1
EXHIBIT 1.1
MIDWEST BANC HOLDINGS, INC.
1,100,000 Shares Common Stock*
UNDERWRITING AGREEMENT
____________, 1998
▇▇▇▇ ▇▇▇▇▇▇ Investments, Inc.
As Representative of the Several
Underwriters Named in Schedule A
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
SECTION 1. Introductory. Midwest Banc Holdings, Inc. ("Company"), a
Delaware corporation, has an authorized capital stock consisting of 17,000,000
shares of Common Stock, $.01 par value ("Common Stock"), of which 10,015,898
shares were outstanding as of __________, 1998 and 1,000,000 shares of
Preferred Stock, $.01 par value, none of which were outstanding as of
__________, 1998. The Company proposes to issue and sell 1,100,000 shares of
its authorized but unissued Common Stock ("Firm Shares") to the several
underwriters named in Schedule A as it may be amended by the Pricing Agreement
hereinafter defined ("Underwriters"), who are acting severally and not jointly.
In addition, the Company proposes to grant to the Underwriters an option to
purchase up to 165,000 additional shares of Common Stock ("Option Shares") as
provided in Section 4 hereof. The Firm Shares and, to the extent such option
is exercised, the Option Shares, are hereinafter collectively referred to as
the "Shares."
You have advised the Company that the Underwriters propose to make a
public offering of their respective portions of the Shares as soon as you deem
advisable after the registration statement hereinafter referred to becomes
effective, if it has not yet become effective, and the Pricing Agreement
hereinafter defined has been executed and delivered. The Underwriters shall
use their best efforts to sell the Shares to as many investors as possible,
provided that the maximum number of Shares sold to any purchaser in the
offering shall not exceed 50,000 and the number of Shares to be sold to
institutional investors shall not exceed 25% of the offering without the prior
written consent of the Company.
Prior to the purchase and public offering of the Shares by the several
Underwriters, the Company and you, as the Representative, acting on behalf of
the several Underwriters, shall enter into an agreement substantially in the
form of Exhibit A hereto (the "Pricing Agreement"). The Pricing Agreement may
take the form of an exchange of any standard form of written
-----------------------
*Plus an option to acquire up to 165,000 additional shares to cover
overallotments.
2
communication between the Company and the Representative and shall
specify such applicable information as is indicated in Exhibit A hereto. The
offering of the Shares will be governed by this Agreement, as supplemented by
the Pricing Agreement. From and after the date of the execution and delivery of
the Pricing Agreement, this Agreement shall be deemed to incorporate the
Pricing Agreement.
The Company hereby confirms its agreement with the Underwriters as
follows:
SECTION 2. Representations and Warranties of the Company. The Company
represents and warrants to the several Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-_____) and a
related preliminary prospectus with respect to the Shares have been
prepared and filed with the Securities and Exchange Commission
("Commission") by the Company in conformity with the requirements of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "1933 Act;" all references herein
to specific rules are rules promulgated under the ▇▇▇▇ ▇▇▇); 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. If the Company has elected not to rely upon Rule 430A, the
Company has prepared and will promptly file an amendment to the
registration statement and an amended prospectus. If the Company has
elected to rely upon Rule 430A, it will prepare and file a prospectus
pursuant to Rule 424(b) that discloses the information previously omitted
from the prospectus in reliance upon Rule 430A. There have been or will
promptly be delivered to you three signed copies of such registration
statement and amendments, three copies of each exhibit filed therewith,
and conformed copies of such registration statement and amendments (but
without exhibits) and copies of the related preliminary prospectus or
prospectuses and final forms of prospectus for each of the Underwriters.
Such registration statement (as amended, if applicable) at the time
it becomes effective and the prospectus constituting a part thereof
(including the information, if any, deemed to be part thereof pursuant to
Rule 430A(b) and/or Rule 434), as from time to time amended or
supplemented, are hereinafter referred to as the "Registration Statement"
and the "Prospectus," respectively, except that if any revised prospectus
shall be provided to the Underwriters by the Company for use in connection
with the offering of the Shares which differs from the Prospectus on file
at the Commission at the time the Registration Statement became or becomes
effective (whether or not such revised prospectus is required to be filed
by the Company pursuant to Rule 424(b)), the term Prospectus shall refer
to such revised prospectus from and after the time it was provided to the
Underwriters for such use. If the Company elects to rely on Rule 434 of
the 1933 Act, all references to "Prospectus" shall be deemed to include,
without limitation, the form of prospectus and the term sheet, taken
together, provided to the Underwriters by the Company in accordance with
Rule 434 of the 1933 Act ("Rule 434 Prospectus"). Any registration
statement (including any amendment or supplement thereto or information
which is deemed part thereof) filed by the Company
2
3
under Rule 462(b ("Rule 462(b) Registration Statement") shall be
deemed to be part of the "Registration Statement" as defined herein,
and any prospectus (including any amendment or supplement thereto or
information which is deemed part thereof) included in such registration
statement shall be deemed to be part of the "Prospectus," as defined
herein, as appropriate. 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 1933 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; and when the Registration Statement became or
becomes effective, and at all times subsequent thereto, up to the First
Closing Date or the Second Closing Date hereinafter defined, as the case
may be, the Registration Statement, including the information deemed to be
part of the Registration Statement at the time of effectiveness pursuant
to Rule 430A(b), if applicable, and the Prospectus and any amendments or
supplements thereto, contained or will contain all statements that are
required to be stated therein in accordance with the 1933 Act and in all
material respects conformed or will in all material respects conform to
the requirements of the 1933 Act, and neither the Registration Statement
nor the Prospectus, nor any amendment or supplement 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; provided, however, that the
Company makes no representation or warranty as to information contained in
or omitted from any preliminary prospectus, the Registration Statement,
the 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 any Underwriter through the Representative specifically for use
in the preparation thereof.
(c) The Company and each of its subsidiaries have been duly
incorporated and are validly existing as corporations in good standing
under the laws of their respective places of incorporation, with corporate
power and authority to own their respective properties and conduct their
respective businesses as described in the Prospectus; the Company and each
of its subsidiaries 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 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 upon the condition (financial or
otherwise) or results of operations of the Company and its subsidiaries
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) The Company owns directly or indirectly 100 percent of the issued
and outstanding capital stock of each of its subsidiaries, free and clear
of any claims, liens,
3
4
encumbrances or security interests, except for any such stock pledged
against borrowings of the Company or any of its subsidiaries, and all
of such capital stock has been duly authorized and validly issued and is
fully paid and nonassessable.
