EXHIBIT 1
FINANCIAL SERVICES CORPORATION OF THE MIDWEST
$10,000,000
----% NOTES DUE 2006
DATED AS OF NOVEMBER 1, 1996
UNDERWRITING AGREEMENT
---------------, 1996
▇.▇. ▇▇▇▇▇▇▇ and Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
FINANCIAL SERVICES CORPORATION OF THE MIDWEST, a Delaware corporation
(the "Company"), hereby confirms its agreement with you, as follows:
1. THE NOTES. The Company proposes to issue $10,000,000 principal
---------
amount of its -----% Notes Due 2006, dated as of November 1, 1996 (the "Notes")
and to sell the Notes to ▇.▇. ▇▇▇▇▇▇▇ and Company as underwriter (the
"Underwriter"). The Company proposes to issue the Notes for the purpose of
repaying certain indebtedness, making a contribution to the capital of THE Rock
Island Bank, National Association (the "Bank") and for other corporate purposes.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
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represents and warrants to and agrees with you that:
(a) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware and has
been duly qualified as a foreign corporation for the transaction of business and
is in good standing under the laws of each other jurisdiction in which its
ownership or leasing of property or the conduct of its business requires such
qualification and has all requisite power and authority (corporate and other) to
own its properties and conduct its business, as such is currently being
conducted, all as described in the Prospectus (as defined in Section 2(c)
hereof); and each subsidiary of the Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of its
respective jurisdiction of incorporation and has been duly qualified as a
foreign corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which its ownership or leasing of
property or the conduct of its business would require such qualification and has
all requisite power and authority (corporate and other) to own its properties
and conduct its business as such is currently being conducted, all as described
in the Prospectus;
(b) The Company has an authorized and outstanding capitalization as
set forth under the section entitled "Capitalization" in the Prospectus as of
the date indicated therein and there has been no material change therein except
as disclosed in the Prospectus. All of the issued shares of capital stock of
the company as set forth in the Prospectus have been duly and validly authorized
and issued and are fully paid and nonassessable and conform to the description
thereof contained in the Prospectus; and, except to the extent described in the
Prospectus, all outstanding shares of stock of each subsidiary of the Company
are owned by the Company or another subsidiary of the Company, have been duly
and validly authorized and issued, are fully paid and nonassessable, and except
to the extent described in the Prospectus, the shares of stock of each
subsidiary owned by the Company or a subsidiary thereof are held free and clear
of all liens and encumbrances;
(c) A registration statement on Form S-2 (Registration No. 333- )
with respect to the Notes and any and all of the amendments or supplements
thereto have been carefully prepared by the Company in conformity with the
requirements of the Securities Act of 1933, as amended to the date hereof (the
"Act"), and the rules and regulations existing as of the date hereof (the "Rules
and Regulations") of the Securities and Exchange Commission (the "Commission")
thereunder, and have been filed with the Commission. Copies of such
registration statement and amendments or supplements thereto, including the
prospectus, financial statements (including the associated notes and schedules
thereto), documents incorporated by reference and exhibits thereto, have been
delivered to you and your legal counsel. Such registration statement and
prospectus, as finally amended and revised at the time such registration
statement becomes effective with the Commission, are herein respectively
referred to as the "Registration Statement" and the "Prospectus," except that if
the prospectus filed by the Company pursuant to Rule 424(b) of the Rules and
Regulations differs from the prospectus on file at the time the Registration
Statement initially becomes effective, the term "Prospectus" shall refer to the
prospectus filed pursuant to Rule 424(b) from and after the time said prospectus
is filed with or transmitted to the Commission for filing;
(d) The Commission has not issued an order preventing or suspending
the use of any preliminary prospectus (herein referred to as the "Preliminary
Prospectus") with respect to the Notes, and each such Preliminary Prospectus has
conformed fully in all material respects with the requirements of the Act, the
Rules and Regulations, the Trust Indenture Act of 1939, as amended to the date
hereof (the "Trust Indenture Act"), and the rules and regulations thereunder,
and does not include any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein not misleading as of the
time when the Registration Statement becomes effective and at all times
subsequent thereto up to the Closing Date (as defined in Section 3 hereof). The
Registration Statement and Prospectus, and any and all amendments or supplements
thereto, are in accordance with the Act and the Rules and Regulations, will in
all material respects conform to the requirements of the Act and the Rules and
Regulations, and the indenture filed as an exhibit thereto to be dated as of
November 1, 1996 (the "Indenture") between the Company and M&I First National
Bank, as Trustee (the "Trustee"), under which the Notes will be issued, will be
duly qualified under and will conform in all material respects to the
requirements of, the Trust Indenture Act and the rules and regulations
thereunder, and neither the Registration Statement nor the Prospectus, nor any
amendment or supplement thereto, will include any 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 not misleading;
