EXHIBIT 10.1
INVESTMENT AGREEMENT
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This INVESTMENT AGREEMENT, dated as of June 18, 1997, between FIRST MIDWEST
BANCORP, INC., a Delaware corporation ("First Midwest"), and the undersigned
stockholders of SPARBANK, INCORPORATED ("SparBank"), a Delaware corporation
(collectively, the "Stockholders").
WHEREAS, First Midwest and SparBank are parties to an Agreement and Plan of
Merger, dated as of the date hereof (the "Merger Agreement"), providing for the
merger of SparBank with and into a wholly-owned subsidiary of First Midwest (the
"Merger") in which shares of common stock of First Midwest, par value $.01 per
share ("First Midwest Common Stock"), are to be issued to the Stockholders,
under the terms and conditions set forth therein; and
WHEREAS, the Merger Agreement provides that the shares of First Midwest
Common Stock to be issued in the Merger (the "Shares") will be issued in a
private placement transaction exempt from registration under the Securities Act
of 1933, as amended (the "Securities Act"), and that the Shares will be subject
to registration rights as set forth in this Investment Agreement and a
Registration Rights Agreement to be entered into by First Midwest and the
Stockholders; and
WHEREAS, the parties wish to set forth certain representations, agreements
and undertakings for the purpose of qualifying the Shares for an exemption from
registration under the Securities Act and to fix the terms and conditions of
such registration rights hereunder; and
WHEREAS, it is the parties' intention that the Merger qualify as a tax-free
Merger under Section 368(a)(2)(E) of the Internal Revenue Code of 1986, as
amended (the "Code"), and the rules, regulations and interpretations promulgated
or issued thereunder; and
WHEREAS, as a condition to First Midwest's agreement to grant the
registration rights set forth herein and in the Registration Rights Agreement,
First Midwest is requiring that each of the Stockholders provide certain
representations and warranties and enter into certain agreements and
indemnifications in connection with the transfer of the Shares and the
qualification of the Merger as a tax-free Merger under the Code.
NOW, THEREFORE, the parties hereto, in consideration of the premises and of
the mutual covenants and agreements contained herein, agree as follows:
1. REPRESENTATIONS AND COVENANTS OF STOCKHOLDERS. In order to induce First
Midwest to consummate the Merger contemplated by the Merger Agreement and to
issue and exchange the Shares for the shares of the Common Stock of SparBank
held by each of the Stockholders, each of the Stockholders, with respect to
himself or herself, severally and not jointly, represents and warrants to, or
agrees with, First Midwest as follows:
(a) Ownership of Shares. As of the date hereof, each Stockholder: (i) holds
of record or beneficially that number of shares of the Common Stock of SparBank
set forth opposite his or her
name on Schedule 1(a) to this Investment Agreement (the "SparBank Shares"); (ii)
has good title to all SparBank Shares held by such Stockholder, free and clear
of all liens, claims, and encumbrances, except as set forth on Schedule 1(a);
(iii) is domiciled, for purposes of compliance with blue sky filing requirements
in paragraph 2(g), in the state shown opposite each Stockholder's name on
Schedule 1(a); and (iv) will receive the number of Shares set forth opposite his
or her name on Schedule 1(a) in exchange for his or her SparBank Shares and will
seek to register under the terms of this Investment Agreement no more than the
number of Shares as indicated on said Schedule.
(b) Information with respect to First Midwest. First Midwest has furnished
to each of the Stockholders, and each of the Stockholders has received and
reviewed, either alone or with the assistance of counsel or his or her regular
financial advisor, prior to the date hereof, each of the following documents:
(i) First Midwest's Annual Report on Form 10-K for the year ended December 31,
1996 (which contains First Midwest's 1996 Annual Report to its Stockholders) as
filed with the Securities and Exchange Commission (the "SEC"), (ii) First
Midwest's Quarterly Report on Form 10-Q for the quarter ended March 31, 1997, as
filed with the SEC, (iii) First Midwest's notice and proxy statement for its
1997 Annual Meeting of Stockholders, and (iv) First Midwest's Current Report on
Form 8-K filed on February 11, 1997 with the SEC pursuant to the reporting
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). Each of the Stockholders has also received and reviewed a copy of the
Merger Agreement and copies of the following financial statements: (i) unaudited
financial statements of ▇▇▇▇▇▇▇ State Bank for the quarter ended March 31, 1997,
and the year ended December 31, 1996; and (ii) audited consolidated financial
statements of SparBank for the year ended December 31, 1995, as well as a copy
of Section 262 of the General Corporation Law of the State of Delaware (the
"GCL") which would govern the appraisal of the SparBank Shares if a Stockholder
were to pursue his or her appraisal rights under the GCL.
