall cause the
Exchange Agent to effect the allocation among the holders of First Federal
Common Stock of rights to receive Holding Company Common Stock or cash in the
Merger as follows:
(i) Stock Elections Less Than The Minimum Stock Value, If
shares of Holding Company Common Stock that would be issued in the
Merger upon conversion of the Stock Election Shares represents less
than 20% of the shares of First Federal Common Stock outstanding (the
"Minimum Stock Value"), then the Holding Company will be permitted to
allocate cash and stock pro rata to those shareholders electing the
Cash Distribution (other than Dissenting Shares as defined in Section
2.3) in such amount as would result in at least 20% of First Federal
Common Stock to be exchanged for Holding Company Common Stock;
provided, however, that the Holding Company may pay cash for First
Federal Common Stock which, if exchanged for Holding Company Common
Stock in the Merger would result in adverse accounting treatment, as
determined by independent accountants for the Holding Company, and that
any pro rata distribution of cash and stock pursuant to this Section
2.2(f)(i) shall be based on the amount Stock Election Shares excluding
any Stock Election Shares exchangeable for cash due to such accounting
considerations. For purposes of determining the Minimum Stock Value
under this Section 2.2(f)(i) and Section 2.2(f)(ii) below, all
Dissenting Shares shall be deemed Cash Election Shares.
(ii) Stock Elections Greater Than The Maximum Stock Value. If
the shares of Holding Company Common Stock that would be issued in the
Merger upon the conversion of the Stock Election Shares is greater than
49% of the shares of First Federal Common Stock outstanding (the
"Maximum Stock Value"), then the Holding Company will be permitted to
allocate cash and stock pro rata to those shareholders electing the
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Stock Distribution in such amount as would result in less than 49% of
First Federal Common Stock being exchanged for Holding Company Common
Stock in the Merger; provided, however, that the Holding Company may
pay cash for First Federal Common Stock which, if exchanged for Holding
Company Common Stock in the Merger would result in adverse accounting
treatment, as determined by independent accountants for the Holding
Company, and that any pro rata distribution of cash and stock pursuant
to this Section 2.2(f)(i) shall be based on the amount of Stock
Election Shares excluding any Stock Election Shares exchangeable for
cash due to such accounting considerations. Merger Consideration shall
be paid in accordance with the Election Forms subject to the provisions
of Section 2.2(c). No Election Shares shall be converted into the right
to receive cash.
2.3 Dissenting Shares. Any record holder of First Federal's Common
Stock may require First Federal to pay the fair or appraised value of his or her
First Federal Common Stock, determined as of the Effective Date of the Merger,
by complying with Section 552.14 of the Office of Thrift Supervision ("OTS")
Rules and Regulations. The computation of fair or appraised value of such shares
(the "Dissenting Shares") will exclude any element of value arising from the
accomplishment or expectation of the Merger. Notwithstanding any other provision
of this Agreement, any Dissenting Shares shall not, after the Effective Date, be
entitled to vote for any purpose or receive any dividends or other distributions
and shall be entitled only to such rights as are afforded in respect of
Dissenting Shares pursuant to the OTS Regulations.
2.4 Exchange Procedures.
(a) In accordance with Section 2.2(a) herein, holders
of record of certificates formerly representing shares of First Federal Common
Stock (the "Certificates") shall be instructed to tender such Certificates to
the Exchange Agent pursuant to a letter of transmittal that the Exchange Agent
shall deliver or cause to be delivered to such holders, which letter of
transmittal shall be included with the Election Forms distributed pursuant to
Section 2.2(a).
(b) The Holding Company or, at the election of the
Holding Company, the Exchange Agent, shall accept Certificates upon compliance
with such reasonable terms and conditions as the Holding Company or the Exchange
Agent may impose to effect an orderly exchange thereof in accordance with
customary exchange practices. All Certificates shall be appropriately endorsed
or accompanied by such instruments of transfer as the Holding Company or the
Exchange Agent may require.
(c) Each outstanding Certificate shall until duly
surrendered to the Holding Company or the Exchange Agent be deemed to evidence
ownership of the Merger Consideration into which the First Federal Common Stock
previously represented by such Certificate shall have been converted pursuant to
this Agreement.
