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EXHIBIT 1
1,530,000 SHARES
▇▇▇▇▇▇ CAPITAL GROUP, INC.
____% NONCUMULATIVE PERPETUAL PREFERRED STOCK, SERIES A
PURCHASE AGREEMENT
January ___, 1997
▇▇▇▇▇ ▇▇▇▇▇▇▇ INC.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & CO. INCORPORATED
c/o ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇ Tower
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
▇▇▇▇▇▇ Capital Group, Inc., a Delaware corporation (the "Company"),
proposes to sell to ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc. and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated
(the "Underwriters") an aggregate of 1,530,000 shares (the "Firm Shares" or the
"Securities") of ____% Noncumulative Perpetual Preferred Stock, Series A, $.01
par value per share (the "Preferred Stock"), of the Company.
The Company hereby confirms its agreement with respect to the sale of the
Securities to the Underwriters. The Company intends to contribute the proceeds
from the sale of the shares of Preferred Stock to the capital of ▇▇▇▇ ▇▇▇▇▇▇
Bank (the "Bank") which as of the Closing Date (as hereinafter defined) will
be a wholly owned subsidiary of the Company. The Company will acquire the Bank
and CT Mortgage Company (the "Mortgage Company" and collectively with the Bank
and each other entity 50% or more of the voting capital stock of which is owned
directly or indirectly by the Company, the Mortgage Company or the Bank, the
"Subsidiaries") through a series of transactions (the "Split-Off Transactions")
described in the Registration Statement (as defined below) and in an Amended
and Restated Share Exchange Agreement dated as of June 12, 1996 (the "Share
Exchange Agreement"), among ▇▇▇▇ ▇▇▇▇▇▇ Financial Group, Inc. ("CTFG") and the
persons named in Schedule 7(b) thereto (such persons being herein referred to
collectively as the "▇▇▇▇▇▇ Family" and individually a "▇▇▇▇▇▇ Family Member").
An aggregate of 4.5 million shares of common stock, par value ___ per share
(the "Common Stock") has been and is being offered and sold (the "Common Stock
Offering"), in transactions in reliance on the exemption from registration
under Section 4(2) of the Act (as defined below), to the ▇▇▇▇▇▇ Family and the
Company's 401(k)/Profit Sharing Employee Stock Ownership Plan (the "Profit
Sharing/ESOP" and collectively with the ▇▇▇▇▇▇ Family, the "▇▇▇▇▇▇ Group"), all
as more fully described in the Registration Statement (as defined below).
1. Registration Statement and Prospectus. A registration statement on
Form S-1 (File No. 333-14713) with respect to the Securities, including a
preliminary form of prospectus, has been prepared by the Company in conformity
with the requirements of the Securities Act of 1933, as amended (the "Act"),
and the rules and regulations ("Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder and has been filed with the
Commission; one or more
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amendments to such registration statement have also been so prepared and have
been, or will be, so filed; and, if the Company has elected to rely upon Rule
462(b) of the Rules and Regulations to increase the size of the offering
registered under the Act, the Company will prepare and file with the Commission
a registration statement with respect to such increase pursuant to Rule 462(b).
Copies of such registration statement(s) and amendments and each related
preliminary prospectus have been delivered to you.