(c) Approval of the Merger. Each of the Stockholders hereby agrees to
execute and deliver as of the date hereof a written consent approving the Merger
and the Merger Agreement in the form attached hereto as Exhibit A.
(d) Stockholder Intent/Legending of Certificates.
(i) Investment Intent. Each Stockholder (1) has such knowledge and
experience in financial matters that the Stockholder is capable of
evaluating the merits and risks of the acquisition of the Shares and has
requested, received, reviewed and considered all information the
Stockholder deems relevant in making an informed decision to acquire the
Shares, (2) intends to acquire the Shares to be received in the Merger for
investment only and with no present intention of distributing or reselling
any of such Shares (other than for sales pursuant to this Investment
Agreement, the Registration Rights Agreement and the Registration Statement
(as defined below), or sales pursuant to this Investment Agreement which
are otherwise in compliance with the Securities Act and the rules and
regulations promulgated thereunder), and (3) agrees that, for a period of
one (1) year from the date the Shares are issued, the Stockholder will not,
directly or indirectly, offer, sell, pledge, transfer, or otherwise dispose
of (or solicit any offers to buy, purchase or otherwise acquire or take a
pledge of) any of the Shares, other than in compliance with this Investment
Agreement, the
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Registration Rights Agreement, and the Securities Act and the rules and
regulations promulgated thereunder.
(ii) Tax Matters. Each of the Stockholders represents and warrants to First
Midwest and to each other Stockholder who is a party to this Investment
Agreement that there is no present plan or intention by him or her to sell,
exchange, or otherwise dispose of, a number of Shares received in the
transaction that would reduce the Stockholders' ownership of the Shares, as a
group, to a number of Shares having a value, as of the Effective Time of the
Merger (as defined in the Merger Agreement), of less than 50% of the "Exchanged
Value". For the purposes of this Investment Agreement, the term "Exchanged
Value" shall be the aggregate as of the Effective Time of the Merger of the
First Midwest Common Stock and cash and other property, if any, received by the
Stockholders in exchange for the SparBank Shares and pursuant to the exercise of
dissenters' rights.
(iii) Legending of Certificates. Each Stockholder acknowledges and agrees
that the Shares being issued in accordance with the Merger Agreement (1) have
not been registered under the Securities Act in reliance upon an exemption from
registration under the Securities Act, (2) are subject to certain restrictions
on transfer as set forth herein, and (3) that the certificates evidencing the
Shares will bear the following restrictive legend:
"The shares represented by this certificate were issued in
connection with the merger described in that certain Agreement and
Plan of Merger, dated as of June 18, 1997, by and between First
Midwest Bancorp, Inc. ("First Midwest"), FMB Acquisition Corporation
and SparBank, Incorporated, and are subject to certain restrictions on
transfer set forth in that certain Investment Agreement, dated as of
June 18, 1997, between First Midwest and the stockholders named
therein (the "Investment Agreement"), and were issued without
registration under the Securities Act of 1933, as amended (the "Act"),
in reliance on an exemption therefrom. These shares may not be sold
or otherwise transferred except pursuant to a registration statement
under the Act, upon compliance with Rule 144 under the Act, or upon
receipt by First Midwest of an opinion of counsel reasonably
satisfactory to it that an exemption from registration under the Act
is available, and except in compliance with the Investment Agreement.
(iv) Reliance of First Midwest. Each of the Stockholders further
acknowledges and understands that First Midwest is relying on the truth and
accuracy of the representations made by each Stockholder herein for
purposes of, among other matters, establishing the existence of such
exemptions.
(e) Each of the Stockholders shall designate, by written notice delivered
to First Midwest at least five (5) business days prior to the Closing Date (as
defined in the Merger Agreement), the number of Shares that such Stockholder
desires to register pursuant to the Registration Statement (the "Registrable
Shares"). Each Stockholder covenants and agrees (i) to furnish to First
Midwest, in writing, any information relating to the Stockholder which First
Midwest reasonably determines to be necessary for disclosure in any Registration
Statement (as that term is defined in Paragraph 2(a)) covering the Registrable
Shares (or any amendment thereto) or for the purpose of complying
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with an exemption from registration or applicable state securities laws,
promptly after request therefor by First Midwest, (ii) to discuss such
information with First Midwest or its representatives, upon the request of First
Midwest, and (iii) to otherwise cooperate with First Midwest to achieve
compliance with applicable exemptions and applicable federal and state
securities laws and the exemptions thereunder. Each Stockholder warrants that
all information to be furnished by the Stockholder to First Midwest pursuant to
this Paragraph 1(e) shall be true and correct.