(e) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, there has not been, and prior to
the Closing Date there will not be, any material change in the capital stock or
debt of the Company or of the Bank (which entity is also included within the use
herein of the term "subsidiaries") or in the consolidated capitalization of the
Company and its subsidiaries or any material adverse change in the general
affairs, management, financial position, net worth or results of operations of
the Bank or of the Company and its subsidiaries considered as a whole, otherwise
than as set forth and described in the Prospectus;
(f) All real properties owned by the Company and its subsidiaries are
held under good and marketable title in fee simple, free and clear of all liens,
claims, encumbrances, easements, covenants and restrictions, subject only to
defects and encumbrances which do not materially affect the value of such
property and do not interfere with the conduct of the business as set forth and
described in the Prospectus; and all real properties held by the Company and its
subsidiaries under lease are held under valid and enforceable leases subject
only to such exceptions as are not material and do not interfere with the
conduct of the business of the Company and its subsidiaries;
(g) The Company is duly registered under the Federal Bank Holding
Company Act of 1956, as amended to the date hereof ("Bank Holding Company Act")
and is in compliance with the rules and regulations thereunder, and the Company
and each subsidiary thereof are in material compliance with, and conduct their
respective businesses in conformity with, all applicable laws and governmental
regulations, including, without limitation, all laws and governmental
regulations governing bank holding companies and banks of all federal and state
jurisdictions to which they are subject. To the best knowledge of the Company,
no change in such laws or regulations has been proposed or is under
consideration which, if made effective, would have an adverse effect upon the
financial condition or operations of the Company and its subsidiaries. Neither
the Company nor any of its subsidiaries is charged with, or, to their knowledge,
is under investigation with respect to, any violation of any such statutes or
regulations, or, except as set forth and described in the Prospectus, is the
subject of any pending or threatened adverse proceedings by any regulatory
authority having jurisdiction over its business, operations or properties other
than as set forth and described in the Prospectus;
(h) There are no legal or governmental proceedings pending to which
the Company or any of its subsidiaries is a party or of which any property of
the Company or any of its subsidiaries is the subject, other than as set forth
and described in the Prospectus and other than proceedings incident to the
conduct in the ordinary course of the kinds of business conducted by the Company
and its subsidiaries which, if determined adversely to the Company and its
subsidiaries, would have a material adverse effect on the business, financial
position, net worth or results of operations of the Company or such
subsidiaries; and no such proceedings are known by the Company to be threatened
or contemplated by governmental authorities or others except as set forth and
described in the Prospectus;
(i) The issuance and sale of the Notes and the compliance by the
Company with all of the provisions of the Notes, the Indenture and this
Agreement will not contravene, conflict with, result in a breach or violation
of, constitute a default under or result in the creation or imposition of any
lien, charge, or encumbrance upon any of the property or assets of the Company
or any of its subsidiaries or any of the terms or provisions of any contract,
license, indenture, mortgage, deed of trust, loan agreement, lease, financing
agreement or other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries may
be bound or to which any of the property or assets of the Company or any of its
subsidiaries is subject, nor will such action result in any violation of the
provisions of the Certificate (or Articles) of Incorporation or the By-Laws of
the Company or any of its subsidiaries, or of any applicable statute, order,
rule or regulation known to the Company of any court or of any foreign, federal,
state or other regulatory authority or other governmental body having
jurisdiction over the Company, the Bank or any other subsidiary of the Company,
and no consent, approval, authorization, order, registration or qualification
of, or with, any court, public board, agency or any such regulatory authority,
instrumentality or other governmental body is required for the issuance and sale
of the Notes as contemplated by this Agreement, or the execution, delivery or
performance of the Indenture, except the registration under the Act of the
Notes, the qualification of the Indenture under the Trust Indenture Act and such
consents, approvals, authorizations, registrations or qualifications as may be
required under state securities or blue sky laws in connection with the public
offering of the Notes or as otherwise set forth and described in the Prospectus;
(j) This Agreement has been duly authorized, executed and delivered
on behalf of the Company and is a valid and binding agreement of the Company
enforceable in accordance with its terms;
(k) The Notes have been duly authorized, and, when authenticated as
contemplated by the Indenture and issued and delivered pursuant to this
Agreement, will have been duly executed, authenticated, issued and delivered and
will constitute valid and legally enforceable binding obligations of the Company
entitled to the benefits provided by the Indenture, which will be substantially
in the form filed as an exhibit to the Registration Statement; and the Indenture
has been duly authorized by the Company and, when executed and delivered by the