If the Company has elected not to rely upon Rule 430A of the Rules and
Regulations, the Company has prepared and will promptly file an amendment to
the registration statement and an amended prospectus (including a term sheet
meeting the requirements of Rule 434 of the Rules and Regulations). If the
Company has elected to rely upon Rule 430A of the Rules and Regulations, it
will prepare and file a prospectus (or a term sheet meeting the requirements of
Rule 434) pursuant to Rule 424(b) that discloses the information previously
omitted from the prospectus in reliance upon Rule 430A. Such registration
statement as amended at the time it is or was declared effective by the
Commission, and, in the event of any amendment thereto after the effective date
and prior to the Closing Date (as hereinafter defined), such registration
statement as so amended (but only from and after the effectiveness of such
amendment), including a registration statement (if any) filed pursuant to Rule
462(b) of the Rules and Regulations increasing the size of the offering
registered under the Act and information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rules 430A(b)
and 434(d) of the Rules and Regulations, is hereinafter called the
"Registration Statement." The prospectus included in the Registration
Statement at the time it is or was declared effective by the Commission is
hereinafter called the "Prospectus," except that if any prospectus (including
any term sheet meeting the requirements of Rule 434 of the Rules and
Regulations provided by the Company for use with a prospectus subject to
completion within the meaning of Rule 434 in order to meet the requirements of
Section 10(a) of the Rules and Regulations) filed by the Company with the
Commission pursuant to Rule 424(b) (and Rule 434, if applicable) of the Rules
and Regulations or any other such prospectus provided to the Underwriters by
the Company for use in connection with the offering of the Securities (whether
or not required to be filed by the Company with the Commission pursuant to Rule
424(b) of the Rules and Regulations) differs from the prospectus on file at the
time the Registration Statement is or was declared effective by the Commission,
the term "Prospectus" shall refer to such differing prospectus (including any
term sheet within the meaning of Rule 434 of the Rules and Regulations) from
and after the time such prospectus is filed with the Commission or transmitted
to the Commission for filing pursuant to such Rule 424(b) (and Rule 434, if
applicable) or from and after the time it is first provided to the Underwriters
by the Company for such use. The term "Preliminary Prospectus" as used herein
means any preliminary prospectus included in the Registration Statement prior
to the time it becomes or became effective under the Act and any prospectus
subject to completion as described in Rule 430A or 434 of the Rules and
Regulations.
2. Representations and Warranties. The Company represents and warrants
to, and agrees with each Underwriter as follows:
(a) No order preventing or suspending the use of any Preliminary
Prospectus prior to the time it becomes or became effective under the Act has
been issued by the Commission and each Preliminary Prospectus, at the time of
filing thereof, did not contain an untrue statement of a material fact or omit
to state a 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; except that the foregoing shall not apply to statements
in or omissions from any Preliminary Prospectus in reliance upon, and in
conformity with, written information furnished to the Company by either
Underwriter, specifically for use in the preparation thereof.
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(b) As of the time the Registration Statement (or any post-effective
amendment thereto, including a registration statement (if any) filed pursuant
to Rule 462(b) of the Rules and Regulations increasing the size of the offering
registered under the Act) is or was declared effective by the Commission, upon
the filing or first delivery to the Underwriters of the Prospectus (or any
supplement to the Prospectus (including any term sheet meeting the requirements
of Rule 434 of the Rules and Regulations) and at the Closing Date (as
hereinafter defined), and (A) the Registration Statement (in each case, as so
amended and/or supplemented) conformed or will conform in all material respects
to the requirements of the Act and the Rules and Regulations, (B) the
Registration Statement (as so amended) did not or will not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
(C) the Prospectus (as so supplemented) did not or will not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances in which they are or were made, not misleading; except that the
foregoing shall not apply to statements in or omissions from any such document
in reliance upon, and in conformity with, written information furnished to the
Company by either Underwriter, specifically for use in the preparation thereof.
If the Registration Statement has been declared effective by the Commission,
no stop order suspending the effectiveness of the Registration Statement has
been issued, and no proceeding for that purpose has been initiated or, to the
Company's knowledge, threatened by the Commission.
In connection with the Common Stock Offering, the information (the
"Information") transmitted by the Company to the ▇▇▇▇▇▇ Group relating to the
Company and its Subsidiaries and the Common Stock Offering did not or will not
include an untrue statement of a material fact or omit to state a material fact
therein necessary to make the statements therein, in light of the circumstances
in which they are or were made, not misleading.
(c) The financial statements of the Bank, together with the notes thereto,
set forth in the Registration Statement and Prospectus comply in all material
respects with the requirements of the Act and the Rules and Regulations and
fairly present the financial condition of the Bank as of the dates indicated
and the results of operations and changes in cash flows for the periods therein
specified in conformity with generally accepted accounting principles
consistently applied throughout the periods involved (except as otherwise
stated in the Registration Statement and Prospectus and subject, in the case of
unaudited financial statements, to normal year end adjustments which in the
opinion of management are not material); and the supporting schedules included
in the Registration Statements present fairly the information required to be
stated therein; and the historical financial information and statistical data
set forth in the Prospectus under the captions "Summary Selected Financial
Data" and "Selected Bank Financial Data" are fairly stated in all material
respects in relation to the financial statements from which they have been
derived. The pro forma financial data included in the Registration Statement
and the Prospectus present fairly the information shown therein, comply in all
material respects with the requirements of the Act and the Rules and
Regulations with respect to pro forma financial statements, have been properly
compiled on the pro forma basis described therein and the assumptions used in
the preparation thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions or circumstances referred to
therein. No other financial statements or schedules are required to be
included in the Registration Statement or Prospectus. KPMG Peat Marwick LLP,
which has expressed its opinion with respect to the financial statements and
schedules filed as a part of the Registration Statement and included in the
Registration Statement and Prospectus, are independent public accountants as
required by the Act and the Rules and Regulations.
