1
EXHIBIT 1.1
MEGABANK FINANCIAL CORPORATION
1,450,000 SHARES COMMON STOCK(1)
UNDERWRITING AGREEMENT
_______________, 1998
Xxxx Xxxxxx Investments, Inc.
As Representative of the several Underwriters
named in Schedule A
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Section 1. Introductory. MegaBank Financial Corporation (the
"Company"), a Colorado corporation, has an authorized capital stock consisting
of 10,000,000 shares of Preferred Stock, no par value, none of which were
outstanding as of ____________, 1998 and 50,000,000 shares, no par value, of
Common Stock ("Common Stock"), of which 6,407,340 shares were outstanding as of
such date. The Company proposes to issue and sell 1,200,000 shares of its
authorized but unissued Common Stock and a shareholder of the Company (referred
to as the "Selling Shareholder" and named in Schedule B) proposes to sell
250,000 shares of the Company's issued and outstanding Common Stock to the
several underwriters named in Schedule A, as it may be amended by the Pricing
Agreement hereinafter defined (the "Underwriters"), who are acting severally
and not jointly. Collectively, such total of 1,450,000 shares of Common Stock
proposed to be sold by the Company and the Selling Shareholder is hereinafter
referred to as the "Firm Shares." In addition, the Company and the Selling
Shareholder propose to grant to the Underwriters an option to purchase up to
217,500 additional shares of Common Stock ("Option Shares") as provided in
Section 5 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 and the Selling Shareholder 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.
Prior to the purchase and public offering of the Shares by the several
Underwriters, the Company, the Selling Shareholder and the Representative,
acting on behalf of the several Underwriters, shall enter into an agreement
substantially in the form of Exhibit A hereto ("Pricing Agreement"). The
Pricing Agreement may take the form of an exchange of any standard form of
written telecommunication between the Company, the Selling Shareholder 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
__________________________________
(1) Plus an option to acquire up to 217,500 additional shares to cover
overallotments.
1
2
after the date of the execution and delivery of the Pricing Agreement, this
Agreement shall be deemed to incorporate the Pricing Agreement.
The Company and the Selling Shareholder hereby confirm their
agreements 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 SB-2 (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"; unless indicated to the contrary, all references
herein to specific rules are rules promulgated under the 0000 Xxx); 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
and will file such additional amendments thereto and such amended prospectuses
as may hereafter be required. 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 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 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
2
3
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 has been duly organized and is validly existing
and in good standing as a unitary thrift holding company within the meaning of
the Home Owners' Loan Act of 1933, as amended ("HOLA") and is registered with
the Office of Thrift Supervision ("OTS"). Except as otherwise noted to you,
the Company does not directly or indirectly own any stock or other equity
interest in any corporation, partnership, joint venture, unincorporated
association or other entity other than MegaBank (the "Bank") and MB Capital I,
(the Bank and any other entities owned by the Company being collectively
referred to herein as the "Subsidiaries"). Each Subsidiary has been duly
incorporated, is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has the corporate power and
authority to own or lease its properties and conduct its business as described
in the Prospectus, and is duly qualified to transact business in all
jurisdictions in which the conduct of its business or its ownership or leasing
or property requires such qualification and the failure so to qualify would
have a material adverse effect on the business or condition, financial or
otherwise, of the Company and the Subsidiaries, taken as a whole; 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. All outstanding shares of
capital stock of each of the Subsidiaries have been duly authorized and validly
issued, are fully paid and non-assessable, and are owned, directly or
indirectly, by the Company free and clear of all liens, encumbrances and
security interests, except as otherwise noted to you. No options, warrants or
other rights to purchase, agreements or other obligations to issue, or other
rights to convert any obligations into, shares of capital stock or ownership
interests in any of the Subsidiaries are outstanding.
(d) Except as disclosed in the Registration Statement, 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,
encumbrances or security interests 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 to be sold by the Company 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
3
4
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, 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. 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"). This Agreement has been 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 financial statements, together with the related notes and
schedules, contained in the Registration Statement and Prospectus present
fairly the consolidated financial position, results of operations,
shareholders' equity and cash flows of the Company and its consolidated
Subsidiaries on the basis stated therein at the indicated dates and for the
indicated periods. Such financial statements have been prepared in accordance
with generally accepted accounting principles consistently applied throughout
the periods involved, and all adjustments necessary for a fair presentation of
results for such periods have been made, except as otherwise stated therein.