Company and the Trustee, will constitute a valid and legally binding instrument
of the Company enforceable in accordance with its terms;
(l) All taxes payable in connection with the execution or delivery of
the Indenture have been paid;
(m) Deloitte & Touche LLP and McGladrey & ▇▇▇▇▇▇, LLP, who have
certified certain of the financial statements filed with the Commission as parts
of the Registration Statement and Prospectus, are independent certified public
accountants as required by the Act and the Rules and Regulations; and
(n) The consolidated financial statements and schedules relating to
the Company and its subsidiaries in the Registration Statement present fairly
the consolidated financial position and results of operations of the Company and
its subsidiaries as of the dates (and for the periods set forth therein) and
such statements (including the related notes thereto) have been prepared in
accordance with generally accepted accounting principles consistently applied
throughout the periods involved.
3. PURCHASE, SALE AND DELIVERY. Subject to the terms and conditions
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herein set forth, the Company agrees to issue and sell to you, and you agree to
purchase from the Company, the Notes for a purchase price of $9,625,000 plus
accrued interest from November 1, 1996 to the Closing Date.
The certificates for the Notes, in definitive form and in such
authorized denominations and registered in such names as you may request upon at
least 48 hours prior notice to the Company, to be purchased by you shall be
delivered by or on behalf of the Company to you at the offices of ▇▇▇▇▇ &
Lardner, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, or at some other
location to which you and the Company agree, and at such time and date as you
may designate in writing, but in no event later than 10:00 A.M. Milwaukee,
Wisconsin time, on ------------, 1996, such time and date being herein called
the "Closing Date." Such certificates will be made available for checking and
packaging at the offices of ▇▇▇▇▇ & ▇▇▇▇▇▇▇, at least 24 hours prior to the
Closing Date.
The certificates for the Notes shall be delivered as described above
against payment by you on the Closing Date of the purchase price therefor by
wire transfer pursuant to the orders of the Company.
4. COVENANTS OF THE COMPANY. The Company covenants and agrees with
------------------------
you that:
(a) The Company will use its best efforts to cause the Registration
Statement to become effective at the earliest possible time as you may designate
or request, and will advise you and your legal counsel promptly and confirm such
advice in writing:
(i) when the Registration Statement has become effective;
(ii) 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 or registration of the
Notes for sale in any jurisdiction or the initiation or threatening of
any proceedings for that purpose; and
(iii)of any request of the Commission for amendment or
supplement of the Registration Statement (either before or after it
becomes effective), the Prospectus, any Preliminary Prospectus or for
additional information.
The Company will use its best efforts to prevent the issuance of any stop order
and to obtain as soon as possible the lifting thereof, if issued. The Company
will not file any amendment or supplement to the Registration Statement (either
before or after it becomes effective), any Preliminary Prospectus or the
Prospectus before you and your legal counsel have been furnished a copy prior to
the filing, or to which you or your legal counsel shall have objected;
(b) If at any time when a prospectus relating to the Notes is
required to be delivered under the Act any event occurs as a result of which the
Prospectus as then amended or supplemented would include an untrue statement of
a material fact, or omit to state any material fact 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
to comply with the Act or the Rules and Regulations, the Company will promptly
advise you and your legal counsel 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;
(c) Not later than sixteen months after the effective date of the
Registration Statement the Company will make generally available to its security
holders an earnings statement (as defined in Rule 158 under the Act) covering a
period of at least twelve months beginning after such effective date, which will
satisfy the provisions of the last paragraph of Section 11(a) of the Act and
Rule 158 promulgated thereunder;
(d) The Company will use its best efforts, when and as required by
you or your legal counsel, to furnish information and otherwise cooperate in
qualifying or registering the Notes for sale under the laws of such
jurisdictions as you may designate, and will continue such qualifications or
registrations in effect for so long as you may request to effect the
distribution of the Notes;
(e) So long as the Notes shall be outstanding, the Company will
furnish to you and your legal counsel, as soon as practicable after the end of
each fiscal year, a consolidated balance sheet and consolidated statements of
income and stockholders' equity of the Company and its subsidiaries at the end
of and for such year, all in reasonable detail and examined and certified by
independent certified public accountants; and the Company will furnish to you
and your legal counsel:
(i) as soon as practicable after the end of each quarterly
fiscal period (except for the last quarterly fiscal period of each
fiscal year), a consolidated balance sheet and consolidated statement
of income of the Company and its subsidiaries for such period (which
need not be audited);
(ii) as soon as available, a copy of each and any report of
the Company or of the Bank mailed to stockholders thereof or filed
with the Commission; and
(iii)from time to time such other information
concerning the Company as you or your legal counsel may request.