(d) Each of the Company and its Subsidiaries has been duly incorporated
and is validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation. The
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Company has received approval to become a bank holding company under the Bank
Holding Company Act of 1956, as amended (the "BHC Act"), supervised by the
Board of Governors of the Federal Reserve System (the "FRB"). The Bank is a
state banking corporation under the supervision of the Office of Banks and Real
Estate of Illinois (the "Department") and a member in good standing of the FRB.
All activities of the Bank are among those permitted to Illinois
state-chartered banks under the laws of the State of Illinois and federal law.
The deposit accounts maintained at the Bank are insured by the Federal Deposit
Insurance Corporation (the "FDIC") to the fullest extent permitted by law, and
no proceedings for the termination or revocation of such membership or
insurance are pending or, the knowledge of the Company, threatened. Each of
the Company and its Subsidiaries has full corporate power and authority to own
its properties and conduct its business as currently being carried on and as
described in the Registration Statement and Prospectus, and is duly qualified
to do business as a foreign corporation in good standing under the corporation
and banking laws of each jurisdiction in which it owns or leases real property
or in which the conduct of its business makes such qualification necessary and
in which the failure to so qualify would have a material adverse effect upon
its business, condition (financial or otherwise), earnings, prospects, assets,
results of operations or properties of the Company and its Subsidiaries, taken
as a whole (a "Material Adverse Effect").
(e) Except as contemplated in the Prospectus, subsequent to the respective
dates as of which information is given in the Registration Statement and the
Prospectus, neither the Company nor any of its Subsidiaries has incurred any
material liabilities or obligations, direct or contingent, or entered into any
material transactions, or declared or paid any dividends or made any
distribution of any kind with respect to its capital stock; and there has not
been any change in the capital stock, or any material change in the short-term
or long-term debt, or any issuance of options, warrants, convertible securities
or other rights to purchase the capital stock, of the Company or any of its
Subsidiaries, or any material adverse change in the business, condition
(financial or otherwise), earnings, prospects, assets, results of operations or
properties of the Company and its Subsidiaries, taken as a whole (a "Material
Adverse Change") or any development involving a prospective Material Adverse
Change.
(f) Except as set forth in the Prospectus, there is not pending or, to the
knowledge of the Company, threatened or contemplated, any action, suit or
proceeding to which the Company or any of its Subsidiaries is a party, or to
which either of their assets may be subject, before or by any court or
governmental agency, authority or body, or any arbitrator, which might result
in any Material Adverse Effect.
(g) There are no contracts or documents of the Company or any of its
Subsidiaries that are required to be filed as exhibits to the Registration
Statement by the Act or by the Rules and Regulations that have not been so
filed.
(h) Each of this Agreement, the Indemnity Agreement dated _________, 1997
between the Company and the ▇▇▇▇▇▇ Family (the "Indemnity Agreement") and the
Agreement dated ___________, 1997 among the Company, CTFG and the ▇▇▇▇▇▇ Family
(the "7(c) Agreement") has been duly authorized, executed and delivered by the
Company, and constitutes a valid and binding obligation of the Company,
enforceable in accordance with its terms, except as rights to indemnity and
contribution hereunder may be limited by federal or state securities laws and
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting the rights of creditors generally and
subject to general principles of equity. The execution, delivery and
performance of this Agreement and the Share Exchange Agreement, the Indemnity
Agreement, the 7(c) Agreement and any other agreement executed by the Company
or the Subsidiaries in connection with the Split-Off Transactions (the Share
Exchange Agreement and such other agreements, whether executed by the Company,
any Subsidiary or any
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▇▇▇▇▇▇ Family Member, are collectively referred to as the "Split-Off
Agreements") and the consummation of the transactions herein or therein
contemplated or the Split-Off Transactions will not result in a breach or
violation of any of the terms and provisions of, or constitute a default under,
any statute, any agreement or instrument to which the Company or any Subsidiary
is a party or by which it is bound or to which any of its property is subject,
the Company's or any Subsidiary's charter or by-laws, or any consent, approval,
ruling, order, rule, regulation or decree of any court or governmental agency
or body having jurisdiction over the Company or any Subsidiary or any of its
properties, which in each case might result in any Material Adverse Change; no
consent, approval, authorization or order of, or filing with, any court or
governmental agency or body is required for the execution, delivery and
performance of this Agreement or the Split-Off Agreements or for the
consummation of the transactions contemplated hereby or thereby or of the
Split-Off Transactions, including the issuance or sale of the Securities and
Common Stock by the Company, except such as may be required under the Act or
state securities or blue sky laws or approvals of the FRB, the Internal Revenue
Service, National Association of Securities Dealers, Inc. and the Department,
all of which have been obtained; and the Company has full power and authority
to enter into this Agreement and to authorize, issue and sell the Securities as
contemplated by this Agreement; and the Company and each Subsidiary has full
power and authority to enter into the Split-Off Transactions and Split-Off
Agreements.