(e) The issued and outstanding shares of capital stock of the Company
as set forth in the Prospectus have been duly authorized and validly
issued, are fully paid and nonassessable, and conform to the description
thereof contained in the Prospectus.
(f) The Shares have been duly authorized and when issued, delivered
and paid for pursuant to this Agreement, will be validly issued, fully
paid and nonassessable, and will conform to the description thereof
contained in the Prospectus.
(g) The making and performance by the Company of this Agreement and
the Pricing Agreement have been duly authorized by all necessary corporate
action and will not violate any provision of the Company's charter or
bylaws and will not result in the breach, or be in contravention, of any
provision of any agreement, franchise, license, indenture, mortgage, deed
of trust, or other instrument to which the Company or any subsidiary is a
party or by which the Company, any subsidiary or the property of any of
them may be bound or affected (for which any required waiver or consent
has not been obtained), or any order, rule or regulation applicable to the
Company or any subsidiary of any court or regulatory body, administrative
agency or other governmental body having jurisdiction over the Company or
any subsidiary or any of their respective properties, or any order of any
court or governmental agency or authority entered in any proceeding to
which the Company or any subsidiary was or is now a party or by which it
is bound, which breach or contravention would have a Material Adverse
Effect. No consent, approval, authorization or other order of any court,
regulatory body, administrative agency or other governmental body is
required for the execution and delivery of this Agreement or the Pricing
Agreement or the consummation of the transactions contemplated herein or
therein, except for compliance with the 1933 Act and blue sky laws
applicable to the public offering of the Shares by the several
Underwriters and clearance of such offering with the National Association
of Securities Dealers, Inc. ("NASD") except where the failure to obtain
such consents, approvals or authorizations would not have a Material
Adverse Effect. This Agreement has been and the Pricing Agreement will be
duly executed and delivered by the Company.
(h) The accountants who have expressed their opinions with respect to
certain of the financial statements and schedules included in the
Registration Statement are independent accountants as required by the 1933
Act.
(i) The consolidated financial statements of the Company included in
the Registration Statement present fairly the consolidated financial
position of the Company as of the respective dates of such financial
statements, and the consolidated results of operations and cash flows of
the Company 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.
The financial information set
4
5
forth in the Prospectus under "Selected Consolidated Financial Data"
presents fairly, on the basis stated in the Prospectus, the information
set forth therein.
(j) Neither the Company nor any subsidiary is in violation of its
charter or in default under any consent decree, or in default with respect
to any provision of any lease, loan agreement, franchise, license, permit
or other contract obligation to which it is a party which would have a
Material Adverse Effect; and there does not exist any state of facts which
constitutes an event of default as defined in such documents or which,
with notice or lapse of time or both, would constitute such an event of
default, in each case, except for defaults which neither singly nor in the
aggregate would have a Material Adverse Effect.
(k) There are no legal or governmental proceedings pending, or to the
Company's knowledge, threatened to which the Company or any subsidiary is
or may be a party or of which property owned or leased by the Company or
any subsidiary is or may be the subject, or related to environmental or
discrimination matters which if adversely determined would have a Material
Adverse Effect that are not disclosed in the Prospectus, or which question
the validity of this Agreement or any action taken or to be taken pursuant
hereto or thereto.
(l) The Company is a bank holding company duly registered with the
Board of Governors of the Federal Reserve System ("Federal Reserve Board")
under the Bank Holding Company Act of 1956, as amended. The conduct of
the business of the Company and each of its subsidiaries is in compliance
in all respects with applicable federal, state, local and foreign laws and
regulations, except where the failure to be in compliance would not have a
Material Adverse Effect. The Company 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 obtained such
licenses, permits, consents, orders, approvals and other authorization
would not have a Material Adverse Effect, and neither the Company nor its
subsidiaries have received any 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.
Neither the Company nor any banking subsidiary is a party or subject to
any agreement or memorandum with, or directive or order issued by, the
Federal Reserve Board, the Office of Thrift Supervision, the Illinois
Commissioner of Banks and Real Estate or any other bank regulatory
authority, which imposes any restrictions or requirements not generally
applicable to bank holding companies or commercial banks.
(m) The Company and each of its subsidiaries have good and marketable
title to all the properties and assets reflected as owned in the financial
statements hereinabove described (or elsewhere in the Prospectus), subject
to no lien, mortgage, pledge, charge or encumbrance of any kind except for
such properties as are pledged against the borrowings of the Company or
any of its subsidiaries and except those, if any, reflected in such
financial statements (or elsewhere in the Prospectus) or which are not
material to the Company and
5
6
its subsidiaries taken as a whole. The Company and each of its
subsidiaries hold their respective leased properties which are material
to the Company and its subsidiaries taken as a whole under valid and
binding leases.
(n) The Company has not taken and will not 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 to facilitate the sale or resale of the Shares.
(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 change in the
condition (financial or otherwise), earnings, affairs, business or
prospects of the Company or its subsidiaries, whether or not arising in
the ordinary course of business which has had a Material Adverse Effect,
(ii) any material transaction entered into, or any material liability or
obligation incurred, by the Company or its subsidiaries other than in the
ordinary course of business, (iii) any change in the capital stock, or
material increase in the short-term debt or long-term debt, or any
material change in the allowance for loan losses of the Company or its
subsidiaries, or (iv) any dividend or distribution of any kind declared,
paid or made by the Company on its capital stock.
(p) The Company agrees that, except for the Shares, it will not, for
a period of 180 days after this Agreement becomes effective without your
prior written consent: (1) offer, pledge, sell, contract to sell, sell
any option or contract to sell, sell any right or warrant to purchase, or
otherwise transfer or dispose of, directly or indirectly, any shares of
Common Stock or any securities convertible into or exchangeable for Common
Stock or (2) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of
ownership of the Common Stock, whether any such transaction is described
in clause (1) or (2) above is to be settled by delivery of Common Stock or
such other securities, in cash or otherwise. The Company has obtained
similar agreements from each of its executive officers and directors.
(q) There is no material contract or other document of a character
required to be described in the Registration Statement or the Prospectus
or to be filed as an exhibit to the Registration Statement which is not
described or filed as required.
(r) There are no holders of securities of the Company having rights
to registration thereof or preemptive rights to purchase Common Stock.