(f) Compliance with Securities Law and Transfer Requirements. Each
Stockholder will fully comply with all requirements under the Securities Act and
the Exchange Act, including without limitation the prospectus delivery
requirements under the Securities Act and the provisions of Regulation M of the
Exchange Act, if applicable, in connection with any sale or distribution of the
Registrable Shares pursuant to the Registration Statement, and with the transfer
procedures set forth in Paragraph 3 hereof. Each Stockholder further agrees
that no transfer of Registrable Shares may be made to the public except in an
"ordinary trading transaction." As used in this Investment Agreement, an
"ordinary trading transaction" means a sale of Registrable Shares on the NASDAQ
Stock Market's National Market (the "NASDAQ National Market") using the services
of a broker-dealer registered in the state where the transfer is to occur, and
without the use of special selling efforts or methods.
(g) Capacity and Enforceability. Each Stockholder represents, warrants and
covenants to First Midwest that (i) the Stockholder has full right, power,
authority and capacity to enter into this Investment Agreement and to consummate
the transactions contemplated hereby, and (ii) upon his or her execution and
delivery, this Investment Agreement shall constitute a legally binding and valid
obligation of the Stockholder enforceable in accordance with its terms (except
to the extent that enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws or equitable principles
or doctrines).
(h) Hold-Back Agreement. Each Stockholder, who becomes a director,
executive officer or person owning 3% or more of the issued and outstanding
Common Stock of First Midwest, agrees, if requested by an underwriter in an
underwritten offering for First Midwest (whether for its account or otherwise),
not to effect any public sale or distribution of any of the Shares (except as
part of such underwritten distribution), during the ten (10) day period prior
to, and during the sixty (60) day period beginning on the closing date of such
underwritten offering; provided, however, that the provisions of this Paragraph
1(h) shall apply only if such underwriter requests that directors, executive
officers and persons owing 3% or more of the issued and outstanding Common Stock
of First Midwest abide by similar restrictions.
2. REPRESENTATIONS AND COVENANTS OF FIRST MIDWEST. First Midwest hereby
represents and warrants to, and agrees with, the Stockholders as follows:
(a) Filing and Effectiveness of Registration Statement. Prior to the
Closing Date, First Midwest shall prepare a registration statement on Form S-3
(or on such other form as then may be available to First Midwest) registering
the offer and sale, by the Stockholders, of the Registrable Securities (the
"Registration Statement") and shall take all corporate action necessary to
authorize the filing of such Registration Statement with the SEC. First Midwest
shall (i) provide the Stockholders and their respective counsel with an
opportunity to participate in the preparation of
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such Registration Statement and, to the extent practicable, each amendment
thereto, (ii) give each of them such access to the books, records, and
properties of First Midwest and its subsidiaries (to the extent customarily
given to selling stockholders in a registered offering and sale of an issuer's
securities) and (iii) give each of them such opportunities to discuss the
business of First Midwest with its officers and independent public accountants
who have certified its financial statements and require such officers and
accountants to supply such information, as in each case shall be reasonably
requested by any Stockholder or his or her counsel in connection with a
"reasonable investigation" of the information contained in the Registration
Statement within the meaning of the Securities Act; provided, however, that the
Stockholders shall provide to First Midwest written assurances reasonably
satisfactory to First Midwest that any information disclosed as provided above
shall be kept confidential unless required to be set forth in the Registration
Statement. Subject to Paragraph 2(d) below, First Midwest shall file with the
SEC the Registration Statement within five (5) business days following the
Effective Time of the Merger and shall use reasonable efforts to cause the
Registration Statement to become effective as soon as practicable thereafter;
provided, however, that First Midwest shall have the right to delay such filing
and/or effectiveness until such time as the Stockholders have complied with the
requirements of Paragraph 1(e)(i). The Registration Statement shall provide for
the sale of the Registrable Shares from time to time on a delayed or continuous
basis pursuant to Rule 415 under the Securities Act.
(b) Eligibility to Use Form S-3; Timeliness of Effectiveness. First
Midwest hereby represents and warrants to the Stockholders that, as of the date
of this Agreement, First Midwest meets all of the requirements for filing on
Form S-3 and knows of no reason why the Registration Statement should not be
declared effective by the SEC in a timely manner. Without limitation of the
foregoing, (i) First Midwest has filed in a timely manner all reports required
to be filed by it with the SEC during the twelve (12) calendar months prior to
the date of this Agreement, and (ii) First Midwest hereby agrees to file, within
fifteen (15) days of the Closing Date, a Current Report on Form 8-K, reporting
the consummation of the Merger, and within thirty (30) days of the Closing Date,
an amendment to such report which shall include all financial statements and pro
forma financial information required to be filed with the SEC in order to permit
the Registration Statement to be declared effective.