The selected financial and statistical data included in the Registration
Statement present fairly the information shown therein on the basis stated in
the Registration Statement and have been compiled on a basis consistent with
the financial statements presented 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 material provision of any lease, loan agreement, franchise, license, permit
or other contract obligation to which it is a party; 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 are material to the Company and its Subsidiaries taken as a
whole.
(k) There are no material 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 material property owned or leased
by the Company or any Subsidiary is or may be the subject, or related to
environmental or discrimination matters which are not disclosed in the
Prospectus, or which question the validity of this Agreement or the Pricing
Agreement or any action taken or to be taken pursuant hereto or thereto.
(l) There are no holders of securities of the Company having
rights to registration thereof or preemptive rights to purchase Common Stock
except as disclosed in the Prospectus. Holders of registration rights have
waived such rights with respect to the offering being made by the Prospectus.
4
5
(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
those, if any, reflected in such financial statements (or elsewhere in the
Prospectus) or which are not material to the Company and 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, as it may be amended or supplemented, (A) there has
not been any material adverse change, or any development involving a
prospective material adverse change, in or affecting the condition, financial
or otherwise, of the Company and the Subsidiaries taken as a whole, or the
business affairs, management, financial position, shareholders' equity or
results of operations of the Company and the Subsidiaries, taken as a whole,
whether or not occurring in the ordinary course of business, (B) there has not
been any transaction not in the ordinary course of business entered into by the
Company or any of the Subsidiaries which is material to the Company and the
Subsidiaries, taken as a whole, other than transactions described or
contemplated in the Registration Statement, (C) the Company and the
Subsidiaries have not incurred any material liabilities or obligations, which
are not in the ordinary course of business or which could result in a material
reduction in the future earnings of the Company and the Subsidiaries, (D) the
Company and the Subsidiaries have not sustained any material loss or
interference with their respective businesses or properties from fire, flood,
windstorm, accident or other calamity, whether or not covered by insurance, (E)
there has not been any change in the capital stock of the Company or the
Subsidiaries (other than upon the exercise of options and warrants described in
the Registration Statement), or any material increase in the short-term or
long-term debt (including capitalized lease obligations) of the Company and the
Subsidiaries, taken as a whole, and (F) there has not been any declaration or
payment of any dividends or any distributions of any kind with respect to the
capital stock of the Company or the Subsidiaries other than any dividends or
distributions described or contemplated in the Registration Statement.
(p) The Company agrees not to sell, contract to sell or otherwise
dispose of any Common Stock or securities convertible into Common Stock (except
Common Stock issued pursuant to currently outstanding options, warrants or
convertible securities) for a period of 180 days after this Agreement becomes
effective without the prior written consent of the Representatives. The
Company has obtained similar agreements from each of its officers, directors
and principal shareholders.
(q) There is no material 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) 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
5
6
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
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
upon the condition (financial or otherwise) or results of operations of the
Company and its Subsidiaries taken as a whole.
(s) 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 upon the condition
(financial or otherwise) or results of operations of the Company and its
Subsidiaries taken as a whole.
(t) All offers and sales of the Company's capital stock prior to
the date hereof were at all relevant times exempt from the registration
requirements of 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.
(u) 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
might be, asserted against the Company or any of its properties or assets that
would or could be expected to have a material adverse affect upon the condition
(financial or otherwise) or results of operations of the Company and its
subsidiaries taken as a whole.
(v) 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 Nasdaq National Market, 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.
(w) 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").
(x) The deposit accounts of the Bank are insured by the Federal
Deposit Insurance Corporation (the "FDIC") to the fullest extent provided by
law. No proceeding for the termination of such insurance is pending or is
threatened. Neither the Company nor any Subsidiary has received or is subject
to any directive or order from the FDIC or the OTS or any other regulatory
authority to make any material change in the method of conducting their
respective businesses that has not been complied with in all material respects.
(y) Neither the Company nor any of its affiliates does any
business, directly or indirectly, with the government of Cuba or with any
person or entity located in Cuba.