(s) All offers and sales of the Company's capital stock were exempt
from the registration requirements of, or duly registered under, the 1933
Act and were duly registered with or the subject of an available exemption
from the registration requirements of the applicable state securities or
blue sky laws.
6
7
(t) The Company has filed all necessary federal and state income and
franchise tax returns and has paid all taxes shown as due thereon, and
there is no tax deficiency that has been or to the knowledge of the
Company, threatened to be asserted against the Company or any of its
properties or assets that would or could be expected to have a Material
Adverse Effect.
(u) The Company has filed a registration statement pursuant to
Section 12(g) of the Exchange Act to register the Common Stock thereunder,
has filed an application to list the Shares on the National Market System
of the National Association of Securities Dealers, Inc. Automated
Quotations System ("Nasdaq"), and has received notification that the
listing has been approved, subject to notice of issuance or sale of the
Shares, as the case may be.
(v) The Company is not, and does not intend to conduct its business
in a manner in which it would become, an "investment company" as defined
in Section 3(a) of the Investment Company Act of 1940, as amended
("Investment Company Act").
(w) The Company together with its subsidiaries owns and possesses all
right, title and interest in and to, or has duly licensed from third
parties, all patents, patent rights, trade secrets, inventions, know-how,
trademarks, trade names, copyrights, service marks and other proprietary
rights ("Trade Rights") material to the business of the Company and each
of its subsidiaries taken as a whole. Neither the Company nor any of its
subsidiaries has received any 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 to the Company's knowledge neither
the Company nor 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.
(x) The Company confirms as of the date hereof that it is not doing
business in Cuba within the meaning of Section 1 of Laws of Florida,
Chapter 92-198, An Act Relating to Disclosure of Doing Business with Cuba,
and the Company further agrees that if it commences engaging in business
with the government of Cuba or with any person or affiliate located in
Cuba after the date the Registration Statement becomes or has become
effective with the Commission or with the Florida Department of Banking
and Finance (the "Department"), whichever date is later, or if the
information reported in the Prospectus, if any, concerning the Company's
business with Cuba or with any person or affiliate located in Cuba changes
in any material way, the Company will provide the Department notice of
such business or change, as appropriate, in a form acceptable to the
Department.
(y) No statement, representation, warranty or covenant made by the
Company in this Agreement or made in any certificate or document required
by this Agreement to be delivered to you was or will be, when made,
inaccurate, untrue or incorrect.
(z) Neither the Company nor its subsidiaries nor, to the Company's
knowledge, any employee or agent of the Company or its subsidiaries has
made any payment of funds
7
8
of the Company or its subsidiaries or received or retained any funds
in violation of any law, rule or regulation.
SECTION 3. Representations and Warranties of the Underwriters. The
Representative, on behalf of the several Underwriters, represents and warrants
to the Company that the information set forth (a) on the cover page of the
Prospectus with respect to price, underwriting discount and terms of the
offering, (b) the legends concerning stabilizing and passive market making
activities on the inside front cover page of the Prospectus, and (c) under
"Underwriting" in the Prospectus was furnished in writing to the Company by and
on behalf of the Underwriters specifically for use in connection with the
preparation of the Registration Statement and is correct and complete in all
material respects.
SECTION 4. Purchase, Sale and Delivery of Shares. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to sell to the
Underwriters named in Schedule A hereto, and the Underwriters agree, severally
and not jointly, to purchase the Firm Shares from the Company at the price per
share set forth in the Pricing Agreement. The obligation of each Underwriter
to the Company shall be to purchase from the Company the number of Shares set
forth opposite the name of such Underwriter in Schedule A hereto. The initial
public offering price and the purchase price shall be set forth in the Pricing
Agreement.
At 9:00 A.M., Chicago Time, on the fourth business day, if permitted under
Rule 15c6-1 under the Exchange Act, (or the third business day if required
under Rule 15c6-1 under the Exchange Act or unless postponed in accordance with
the provisions of Section 12) following the date the Pricing Agreement is
executed, or such other time not later than ten business days after such date
as shall be agreed upon by the Representative and the Company, the Company will
deliver to you at the offices of counsel for the Underwriters or through the
facilities of The Depository Trust Company for the accounts of the several
Underwriters, certificates representing the Firm Shares to be sold by it
against payment of the purchase price therefor by wire transfer or certified or
bank cashier's check in Chicago Clearing House funds (next-day funds) payable
to the order of the Company. Such time of delivery and payment is herein
referred to as the "First Closing Date." The certificates for the Firm Shares
so to be delivered will be in such denominations and registered in such names
as you request by notice to the Company prior to 10:00 A.M., Chicago Time, on
the second full business day preceding the First Closing Date, and will be made
available at the Company's expense for checking and packaging by the
Representative at 10:00 A.M., Chicago Time, on the full business day preceding
the First Closing Date. Payment for the Firm Shares so to be delivered shall
be made at the time and in the manner described above at the offices of counsel
for the Underwriters.
In addition, on the basis of the representations, warranties and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Company hereby grants an option to the several Underwriters to
purchase, severally and not jointly, up to an aggregate of 165,000 Option
Shares, at the same purchase price per share to be paid for the Firm Shares,
for use solely in covering any overallotments made by the Underwriters in the
sale and distribution of the Firm Shares. The
8
9
option granted hereunder may be exercised at any time (but not more
than once) within 30 days after the date of the initial public offering upon
notice by you to the Company setting forth the aggregate number of Option
Shares as to which the Underwriters are exercising the option, the names and
denominations in which the certificates for such shares are to be registered
and the time and place at which such certificates will be delivered. Such time
of delivery (which may not be earlier than the First Closing Date), being
herein referred to as the "Second Closing Date," shall be determined by you,
but if at any time other than the First Closing Date, shall not be earlier than
three nor later than 10 full business days after delivery of such notice of
exercise. The number of Option Shares to be purchased by each Underwriter
shall be determined by multiplying the number of Option Shares to be sold by a
fraction, the numerator of which is the number of Firm Shares to be purchased
by such Underwriter as set forth opposite its name in Schedule A and the
denominator of which is the total number of Firm Shares (subject to such
adjustments to eliminate any fractional share purchases as you in your absolute
discretion may make). Certificates for the Option Shares will be made
available at the Company's expense for checking and packaging at 10:00 A.M.,
Chicago Time, on the first full business day preceding the Second Closing Date.
The manner of payment for and delivery of the Option Shares shall be the same
as for the Firm Shares as specified in the preceding paragraph.