(f) Regardless of whether or not the sale of the Notes provided for
herein is consummated, the Company will pay all expenses incident to the sale of
the Notes hereunder and the performance of the obligations of the Company under
this Agreement. Without limiting the generality of the foregoing, and subject
only to the exceptions specifically referred to below, the expenses to be paid
by the Company as aforesaid shall include such of the following as are incident
to the sale of the Notes hereunder:
(i) expenses incident to the performance of the obligations
of the Company under paragraphs (c) and (e) of Section 4 hereof;
(ii) the fees and expenses of the Trustee;
(iii)the printing and preparation of certificates for
the Notes;
(iv) all fees and disbursements of legal counsel for the
Company, of your legal counsel and of Deloitte & Touche LLP and
McGladrey & ▇▇▇▇▇▇, LLP, limited in the case of legal fees (but not
disbursements) of your counsel to $50,000;
(v) the cost of obtaining, preparing, printing,
reproducing, filing and furnishing to you and your legal counsel the
Registration Statement, Prospectus, Preliminary Prospectus, the
Indenture and any and all amendments and supplements to all such
documents, this Agreement, and any other documents required to be
filed or furnished to you or your legal counsel by the Company
pursuant to this Agreement;
(vi) all costs, fees and expenses, including legal counsel
fees, incident to registering or qualifying the Notes under the
securities or blue sky laws of the several states pursuant to Section
4(d) hereof; and
(vii)all fees payable to the National Association of
Securities Dealers, Inc.
(g) There shall be delivered to you and your legal counsel on the
effective date of the Registration Statement, and from time to time thereafter
during such period as in the opinion of your counsel a prospectus is required by
law to be delivered in connection with sales of the Notes, so many copies of the
Prospectus (as supplemented or amended if the Company shall have prepared any
supplements or amendments thereof) as you or your legal counsel may request, and
to you and your legal counsel, prior to the effective date of the Registration
Statement, such number of copies of the Preliminary Prospectus as you or your
legal counsel may request. No charge shall be made for furnishing any thereof;
(h) There shall be delivered to you and your legal counsel, without
charge, two signed copies of the Registration Statement, including all exhibits
thereto and of any amendments or supplements made to the Registration Statement
subsequent to its effective date, and to you and your legal counsel, without
charge, such reasonable number of conformed copies of the Registration Statement
(excluding exhibits) and of any amendments or supplements made to the
Registration Statement subsequent to its effective date as you or your legal
counsel may request; and
(i) The Company will comply with, or cause to be complied with, the
conditions precedent to your obligations specified in Section 5 hereof.
5. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITER. Your
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obligations to purchase and pay for the Notes on the Closing Date shall be
subject to the accuracy, as of the date hereof and as of the Closing Date, of
the representations and warranties on the part of the Company herein set forth,
to the accuracy of the Statements of Company officers made pursuant to the
provisions hereof, to the performance by the Company of its obligations
hereunder, and to the following additional conditions:
(a) The Registration Statement shall have become effective not later
than 5:30 P.M., Milwaukee, Wisconsin time, on the date of this Agreement, or
such later date or time as shall have been consented to in writing by you, and
prior to the Closing Date:
(i) 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 after due inquiry of the Commission, or
you, shall be contemplated by the Commission;
(ii) trading in securities on the New York Stock Exchange
shall not have been suspended and minimum or maximum prices shall not
have been established on such Exchange;
(iii)no banking moratorium shall have been declared by
Iowa, Illinois, New York, Wisconsin or United States authorities;
(iv) the United States shall not have become engaged in
hostilities which have resulted in a declaration of a national
emergency or declaration of war and which, in your judgment, render it
inadvisable to proceed with the public offering or the delivery of the
Notes; and
(v) neither the Company nor any of its subsidiaries shall
have sustained since March 31, 1996, any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or
governmental action, order or decree; since the respective dates as of
which information is given in the Prospectus there shall not have been
any change in the Capital Stock or debt of the Company or the Bank or
a change, or a development involving a prospective change, in or
affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company, the Bank
or any other subsidiary otherwise than as set forth and described in
the Prospectus; and operating, political, international, economic or
market conditions shall not exist, as of the date hereof or as the
Closing Date, the effect of which, in any case described in this
clause (a), is in your judgment so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering of
the Notes at 100% of the principal amount thereof.