(d) Subject to Section 2.3, after the Effective Date,
holders of Certificates shall cease to have rights with respect to First Federal
Common Stock previously represented by such Certificates, and their sole rights
shall be to exchange such Certificates for the Merger Consideration provided for
in this Agreement. After the Effective Date, there shall be no further transfer
on the records of First Federal of Certificates, and if such Certificates are
presented to First Federal for transfer, they shall be cancelled against
delivery of the Merger Consideration
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provided therefor in this Agreement. Neither the Exchange Agent nor the Holding
Company shall be obligated to deliver the Merger Consideration to which any
former holder of First Federal Common Stock is entitled as a result of the
Merger until such holder surrenders the Certificates as provided herein. No
dividends declared will be remitted to any person entitled to receive Holding
Company Common Stock under this Agreement until such person surrenders the
Certificates representing the right to receive such Holding Company Common
Stock, at which time such dividends shall be remitted to such person, without
interest and less any taxes that may have been imposed thereon. [CERTIFICATES
SURRENDERED FOR EXCHANGE BY ANY PERSON CONSTITUTING AN "AFFILIATE" OF FIRST
FEDERAL FOR PURPOSES OF RULE 145 OF THE SECURITIES ACT OF 1933, AS AMENDED
(TOGETHER WITH THE RULES AND REGULATIONS THEREUNDER, THE "SECURITIES ACT"),
SHALL NOT BE EXCHANGED FOR HOLDING COMPANY COMMON STOCK UNTIL THE HOLDING
COMPANY HAS RECEIVED A WRITTEN AGREEMENT FROM SUCH PERSON IN THE FORM ATTACHED
AS EXHIBIT C.] Neither the Exchange Agent nor any party to this Agreement nor
any affiliate thereof shall be liable to any holder of stock represented by any
Certificate for any consideration paid to a public official pursuant to
applicable abandoned property, escheat or similar laws. The Holding Company and
the Exchange Agent shall be entitled to rely upon the stock transfer books of
First Federal to establish the identity of those persons entitled to receive the
Merger Consideration specified in this Agreement, which books shall be
conclusive with respect thereto. In the event of a dispute with respect to
ownership of stock represented by any Certificate, the Holding Company and the
Exchange Agent shall be entitled to deposit any Merger Consideration represented
thereby in escrow with an independent third party and thereafter be relieved
with respect to any claims thereto.
2.5 No Fractional Shares. Notwithstanding any other provision of this
Agreement, neither certificates nor scrip for fractional shares of Holding
Company Common Stock shall be issued in the Merger. Each holder who otherwise
would have been entitled to a fraction of a share of Holding Company Common
Stock shall receive the number of shares rounded up to the next whole number of
shares.
2.6 First Federal Preferred Shares. First Federal preferred stock
currently issued and outstanding will remain issued and outstanding First
Federal Preferred Stock. The Merger will not change any of the terms or
conditions of First Federal Preferred Stock, and holders of First Federal
Preferred Stock will not have any election in the Merger.
2.7 New Bank Stock. The outstanding share of New Bank Stock issued to
the Holding Company shall be cancelled and converted into a share of First
Federal Common Stock.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF HOLDING COMPANY
The Holding Company hereby represents and warrants as follows:
3.1 The Holding Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. At the
Effective Date, the Holding Company will have corporate power to carry on its
business as then to be conducted and will be
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qualified to do business in every jurisdiction in which the character and
location of the assets to be owned by it or the nature of the business to be
transacted by it require qualification.
3.2 The Holding Company has no subsidiaries other than New Bank at the
date of this Agreement. Between the date hereof and the Effective Date, the
Holding Company will not create or acquire any subsidiaries, other than New
Bank, without the consent of First Federal.
3.3 The authorized capital stock of the Holding Company consists on
the date hereof of three million shares of Holding Company Common Stock, par
value $.01 per share, and one million shares of serial preferred stock. Except
as set forth above or as contemplated by this Agreement or necessary for the
effectuation of the Merger, as of the date hereof, the Holding Company has one
share of its capital stock issued and outstanding and does not have any
outstanding subscriptions, options or other agreements or commitments obligating
it to issue shares of its capital stock.
3.4 Compliance with the terms and provisions of this Agreement by the
Holding Company will not conflict with or result in a breach of any of the
terms, conditions or provisions of any judgment, order, injunction, decree or
ruling of any court or governmental authority, domestic or foreign, or of any
agreement or instrument to which the Holding Company is a party, or constitute a
default thereunder.