You have advised the Company that each Underwriter has authorized you to
accept delivery of its Shares, to make payment and to receipt therefor. You,
individually and not as the Representative of the Underwriters, may make
payment for any Shares to be purchased by any Underwriter whose funds shall not
have been received by you by the First Closing Date or the Second Closing Date,
as the case may be, for the account of such Underwriter, but any such payment
shall not relieve such Underwriter from any obligation hereunder.
SECTION 5. Covenants of the Company. The Company covenants and agrees
that:
(a) The Company will advise you promptly of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or of the institution of any proceedings for that
purpose, or of any notification of the suspension of qualification of the
Shares for sale in any jurisdiction or the initiation or threatening of
any proceedings for that purpose, and will also advise you 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.
(b) The Company will give you notice of its intention to file or
prepare any amendment to the Registration Statement (including any
post-effective amendment) or any Rule 462(b) Registration Statement or any
amendment or supplement to the Prospectus (including any revised
prospectus which the Company proposes for use by the Underwriters in
connection with the offering of the Shares which differs from the
prospectus on file at the Commission at the time the Registration
Statement became or becomes effective, whether or not such revised
prospectus is required to be filed pursuant to Rule 424(b) and any term
sheet as contemplated by Rule 434) and will furnish you with copies of any
such amendment or supplement a reasonable amount of time prior to such
proposed filing or use, as the case
9
10
may be, and will not file any such amendment or supplement or use any
such prospectus to which you or counsel for the Underwriters shall
reasonably object.
(c) If the Company elects to rely on Rule 434 of the 1933 Act, the
Company will prepare a term sheet that complies with the requirements of
Rule 434. If the Company elects not to rely on Rule 434, the Company will
provide the Underwriters with copies of the form of prospectus, in such
numbers as the Underwriters may reasonably request, and file with the
Commission such prospectus in accordance with Rule 424(b) of the 1933 Act
by the close of business in New York City on the second business day
immediately succeeding the date of the Pricing Agreement. If the Company
elects to rely on Rule 434, the Company will provide the Underwriters with
copies of the form of Rule 434 Prospectus, in such numbers as the
Underwriters may reasonably request, by the close of business in New York
on the business day immediately succeeding the date of the Pricing
Agreement.
(d) If at any time when a prospectus relating to the Shares is
required to be delivered under the 1933 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
Underwriters in connection with the offering of the Shares 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 pursuant to Rule 424(b) to comply with
the 1933 Act, the Company promptly will advise you thereof and will
promptly prepare and file with the Commission an amendment or supplement
which will correct such statement or omission or an amendment which will
effect such compliance; and, in case any Underwriter is required to
deliver a prospectus nine months or more after the effective date of the
Registration Statement, the Company upon request, but at the expense of
such Underwriter, will prepare promptly such prospectus or prospectuses as
may be necessary to permit compliance with the requirements of Section
10(a)(3) of the 1933 Act.
(e) Neither the Company nor any of its subsidiaries will, prior to
the earlier of the Second Closing Date or termination or expiration of the
related option, 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.
(f) Neither the Company nor any of its subsidiaries will acquire any
capital stock of the Company prior to the earlier of the Second Closing
Date or termination or expiration of the related option nor will the
Company declare or pay any dividend or make any other distribution upon
the Common Stock payable to stockholders of record on a date prior to the
earlier of the Second Closing Date or termination or expiration of the
related option, except in either case in the ordinary course of business
or as contemplated by the Prospectus.
10
11
(g) Not later than May 15, 1999 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 1933 Act.
(h) During such period as a prospectus is required by law to be
delivered in connection with offers and sales of the Shares by an
Underwriter or dealer, the Company will furnish to you at its expense,
subject to the provisions of subsection (d) hereof, 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 you may reasonably request, for the
purposes contemplated by the 1933 Act.
(i) The Company will cooperate with the Underwriters in qualifying
or registering the Shares for sale under the blue sky laws of such
jurisdictions as you designate, and will continue such qualifications in
effect so long as reasonably required for the distribution of the Shares.
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.
(j) During the period of five years hereafter, the Company will
furnish you with 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 NASD; (ii) as soon as practicable after the
release thereof, of each material press release in respect of the Company;
and (iii) as soon as available, of each report of the Company mailed to
shareholders.
(k) The Company will use the net proceeds received by it from the
sale of the Shares in the manner specified in the Prospectus.
(l) If, at the time of effectiveness of the Registration Statement,
any information shall have been omitted therefrom in reliance upon Rule
430A and/or Rule 434, then immediately following the execution of the
Pricing Agreement, the Company will prepare, and file or transmit for
filing with the Commission in accordance with such Rule 430A, Rule 424(b)
and/or Rule 434, copies of an amended Prospectus, or, if required by such
Rule 430A and/or Rule 434, a post-effective amendment to the Registration
Statement (including an amended Prospectus), containing all information so
omitted. If required, the Company will prepare and file, or transmit for
filing, a Rule 462(b) Registration Statement not later than the date of
the execution of the Pricing Agreement. If a Rule 462(b) Registration
Statement is filed, the Company shall make payment of, or arrange for
payment of, the additional registration fee owing to the Commission
required by Rule 111.
(m) The Company will comply with all registration, filing and
reporting requirements of the Exchange Act and Nasdaq.
11
12
SECTION 6. Payment of Expenses. Whether or not the transactions
contemplated hereunder are consummated or this Agreement becomes effective as
to all of its provisions or is terminated, the Company agrees to pay (i) all
costs, fees and expenses (other than legal fees and disbursements of counsel
for the Underwriters and the expenses incurred by the Underwriters) incurred in
connection with the performance of the Company's obligations hereunder,
including without limiting the generality of the foregoing, all fees and
expenses of legal counsel for the Company and of the Company's independent
accountants, all costs and expenses incurred in connection with the
preparation, printing, filing and distribution of the Registration Statement,
each preliminary prospectus and the Prospectus (including all exhibits and
financial statements) and all amendments and supplements provided for herein,
this Agreement, the Pricing Agreement and the Blue Sky Memorandum, (ii) all
costs, fees and expenses (including legal fees and disbursements of counsel for
the Underwriters not to exceed $10,000) incurred by the Underwriters in
connection with qualifying or registering all or any part of the Shares for
offer and sale under blue sky laws, including the preparation of a blue sky
memorandum relating to the Shares, and clearance of such offering with the
NASD; and (iii) all fees and expenses of the Company's transfer agent, printing
of the certificates for the Shares and all transfer taxes, if any, with respect
to the sale and delivery of the Shares to the several Underwriters.