(b) The Notes shall have been qualified or registered for sale under
the state securities or blue sky laws of such jurisdictions as shall have been
specified by you prior to the date hereof;
(c) You shall not have advised the Company that the Registration
Statement or Prospectus, or any amendment or supplement thereto, contains an
untrue statement of fact which, in the opinion of your legal counsel is
material, or omits to state a fact which, in the opinion of such legal counsel,
is material and is required to be stated therein or is necessary to make the
statements therein not misleading;
(d) Prior to the effective date of the Registration Statement and
prior to the Closing Date you shall have received an opinion or opinions of
Winthrop & Weinstine, P.A., as counsel for the Company, dated as of the
effective date and the Closing Date, respectively, in form satisfactory to you
and your legal counsel, to the effect contained in paragraphs (a), (f)
(provided, however, that the opinion of such counsel with respect to paragraph
(f) of Section 2 hereof shall be limited solely to the status of title of the
Company's banking facility located at 230-18th Street, Rock Island, Illinois),
(g), (h) and (i) of Section 2 hereof (in each of these respective paragraphs
where the Company has qualified its representations and warranties to the best
of its knowledge, such counsel may do the same, and with respect to paragraphs
(h) and (i) of Section 2 hereof, such counsel may qualify its opinion, to the
extent acceptable to you and your legal counsel, to the best of its knowledge
after due inquiry of each of the current directors of the Company) and further
to the effect that:
(i) the Company is duly registered under the Bank Holding
Company Act and is in compliance in all material respects with the
provisions thereof and the rules and regulations thereunder, and, the
Company and each subsidiary thereof are in compliance with, and
conduct their respective businesses in conformity with, all other
applicable laws and governmental regulations of jurisdictions to which
they are subject; provided, however, that no opinion need be expressed
by such counsel as to whether the Company and each subsidiary thereof
are in compliance with, and conduct their respective businesses in
conformity with, all applicable laws and governmental regulations
governing the making and enforceability of any loan made by the
Company or any of its subsidiaries to third parties;
(ii) the Company has full power and authority to enter into
and perform this Agreement and the Indenture and to issue and sell the
Notes hereunder and this Agreement and the performance of the
Company's obligations hereunder have been duly authorized by all
necessary corporate action and this Agreement has been duly executed
and delivered by and on behalf of the Company and is a validly and
legally enforceable binding obligation of the Company except to the
extent that rights to indemnification may be limited by public policy
and under the federal securities laws or by any orders, rules and
regulations thereunder, and by order of any court;
(iii)the Notes have been duly authorized, executed,
authenticated, issued and delivered and constitute valid and legally
enforceable binding obligations of the Company entitled to the
benefits provided by the Indenture except as the same may be limited
by bankruptcy, insolvency, reorganization or other laws relating to or
affecting the enforcement of creditors' rights; the terms of the Notes
and the Indenture substantially conform to the descriptions thereof in
the Prospectus;
(iv) the Indenture has been duly authorized, executed and
delivered by the Company, and (assuming that the Indenture has been
duly authorized, executed and delivered by the Trustee) constitutes a
valid and legally enforceable binding instrument of the Company
enforceable against the Company in accordance with its terms, except
as the same may be limited by bankruptcy, insolvency, reorganization
or other laws relating to or affecting the enforcement of creditors'
rights and except to the extent that rights to indemnification may be
limited by public policy and under the federal securities laws or by
any orders, rules and regulations thereunder, and by any order of any
court;
(v) all taxes and fees required to be paid with respect to
the execution of the Indenture and the issuance of the Notes have been
paid; and there is no need to file or record the Indenture with any
governmental authority except in connection with compliance with
federal and state securities laws;
(vi) all of the issued shares of capital stock of the
Company as set forth in the Prospectus have been duly and validly
authorized and issued and are fully paid and nonassessable and conform
to the description thereof contained in the Prospectus; and, except to
the extent described in the Prospectus, all outstanding shares of
stock of each subsidiary of the Company are owned by the Company or
another subsidiary of the Company, have been duly and validly
authorized and issued, are fully paid and nonassessable, and except to
the extent described in the Prospectus, including the financial
statements and notes thereto, the shares of stock of each subsidiary
owned by the Company or a subsidiary thereof are held free and clear
of liens and encumbrances;
(vii)the Registration Statement has become effective