3.5 The execution, delivery and performance of this Agreement have
been duly authorized by the Board of Directors of the Holding Company and have
been approved by the Holding Company Common Stockholders.
3.6 The Holding Company has complete and unrestricted power to enter
into and to consummate the transactions contemplated by this Agreement, subject
to approval of this Agreement and the Merger by the Holding Company Stockholder
and the provisions of Section 7.3 hereof.
3.7 On or prior to the Effective Date, the Holding Company will have
available the funds necessary to convert and exchange the outstanding First
Federal Common Stock to be converted and exchanged pursuant to the Merger as
provided herein.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF FIRST FEDERAL
First Federal hereby represents and warrants as follows:
4.1 First Federal is a capital stock thrift institution duly
organized, validly existing and in good standing under the laws of the United
States of America, and is duly authorized to carry on its business as it is now
being conducted.
4.2 The authorized capital stock of First Federal consists on the date
hereof of three million shares of First Federal Common Stock, par value $.01 per
share, of which 239,612 shares
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are issued and outstanding, and one million shares of serial preferred stock, of
which 87,263 shares are issued and outstanding.
4.3 Compliance with the terms and provisions of this Agreement by
First Federal will not conflict with, constitute a default under or result in a
breach of any of the terms, conditions or provisions of any judgment, order,
injunction, decree or ruling of any court or governmental authority, domestic or
foreign, or of any agreement or instrument to which First Federal is a party.
4.4 The execution, delivery and performance of this Agreement have
been duly authorized by the Board of Directors of First Federal.
4.5 First Federal has complete and unrestricted power to enter into
and to consummate the transactions contemplated by this Agreement, subject to
the provisions of Section 7.3 hereof.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF NEW BANK
New Bank hereby represents and warrants as follows:
5.1 New Bank, at the direction of the Holding Company, will apply to
the Office of Thrift Supervision to be chartered as a capital stock thrift
institution, and immediately before the Effective Date will be duly organized,
validly existing and in good standing under the laws of the United States of
America, and duly authorized to carry on the business of an interim federal
thrift institution.
5.2 The authorized capital stock of New Bank is proposed to consist of
one million shares of New Bank Stock, par value $.01 per share. Except for the
share of New Bank Stock issued to the Holding Company for the effectuation of
the Merger, prior to the Merger, New Bank will not have any shares of its stock
issued and outstanding. There are no outstanding subscriptions, options or other
arrangements or commitments obligating New Bank to issue any shares of its
capital stock.
5.3 Compliance with the terms and provisions of this Agreement by New
Bank will not conflict with, constitute a default under or result in a breach of
any of the terms, conditions or provisions of any judgment, order, injunction,
decree or ruling of any court or governmental authority, domestic or foreign, or
of any agreement or instrument to which New Bank is, or upon organization will
be, a party.
5.4 Prior to the Merger, the execution, delivery and performance of
this Agreement will be duly authorized by the Board of Directors of New Bank and
will be approved by the Holding Company as the sole stockholder of New Bank.
5.5 New Bank has complete and unrestricted power to enter into and to
consummate the transaction contemplated by this Agreement, subject to the
approval of this Agreement and
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the Merger by the Holding Company as sole stockholder of New Bank and the
provisions of Section 7.3 hereof.
ARTICLE VI
OBLIGATIONS OF THE PARTIES PENDING THE EFFECTIVE DATE
6.1 Prior to the Effective Date, (i) New Bank shall complete its
organization and have directors who shall be duly elected and qualified, (ii)
the Holding Company shall complete its organization and have directors who shall
be duly elected and qualified, and (iii) this Agreement shall be duly submitted
to the stockholders of First Federal for the purpose of considering and acting
upon this Agreement in the manner required by law. Each party shall use its best
efforts to obtain the requisite approvals of this Agreement and the transactions
contemplated herein and, after obtaining such approval, the parties through
their respective officers and directors, shall execute and file with the
appropriate regulatory authorities all documents and papers, and the parties
shall take every reasonable action, necessary to comply with and to secure such
approval of this Agreement and the transactions contemplated herein as may be
required by all applicable statutes, rules and regulations.
ARTICLE VII
CONDITIONS PRECEDENT TO THE CONSUMMATION OF
THE MERGER AND REORGANIZATION
The obligations of the parties hereto to consummate the Merger and the
reorganization contemplated hereby shall be subject to the conditions that on or
before the Effective Date:
7.1 Each of the parties hereto shall have performed and complied with
all of its obligations hereunder which are to be complied with or performed on
or before the Effective Date.