(z) The Company and its Subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurances that (A)
transactions are executed in accordance with management's general or specific
authorization; (B) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (C) access to records is
permitted only in accordance with
6
7
management's general or specific authorization; and (D) the recorded
accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
(aa) Other than as contemplated by this Agreement and as
disclosed in the Registration Statement, the Company has not incurred any
liability for any finder's or broker's fee or agent's commission in connection
with the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby.
(bb) No report or application filed by the Company or any
of its subsidiaries with the FDIC or the OTS, as of the date it was filed,
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading when made or failed to comply with the applicable requirements
of the FDIC or the OTS, as the case may be.
Section 3. Representations, Warranties and Covenants of the
Selling Shareholder.
(a) The Selling Shareholder represents and warrants to, and agrees
with, the Company and the Underwriters that:
(i) Such Selling Shareholder has, and on the First
Closing Date or the Second Closing Date hereinafter defined, as the case may
be, will have, valid marketable title to the Shares proposed to be sold by such
Selling Shareholder hereunder on such date and full right, power and authority
to enter into this Agreement and the Pricing Agreement and to sell, assign,
transfer and deliver such Shares hereunder, free and clear of all voting trust
arrangements, liens, encumbrances, equities, claims and community property
rights; and upon delivery of and payment for such Shares hereunder, the
Underwriters will acquire valid marketable title thereto, free and clear of all
voting trust arrangements, liens, encumbrances, equities, claims and community
property rights.
(ii) Such Selling Shareholder has not taken and will not
take, directly or indirectly, any action designed to or which might be
reasonably 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.
(iii) Such Selling Shareholder further represents, warrants
and agrees that such Selling Shareholder has deposited in custody, under a
Custody Agreement ("Custody Agreement") with _____________________________, as
custodian ("Custodian"), certificates in negotiable form for the Shares to be
sold hereunder by such Selling Shareholder, for the purpose of further delivery
pursuant to this Agreement. Such Selling Shareholder agrees that the Shares to
be sold by such Selling Shareholder on deposit with the Custodian are subject
to the interests of the Company and the Underwriters, that the arrangements
made for such custody, are to that extent irrevocable, and that the obligations
of such Selling Shareholder hereunder and under the Custody Agreement shall not
be terminated except as provided in this Agreement or the Custody Agreement by
any act of such Selling Shareholder, by operation of law, whether, in the case
of the individual Selling Shareholder, by the death or incapacity of such
Selling Shareholder or, in the case of a trust or estate, by the death of the
trustee or trustees or the executor or executors or the termination of such
trust or estate, or, in the case of a partnership or corporation, by the
dissolution, winding-up or other event affecting the legal life of such entity,
or by the occurrence of any other event. If the Selling Shareholder, trustee
or executor should die or become incapacitated, or any such trust, estate,
partnership or corporation should be terminated, or if any other event should
occur before the
7
8
delivery of the Shares hereunder, the documents evidencing Shares then on
deposit with the Custodian shall be delivered by the Custodian in accordance
with the terms and conditions of this Agreement as if such death, incapacity,
termination or other event had not occurred, regardless of whether or not the
Custodian shall have received notice thereof. The Custodian has been
authorized to receive and acknowledge receipt of the proceeds of sale of the
Shares to be sold by such Selling Shareholder against delivery thereof and
otherwise act on behalf of such Selling Shareholder. The Custody Agreement has
been duly executed by such Selling Shareholder and a copy thereof has been
delivered to you.
(iv) Each preliminary prospectus, insofar as it has
related to such Selling Shareholder and, to the knowledge of such Selling
Shareholder in all other respects, as of its date, 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 the
Registration Statement at the time of effectiveness, and at all times
subsequent thereto, up to the First Closing Date or the Second Closing Date
hereinafter defined, as the case may be, (1) such parts of the Registration
Statement and the Prospectus and any amendments or supplements thereto as
relate to such Selling Shareholder, and the Registration Statement and the
Prospectus and any amendments or supplements thereto, to the knowledge of such
Selling Shareholder in all other respects, 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 (2) neither the Registration
Statement nor the Prospectus, nor any amendment or supplement thereto, as it
relates to such Selling Shareholder, and, to the knowledge of such Selling
Shareholder in all other respects, included or will include any untrue
statement of a material fact or omitted or will omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading; provided that neither clause (1) nor (2) shall have any effect if
information has been given by such Selling Shareholder to the Company and the
Representative in writing which would eliminate or remedy any such untrue
statement or omission.