under the Act and the Commission has not issued an order preventing or
suspending the use of any Preliminary Prospectus, the Prospectus or
the effectiveness of the Registration Statement, and to the best of
such counsel's knowledge after due inquiry of the Commission, no
proceedings for that purpose have been instituted or are pending or
contemplated under the Act, and the Registration Statement, the
Prospectus and each amendment and supplement thereto made by the
Company prior to the Closing Date (other than the financial statements
and related schedules thereto, as to which such counsel need express
no opinion) comply as to form in all material respects with the
requirements of the Act, the Rules and Regulations, the Trust
Indenture Act and the rules and regulations thereunder; the
descriptions in each Preliminary Prospectus and in the Prospectus of
statutes, legal proceedings, contracts and other documents are
accurate in all material respects and present fairly the information
contained therein; such counsel has no reason to believe that the
Registration Statement, any Preliminary Prospectus, the Prospectus or
any amendment or supplement thereto as of the date of such opinion
contains any untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading (other than financial statements and
related schedules thereto, as to which such counsel need express no
opinion); and such counsel does not know, after due inquiry and
investigation, of any contracts, leases, agreements or other
documents, or transactions or relationships of a character required to
be filed as an exhibit to the Registration Statement or required to be
described in the Registration Statement, any Preliminary Prospectus,
the Prospectus or any amendment or supplement thereto which are not
filed or described as required (no opinion need be given as to
consents, approvals, authorizations, registrations or qualifications
required under state securities or blue sky laws in connection with
the public offering of the Notes by you); and
(viiii)the opinion of such counsel may also be subject to
the following matters: (A) the enforceability of each of the
documents herein is subject to applicable statutes of limitations; and
(B) the availability of the remedy of specific performance, injunctive
relief or any other equitable remedy is subject to the discretion of
the court before which any proceedings therefor may be brought.
(e) All corporate proceedings and related matters in connection with
the organization of the Company and the registration, qualification,
authorization, issue, sale and delivery of the Notes shall have been
satisfactory to ▇▇▇▇▇ & ▇▇▇▇▇▇▇, legal counsel to you, and ▇▇▇▇▇ & Lardner shall
have been furnished with such papers and information as they may have requested
to enable them to pass upon the matters referred to in this paragraph (e);
(f) you shall have received a certificate of the Company signed by
its chief executive officer and its principal financial or accounting officer,
dated the Closing Date, to the effect that:
(i) the representations and warranties of the Company set
forth in Section 2 of this Agreement were true and correct as of the
date of this Agreement and are true and correct as of the Closing
Date, as if again made on and as of the Closing Date, and the Company
has complied with all of the agreements and satisfied all of the
conditions to be performed or satisfied by it at or prior to the
Closing Date;
(ii) no stop order preventing or suspending the
effectiveness of the Registration Statement has been issued; the
Commission has not issued an order preventing or suspending the use of
any Preliminary Prospectus or the Prospectus filed as part of the
Registration Statement or any amendment or supplement thereto; and to
the best of the knowledge of such officers after due inquiry and
investigation of the Commission, no proceedings for that purpose have
been instituted or are pending or contemplated under the Act;
(iii)each of the respective signatories of the
certificate has carefully examined the Registration Statement, each
Preliminary Prospectus and the Prospectus and, in his or her opinion
and to the best of his or her knowledge, information and belief, the
Registration Statement, each Preliminary Prospectus and the Prospectus
and any amendment or supplement thereto, contain all statements
required to be stated therein, and neither the Registration Statement,
any Preliminary Prospectus nor the Prospectus nor any amendment or
supplement thereto includes any untrue statement of a material fact or
omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and, since
the effective date of the Registration Statement, there has occurred
no event required to be set forth in an amended or supplemented
prospectus which has not been so set forth; and
(iv) since the latest dates as of which information is given
in the Registration Statement and the Prospectus, there has not been
any adverse change or a development involving a prospective adverse
change in the business, properties, financial condition or earnings of
the Company or its subsidiaries on a consolidated basis, whether or
not arising from transactions in the ordinary course of business,
except as disclosed in said Registration Statement or Prospectus as
theretofore amended; since such dates and except as so disclosed or in