(i) All of the issued and outstanding shares of capital stock of the
Company, including the outstanding shares of Common Stock and the shares of
Common Stock to be issued by the Company to the ▇▇▇▇▇▇ Group in the Common
Stock Offering are duly authorized and are, or will be at the Closing Date,
validly issued, fully paid and nonassessable, have been issued, or will have
been issued as of the Closing Date, in compliance with all federal and state
securities laws, were not, or will not be, issued in violation of or subject to
any preemptive rights or other rights to subscribe for or purchase securities,
and the holders thereof are not, or will not be, subject to personal liability
by reason of being such holders (except as contemplated by the Split-Off
Agreements); the Securities which may be sold hereunder by the Company have
been duly authorized and, when issued, delivered and paid for in accordance
with the terms hereof, will have been validly issued and will be fully paid and
nonassessable, and the holders thereof will not be subject to personal
liability by reason of being such holders; and the capital stock of the
Company, including the Common Stock and Preferred Stock, conforms to the
description thereof in the Registration Statement and Prospectus. Except as
otherwise stated in the Registration Statement and Prospectus, there are no
preemptive rights or other rights to subscribe for or to purchase, or any
restriction upon the voting or transfer of, any shares of capital stock
pursuant to the Company's charter, by-laws or any agreement or other instrument
to which the Company is a party or by which the Company is bound. Neither the
filing of the Registration Statement nor the offering or sale of the Securities
as contemplated by this Agreement gives rise to any rights for or relating to
the registration of any shares of Common Stock or other securities of the
Company. All of the issued and outstanding shares of capital stock of each of
the Subsidiaries have been duly and validly authorized and issued and are fully
paid and nonassessable, and, except as otherwise described in the Registration
Statement and Prospectus and the Company or another Subsidiary owns, or on the
Closing Date shall own, of record and beneficially, free and clear of any
security interests, claims, liens, proxies, equities or other encumbrances, all
of the issued and outstanding shares of such Subsidiary capital stock. Except
as described in the Registration Statement and the Prospectus, there are no
options, warrants, agreements, contracts or other rights in existence to
purchase or acquire from the Company or any Subsidiary any shares of the
capital stock of the Company or any Subsidiary. The Company has an authorized
and outstanding capitalization as set forth in the Registration Statement and
the Prospectus.
(j) The Company and each of its Subsidiaries holds, and is operating in
compliance with, all franchises, grants, authorizations, licenses, permits,
easements, consents, certificates and orders of any governmental or
self-regulatory body required for the conduct of its business and where failure
to
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comply would reasonably be expected to have a Material Adverse Effect, and all
such franchises, grants, authorizations, licenses, permits, easements,
consents, certifications and orders are valid and in full force and effect,
except where it would not be expected to have a Material Adverse Effect; and
the Company and each of its Subsidiaries is and has been in compliance with all
applicable federal, state, local and foreign laws, regulations, orders and
decrees and where failure to comply would reasonably be expected to have a
Material Adverse Effect.