(v) Such Selling Shareholder agrees with the Company and
the Underwriters not to sell, contract to sell or otherwise dispose of any
Common Stock for a period of 180 days after this Agreement becomes effective
without the prior written consent of the Representative.
The Selling Shareholder represents and warrants to, and agrees with,
the Underwriters to the same effect as the representations and warranties of
the Company set forth in Section 2 of this Agreement.
In order to document the Underwriters' compliance with the reporting
and withholding provisions of the Internal Revenue Code of 1986, as amended,
with respect to the transactions herein contemplated, the Selling Shareholder
agrees to deliver to you prior to or on the First Closing Date, as hereinafter
defined, a properly completed and executed United States Treasury Department
Form W-8 or W-9 (or other applicable form of statement specified by Treasury
Department regulations in lieu thereof).
Section 4. Representations and Warranties of the Underwriters.
The Representative, on behalf of the several Underwriters, represents and
warrants to the Company and the Selling Shareholder that the information set
forth (a) on the cover page of the Prospectus with respect to price,
underwriting discount and terms of the offering and (b) under "Underwriting" in
the Prospectus was furnished to the Company by and on behalf of the
Underwriters for use in connection with the preparation of the Registration
Statement and is correct and complete in all material respects.
8
9
Section 5. 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 and the Selling
Shareholder, severally and not jointly, agree to sell to the Underwriters named
in Schedule A hereto, and the Underwriters agree, severally and not jointly, to
purchase from the Company and the Selling Shareholder, respectively, 1,200,000
Firm Shares from the Company and 250,000 Firm Shares from the Selling
Shareholder 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 that number of full shares which (as nearly as practicable, as
determined by you) bears to 1,200,000, the same proportion as the number of
Shares set forth opposite the name of such Underwriter in Schedule A hereto
bears to the total number of Firm Shares to be purchased by all Underwriters
under this Agreement. The obligation of each Underwriter to the Selling
Shareholder shall be to purchase from such Selling Shareholder the number of
full shares which (as nearly as practicable, as determined by you) bears to
250,000, the same proportion as the number of Shares set forth opposite the
name of such Underwriter in Schedule A hereto bears to the total number of Firm
Shares to be purchased by all Underwriters under this Agreement. 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
Registration Statement becomes effective (or, if the Company has elected to
rely upon Rule 430A, 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) after execution of the Pricing Agreement), 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 and the
Custodian 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
them, respectively, against payment of the purchase price therefor by delivery
of federal or other immediately available funds, by wire transfer or otherwise,
to the Company and the Custodian. 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 and the Custodian prior to 10:00 A.M.,
Chicago Time, on the second 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 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 and the Selling Shareholder hereby grant an option to the
several Underwriters to purchase, severally and not jointly, up to an aggregate
of 217,500 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 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
9
10
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 from the Company shall be 192,500 and the number of Option Shares to
be purchased from the Selling Shareholder shall be 25,000. [If less than all
Option Shares are to be purchased by the Underwriter, the reduction will be
first to the Selling Shareholder and then the Company.] 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 the Company and the Selling
Shareholder pursuant to such notice of exercise 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 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 and the Selling Shareholder 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 6. Covenants of the Company. The Company covenants and
agrees that:
(a) The Company will advise you and the Selling Shareholder
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 and
the Selling Shareholder 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 and the Selling Shareholder 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 and the Selling Shareholder with copies of any such amendment
or supplement a reasonable amount of time prior to such proposed filing or use,
as the case 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
10
11
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 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 shareholders 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 as contemplated by the Prospectus.
(g) The Company will make generally available to its shareholders,
as soon as it is practicable to do so, but in any event not later than 18
months after the effective date of the Registration Statement, an earnings
statement (which need not be audited) in reasonable detail, covering a period
of at least 12 consecutive months beginning after the effective date of the
Registration Statement, which earnings statement shall satisfy the requirements
of Section 11(a) of the Act and Rule 158 thereunder and will advise you in
writing when such statement has been so made available.
(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.
11
12
(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 and each of the other Underwriters 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 being sold by it 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 the Nasdaq National Market.
Section 7. 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 not to exceed $3,000 and
disbursements of counsel for the Underwriters) 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.