(c) Amendments or Subsequent Registration Statement. First Midwest shall,
subject to Paragraph 2(d) below, prepare and file with the SEC such amendments
and supplements to the Registration Statement and the prospectus used in
connection therewith as may be necessary to keep the Registration Statement
effective until the earlier of (i) the date that all of the Registrable Shares
have been sold pursuant thereto or (ii) until all of the Registrable Shares
owned by the Stockholders may be sold pursuant to Rule 144(c) through (i) under
the Securities Act or any other rule of similar effect, without the registration
of such Shares under the Securities Act; or, in lieu of filing an amendment or
supplement to the Registration Statement, First Midwest may, at its option, file
and cause to become effective a subsequent registration statement on Form S-3 or
on such other form as may be then available to First Midwest covering the
Registrable Shares to permit the transfer of the Registrable Shares from time to
time. If First Midwest elects to file such subsequent registration statement
which thereafter becomes effective, such subsequent registration statement, upon
its effectiveness, shall be deemed the "Registration Statement" for all purposes
of this Investment Agreement. The period from the effective date of the
Registration Statement through the earlier of
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the dates described in clauses (i) and (ii) of this Paragraph 2(c) is herein
referred to as the "Effective Period".
(d) Right to Delay Effectiveness or Amendments. Notwithstanding the
provisions of Paragraphs 2(a) and (c), First Midwest shall have the right to
postpone for a reasonable period of time (but not exceeding forty-five (45)
days) the filing, effectiveness, supplementing or amending of the Registration
Statement if (i) First Midwest in its good faith judgment determines that such
action would interfere with any material financing, acquisition, disposition,
corporate reorganization or other material transaction involving First Midwest
or any of its subsidiaries then planned, pending or in progress or would require
public disclosure thereof (unless public disclosure thereof has previously been
made), and (ii) First Midwest gives the Stockholders whose Registrable Shares
are to be offered and sold pursuant to the Registration Statement prompt written
notice of such determination, signed by the Chairman, the President, or any
Executive Vice President of First Midwest, including a statement of the
anticipated length of the postponement; provided, however, that after any
exercise of its right of postponement under this Paragraph 2(d), First Midwest
shall not exercise again its right of postponement within three (3) months of
the expiration of any such postponement.
(e) Notification of Stockholders. First Midwest shall notify, as soon as
reasonably practicable, each Stockholder whose Registrable Shares are to be
offered and sold pursuant to the Registration Statement of the occurrence of any
of the following events: (i) the filing and effectiveness of the Registration
Statement and any post-effective amendment thereof, (ii) the receipt by First
Midwest of any request from the SEC for amendments or supplements to the
Registration Statement or the prospectus included therein or for any additional
information, (iii) the receipt by First Midwest of any stop order issued by the
SEC or of any notification with respect to the suspension of the qualification
of the Registrable Shares in any jurisdiction or of the initiation or
threatening of any proceeding for such purpose, and (iv) the discovery that the
prospectus included in the Registration Statement, as then in effect, includes
an untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in light of the circumstances under which they were made.
(f) Copies of Prospectus. First Midwest shall furnish to the Stockholders
copies of the preliminary prospectuses and prospectuses included in the
Registration Statement as required by the Securities Act and such other
documents as the Stockholders may reasonably request, in order to facilitate the
public sale or other disposition of all or any of the Registrable Shares by the
Stockholders.
(g) Blue Sky Filings. First Midwest shall file all documents required to
be filed by First Midwest for routine blue sky clearance in the State of
Illinois, or such other state in which a Stockholder may be domiciled, except
that First Midwest shall not be required to obtain blue sky clearance for
Registrable Shares in any other state where First Midwest may be required (i) to
qualify to do business as a foreign corporation or as a dealer in any state
where it is not so qualified, (ii) to conform its capitalization or the
composition of its assets at the time to the securities or blue sky laws of such
state, (iii) to take any action which would subject it to service of process in
suits other than those arising out of the offer and sale of the Registrable
Shares covered by such Registration
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Statement, or (iv) to subject itself to taxation in any state where it is not so
subject at the time First Midwest is asked to obtain blue sky clearance.
(h) Expenses. First Midwest agrees to bear all expenses in connection with
the registration of the Registrable Shares on such Registration Statement and
the satisfaction of the blue sky requirements set forth in this Investment
Agreement, except for underwriting discounts, selling commissions, brokers' fees
or similar discounts, commissions or fees, and fees and expenses, if any, of
counsel and other advisors to the Stockholders, which fees and expenses shall be
paid by the Stockholders.
(i) Underwriters. First Midwest understands that the Stockholders disclaim
being underwriters for purposes of the Securities Act, but if any of the
Stockholders are deemed to be underwriters that fact shall not relieve First
Midwest or any of the Stockholders of any of their respective obligations under
this Investment Agreement.