7.2 This Agreement and related transactions contemplated hereby shall
have been duly and validly authorized, approved and adopted at a meeting of
stockholders duly and properly called for such purpose by First Federal by an
affirmative vote of at least 50 percent of the outstanding voting stock of First
Federal plus one affirmative vote, all in accordance with the applicable
regulations of the Office of Thrift Supervision.
7.3 Orders, consents and approvals, in form and substance reasonably
satisfactory to all the parties hereto, shall have been entered by the Office of
Thrift Supervision, (or there shall have been received satisfactory assurance
that such orders, consents or approvals are not required), granting the
authority necessary for consummation of the transactions contemplated by this
Agreement pursuant to the provisions of the Rules and Regulations of the Office
of Thrift Supervision, all other requirements prescribed by law and the rules
and regulations of any other regulatory authority having jurisdiction over the
transactions contemplated herein shall have been satisfied.
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7.4 There shall have been received from Xxxxx, Xxxxxx & Company LLP,
accountants to First Federal, an opinion to the effect that:
1. No gain or loss will be recognized on the receipt of the
Holding Company Common Stock by First Federal common
shareholders who receive solely Holding Company Common Stock
in exchange for First Federal Common Stock (IRC Section
351(a)). Gain, but not loss, will be recognized by First
Federal common shareholders who receive both Holding Company
Common Stock and cash in exchange for First Federal Common
Stock, but in an amount not in excess of the cash received
(IRC Section 351(b)).
2. No gain or loss will be recognized by the Holding Company on
the receipt of cash and First Federal Common Stock solely in
exchange for shares of Holding Company Common Stock (IRC
Section 1032).
3. The basis of the Holding Company Common Stock received by a
First Federal common shareholder will be the same as the
adjusted basis of the First Federal Common Stock surrendered
in exchange therefor, decreased by the amount of any cash
received, and increased by any gain recognized in the exchange
(IRC Section 358).
4. The holding period of the Holding Company Stock received by a
First Federal common shareholder in exchange for the transfer
of First Federal Common Stock will include the period during
which the First Federal Common Stock surrendered in exchange
therefor was held, provided that the First Federal Common
Stock was held as a capital asset on the date of the exchange
(IRC Section 1223(1)).
5. The basis of the First Federal Common Stock received by the
Holding Company will be the same as the basis of the First
Federal Common Stock in the hands of the First Federal common
shareholders immediately prior to the exchange, increased by
any gain recognized by the First Federal common shareholders
in the exchange (IRC Section 362(a)).
6. The holding period of the First Federal Common Stock received
by Holding Company will include the period during which the
First Federal Common Stock was held by the First Federal
common shareholders (IRC Section 1223(2)).
7. Gain or loss, if any, will be recognized by a First Federal
common shareholder who receives solely cash in exchange for
the transfer of First Federal Common Stock.
7.6 Holders of no more than 80% of First Federal Common Stock shall
elect to receive cash as Merger Consideration (approximately $4.6 million of
cash elections).
7.7 The Holding Company will have successfully completed a public
offering for at least 100,000 shares of Holding Company Common Stock, and at
least $3,900,000 of Units, each Unit consisting of debentures and warrants to
purchase Holding Company Common Stock.
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7.8 No good faith action, suit or proceeding shall have been
instituted or shall have been threatened before any court or other governmental
body or by any public authority to restrain, enjoin or prohibit the Merger and
reorganization contemplated herein, or which might restrict the operation of the
business of the Surviving Institution or the ownership of the capital stock of
the Surviving Institution or the exercise of any rights with respect thereto by
the Holding Company, or subject any of the parties hereto or any of their
directors or officers to any liability, fine, forfeiture, or penalty on the
grounds that the transactions contemplated hereby, the parties hereto or their
directors or officers, have breached or will breach any applicable law or
regulation, or have otherwise acted improperly in connection with the
transactions contemplated hereby, and with respect to which the parties hereto
have been advised by counsel that, in the opinion of such counsel, such action,
suit or proceeding raises substantial questions of law or fact which could
reasonably be decided adversely to any party hereto or its directors or
officers.