The provisions of this Section shall not affect any agreement which
the Company and the Selling Shareholder may make for the allocation or sharing
of such expenses and costs.
12
13
Section 8. 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 and the Selling Shareholder 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 and the
Selling Shareholder of their respective 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, the
Selling Shareholder 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 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 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 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 judgment of the Representative, makes it impractical
or inadvisable to proceed with the public offering or purchase of the Shares as
contemplated hereby.
13
14
(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 Xxxxx & Xxxxxx, P.C., Denver, Colorado,
counsel for the Company and for the Selling Shareholders, 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 in good standing as a unitary thrift holding company under
HOLA with corporate power and authority to own its properties and conduct its
business as described in the Prospectus; and the Company has been 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 the ownership or
leasing of property, or the conduct of its business requires such qualification
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;
(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) all of the issued and outstanding capital
stock of each Subsidiary of the Company has been duly authorized, validly
issued and is fully paid and nonassessable, and, except as disclosed in the
Registration Statement, the Company owns directly or indirectly 100 percent of
the outstanding capital stock of each Subsidiary, and to the best knowledge of
such counsel, such stock is owned free and clear of any claims, liens,
encumbrances or security interests;
(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
14
15
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 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; the statements in the Registration Statement and the
Prospectus summarizing statutes, rules and regulations are accurate and fairly
and correctly present the information required to be presented by the 1933 Act
or the rules and regulations thereunder, in all material respects and such
counsel does not know of any statutes, rules and regulations required to be
described or referred to in the Registration Statement or the Prospectus that
are not described or referred to therein as required; 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 "Management
- Executive Compensation - Stock Incentive Plan," "Related Party Transactions,"
"Description of Capital Stock" and "Shares Eligible for Future Sale" in the
Prospectus, insofar as such statements constitute a summary of documents
referred to therein or matters of law, are accurate summaries and fairly and
correctly 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,
enforceable in accordance with their respective terms, 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 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 by the Company pursuant to this Agreement (other than under the 1933
Act, applicable blue sky laws and the rules of the NASD) or the consummation by
the Company of any other transactions contemplated hereby;
(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;
15
16
(11) to such counsel's knowledge, all offers and
sales of the Company's capital stock since August 1, 1995 were at all relevant
times exempt from the registration requirements of the 1933 Act and were duly
registered or the subject of an available exemption from the registration
requirements of the applicable state securities or blue sky laws;
(12) with respect to the Selling Shareholder, this
Agreement and the Pricing Agreement have been duly authorized, executed and
delivered by or on behalf of such Selling Shareholder; the Custodian for such
Selling Shareholder has been duly and validly authorized to carry out all
transactions contemplated herein on behalf of such Selling Shareholder; and the
performance of this Agreement and the Pricing Agreement and the consummation of
the transactions herein contemplated by such Selling Shareholder will not
result in a breach or violation of any of the terms and provisions of, or
constitute a default under, any statute, any indenture, mortgage, deed of
trust, note agreement or other agreement or instrument known to such counsel to
which such Selling Shareholder is a party or by which he is bound or to which
any of the property of such Selling Shareholder is subject, or any order, rule
or regulation known to such counsel of any court or governmental agency or body
having jurisdiction over such Selling Shareholder or any of his properties; and
no consent, approval, authorization or order of any court or governmental
agency or body is required for the consummation of the transactions
contemplated by this Agreement and the Pricing Agreement in connection with the
sale of Shares to be sold by such Selling Shareholder hereunder, except such as
have been obtained under the 1933 Act and such as may be required under
applicable blue sky laws in connection with the purchase and distribution of
such Shares by the Underwriters and the clearance of such offering with the
NASD;
(13) the Selling Shareholder has full right, power
and authority to enter into this Agreement and the Pricing Agreement and to
sell, transfer and deliver the Shares to be sold on the First Closing Date or
the Second Closing Date, as the case may be, by such Selling Shareholder
hereunder and good and marketable title to such Shares so sold, free and clear
of all voting trust arrangements, liens, encumbrances, equities, claims and
community property rights whatsoever, has been transferred to the Underwriters
(who counsel may assume to be bona fide purchasers) who have purchased such
Shares hereunder;
(14) this Agreement and the Pricing Agreement are
legal, valid and binding agreements of the Selling Shareholder 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 with respect
to those provisions relating to indemnities for liabilities arising under the
1933 Act, as to which no opinion need be expressed; and
(15) 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 they are
relying upon the certificate of _______________, the transfer agent for the
Common Stock, as to the number of shares of Common Stock at any time or times
outstanding, and 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 the Selling
Shareholders and of officers of the Company and of state officials, in which
case their opinion is to state that they are so doing and copies of said
16
17
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 Representatives in other form.