(k) The Company and its Subsidiaries have good and marketable title to all
property described in the Registration Statement and Prospectus as being owned
by them, in each case free and clear of all liens, claims, security interests
or other encumbrances except such as are described in the Registration
Statement and the Prospectus or would not reasonably be expected to have a
Material Adverse Effect; the property held under lease by the Company and its
Subsidiaries is held by them under valid, subsisting and enforceable leases
with only such exceptions with respect to any particular lease as would not
reasonably be expected to have a Material Adverse Effect; the Company and each
of its Subsidiaries owns or possesses all patents, patent applications,
trademarks, service marks, tradenames, trademark registrations, service ▇▇▇▇
registrations, copyrights, licenses, inventions, trade secrets and rights
necessary for the conduct of the business of the Company and its Subsidiaries
as currently carried on and as described in the Registration Statement and
Prospectus; except as stated in the Registration Statement and Prospectus, no
name which the Company or any of its Subsidiaries uses and no other aspect of
the business of the Company or any of its Subsidiaries will involve or give
rise to any infringement of, or license or similar fees for, any patents,
patent applications, trademarks, service marks, tradenames, trademark
registrations, service ▇▇▇▇ registrations, copyrights, licenses, inventions,
trade secrets or other similar rights of others which would have a Material
Adverse Effect and neither the Company nor any of its Subsidiaries has received
any notice alleging any such infringement or fee which has not been resolved or
disposed of and which would have a Material Adverse Effect.
(l) Neither the Company nor any of its Subsidiaries is in violation of its
respective charter or by-laws or in breach of or otherwise in default in the
performance of any obligation, agreement or condition contained in any bond,
debenture, note, indenture, loan agreement or any other material contract,
lease or other instrument to which it is subject or by which any of them may be
bound, or to which any of the material property or assets of the Company or any
of its Subsidiaries is subject in each case referred to in this subparagraph
(xii) which violations or defaults would have a Material Adverse Effect.
(m) The Company and its Subsidiaries have filed all federal, state, local
and foreign income and franchise tax returns required to be filed and are not
in default in the payment of any taxes which were payable pursuant to said
returns or any assessments with respect thereto, other than any which the
Company or any of its Subsidiaries is contesting in good faith, or, in the case
of franchise tax returns or payments, where such failure to file or default in
payment would not reasonably be expected to have a Material Adverse Effect.
(n) The Company has not distributed and will not distribute any prospectus
or other offering material in connection with the offering and sale of the
Securities other than any Preliminary Prospectus or the Prospectus or other
materials permitted by the Act to be distributed by the Company.
(o) Other than the Bank, the Mortgage Company and Alpha Capital Fund, the
Company owns, directly or indirectly, no capital stock or other equity or
ownership or proprietary interest in any corporation, partnership, association,
trust or other entity which would be material to the Company and its
Subsidiaries taken as a whole.
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(p) The Company and its Subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (iii) access
to assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(q) Other than as contemplated by this Agreement or described 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 Split-Off Agreements or the consummation
of the transactions contemplated hereby or thereby or of the Split-Off
Transactions.
(r) Neither the Company nor any of its Subsidiaries is an "investment
company" or a company "controlled" by an "investment company" within the
meaning of the Investment Company Act of 1940, as amended, or an "investment
adviser" within the meaning of the Investment Advisers Act of 1940, as amended.
(s) No report or application filed by the Company or any of its
Subsidiaries with the FRB, Department or the FDIC, 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 and complied with the applicable
requirements of the FRB, Department or the FDIC, as the case may be, except for
such amendments thereto as have been timely filed and corrected appropriately
any such report or application.
(t) To the knowledge of the Company, the request for ruling (the "Ruling
Request") filed with the Internal Revenue Service, and the ruling dated
September 3, 1996 issued thereby (the "Tax Ruling") do not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein. The Split-Off Transactions as described in the Registration
Statements do, and when consummated in accordance with the Share Exchange
Agreement will, conform in all respects with the Tax Ruling, except for such
differences as do not affect the validity of the Tax Ruling.
(u) The proceeds from the sale of the Securities will constitute "tier 1"
capital (as defined in 12 C.F.R. Part 325).
(v) Neither the Company nor any of its affiliates is presently doing
business with the government of Cuba or with any person or affiliate located in
Cuba.
(w) Except for closing of the offering of Securities contemplated hereby,
all conditions precedent to CTFG's, the Company's and the ▇▇▇▇▇▇ Family's
obligation to effect the Split-Off Transactions as set forth in the Share
Exchange Agreement, have been performed, complied with, or otherwise satisfied
or waived, and no other action is required except for delivery of the proceeds
of the sale of the Securities in order to consummate the Split-Off
Transactions. If waived, any condition so waived has been identified to the
Underwriters.