ARTICLE VIII
ADDITIONAL CONDITIONS PRECEDENT
8.1 Each obligation of the Holding Company and New Bank to be
performed on or prior to the Effective Date shall be subject to the
satisfaction, on or before the Effective Date, of the following additional
conditions:
(a) The representations and warranties made by First Federal and
by New Bank in this Agreement shall be true as though such
representations and warranties had been made or given on and as of the
Effective Date; and
(b) The Holding Company shall have received an opinion of Silver,
Xxxxxxxx & Taff, L.L.P. which shall be to the effect that:
(i) First Federal is duly organized, validly existing
and in good standing under the laws of the United States of
America and the Rules and Regulations of the Office of Thrift
Supervision;
(ii) the execution and delivery of this Agreement did
not, and the consummation of the Merger and reorganization
contemplated hereby will not, violate any provisions of the
Charter or Bylaws of First Federal;
(iii) New Bank is a capital stock thrift institution,
duly organized, validly existing and in good standing under
the laws of the United States of America and Rules and
Regulations of the Office of Thrift Supervision;
(iv) the execution and delivery of this Agreement did
not, and the consummation of the Merger and reorganization
contemplated hereby will not, violate any provisions of the
Charter or Bylaws of New Bank; and
(v) the Boards of Directors and stockholders of First
Federal and New Bank have taken all corporate action required
by their respective Charters and Bylaws and by the Rules and
Regulations of the Office of Thrift Supervision to
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authorize the execution and delivery of this Agreement and to
approve the Merger and reorganization in accordance with the
terms of this Agreement; First Federal and New Bank have
obtained the requisite approvals from the Office of Thrift
Supervision to consummate the Merger and reorganization
contemplated by this Agreement; and this Agreement is a legal,
valid and binding agreement of First Federal and New Bank in
accordance with its terms, except to the extent that
enforceability may be limited by bankruptcy laws, insolvency
laws, or other laws affecting the rights of creditors
generally or the rights of creditors of thrift institutions
the accounts of which are insured by the Federal Deposit
Insurance Corporation or which are subject to regulation by
the Office of Thrift Supervision, including but not limited to
laws relating to the availability of equitable remedies.
8.2 Each obligation of First Federal to be performed on or prior to
the Effective Date shall be subject to the satisfaction, on or before the
Effective Date, of the following additional conditions:
(a) The representations and warranties made by the Holding
Company and by New Bank contained in this Agreement shall be true as
though such representations and warranties had been made or given at
and as of the Effective Date;
(b) This Agreement and the transactions contemplated hereby shall
have been duly and validly authorized, approved and adopted by the
Holding Company and by New Bank; and
(c) First Federal shall have received an opinion of Silver,
Xxxxxxxx & Xxxx, L.L.P. which shall be to the effect that:
(i) The Holding Company is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Delaware;
(ii) The Holding Company has corporate power to execute and
deliver this Agreement; the Board of Directors and the Holding
Company Stockholder have taken all action required by its
Certificate of Incorporation and Bylaws to authorize such
execution and delivery, to approve the Merger and reorganization
contemplated hereby and to authorize the issuance of the shares
of Holding Company Common Stock necessary to consummate the
Merger and reorganization; and this Agreement is the legal, valid
and binding agreement of the Holding Company in accordance with
its terms, except to the extent that enforceability may be
limited by bankruptcy laws, insolvency laws, or other laws
affecting the rights of the creditors generally, including but
not limited to laws relating to the availability of equitable
remedies;
(iii) New Bank is a capital stock thrift institution duly
organized, validly existing and in good standing under the laws
of the United States of America and the Rules and Regulations of
the Office of Thrift Supervision;
(iv) New Bank has corporate power to execute, deliver and
perform this Agreement; the Board of Directors and the
stockholder of New Bank have taken
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all action required by its Charter and Bylaws and by the Rules
and Regulations of the Office of Thrift Supervision to authorize
such execution, delivery and performance and to approve the
Merger; and this Agreement is the legal, valid and binding
agreement of New Bank in accordance with its terms, except to the
extent that enforceability may be limited by bankruptcy laws,
insolvency laws, or other laws affecting the rights of creditors
generally or the rights of creditors of thrift institutions the
accounts of which are insured by the Federal Deposit Insurance
Corporation or which are subject to regulation by the Office of
Thrift Supervision, including but not limited to laws relating to
the availability of equitable remedies; and
(v) The Holding Company and New Bank have obtained or will
obtain the requisite approvals from the Office of Thrift
Supervision to consummate the Merger and reorganization
contemplated by this Agreement.