(ii) An opinion of Xxxxxx Xxxxxxxx Xxxxxx & X'Xxxxxxx,
P.C., banking counsel for the Company, dated the Closing Date, addressed to the
Underwriters, to the effect that:
(1) The Bank has been duly chartered to conduct
the business of banking in its state of domicile and the Company has all
necessary power and authority to own the Bank. The Company and the Bank have
all necessary consents and approvals under applicable federal and state laws
and regulations relating to banks and bank holding companies ("banking laws")
to own their respective assets and carry on their respective businesses as
currently conducted.
(2) The statements in the Prospectus under the
captions "Risk Factors -- Competitive Banking Environment, -- Government
Regulation, Recent Legislation and Monetary Policy," and -- Potential Liability
for Undercapitalized Subsidiary" insofar as such statements constitute a
summary of banking laws, are accurate summaries and fairly present the
information called for with respect to such matters.
(3) Such counsel knows of no legal or
governmental proceeding, pending or threatened, before any court or
administrative body or regulatory agency, to which the Company or any of the
Subsidiaries is a party or to which any of the properties of the Company or any
of the Subsidiaries is subject that are required to be described in the
Registration Statement or Prospectus and are not so described, or statutes or
regulations that are required to be described in the Registration Statement or
the Prospectus that are not so described.
(4) The execution and delivery of this Agreement
and the Pricing Agreement and the consummation of the transactions herein and
therein contemplated do not and will not conflict with or result in a violation
of or default under any banking laws, or any permit, judgment, decree or order
known to such counsel, or any lease, contract, indenture, mortgage, loan
agreement or other agreement or other instrument or obligation known to such
counsel to which the Company or the Bank is a party or by which the Company or
the Banks or any of their respective properties is bound.
(5) No approval, consent, order, authorization,
designation, declaration or filing by or with any regulatory, administrative or
other governmental body under banking laws is necessary in connection with the
execution and delivery of this Agreement and the Pricing Agreement and the
consummation of the transactions herein and therein contemplated, except such
as have been obtained or made, specifying the same.
(iii) Such opinion or opinions of Xxxxxxx and Xxxxxx,
counsel for the Underwriters, dated the First Closing Date or the Second
Closing Date, as the case may be, with respect to the incorporation of the
Company, the validity of the Shares to be sold by the Company, the Registration
Statement and the Prospectus and other related 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.
(iv) 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:
17
18
(1) the representations and warranties of the
Company set forth in Section 2 of this Agreement are true and correct 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 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.
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.
(v) A certificate of the Selling Shareholder dated the
First Closing Date or the Second Closing Date, as the case may be, to the
effect that the representations and warranties of such Selling Shareholder set
forth in Section 3 of this Agreement are true and correct as of such date and
the Selling Shareholder has complied with all the agreements and satisfied all
the conditions on the part of such Selling Shareholder to be performed or
satisfied at or prior to such date.
(vi) 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 Representatives
of the Underwriters, from Fortner, Bayens, Xxxxxxxxx and Co., 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 C. There shall not have been any change or decrease
specified in the letters referred to in this subparagraph which makes it
impractical or inadvisable in the judgment of the Representative to proceed
with the public offering or purchase of the Shares as contemplated hereby.
(vii) 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 Xxxxxxx and Xxxxxx, 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 and
the Selling Shareholder without liability on the part of any Underwriter or the
Company or the Selling Shareholder, except for the expenses to be paid or
reimbursed by the Company pursuant to Sections 7 and 9 hereof and except to the
extent provided in Section 11 hereof.
Section 9. 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
18
19
Underwriters' obligations hereunder is not satisfied or because of any refusal,
inability or failure on the part of the Company or the Selling Shareholder 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 7 and Section 11 shall at all times be effective and shall
apply.