(x) The Company and the Subsidiaries, and, to the knowledge of the Company
and its Subsidiaries the ▇▇▇▇▇▇ Family and CTFG, have complied in all material
respects with all covenants and agreements set forth in the Split-Off
Agreements. To the knowledge of the Company and its Subsidiaries,
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each of the representations and warranties in the Share Exchange Agreement of
the ▇▇▇▇▇▇ Family and of CTFG are true and correct.
(y) Except as described with reasonable specificity in the Registration
Statement, there is no obligation, claim, action or proceeding pending or, to
the Company's knowledge, threatened, nor does, to the Company's knowledge, any
reasonable basis exist for such obligation, claim, action or proceeding, which
may result in any liability of either the Company or any Subsidiary to either
CTFG or the ▇▇▇▇▇▇ Family pursuant to the Split-Off Agreements or the Split-Off
Transactions, or, to the Company's knowledge, any liability of the ▇▇▇▇▇▇
Family to CTFG which would reasonably be expected to give rise to a claim for
reimbursement from the Company.
3. Purchase, Sale and Delivery of Securities.
(a) On the basis of the representations, warranties and agreements herein
contained, but subject to the terms and conditions herein set forth, the
Company agrees to issue and sell the Firm Shares, to the Underwriters, and each
Underwriter agrees, severally and not jointly, to purchase from the Company the
number of Firm Shares set forth opposite the name of such Underwriter in
Schedule II hereto. The purchase price for each Firm Share shall be $ per
share. The obligation of each Underwriter to the Company shall be to purchase
from the Company that number of Firm Shares set forth opposite the name of such
Underwriter in Schedule II hereto. In making this Agreement, each Underwriter
is contracting severally and not jointly; the agreement of each Underwriter is
to purchase only the respective number of Firm Shares specified in Schedule I.
The Firm Shares will be delivered by the Company to you for the accounts
of the Underwriters against payment of the purchase price therefor by certified
or official bank check or other same day funds payable to the order of the
Company at the offices of ▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, or such other location as may be mutually acceptable, at
9:00 a.m. Central time on the third (or if the Securities are priced, as
contemplated by Rule 15c6-1(c) under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), after 4:30 p.m. Eastern Time on the fourth) full
business day following the date hereof, or at such other time and date as you
and the Company determine pursuant to Rule 15c6-1(c) under the Exchange Act,
such time and date of delivery being herein referred to as the "Closing Date."
If you so elect, delivery of the Firm Shares may be made by credit through full
fast transfer to the accounts at The Depository Trust Company designated by the
Underwriters. Certificates representing the Firm Shares, in definitive form
and in such denominations and registered in such names as you may request upon
at least two business days' prior notice to the Company, will be made available
for checking and packaging not later than 10:30 a.m., Central time, on the
business day next preceding the Closing Date at the offices of ▇▇▇▇▇ ▇▇▇▇▇▇▇
Inc., ▇▇▇▇▇ ▇▇▇▇▇▇▇ Tower, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, or
such other location as may be mutually acceptable.
(b) It is understood that each Underwriter, may (but shall not be
obligated to) make payment to the Company on behalf of the other Underwriter
for the Securities to be purchased by such Underwriter. Any such payment shall
not relieve such other Underwriter of any of its obligations hereunder.
Nothing herein contained shall constitute either of the Underwriters an
unincorporated association or partner with the Company.
4. Covenants.
(a) The Company covenants and agrees with the Underwriters as follows:
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(i) If the Registration Statement has not already been declared
effective by the Commission, the Company will use its best efforts to
cause the Registration Statement and any post-effective amendments
thereto to become effective as promptly as possible; the Company will
notify you promptly of the time when the Registration Statement or any
post-effective amendment to the Registration Statement has become
effective or any supplement to the Prospectus (including any term sheet
within the meaning of Rule 434 of the Rules and Regulations) has been
filed and of any request by the Commission for any amendment or
supplement to the Registration Statement or Prospectus or additional
information; if the Company has elected to rely on Rule 430A of the Rules
and Regulations, the Company will prepare and file a Prospectus (or term
sheet within the meaning of Rule 434 of the Rules and Regulations)
containing the information omitted therefrom pursuant to Rule 430A of the
Rules and Regulations with the Commission within the time period required
by, and otherwise in accordance with the provisions of, Rules 424(b),
430A and 434, if applicable, of the Rules and Regulations; if the Company
has elected to rely upon Rule 462(b) of the Rules and Regulations to
increase the size of the offering registered under the Act, the Company
will prepare and file a registration statement with respect to such
increase with the Commission within the time period required by, and
otherwise in accordance with the provisions of, Rule 462(b); the Company
will prepare and file with the Commission, promptly upon your request,
any amendments or supplements to the Registration Statement or Prospectus
(including any term sheet within the meaning of Rule 434 of the Rules and
Regulations) that, in your opinion, may be necessary or advisable in
connection with the distribution of the Securities by the Underwriters;
and the Company will not file any amendment or supplement to the
Registration Statement or Prospectus (including any term sheet within the
meaning of Rule 434 of the Rules and Regulations) to which you shall
reasonably object by notice to the Company after having been furnished a
copy a reasonable time prior to the filing.