In rendering opinions provided for in this Agreement, counsel may rely
upon opinions of other counsel and, as to matters of fact, upon certificates of
public officials and of any officer or officers of First Federal, New Bank and
the Holding Company.
ARTICLE IX
AMENDMENTS
First Federal, the Holding Company and New Bank, by mutual consent of
their respective Boards of Directors or incorporators, as the case may be, to
the extent permitted by law, may amend, modify, supplement and interpret this
Agreement in such manner as may be mutually agreed upon by them in writing at
any time before or after the approval and adoption thereof by the stockholders
of First Federal, provided, however, that no such amendment, modification,
supplement or interpretation shall have a materially adverse impact on First
Federal or its stockholders except with the approval of the stockholders of
First Federal.
ARTICLE X
TERMINATION AND ABANDONMENT
10.1 Anything contained in this Agreement to the contrary
notwithstanding, this Agreement may be terminated and the Merger and
reorganization abandoned at any time (whether before or after the approval and
adoption thereof by the stockholders of First Federal) prior to the Effective
Date:
(a) By mutual consent of the parties hereto;
(b) By the Holding Company or New Bank, if any condition set
forth in Sections 7.1 through 7.8 of Article VII or Section 8.1 of
Article VIII has not been met or has not been validly waived or if; or
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(c) By First Federal, if any condition set forth in Sections
7.1 through 7.8 of Article VII or Section 8.2 of Article VIII has not
been met or has not been validly waived or if the holders of more than
10 percent of the outstanding voting stock of First Federal deliver
properly to First Federal a demand for appraisal and payment for
shares pursuant to 12 C.F.R. Section 552.14.
10.2 An election by a party hereto to terminate this Agreement and
abandon the Merger as provided in Section 10.1 shall be exercised on behalf of
such thrift institution or corporation by its Board of Directors or
incorporators, as may be the case.
10.3 In the event of the termination of this Agreement pursuant to the
provisions of Section 10.1 hereof, this Agreement shall become void and have no
effect and create no liability on the part of any of the parties hereto or their
respective incorporators, directors, officers or stockholders in respect to this
Agreement.
10.4 Any of the terms or conditions of this Agreement (other than the
necessary approvals of stockholders and government authorities) may be waived at
any time by the party which is entitled to the benefit thereof, by action taken
by its Board of Directors; provided, however, that such action shall be taken
only if, in the judgment of the Board of Directors taking the action, such
waiver will not have a materially adverse effect on the benefits intended under
this Agreement to be afforded to the stockholders of First Federal.
ARTICLE XI
EFFECTIVE DATE
The effective date of the Merger ("Effective Date") shall be the last
day of the calendar month during which the last to occur of the following events
takes place: (i) the Merger is approved by the Office of Thrift Supervision and
the Articles of Combination are executed by the Office of Thrift Supervision,
(ii) all other required regulatory approvals have been obtained, and (iii) all
other conditions to the Merger herein set forth have been met. The Boards of
Directors of First Federal, New Bank and the Holding Company each specifically
and expressly delegate to their respective chief executive officers the
authority to change, by mutual consent of such officers, the Effective Date of
the Merger if necessary to properly and efficiently accomplish the Merger.
However, in no event shall the Merger become effective unless and until approved
by the Office of Thrift Supervision.
ARTICLE XII
TERMINATION OF REPRESENTATIONS AND
WARRANTIES AND CERTAIN AGREEMENTS
The respective representations, warranties, covenants and agreements
of the parties hereto in Articles III, IV and V hereof shall expire with, and be
terminated and extinguished by, the Merger and reorganization pursuant to this
Agreement at the time of the consummation thereof on the Effective Date. None of
the parties shall be under any liability whatsoever with respect
15
to any such representation, warranty, covenant or agreement which does not
survive the Merger and reorganization, it being intended that the sole remedy of
the parties for a breach of any such representation, warranty, covenant or
agreement shall be to elect not to proceed with the Merger and reorganization if
such breach has resulted in the failure to satisfy a condition precedent to such
party's obligation to consummate the transactions contemplated hereby.
ARTICLE XIII
MISCELLANEOUS
13.1 This Agreement embodies the entire agreement among the parties
and there have been and are no agreements, representations or warranties among
the parties other than those set forth or provided for herein.