Section 10. Effectiveness of Registration Statement. You, the
Company and the Selling Shareholder will use your, its and their 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 11. Indemnification. (a) The Company and the Selling
Shareholder, jointly and severally, agree 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 and/or such Selling Shareholder, as the case may be),
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 neither the Company nor the Selling Shareholder will 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 Representatives,
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 their other obligations under this
Section 11(a), the Company and the Selling Shareholder agree 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
11(a), they will reimburse the Underwriters on a monthly basis for all
reasonable legal and other expenses incurred in connection with investigating
or defending any such
19
20
claim, action, investigation, inquiry or other proceeding, notwithstanding the
absence of a judicial determination as to the propriety and enforceability of
the Company's and the Selling Shareholder'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. This
indemnity agreement will be in addition to any liability which the Company and
the Selling Shareholder may otherwise have.
Without limiting the full extent of the Company's agreement to
indemnify each Underwriter, as herein provided, the Selling Shareholder shall
be liable under the indemnity agreements contained in paragraph (a) of this
Section only for an amount not exceeding the proceeds received by such Selling
Shareholder from the sale of Shares hereunder.
(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 Selling Shareholder 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, Selling Shareholder 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 and in conformity with Section
4 of this Agreement or any other written information furnished to the Company
by such Underwriter through the Representatives 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, the Selling Shareholder
or controlling person in connection with investigating or defending any such
loss, claim, damage, liability or action. In addition to their other
obligations under this Section 11(b), the Underwriters agree 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
11(b), they will reimburse the Company and the Selling Shareholder on a monthly
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 Underwriters' obligation to reimburse
the Company and the Selling Shareholder for such expenses and the possibility
that such payments might later be held to have been improper by a court of
competent jurisdiction. 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
20
21
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 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 Representatives in the case of paragraph (a)
representing all indemnified parties not having different or additional
defenses or potential conflicting interest 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, the Selling Shareholder 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, the Selling Shareholder 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, the Selling Shareholders
and the Underwriters shall be deemed to be in the same proportion in the case
of the Company and the Selling Shareholder, as the total price paid to the
Company and the Selling Shareholder 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 the Selling Shareholder and received by
the Underwriters as underwriting discount in each case as contemplated by the
Prospectus. The relative fault of the Company and the Selling Shareholder 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 to state a material fact relates to information supplied by the
Company or by the Selling Shareholder or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such
21
22
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, the Selling Shareholder 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
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 0000 Xxx) 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 this Agreement.
Section 12. Default of Underwriters. It shall be a condition to
the agreement and obligation of the Company and the Selling Shareholder 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 Representatives 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 and the Selling Shareholder 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 and the Selling Shareholder 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 or the Selling Shareholder, except for
the expenses to be paid by the Company pursuant to Section 7 hereof and except
to the extent provided in Section 11 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.
22
23
Section 13. Effective Date. This Agreement shall become
effective immediately as to Sections 7, 9, 11 and 14 and as to all other
provisions at 10:00 A.M., Chicago Time, on the day following the date upon
which the Pricing Agreement is executed and delivered, unless such a day is a
Saturday, Sunday or holiday (and in that event this Agreement shall become
effective at such hour on the business day next succeeding such Saturday,
Sunday or holiday); but this Agreement shall nevertheless become effective at
such earlier time after the Pricing Agreement is executed and delivered as you
may determine on and by notice to the Company and the Selling Shareholder or by
release of any Shares for sale to the public. For the purposes of this
Section, the Shares shall be deemed to have been so released upon the release
for publication of any newspaper advertisement relating to the Shares or upon
the release by you of telegrams (i) advising Underwriters that the Shares are
released for public offering, or (ii) offering the Shares for sale to
securities dealers, whichever may occur first.
Section 14. Termination. Without limiting the right to terminate
this Agreement pursuant to any other provision hereof:
(a) This Agreement may be terminated by the Company by notice to
you and the Selling Shareholder or by you by notice to the Company and the
Selling Shareholder at any time prior to the time this Agreement shall become
effective as to all its provisions, and any such termination shall be without
liability on the part of the Company or the Selling Shareholder to any
Underwriter (except for the expenses to be paid or reimbursed pursuant to
Section 7 hereof and except to the extent provided in Section 11 hereof) or of
any Underwriter to the Company or the Selling Shareholder.