(j) Compliance with SEC Reporting Obligations. From and after the date of
this Agreement, First Midwest shall timely file all reports required to be filed
by it under the Exchange Act or the Securities Act in order (i) to preserve
First Midwest's continued eligibility to use Form S-3, (ii) to ensure the timely
updating of the information included in the prospectus which forms a part of the
Registration Statement, and (iii) to enable the Stockholders to sell Shares
without registration under the Securities Act within the limitation of the
exemption provided by Rule 144 of the SEC under the Securities Act, as such Rule
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC. Upon the request of any Stockholder, First Midwest shall
deliver to such Stockholder a written statement as to whether it has complied
with such requirements.
(k) Removal of Legend. Following the second anniversary of the Closing
Date, First Midwest shall promptly remove, at the request of any Stockholder,
the legend on the certificates evidencing the Shares, as set forth in Paragraph
1(d)(iii) of this Investment Agreement.
(l) Listing. First Midwest shall cause the Registrable Shares covered by
the Registration Statement to be listed on the NASDAQ National Market.
3. TRANSFERS OF REGISTRABLE SHARES AFTER REGISTRATION; LIMITATIONS ON
TRANSFERS; AMENDED REGISTRATION STATEMENT.
(a) Advance Notice of Sales. At any time following notice to the
Stockholders by First Midwest that First Midwest has begun repurchasing shares
of First Midwest Common Stock under its stock repurchase program, any
Stockholder who may be deemed to constitute an "affiliated purchaser" of First
Midwest within the meaning of Regulation M of the SEC under the Exchange Act,
shall give prior written notice to First Midwest of his or her intent to place,
with a registered broker-dealer, an order to sell Registrable Shares pursuant to
the Registration Statement (a "Transfer Notice"), unless such Stockholder shall
have delivered to First Midwest an opinion of counsel, reasonably acceptable to
First Midwest and its counsel, to the effect that sales of Registrable Shares by
the Stockholder under the Registration Statement are not subject to the
provisions of Regulation M. Such Transfer Notice shall specify the date upon
which the order to sell is to be placed and shall
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be given no later than 2:00 p.m. on the second business day preceding such date.
First Midwest shall not repurchase any shares of First Midwest Common Stock
during the period beginning with the business day immediately preceding the date
specified in the notice and ending on the date on which the Stockholder
providing such Transfer Notice notifies First Midwest of the completion of the
sale; provided, however, that in no event shall First Midwest will be required
to cease repurchases for a period of more than five (5) business days from the
date specified in the Transfer Notice.
(b) Right to Amend Registration Statement. If First Midwest notifies the
Stockholders (whether or not First Midwest has received a Transfer Notice) that
the Registration Statement may be required to be amended or supplemented so that
a transfer of the Registrable Shares pursuant to the Registration Statement can
be effected in compliance with the Securities Act and the Exchange Act, then
subject to Paragraph 2(d), (i) First Midwest shall, within twenty (20) business
days after the date of such notice, prepare and file with the SEC such
amendments and supplements to the Registration Statement as may be necessary to
permit the Stockholders to transfer their Registrable Shares pursuant to the
Registration Statement in compliance with the Securities Act and the Exchange
Act, and (ii) until such amendment or supplement becomes effective pursuant to
the rules and regulations promulgated under the Securities Act, none of the
Stockholders shall effect any transfer of the Registrable Shares pursuant to the
Registration Statement. Notwithstanding the foregoing, the obligation of First
Midwest to file any amendment or supplement to the Registration Statement shall
not apply with respect to any amendment or supplement relating to information
supplied by any of the Stockholders or any other person selling shares pursuant
to the Registration Statement unless the Stockholders or such other person shall
have given prior written notice to First Midwest that an amendment or supplement
is required, in which case (i) First Midwest shall file such amendment or
supplement within twenty (20) business days following the date such notice is
received by First Midwest, and (ii) until such amendment or supplement becomes
effective pursuant to the rules and regulations promulgated under the Securities
Act, none of the Stockholders shall effect any transfer of the Registrable
Shares pursuant to the Registration Statement. In each case, First Midwest will
use its reasonable best efforts to cause the amendment to become effective.
(c) Transfer Procedures. During the Effective Period, if a transfer has
been made in compliance with this Investment Agreement, the Stockholder shall
furnish to First Midwest's Transfer Agent the certificates evidencing the
Registrable Shares being transferred, together with (i) a representation letter
in the form of Exhibit B hereto, addressed to the Transfer Agent and First
Midwest and signed by the Stockholder making the transfer, (ii) any other
opinions or certifications required under this Investment Agreement, and (iii)
such other documents as First Midwest's Transfer Agent may reasonably require.
(d) Pledges of Shares. Each Stockholder shall deliver to First Midwest a
notice in the form attached as Exhibit C and the opinion of counsel referred to
therein before pledging any of the Shares to a third party for purposes of
security.