13.2 Any number of counterparts hereof may be executed and each such
counterpart shall be deemed to be an original instrument, but all such
counterparts together shall constitute but one instrument.
13.3 Any notice or waiver to be given to any party shall be in writing
and shall be deemed to have been duly given if delivered, mailed, or sent by
prepaid telegram, addressed to such party at 0000 Xxxxx Xxxxxx, Xxxxx, Xxxxx
00000.
13.4 The captions contained in this Agreement are solely for
convenient reference and shall not be deemed to affect the meaning or
interpretation of any paragraph hereof.
13.5 First Federal will pay all fees and expenses incurred in
connection with the transactions contemplated by this Agreement.
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IN WITNESS WHEREOF, First Federal, New Bank and the Holding Company
each under the authority of its Board of Directors, and Xxxxxxx X. Xxxxxxx have
caused this Agreement to be executed with the intent to be legally bound hereby.
FIRST FEDERAL SAVINGS BANK
ATTEST:
By: /s/ Xxxxxxx Xxxxxxx By: /s/ J. Xxxxxxx Xxxxxxx
Xxxxxxx Xxxxxxx, Secretary J. Xxxxxxx Xxxxxxx,
President and Chief Executive Officer
Date: Date:
NEW FIRST FEDERAL SAVINGS
ATTEST: BANK
By: /s/ Xxxxxxx Xxxxxxx By: /s/J. Xxxxxxx Xxxxxxx
Xxxxxxx Xxxxxxx, Secretary J. Xxxxxxx Xxxxxxx
President and Chief Executive Officer
Date: Date:
ATTEST: THE XXXXX-COLLEGE STATION
FINANCIAL HOLDING COMPANY
By: /s/ Xxxxxxx Xxxxxxx By: /s/ J. Xxxxxxx Xxxxxxx
Xxxxxxx Xxxxxxx, Secretary J. Xxxxxxx Xxxxxxx
President and Chief Executive Officer
Date: Date:
Witness:
/s/ Xxxxxxx Xxxxxxx /s/ J. Xxxxxxx Xxxxxxx
Xxxxxxx Xxxxxxx J. Xxxxxxx Xxxxxxx
Date: Date:
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SCHEDULE A
OFFICES OF SURVIVING INSTITUTION
MAIN OFFICE
0000 Xxxxx Xxxxxx
Xxxxx, Xxxxx 00000
BRANCH OFFICE
0000 Xxxxxxxx
Xxxxxxx Xxxxxxx, Xxxxx
LOAN PRODUCTION OFFICES
000 X. Xxxxxx Xxxxx Xxxxx
Xxxx, Xxxxx 00000
000 Xxxxxx Xxxx, Xxxxx 000X
Xxxxxxxxxx, Xxxxx 00000
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SCHEDULE B
DIRECTORS OF SURVIVING INSTITUTION
Term
Name Address Expires
---- ------- -------
J. Xxxxxxx Xxxxxxx 0000 Xxxxx Xxxxxx 0000
Xxxxx, Xxxxx 00000
Xxx Xxxxx 0000 Xxxxx Xxxxxx 0000
Xxxxx, Xxxxx 00000
Xxxxxxx Xxxxxxx 0000 Xxxxx Xxxxxx 0000
Xxxxx, Xxxxx 00000
Xxxxxx Xxxxxx 0000 Xxxxx Xxxxxx 0000
Xxxxx, Xxxxx 00000
Xxxxxx X. Xxxxxxxx 0000 Xxxxx Xxxxxx 0000
Xxxxx, Xxxxx 00000
Xxxxxx X. Xxxxxxx 0000 Xxxxx Xxxxxx 0000
Xxxxx, Xxxxx 00000
Xxxxxxx X. Xxxxxxx 0000 Xxxxx Xxxxxx 0000
Xxxxx, Xxxxx 00000
Xxxx X. Xxxxxx, Xx. 0000 Xxxxx Xxxxxx 0000
Xxxxx, Xxxxx 00000
Xxxx Xxxxxx 0000 Xxxxx Xxxxxx 0000
Xxxxx, Xxxxx 00000
J. Xxxxxx Xxxxxxx 0000 Xxxxx Xxxxxx 0000
Xxxxx, Xxxxx 00000
Successor or substitute directors may be named, subject to compliance
with the requirements of applicable law and the Charter and Bylaws of the
Surviving Institution.
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