SECTION 7. Conditions of the Obligations of the Underwriters. The
obligations of the several Underwriters to purchase and pay for the Firm Shares
on the First Closing Date and the Option Shares on the Second Closing Date
shall be subject to the accuracy of the representations and warranties on the
part of the Company herein set forth as of the date hereof and as of the First
Closing Date or the Second Closing Date, as the case may be, to the accuracy of
the statements of officers of the Company made pursuant to the provisions
hereof, to the performance 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 1:00 P.M.,
Chicago Time, on the first full business day after the date of this
Agreement, or such later time as shall have been consented to by you but
in no event later than 1:00 P.M., Chicago Time, on the third full business
day following the date hereof; and prior to the First Closing Date or the
Second Closing Date, as the case may be, 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 you, shall be contemplated
by the Commission. If the Company has elected to rely upon Rule 430A
and/or Rule 434, the information concerning the initial public offering
price of the Shares and price-related information shall have been
transmitted to the Commission for filing pursuant to Rule 424(b) within
the prescribed period and the Company will provide evidence satisfactory
to the Representative of such timely filing (or a post-effective amendment
providing such information shall have been filed and declared effective in
accordance with the requirements of Rules 430A and 424(b)). If a Rule
462(b) Registration Statement is required, such Registration Statement
shall have been transmitted to the Commission for filing and become
effective within the prescribed time period and, prior to the First
Closing Date, the Company
12
13
shall have provided evidence of such filing and effectiveness in
accordance with Rule 462(b).
(b) The Shares shall have been qualified for sale under the blue sky
laws of such states as shall have been reasonably specified by the
Representative.
(c) The legality and sufficiency of the authorization, issuance and
sale or transfer and sale of the Shares hereunder, the validity and form
of the certificates representing the Shares, the execution and delivery of
this Agreement and the Pricing Agreement, and all corporate proceedings
and other legal matters incident thereto, and the form of the Registration
Statement and the Prospectus (except financial statements) shall have been
approved by counsel for the Underwriters exercising reasonable judgment.
(d) You shall not have advised the Company that the Registration
Statement or the Prospectus or any amendment or supplement thereto,
contains an untrue statement of fact, which, in the opinion of counsel for
the Underwriters, is material or omits to state a fact which, in the
opinion of such counsel, is material and is required to be stated therein
or necessary to make the statements therein not misleading.
(e) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred any material change, or any development involving
a prospective change, in or affecting particularly the business or
properties of the Company or its subsidiaries, whether or not arising in
the ordinary course of business, which, in the reasonable judgment of the
Representative, makes it impractical or inadvisable to proceed with the
public offering or purchase of the Shares as contemplated hereby.
(f) There shall have been furnished to you, as Representative of the
Underwriters, on the First Closing Date or the Second Closing Date, as the
case may be, except as otherwise expressly provided below:
(i) An opinion of Vedder, Price, ▇▇▇▇▇▇▇ & Kammholz, counsel
for the Company, addressed to the Underwriters and dated the First
Closing Date or the Second Closing Date, as the case may be, to the
effect that:
(1) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
the State of Delaware with corporate power and authority to
own its properties and conduct its business as described in
the Prospectus; and, to the best of such counsel's knowledge
the Company is duly qualified to do business as a foreign
corporation under the corporation law of, and is in good
standing as such in, every jurisdiction where such
qualification is required except where the failure so to
qualify would not have a Material Adverse Effect upon the
condition (financial or otherwise) or results of operations of
the Company and its subsidiaries taken as a whole;
13
14
(2) an opinion to the same general effect as clause (1)
of this subparagraph (i) in respect of each direct and
indirect subsidiary of the Company;
(3) the Company owns directly or indirectly 100 percent
of the outstanding capital stock of each subsidiary;
(4) the authorized capital stock of the Company, of which
there is outstanding the amount set forth in the Registration
Statement and Prospectus (except for subsequent issuances, if
any, pursuant to stock options or other rights referred to in
the Prospectus), conforms as to legal matters in all material
respects to the description thereof in the Registration
Statement and Prospectus;
(5) the issued and outstanding capital stock of the
Company has been duly authorized and validly issued and is
fully paid and nonassessable;
(6) the certificates for the Shares to be delivered
hereunder are in due and proper form, and when duly
countersigned by the Company's transfer agent and delivered to
you or upon your order against payment of the agreed
consideration therefor in accordance with the provisions of
this Agreement and the Pricing Agreement, the Shares
represented thereby will be duly authorized and validly
issued, fully paid and nonassessable;
(7) the Registration Statement has become effective under
the 1933 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 under the
1933 Act, and the Registration Statement (including the
information deemed to be part of the Registration Statement at
the time of effectiveness pursuant to Rule 430A(b) and/or Rule
434, if applicable), the Prospectus and each amendment or
supplement thereto (except for the financial statements and
other statistical or financial data included therein as to
which such counsel need express no opinion) comply as to form
in all material respects with the requirements of the 1933
Act; such counsel have no reason to believe that either the
Registration Statement (including the information deemed to be
part of the Registration Statement at the time of
effectiveness pursuant to Rule 430A(b) and/or Rule 434, if
applicable) or the Prospectus, or the Registration Statement
or the Prospectus as amended or supplemented (except as
aforesaid), as of their respective effective or issue dates,
contained any 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 as amended or supplemented, if applicable,
as of the First Closing Date or the Second Closing Date, as
the
14
15
case may be, contained any untrue statement of a material
fact or omitted to state any material fact necessary to make
the statements therein not misleading in light of the
circumstances under which they were made; and such counsel
does not know of any legal or governmental proceedings pending
or threatened required to be described in the Prospectus which
are not described as required, nor of any contracts or
documents of a character 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;
(8) the statements under the captions "Description of
Capital Stock" in the Prospectus, insofar as such statements
constitute a summary of documents referred to therein or
matters of law, are accurate summaries and fairly present, in
all material respects, the information called for with respect
to such documents and matters;
(9) this Agreement and the Pricing Agreement and the
performance of the Company's obligations hereunder have been
duly authorized by all necessary corporate action and this
Agreement and the Pricing Agreement have been duly executed
and delivered by and on behalf of the Company, and are legal,
valid and binding agreements of the Company, except as
enforceability of the same may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights and by the exercise of judicial
discretion in accordance with general principles applicable to
equitable and similar remedies and except as to those
provisions relating to indemnities and contribution for
liabilities arising under the 1933 Act as to which no opinion
need be expressed; and no approval, authorization or consent
of any public board, agency, or instrumentality of the United
States or of any state or other jurisdiction is necessary in
connection with the issue or sale of the Shares pursuant to
this Agreement (other than under the 1933 Act, applicable blue
sky laws and the rules of the NASD);
(10) the execution and performance of this Agreement will
not contravene any of the provisions of, or result in a
default under, any agreement, franchise, license, indenture,
mortgage, deed of trust, or other instrument known to such
counsel, of the Company or any of its subsidiaries or by which
the property of any of them is bound and which contravention
or default would be material to the Company and its
subsidiaries taken as a whole; or violate any of the
provisions of the charter or bylaws of the Company or any of
its subsidiaries or, so far as is known to such counsel,
violate any statute, order, rule or regulation of any
regulatory or governmental body having jurisdiction over the
Company or any of its subsidiaries; and
15
16
(11) the Company is not an "investment company" or a
person "controlled by" an "investment company" within the
meaning of the Investment Company Act.