4. INFORMATION TO BE FURNISHED TO STOCKHOLDERS. So long as the
Registration Statement is effective, First Midwest shall furnish to each of the
Stockholders as soon as practicable after available, one copy of (i) its Annual
Report to Stockholders (which shall contain audited financial statements
prepared in accordance with generally accepted accounting principles), (ii) such
Quarterly Reports to Stockholders which First Midwest may prepare and distribute
from
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time to time, and (iii) a full copy of the Registration Statement covering the
Registrable Shares (excluding exhibits). In addition, upon the reasonable
request of any of the Stockholders, First Midwest shall furnish to such
Stockholder any other information that is generally made available to the public
by First Midwest.
5. TERMINATION OF CONDITIONS AND OBLIGATIONS. The conditions imposed by
this Investment Agreement upon the transferability of the Shares shall terminate
as to any particular Shares (i) when such Shares shall have been effectively
registered under the Securities Act and sold or otherwise disposed of in
accordance with the intended method of disposition set forth in the Registration
Statement, (ii) upon the second anniversary of the Closing Date or (iii) at such
time as an opinion of counsel satisfactory to First Midwest shall have been
rendered to the effect that such conditions are not necessary in order to comply
with the Securities Act.
6. INDEMNIFICATION.
(a) Indemnification By First Midwest. In the event of any registration of
any securities of First Midwest under the Securities Act pursuant hereto, First
Midwest will, and it hereby agrees to, indemnify and hold harmless, to the
extent permitted by law, each Stockholder, its directors and officers or general
and limited partners (and directors and officers thereof), and each other
person, if any, who controls such Stockholder within the meaning of the
Securities Act, as follows:
(i) against any and all loss, liability, claim, damage or expense
whatsoever arising out of or based upon an untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment or supplement thereto), including all documents
incorporated therein by reference, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading, or arising out of an untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus or prospectus (or any amendment or supplement
thereto) or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever to the extent of the aggregate amount paid in settlement of any
litigation, or investigation or proceeding by any governmental agency or
body, commenced or threatened, or of any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue statement or
omission, if such settlement is effected with the written consent of First
Midwest; and
(iii) against any and all expense reasonably incurred by them in
connection with investigating, preparing or defending against any
litigation, or investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under
subparagraph (i) or (ii) above;
provided, however, that this indemnity does not apply to any loss, liability,
claim, damage or expense to the extent arising out of (y) an untrue statement or
alleged untrue statement or omission
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or alleged omission made in reliance upon and in conformity with written
information furnished to First Midwest by or on behalf of any such Stockholder
expressly for use in the preparation of the Registration Statement (or any
amendment thereto) or any preliminary prospectus or prospectus (or any amendment
or supplement thereto) or (z) any transfer not in material compliance with the
terms of this Investment Agreement. Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of such
Stockholder or any such director, officer, general or limited partner or
controlling person and shall survive the transfer of such securities by such
Stockholder.
(b) Indemnification by the Stockholders. Each Stockholder agrees to
indemnify and hold harmless (in the same manner and to the same extent as set
forth in Paragraph 6(a)) First Midwest with respect to (i) any statement or
alleged statement in or omission or alleged omission from such registration
statement, any preliminary, final or summary prospectus contained therein, or
any amendment or supplement, if such statement or alleged statement or omission
or alleged omission was made in reliance upon and in conformity with written
information furnished to First Midwest by or on behalf of such Stockholder
specifically stating that it is for use in the preparation of such registration
statement, preliminary, final or summary prospectus or amendment or supplement
or (ii) any transfer not in material compliance with this Investment Agreement.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of First Midwest or any such director,
officer or controlling person and shall survive the transfer of such securities
by such Stockholder. In that event, the obligations of First Midwest and such
Stockholders pursuant to this Paragraph 6 are to be several and not joint;
provided, however, that, with respect to each claim pursuant to this Paragraph
6, First Midwest shall be liable for the full amount of such claim, and each
such Stockholder's liability under this Paragraph 6 shall be limited to an
amount equal to the net proceeds received by such Stockholder from the sale of
Registrable Shares held by such Stockholder pursuant to this Investment
Agreement.
(c) Notice of Claim and Defense of Claim or Action. Promptly after receipt
of notice of any claim or commencement of any action for which indemnification
is sought under this Paragraph 6, the person seeking indemnification (the
"Claimant") shall give the person from whom indemnification is sought (the
"Indemnifier") written notice of such claim or the commencement of such action
("Notice"). If, within five (5) business days of receipt of such Notice, the
Indemnifier notifies the Claimant that it has elected to assume the defense of
such claim or action, with counsel reasonably satisfactory to the Claimant, then
the Indemnifier shall not be liable to such Claimant for any legal fees or
expenses subsequently incurred by the Claimant in such defense; provided,
however, that if, in the reasonable judgment of the Claimant, there is or would
be a conflict of interest that would make it inappropriate for the same counsel
to represent both the Claimant and the Indemnifier, then the Claimant shall be
entitled to retain its own counsel at the expense of the Indemnifier.