the ordinary course of business, neither the Company nor any of its
subsidiaries has incurred any material liability or obligation, direct
or indirect, or entered into any other material transaction; since
such dates and except as so disclosed, there has not been any material
change in the capital stock, short-term debt or long-term debt of the
Company or any of its subsidiaries and neither the Company nor any of
its subsidiaries has declared or paid any dividend, or made any other
distribution, upon its outstanding shares of Common Stock payable to
stockholders of record on a date prior to the Closing Date, except
that in August 1996 the Company declared dividends of approximately
$236,514, which were paid in September 1996; since such date and
except as so disclosed, the Company and its subsidiaries have not
incurred any material contingent obligations, and no material
litigation is pending or threatened against the Company or any such
subsidiary; and, since such date and except as so disclosed, neither
the Company nor any such subsidiary has sustained a material loss or
interference by strike, labor dispute, fire, explosion, flood,
windstorm, accident or other calamity (whether or not insured) or from
any court or governmental action, order or decree.
The delivery of the certificate provided for in this paragraph (f)
shall be and constitute a representation and warranty of the Company as to the
facts required in the immediately foregoing subparagraphs (i), (ii), (iii) and
(iv) of this paragraph (f) to be set forth in said certificate.
(g) At the time this Agreement is executed by the Company, you shall
have received a letter addressed to you from Deloitte & Touche LLP and McGladrey
& ▇▇▇▇▇▇, LLP, independent certified public accountants, dated as of a date not
more than five business days prior to the date of this Agreement (which letter
shall be confirmed on the Closing Date with another letter as of the date not
more than five business days prior to the Closing Date), as to certain financial
or accounting matters previously requested by you. There shall not have been
any change or decrease specified in any of these letters which make it
impractical or inadvisable in your judgment to proceed with the purchase or sale
of the Notes as contemplated hereby;
(h) Such further certificates and documents as you or your legal
counsel may request.
6. REIMBURSEMENT OF YOUR EXPENSES. If the sale of the Notes
------------------------------
provided for herein is not consummated because any condition to your obligations
hereunder are not satisfied or because of any refusal, inability or failure on
the part of the Company to perform any agreement herein or comply with any
provision hereof, the Company will reimburse you upon demand for all out-of-
pocket expenses (including reasonable fees and disbursements of legal counsel)
that shall have been incurred by you and them in connection with the proposed
purchase and sale of the Notes, and the Company shall not have any further
liability hereunder except as provided in Section 4 and Section 7 hereof.
7. INDEMNIFICATION.
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(a) The Company will indemnify and hold you harmless against any
losses, claims, damages or liabilities (or actions in respect thereof) to which
you may become subject, which arise out of or are based upon any untrue
statement 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 in any application filed under any blue sky
law or other document executed by the Company specifically for that purpose or
based upon written information furnished by the Company and filed in any state
or other jurisdiction in order to qualify or register any or all of the Notes
under the securities laws thereof (any such document, application or information
being hereinafter referred to as a "Blue Sky Application"), 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 you for any legal or other expenses incurred by
you in connection with investigating or defending any such action or claim;
provided, however, that the Company shall not be liable in any such case to the
extent that 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, Preliminary Prospectus, the
Prospectus, any amendment or supplement thereto or in any Blue Sky Application
in reliance upon and in conformity with written information furnished to the
Company by you expressly for use therein.
The indemnity agreement provided for in this paragraph (a) shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls you
within the meaning of the Act.
(b) You will indemnify and hold harmless the Company against any
losses, claims, damages or liabilities to which the Company may become subject
(or actions in respect thereof) which arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, the Preliminary Prospectus, the Prospectus, any
amendment or supplement thereto or in any Blue Sky Application, 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 you for any legal or other expenses incurred
by you in connection with investigating or defending any such action or claim,
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, the Preliminary Prospectus, the Prospectus, or any
amendment or supplement thereto or in any Blue Sky Application, in reliance upon
and in conformity with written information furnished to the Company by you
expressly for use therein.