In rendering such opinion, such counsel may state that insofar
as their opinion under clause (7) above relates to the accuracy and
completeness of the Prospectus and Registration Statement, it is
based upon a general review with the Company's representatives and
independent accountants of the information contained therein,
without independent verification by such counsel of the accuracy or
completeness of such information. Such counsel may also rely upon
the opinions of other competent counsel and, as to factual matters,
on certificates of officers of the Company and of federal or state
agencies or officials, in which case their opinion is to state that
they are so doing and copies of said opinions or certificates are to
be attached to the opinion unless said opinions or certificates (or,
in the case of certificates, the information therein) have been
furnished to the Representative in other form.
(ii) Such opinion or opinions of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, counsel
for the Underwriters, dated the First Closing Date or the Second
Closing Date, as the case may be, as to such matters as you may
reasonably require, and the Company shall have furnished to such
counsel such documents and shall have exhibited to them such papers
and records as they request for the purpose of enabling them to pass
upon such matters.
(iii) A certificate of the chief executive officer and the
principal financial officer of the Company, dated the First Closing
Date or the Second Closing Date, as the case may be, 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 First Closing Date or the Second Closing Date, as the
case may be, 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 such 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 a 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 1933 Act.
16
17
The delivery of the certificate provided for in this
subparagraph shall be and constitute a representation and warranty
of the Company as to the facts required in the immediately foregoing
clauses (1) and (2) of this subparagraph to be set forth in said
certificate.
(iv) At the time the Pricing Agreement is executed and also on
the First Closing Date or the Second Closing Date, as the case may
be, there shall be delivered to you a letter addressed to you, as
Representative of the Underwriters, from ▇▇▇▇▇, ▇▇▇▇▇▇ and Company
LLP, independent accountants, the first one to be dated the date of
the Pricing Agreement, the second one to be dated the First Closing
Date and the third one (in the event of a second closing) to be
dated the Second Closing Date, to the effect set forth in Schedule
B. There shall not have been any material change or decrease
specified in the letters referred to in this subparagraph which
makes it impractical or inadvisable in the reasonable judgment of
the Representative to proceed with the public offering or delivery
of the Shares as contemplated hereby or to attempt to enforce
contracts for purchase of the Shares.
(v) Such further certificates and documents as you may
reasonably request.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are satisfactory to you and
to ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, counsel for the Underwriters, which approval shall not
be unreasonably withheld. The Company shall furnish you with such manually
signed or conformed copies of such opinions, certificates, letters and
documents as you request.
If any condition to the Underwriters' obligations hereunder to be
satisfied prior to or at the First Closing Date is not so satisfied, this
Agreement at your election will terminate upon notification to the Company
without liability on the part of any Underwriter or the Company, except for the
expenses to be paid or reimbursed by the Company pursuant to Sections 6 and 8
hereof and except to the extent provided in Section 10 hereof.
SECTION 8. Reimbursement of Underwriters' Expenses. If the sale to the
Underwriters of the Shares on the First Closing Date is not consummated because
any condition of the Underwriters' obligations hereunder is not satisfied or
because of any refusal, inability or failure on the part of the Company to
perform any agreement herein or to comply with any provision hereof, unless
such failure to satisfy such condition or to comply with any provision hereof
is due to the default or omission of any Underwriter, the Company agrees to
reimburse you and the other Underwriters upon demand for all out-of-pocket
expenses (including reasonable fees and disbursements of counsel) that shall
have been reasonably incurred by you and them in connection with the proposed
purchase and the sale of the Shares. Any such termination shall be without
liability of any party to any other party except that the provisions of this
Section, Section 6 and Section 10 shall at all times be effective and shall
apply.
17
18
SECTION 9. Effectiveness of Registration Statement. You and the Company
will use your and its best efforts to cause the Registration Statement to
become effective, if it has not yet become effective, and to prevent the
issuance of any stop order suspending the effectiveness of the Registration
Statement and, if such stop order be issued, to obtain as soon as possible the
lifting thereof.
SECTION 10. Indemnification. (a) The Company agrees to indemnify and hold
harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of the 1933 Act or the Exchange Act against any losses,
claims, damages or liabilities, joint or several, to which such Underwriter or
such controlling person may become subject under the 1933 Act, the Exchange Act
or other federal or state statutory law or regulation, at common law or
otherwise (including in settlement of any litigation if such settlement is
effected with the written consent of the Company), insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, including the information deemed
to be part of the Registration Statement at the time of effectiveness pursuant
to Rule 430A and/or Rule 434, if applicable, any preliminary prospectus, the
Prospectus, or 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; and will reimburse each Underwriter and each such controlling
person for any legal or other expenses reasonably incurred by such Underwriter
or such controlling person in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
Company will not be liable in any such case to the extent that (i) any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
the Registration Statement, any preliminary prospectus, the Prospectus or any
amendment or supplement thereto in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Underwriter through
the Representative, specifically for use therein; or (ii) if such statement or
omission was contained or made in any preliminary prospectus and corrected in
the Prospectus and (1) any such loss, claim, damage or liability suffered or
incurred by any Underwriter (or any person who controls any Underwriter)
resulted from an action, claim or suit by any person who purchased Shares which
are the subject thereof from such Underwriter in the offering and (2) such
Underwriter failed to deliver or provide a copy of the Prospectus to such
person at or prior to the confirmation of the sale of such Shares in any case
where such delivery is required by the 1933 Act. In addition to its other
obligations under this Section 10(a), the Company agrees that, as an interim
measure during the pendency of any 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 10(a), it will
reimburse the Underwriters on a quarterly basis for all reasonable legal and
other expenses incurred in connection with investigating or defending any such
claim, action, investigation, inquiry or other proceeding, notwithstanding the
absence of a judicial determination as to the propriety and enforceability of
the Company's obligation to reimburse the Underwriters for such expenses and
the possibility that such payments might later be held to have been improper by
a court of competent jurisdiction. 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
18
19
Company. This indemnity agreement will be in addition to any liability
which the Company may otherwise have.