(ii) The Company will advise you, promptly after it shall receive
notice or obtain knowledge thereof, of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration
Statement, of the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, or of the initiation or threatening
of any proceeding for any such purpose; and the Company will promptly use
its reasonable best efforts to prevent the issuance of any stop order or
to obtain its withdrawal if such a stop order should be issued.
(iii) Within the time during which a prospectus (including any term
sheet within the meaning of Rule 434 of the Rules and Regulations)
relating to the Securities is required to be delivered under the Act, the
Company will comply as far as it is able with all requirements imposed
upon it by the Act, as now and hereafter amended, and by the Rules and
Regulations, as from time to time in force, so far as necessary to permit
the continuance of sales of or dealings in the Securities as contemplated
by the provisions hereof and the Prospectus. If during such period any
event occurs as a result of which the Prospectus would include an untrue
statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances then
existing, not misleading, or if during such period it is necessary to
amend the Registration Statement or supplement the Prospectus to comply
with the Act, the Company will promptly notify you and will amend the
Registration Statement or supplement the Prospectus (at the expense of
the Company) so as to correct such statement or omission or effect such
compliance.
(iv) The Company will use its best efforts to qualify the Securities
for sale under the securities laws of such jurisdictions as you
reasonably designate and to continue such qualifications in effect so
long as required for the distribution of the Securities, except that the
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Company shall not be required in connection therewith to qualify as a
foreign corporation or to execute a general consent to service of process
in any state.
(v) The Company will furnish to the Underwriters copies of the
Registration Statement (three of which will be signed and will include
all exhibits), each of the Preliminary Prospectus, the Prospectus, any
written Information, and all amendments and supplements (including any
term sheet within the meaning of Rule 434 of the Rules and Regulations)
to such documents, in each case as soon as available and in such
quantities as you may from time to time reasonably request.
(vi) During a period of five years commencing with the date hereof,
the Company will furnish to each Underwriter copies of all periodic and
special reports furnished to the stockholders of the Company and all
information, documents and reports filed with the Commission and the
National Association of Securities Dealers, Inc. ("NASD"), the Nasdaq
Stock Market or any securities exchange.
(vii) The Company will make generally available to its security
holders as soon as practicable, but in any event not later than 15 months
after the end of the Company's current fiscal quarter, an earnings
statement (which need not be audited) covering a 12-month period
beginning after the effective date of the Registration Statement that
shall satisfy the provisions of Section 11(a) of the Act and Rule 158 of
the Rules and Regulations.
(viii) The Company, whether or not the transactions contemplated
hereunder are consummated or this Agreement is prevented from becoming
effective under the provisions of Section 9(a) hereof or is terminated,
will pay or cause to be paid (A) all expenses and fees (including,
without limitation, fees and expenses of the Company's accountants and
counsel but, except as otherwise provided below, not including fees of
the Underwriters' counsel) in connection with the preparation, printing,
filing, delivery, and shipping of the Registration Statement (including
the financial statements therein and all amendments, schedules, and
exhibits thereto), the Securities, each Preliminary Prospectus, the
Prospectus, and any amendment thereof or supplement thereto, and the
printing, delivery, and shipping of this Agreement and other underwriting
documents, including Blue Sky Memoranda, (B) all filing fees and fees and
disbursements of the Underwriters' counsel incurred in connection with
the qualification of the Securities for offering and sale by the
Underwriters or by dealers under the securities or blue sky laws of the
states and other jurisdictions which the Underwriters shall designate in
accordance with Section 4(a)(iv) hereof, (C) the fees and expenses of any
transfer agent or registrar, (D) the filing fees incident to any required
review by the NASD of the terms of the sale of the Securities, (E)
listing fees, if any, and (F) all other costs and expenses incident to
the performance of its obligations hereunder that are not otherwise
specifically provided for herein. If the sale of the Securities provided
for herein is not consummated by reason of action by the Company pursuant
to Section 9(a) hereof which prevents this Agreement from becoming
effective, or by reason of any failure, refusal or inability on the part
of the Company or any ▇▇▇▇▇▇ Family Representative (as hereinafter
defined) to perform any agreement on its or his part to be performed, or
because any other condition of the Underwriters' obligations hereunder
required to be fulfilled by the Company or any ▇▇▇▇▇▇ Family
Representative is not fulfilled, the Company will reimburse the
Underwriters for all out-of-pocket disbursements (including reasonable
fees and disbursements of counsel) incurred by the Underwriters in
connection with their investigation, preparing to market and marketing
the Securities or in contemplation of performing their obligations
hereunder. The Company shall not
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in any event be liable to any of the Underwriters for loss of anticipated
profits from the transactions covered by this Agreement.