The indemnity agreement in this paragraph (b) shall be in addition to
any liability which you may otherwise have and shall extend, upon the same terms
and conditions, to each officer and director of the Company and to each person,
if any, who controls the Company within the meaning of the Act and the Rules and
Regulations. Notwithstanding the provisions of this Section, you shall not be
required to indemnify the Company in any amount in excess of the total price at
which the Notes purchased by you hereunder were offered to the public.
(c) Promptly after receipt by an indemnified party under paragraph
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subdivision, notify the indemnifying party in
writing of the commencement thereof; but the omission to so notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subdivision. In case any such
action shall be brought against any indemnified party, and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate in, and, to the extent that it shall wish, jointly with
any other indemnifying party similarly notified, to assume the defense thereof,
with counsel satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to such indemnified
party under such subdivision for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof, other
than reasonable costs of investigation; and
(d) If the indemnification provided for in this Section is
unavailable to an indemnified party under paragraph (a) or (b) hereof in respect
of any losses, claims, damages or liabilities referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall,
subject to the limitations hereinafter set forth, contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims, damages
or liabilities:
(i) in such proportion as is appropriate to reflect the
relative benefits received by the Company and you from the purchase
and sale of the Notes; or
(ii) if the allocation provided by subparagraph (i) above is
not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in subparagraph
(i) above, but also the relative fault of the Company and you in
connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities, as well as any other relevant
equitable considerations.
The respective relative benefits received by the Company and you shall
be deemed to be in such proportion so that you are responsible for the portion
of the losses, claims, damages or liabilities represented by the percentage that
the "Underwriting Discounts and Commissions per Note" appearing on the cover
page of the Prospectus bears to the "Price to Public per Note" appearing
thereon, and the Company and its officers, directors and controlling persons, in
the aggregate, jointly and severally, are responsible for the remaining portion.
The relative fault of the Company and you 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 you and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims, damages
and liabilities referred to above shall be deemed to include, subject to the
limitations set forth in paragraph (c) of this Section, any legal or other fees
or expenses reasonably incurred by such party in connection with investigating
or defending any action or claim.
The Company and you agree that it would not be just and equitable if
contribution pursuant to this Section were determined by pro rata or per capita
allocation or by any other method or allocation which does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section, you shall not be required to
contribute any amount in excess of the amount by which the total price at which
the Notes underwritten by you and distributed to the public were offered to the
public exceeds the amount of any damages which you have 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 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
8. SURVIVAL OF PROVISIONS. The respective agreements, indemnities,
----------------------
representations, warranties and other statements of the Company and you 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 you, the Company
or any of its officers or directors or any controlling person, and will survive
delivery of and payment of the Notes.
9. NOTICES. Any notices which you may desire or be required to give
-------
to the Company hereunder shall be deemed to be duly given when sent by telegram
addressed to, or when delivered to Financial Services Corporation of the
Midwest, ▇▇▇ - ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇. Any
notice which the Company may desire or be required to give to you hereunder
shall be deemed to be duly given when sent by telegram addressed to, or when
delivered to you at ▇.▇. ▇▇▇▇▇▇▇ and Company, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
10. SUCCESSORS. This Agreement will inure to the benefit of and be
----------
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 7, and no other
person will have any right or obligation hereunder. The term "successors" as
used in this agreement shall not include any purchasers, as such purchaser, from
you of any of the Notes.
11. APPLICABLE LAW. This Agreement shall be construed in accordance
--------------
with the laws of the State of Illinois applicable to contracts made and to be
performed in that state.
12. COUNTERPARTS. This Agreement may be executed in two or more
------------
fully or partially executed counterparts, each of which shall be deemed an
original binding the signatory thereof, and the entity on whose behalf this
Agreement is executed, against the other party hereto, but all counterparts
together shall constitute one and the same instrument; provided, however, that
you shall have no obligation or liability hereunder until the Company has
executed this Agreement.
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Company and you in
accordance with its terms.
Very truly yours,
FINANCIAL SERVICES CORPORATION
OF THE MIDWEST
By:---------------------------
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
▇.▇. ▇▇▇▇▇▇▇ AND COMPANY
By: ------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Senior Vice President