(b) Each Underwriter will severally indemnify and hold harmless the
Company, each of its directors, each of its officers who signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of the 1933 Act or the Exchange Act, against any losses, claims,
damages or liabilities to which the Company, or any such director, officer or
controlling person may become subject under the 1933 Act, the Exchange Act or
other federal or state statutory law or regulation, at common law or otherwise
(including in settlement of any litigation, if such settlement is effected with
the written consent of such Underwriter), insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue or alleged untrue statement of any material fact
contained in the Registration Statement, any preliminary prospectus, the
Prospectus, or 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, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission
was made in the Registration Statement, any preliminary prospectus, the
Prospectus, or any amendment or supplement thereto in reliance upon any written
information furnished to the Company by such Underwriter through the
Representative specifically for use in the preparation thereof; and will
reimburse any legal or other expenses reasonably incurred by the Company, or
any such director, officer or controlling person in connection with
investigating or defending any such loss, claim, damage, liability or action.
This indemnity agreement will be in addition to any liability which such
Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party under this
Section, notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party except to the extent that
the indemnifying party was prejudiced by such failure to notify. In case any
such action is brought against any indemnified party, and it notifies an
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate in, and, to the extent that it may wish, jointly with
all other indemnifying parties similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party; provided,
however, if the defendants in any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have
reasonably concluded that there may be legal defenses available to it and/or
other indemnified parties which are different from or additional to those
available to the indemnifying party, or the indemnified and indemnifying
parties may have conflicting interests which would make it inappropriate for
the same counsel to represent both of them, the indemnified party or parties
shall have the right to select separate counsel to assume such legal defense
and otherwise to participate in the defense of such action on behalf of such
indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of its election so 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 this Section for any
legal or other expenses subsequently
19
20
incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed such counsel in
connection with the assumption of legal defense in accordance with the proviso
to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel, approved by the Representative in the case of paragraph (a)
representing all indemnified parties not having different or additional
defenses or potential conflicting interests among themselves who are parties to
such action), (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
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability arising out
of such proceeding.
(d) If the indemnification provided for in this Section is unavailable to
an indemnified party under paragraphs (a) or (b) hereof in respect of any
losses, claims, damages or liabilities referred to therein, then each
applicable indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company and the
Underwriters from the offering of the Shares or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company and the Underwriters in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The respective relative benefits received by the Company and
the Underwriters 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 Shares by the
Underwriters (net of underwriting discount but before deducting expenses), and
in the case of the Underwriters as the underwriting discount received by them
bears to the total of such amounts paid to the Company and received by the
Underwriters as underwriting discount in each case as contemplated by the
Prospectus. The relative fault of the Company and the Underwriters 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
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The amount
paid or payable by a party as a result of the losses, claims, damages and
liabilities referred to above shall be deemed to include any legal or other
fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 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 the
20
21
immediately preceding paragraph. Notwithstanding the provisions of
this Section, no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Shares underwritten
by it and distributed to the public were offered to the public exceeds the
amount of any damages which such Underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute pursuant to this Section are several in
proportion to their respective underwriting commitments and not joint.
(e) The provisions of this Section shall survive any termination of the
Agreement.
SECTION 11. Default of Underwriters. It shall be a condition to the
agreement and obligation of the Company to sell and deliver the Shares
hereunder, and of each Underwriter to purchase the Shares hereunder, that,
except as hereinafter in this paragraph provided, each of the Underwriters
shall purchase and pay for all Shares agreed to be purchased by such
Underwriter hereunder upon tender to the Representative of all such Shares in
accordance with the terms hereof. If any Underwriter or Underwriters default
in their obligations to purchase Shares hereunder on the First Closing Date and
the aggregate number of Shares which such defaulting Underwriter or
Underwriters agreed but failed to purchase does not exceed 10 percent of the
total number of Shares which the Underwriters are obligated to purchase on the
First Closing Date, the Representative may make arrangements satisfactory to
the Company for the purchase of such Shares by other persons, including any of
the Underwriters, but if no such arrangements are made by such date the
nondefaulting Underwriters shall be obligated severally, in proportion to their
respective commitments hereunder, to purchase the Shares which such defaulting
Underwriters agreed but failed to purchase on such date. If any Underwriter or
Underwriters so default and the aggregate number of Shares with respect to
which such default or defaults occur is more than the above percentage and
arrangements satisfactory to the Representative and the Company for the
purchase of such Shares by other persons are not made within 36 hours after
such default, this Agreement will terminate without liability on the part of
any nondefaulting Underwriter or the Company, except for the expenses to be
paid by the Company pursuant to Section 6 hereof and except to the extent
provided in Section 10 hereof.
In the event that Shares to which a default relates are to be purchased by
the nondefaulting Underwriters or by another party or parties, the
Representative or the Company shall have the right to postpone the First
Closing Date for not more than seven business days in order that the necessary
changes in the Registration Statement, Prospectus and any other documents, as
well as any other arrangements, may be effected. As used in this Agreement,
the term "Underwriter" includes any person substituted for an Underwriter under
this Section. Nothing herein will relieve a defaulting Underwriter from
liability for its default.
SECTION 12. Effective Date. This Agreement shall become effective
immediately as to all of its provisions upon execution and delivery of the
Pricing Agreement.