(d) Contribution. In order to provide for just and equitable contribution
in circumstances under which the indemnity contemplated by this Paragraph 6 is
for any reason not available, the parties required to indemnify by the terms
thereof shall contribute to the aggregate losses, liabilities, claims, damages
and expenses of the nature contemplated by such indemnity agreement incurred by
First Midwest and any Stockholder, except to the extent that contribution is not
permitted under Section 11(f) of the Securities Act. In determining the amounts
which the
10
respective parties shall contribute, there shall be considered the relative
benefits received by each party from the offering of the Registrable Securities
(taking into account the portion of the proceeds of the offering realized by
each), the parties' relative knowledge and access to information concerning the
matter with respect to which the claim was asserted, the opportunity to correct
and prevent any statement or omission and any other equitable considerations
appropriate under the circumstances. First Midwest and each Stockholder agree
with each other that no Stockholder shall be required to contribute any amount
in excess of the amount such person would have been required to pay to an
indemnified party if the indemnity under Paragraph 6(b) were available. First
Midwest and each such Stockholder agree with each other that it would not be
equitable if the amount of such contribution were determined by pro rata or per
capita allocation. For purposes of this Paragraph 6(d), each director and each
officer of First Midwest who signed the Registration Statement, and each person,
if any, who controls First Midwest or a Stockholder within the meaning of
Section 15 of the Securities Act shall have the same rights to contribution as
First Midwest or a Stockholder, as the case may be.
7. NOTICES. All notices, consents, requests, demands and other
communications hereunder shall be in writing and shall be deemed duly given to
any party or parties (a) upon delivery to the address of the party or parties as
specified below if delivered in person or by courier or if sent by certified or
registered mail (return receipt requested), or (b) upon dispatch if transmitted
by telecopy or other means of facsimile transmission and such transmission is
confirmed successfully by the transmitting machine, provided that such
transmission is received during normal business hours and that any transmission
received outside of normal business hours shall be deemed to be received at the
start of normal business hours commencing immediately after the dispatch of the
transmission, in each case addressed as follows:
(a) if to First Midwest:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Executive Vice President
First Midwest Bancorp, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
11
(b) if to the Stockholders:
To the address listed under such
Stockholder's name on the
Exhibit D hereto
(c) copy to:
▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address with respect to a party as such party shall notify the
other in writing as above provided.
8. SUCCESSORS AND ASSIGNS. This Investment Agreement and the rights and
obligations of the Stockholders hereunder shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns, but
the rights granted hereunder shall not be assignable by any Stockholder by
operation of law or otherwise without the prior written consent of First
Midwest, except that such consent shall not be required in the event of transfer
by bequest, devise, inheritance or law of intestacy or gift.
9. GOVERNING LAW. This Investment Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Illinois
without regard to conflicts of law principles thereof.
12
10. COUNTERPARTS. This Investment Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
shall constitute but one instrument.
FIRST MIDWEST BANCORP, INC.
By ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
-----------------------------------
Executive Vice President
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------
Secretary
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------- ---------------------------------
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------- ---------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------- ---------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
---------------------------- ---------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ SALMON
---------------------------------
▇▇▇▇ ▇▇▇▇▇▇ Salmon
13
SCHEDULE 1(a)
-------------
SPARBANK, INCORPORATED
STOCKHOLDER LIST
Number of
Shares to Maximum
Number of be Received Number of
SparBank in the Shares to be
Name Shares Domicile Merger Registered
---- --------- -------- ----------- ------------
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 106,344 Illinois 2,310,153 800,000
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. 400 Illinois 8,689 8,689
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. 5,261 Illinois 114,286 114,286
▇▇▇▇▇ ▇▇▇▇▇▇ Towne 5,261 Illinois 114,286 114,286
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 5,261 Illinois 114,286 114,286
▇▇▇▇▇▇ ▇▇▇▇▇▇ 5,261 California 114,286 114,286
▇▇▇▇▇ ▇▇▇▇▇▇ 5,263 Indiana 114,330 114,330
▇▇▇▇ ▇▇▇▇▇▇ 7,836 Minnesota 170,224 170,224
▇▇▇▇ ▇▇▇▇▇▇ Salmon 7,836 Colorado 170,224 170,224
------- --------- ---------
Total: 148,723 3,230,764 1,720,611
EXHIBIT B TO INVESTMENT AGREEMENT
REPRESENTATION LETTER
___________________, 199_
[Name and Address of First Midwest Transfer Agent]
RE: Notice of Sale of Common Stock Pursuant to an Investment Agreement,
dated as of June 18, 1997, Relating to the Acquisition of SparBank,
Incorporated by First Midwest Bancorp, Inc.