(b) This Agreement may also be terminated by you prior to the
First Closing Date, and the option referred to in Section 5, if exercised, may
be canceled 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 change in financial markets or
in political, economic or financial conditions 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 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 the Selling Shareholder or on the part of the
Company to any Underwriter or the Selling Shareholder (except for expenses to
be paid or reimbursed pursuant to Section 7 hereof and except to the extent
provided in Section 11 hereof).
Section 15. Representations and Indemnities to Survive Delivery.
The respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers, of the Selling Shareholder 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,
principals, members, officers or directors or any controlling person, or the
Selling Shareholder as the case may be, and will survive delivery of and
payment for the Shares sold hereunder.
Section 16. Notices. All communications hereunder will be in
writing and, if sent to the Underwriters will be mailed, delivered or
telegraphed and confirmed to you c/x Xxxx Xxxxxx Investments, Inc. 000 Xxxxx
XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxx X. Xxxxxxxx;
23
24
if sent to the Company will be mailed, delivered or telegraphed and confirmed
to the Company at its corporate headquarters; and if sent to the Selling
Shareholder will be mailed, delivered or telegraphed and confirmed to the
Custodian at such address as they have previously furnished to the Company and
the Representative.
Section 17. 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
11, 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.
Section 18. 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 19. 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 20. Applicable Law. This Agreement and the Pricing
Agreement shall be governed by and construed in accordance with the laws of the
State of Illinois.
24
25
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, the Selling
Shareholder and the several Underwriters including you, all in accordance with
its terms.
Very truly yours,
MEGABANK FINANCIAL CORPORATION
By:
Xxxxxx X. Xxxxxxxx
Chairman and Chief Executive Officer
SELLING SHAREHOLDER
By
Xxxxxx X. Xxxxxxxx
The foregoing Agreement is hereby
confirmed and accepted as of
the date first above written.
XXXX XXXXXX INVESTMENTS, INC.
Acting as Representative of the
several Underwriters named in
Schedule A.
By
------------------------------
Xxxxxx X. Xxxxxxxx
Senior Vice President
25
26
SCHEDULE A
Underwriter Number of Firm
----------- Shares to
be Purchased
--------------
Xxxx Xxxxxx Investments, Inc.
---------
TOTAL 1,450,000
=========
26
27
SCHEDULE B
Number of Number of Option
Firm Shares Shares
to be Sold to be Sold
---------- ----------
Company 1,200,000 192,500
Xxxxxx X. Xxxxxxxx 250,000 25,000
--------- --------
TOTAL 1,450,000 217,500
========= ========
27
28
SCHEDULE C
Comfort Letter of Fortner, Bayens, Xxxxxxxxx and Co.
(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 shareholders 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 financial statements are not fairly presented in accordance with
generally accepted accounting principles applied on a basis substantially
consistent with that of the audited 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 consolidated net
current assets or consolidated shareholders' equity 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 consolidated net sales,
consolidated income before income taxes or in the total or per share amounts of
consolidated net income 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 and its Subsidiaries.
28
29
EXHIBIT A
MEGABANK FINANCIAL CORPORATION
1,450,000 SHARES COMMON STOCK(2)
PRICING AGREEMENT
________________, 1998
Xxxx Xxxxxx Investments, Inc.
As Representative of the several Underwriters
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement dated
_________________, 1998 (the "Underwriting Agreement") relating to the sale by
the Company and the Selling Shareholder and the purchase by the several
Underwriters for whom Xxxx Xxxxxx Investments, Inc. is acting as the
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 5 of the Underwriting Agreement, the Company and
the Selling Shareholder agree 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.
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, the Selling
Shareholder and the several Underwriters, including you, all in accordance with
its terms.
__________________________________
(2)Plus an option to acquire up to 217,500 additional shares to cover
overallotments.
29
30
Very truly yours,
MEGABANK FINANCIAL CORPORATION
By
Xxxxxx X. Xxxxxxxx
Chairman and Chief Executive Officer
SELLING SHAREHOLDER
By
Xxxxxx X. Xxxxxxxx
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
XXXX XXXXXX INVESTMENTS, INC.
Acting as Representative of the
several Underwriters.
By
Xxxxxx X. Xxxxxxxx
Senior Vice President
30