21
22
SECTION 13. Termination. Without limiting the right to terminate this
Agreement pursuant to any other provision hereof:
(a) This Agreement may be terminated by you prior to the First
Closing Date, and the option referred to in Section 4, if exercised, may
be cancelled at any time prior to the Second Closing Date, if (i) trading
in securities on the New York Stock Exchange shall have been suspended or
minimum prices shall have been established on such exchange, or (ii) a
banking moratorium shall have been declared by Illinois, New York, or
United States authorities, or (iii) there shall have been any material
adverse change in financial markets or in political, economic or financial
conditions from the date hereof which, in the opinion of the
Representative, either renders it impracticable or inadvisable to proceed
with the offering and sale of the Shares on the terms set forth in the
Prospectus or materially and adversely affects the market for the Shares,
or (iv) there shall have been an outbreak of major armed hostilities
between the United States and any foreign power which in the reasonable
opinion of the Representative makes it impractical or inadvisable to offer
or sell the Shares. Any termination pursuant to this paragraph (b) shall
be without liability on the part of any Underwriter to the Company or on
the part of the Company to any Underwriter (except for expenses to be paid
or reimbursed pursuant to Section 6 hereof and except to the extent
provided in Section 10 hereof).
SECTION 14. Representations and Indemnities to Survive Delivery. The
respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers and of the several Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter
or the Company or any of its or their partners, officers or directors or any
controlling person, as the case may be, and will survive delivery of and
payment for the Shares sold hereunder.
SECTION 15. Notices. All communications hereunder will be in writing and,
if sent to the Underwriters will be mailed, delivered or sent by facsimile
transmission and confirmed to you c/o ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇
Investments, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, with a
copy to ▇▇▇▇▇▇▇ ▇. Boba, ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇; and if sent to the Company will be mailed, delivered or
telegraphed and confirmed to the Company, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ at its
corporate headquarters with a copy to ▇▇▇▇▇▇ ▇. ▇▇▇▇, Vedder, Price, ▇▇▇▇▇▇▇ &
Kammholz, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
SECTION 16. Successors. This Agreement and the Pricing Agreement will
inure to the benefit of and be binding upon the parties hereto and their
respective successors, personal representatives and assigns, and to the benefit
of the officers and directors and controlling persons referred to in Section
10, and no other person will have any right or obligation hereunder. The term
"successors" shall not include any purchaser of the Shares as such from any of
the Underwriters merely by reason of such purchase.
22
23
SECTION 17. Representation of Underwriters. You will act as
Representative for the several Underwriters in connection with this financing,
and any action under or in respect of this Agreement taken by you will be
binding upon all the Underwriters.
SECTION 18. 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 19. Applicable Law. This Agreement and the Pricing Agreement
shall be governed by and construed in accordance with the laws of the State of
Illinois.
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Company and the several
Underwriters including you, all in accordance with its terms.
Very truly yours,
MIDWEST BANC HOLDINGS, INC.
By
-------------------------------
President
By
-------------------------------
Executive Vice President and
Chief Financial Officer
The foregoing Agreement is hereby
confirmed and accepted as of the date first
above written.
▇▇▇▇ ▇▇▇▇▇▇ INVESTMENTS, INC.
Acting as Representative of the several
Underwriters named in Schedule A.
By
---------------------------
Senior Vice President
23
24
SCHEDULE A
Number of Firm
Underwriter Shares to be
----------- Purchased
---------
▇▇▇▇ ▇▇▇▇▇▇ Investments, Inc.
---------
TOTAL........................................... 1,100,000
=========
25
SCHEDULE B
Comfort Letter of ▇▇▇▇▇, ▇▇▇▇▇▇ and Company LLP
(1) They are independent public accountants with respect to the Company
and its subsidiaries within the meaning of the 1933 Act.
(2) In their opinion the consolidated financial statements and schedules
of the Company and its subsidiaries included in the Registration Statement and
the consolidated financial statements of the Company from which the information
presented under the caption "Selected Consolidated Financial Data" has been
derived which are stated therein to have been examined by them comply as to
form in all material respects with the applicable accounting requirements of
the 1933 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 responsible for financial
and accounting matters as to transactions and events subsequent to December 31,
1997, a reading of minutes of meetings of the stockholders and directors of the
Company and its subsidiaries since December 31, 1997, a reading of the latest
available interim unaudited consolidated financial statements of the Company
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 included in the Registration Statement do
not comply as to form in all material respects with the applicable accounting
requirements of the 1933 Act or that such unaudited consolidated financial
statements are not fairly presented in accordance with generally accepted
accounting principles applied on a basis substantially consistent with that of
the audited consolidated financial statements included in the Registration
Statement, 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 and third letters,
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 on a
consolidated basis or any decrease in the total assets or shareholder's equity
or allowance for loan losses of the Company and its subsidiaries on a
consolidated basis as compared with amounts shown on the latest unaudited
balance sheet of the Company 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 and third
letters, there were any decreases, as compared with the corresponding period of
the prior year, in net interest income, total other income, income before
income tax expense, net income and net income per share of the Company and its
subsidiaries on a consolidated basis 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 Representative, with respect to certain information in the Prospectus
specified by the Representative, and on the basis of such procedures, they have
found such information to be in agreement with the general accounting records
of the Company, its subsidiaries or other entities.
26
EXHIBIT A
Midwest Banc Holdings, Inc.*
1,100,000 Shares Common Stock
PRICING AGREEMENT
____________, 1998
▇▇▇▇ ▇▇▇▇▇▇ Investments, Inc.
As Representative of the Several
Underwriters
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement dated __________, 1998
(the "Underwriting Agreement") relating to the sale by the Company and the
purchase by the several Underwriters for whom ▇▇▇▇ ▇▇▇▇▇▇ Investments, Inc. is
acting as Representative (the "Representative"), of the above Shares. All
terms herein shall have the definitions contained in the Underwriting Agreement
except as otherwise defined herein.
Pursuant to Section 4 of the Underwriting Agreement, the Company agrees
with the Representative as follows:
1. The initial public offering price per share for the Shares shall be
$__________.
2. The purchase price per share for the Shares to be paid by the several
Underwriters shall be $__________, being an amount equal to the initial public
offering price set forth above less $__________ per share.
---------------------
* Plus an option to acquire up to 165,000 additional shares to cover
overallotments.
27
Schedule A is amended as follows:
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Company and the several
Underwriters, including you, all in accordance with its terms.
Very truly yours,
MIDWEST BANC HOLDINGS, INC.
By
---------------------------------
President
By
---------------------------------
Executive Vice President and
Chief Financial Officer
The foregoing Agreement is hereby
confirmed and accepted as of the date
first above written.
▇▇▇▇ ▇▇▇▇▇▇ INVESTMENTS, INC.
Acting as Representative of the
Several Underwriters.
By
-----------------------------
Senior Vice President
2