Ladies and Gentlemen:
I am a party to the above-referenced Investment Agreement and a "Selling
Stockholder" named in the prospectus included in that certain Registration
Statement on Form S-3 (the "S-3 Registration Statement"). In accordance with the
provisions of Paragraph 3(c) of the Investment Agreement, you are hereby
notified that I have sold ________ shares (the "Shares") (the "Transfer") of the
common stock ($.01 par value) (the "Common Stock") of First Midwest Bancorp,
Inc. ("First Midwest"), pursuant to the S-3 Registration Statement.
In connection with this Transfer, and as a requirement to the transfer of
the Shares sold to the purchaser by me, I hereby represent and warrant to you
and to First Midwest as follows:
a. The Transfer was made to the public in an "ordinary trading
transaction" (as that term is defined in Paragraph 1(f) of the Investment
Agreement) by a registered broker-dealer, without the use of special selling
efforts or methods;
b. I have delivered, or caused the broker handling the sale to
deliver, prior to the sale of the Shares to the purchaser thereof, a copy of the
Prospectus included in the S-3 Registration Statement and have otherwise have
complied with all prospectus delivery requirements under the Securities Act of
1933, as amended (the "Securities Act"). I have further complied with all other
requirements of the Securities Act and the Exchange Act and the regulations
thereunder applicable to the Transfer; and
c. The number of Shares being transferred, when added to any shares
previously transferred pursuant to the S-3 Registration Statement or the
Investment Agreement, do not exceed the number of shares set forth opposite my
name in the "Selling Stockholder" table in the Prospectus, and will not cause a
breach of any representation or warranty made by me in the Investment Agreement.
I hereby undertake to provide you with such other documentation as you may
require as Transfer agent or as may be required under the Investment Agreement
in order to complete the transfer of the Shares.
Very truly yours,
---------------------------
Name of Stockholder
2
EXHIBIT C TO INVESTMENT AGREEMENT
NOTICE OF PROPOSED TRANSFER (PLEDGE)
___________________, 199_
First Midwest Bancorp, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Corporate Secretary
RE: Pledge and Consent Pursuant to an Investment Agreement, dated as of June
18, 1997, Relating to the Acquisition of SparBank, Incorporated by First
Midwest Bancorp, Inc.
Ladies and Gentlemen:
I am entering into a loan transaction (the "Loan") with the financial
institution identified below (the "Bank") which Loan is to be secured by, among
other collateral, a pledge of ______________ shares of the Common Stock of First
Midwest Bancorp, Inc. (the "Shares"), held by me to the Bank (the "Pledge"). The
Shares were issued to me without registration under federal and state securities
laws pursuant to that certain Investment Agreement, dated as of June 18, 1997.
The certificates evidencing the Shares bear a restrictive legend to the effect
that any transfer of such Shares is restricted by, among other things, the
provisions of the Investment Agreement. Paragraph 3(d) of the Investment
Agreement requires me to deliver notice to First Midwest of any proposed Pledge
describing the proposed Pledge, together with an opinion of counsel that such
Pledge does not require registration under the Securities Act of 1933, as
amended (the "Securities Act"), and that First Midwest consent to such Pledge.
I hereby enclose an opinion of counsel to the effect that registration under the
Securities Act is not required in connection with the proposed Pledge, and
request that First Midwest consent to the proposed Pledge of the Shares to the
Bank.
Name and Address of Bank:
------------------------------------------------
------------------------------------------------
Name of Contact Person:
------------------------
Tel.: ; Fax:
------------------- ------------------
Very truly yours,
-----------------------------------
Name of Stockholder
ACKNOWLEDGMENT BY BANK
The Bank understands and agrees that the Shares are subject to the restrictions
on transfer described in the Investment Agreement, a copy of which has been
furnished to the Bank, and that any disposition of the Shares by the Bank
following foreclosure of the Pledge will be subject to the provisions of federal
and state securities laws and the Investment Agreement.
-----------------------------------
Name of Bank
By
--------------------------------
Its
-------------------------------
Consent is hereby given for the pledge by the Stockholder named above to the
above Bank of shares of First Midwest Bancorp, Inc. common stock received
pursuant to that certain Investment Agreement, dated as of June 18, 1997.
FIRST MIDWEST BANCORP, INC.
By
--------------------------------
Its
-------------------------------
2
EXHIBIT D
---------
STOCKHOLDER ADDRESS LIST
------------------------
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
c/o Law Offices of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
c/o Law Offices of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Law Offices of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ Salmon
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