(ix) The Company will apply the net proceeds from the sale of the
Securities to be sold by it hereunder for the purposes set forth in the
Prospectus and will file such reports with the Commission with respect to
the sale of the Securities and the application of the proceeds therefrom
as may be required in accordance with Rule 463 of the Rules and
Regulations.
(x) The Company has not taken and will not take, directly or
indirectly, any action designed to or which might reasonably be expected
to cause or result in, or which has constituted, the stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities, and has not effected any sales of
Common Stock or Preferred Stock which are required to be disclosed in
response to Item 701 of Regulation S-K under the Act which have not been
so disclosed in the Registration Statement.
(xi) Other than as contemplated by this Agreement or any other
agreement with either Underwriter, the Company will not incur 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.
(xii) The Company will inform the Florida Department of Banking and
Finance at any time prior to the consummation of the distribution of the
Securities by the Underwriters if it commences engaging in business with
the government of Cuba or with any person or affiliate located in Cuba.
Such information will be provided within 90 days after the commencement
thereof or after a change occurs with respect to previously reported
information.
(xiii) The Company will, and will cause each Subsidiary to, comply
in all material respects with all covenants and agreements of the Company
and the Subsidiaries contained in the Split-Off Agreements.
(b) Each of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (collectively the
"▇▇▇▇▇▇ Family Representatives" and individually a "▇▇▇▇▇▇ Family
Representative") covenants and agrees, jointly and severally, with the several
Underwriters as follows:
(i) If this Agreement shall be terminated by the Underwriters
because of any failure, refusal or inability on the part of the Company
or any ▇▇▇▇▇▇ Family Representative to perform any agreement on the
Company's or such ▇▇▇▇▇▇ Family Representative's part to be performed, or
because any other condition of the Underwriters' obligations hereunder
required to be fulfilled by the Company or such ▇▇▇▇▇▇ Family
Representative is not fulfilled, each ▇▇▇▇▇▇ Family Representative agrees
to reimburse the several Underwriters for all out-of-pocket disbursements
(including reasonable fees and disbursements of counsel for the
Underwriters) incurred by the Underwriters in connection with their
investigation, preparing to market and marketing the Securities or in
contemplation of performing their obligations hereunder. The ▇▇▇▇▇▇
Family Representative shall not in any event be liable to any of the
Underwriters for loss of anticipated profits from the transactions
covered by this Agreement.
(ii) Each ▇▇▇▇▇▇ Family Representative will, and will use such
▇▇▇▇▇▇ Family Representative's reasonable best efforts to cause the
▇▇▇▇▇▇ Family, the Company and its
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Subsidiaries to, comply in all material respects with all covenants and
agreements thereof contained in the Split-Off Agreements.
5. Conditions of Underwriters' Obligations. The obligations of the
Underwriters are subject to the accuracy, as of the date hereof and at the
Closing Date (as if made at such Closing Date), of and compliance with all
representations, warranties and agreements of the Company and the ▇▇▇▇▇▇ Family
Representatives contained herein, to the performance by the Company and the
▇▇▇▇▇▇ Family Representatives of their respective obligations hereunder and to
the following additional conditions:
(a) The Registration Statement shall have become effective not later than
5:00 p.m., Central time, on the date of this Agreement, or such later time and
date as the Underwriters shall approve and all filings required by Rules 424,
430A and 434 of the Rules and Regulations shall have been timely made; no stop
order suspending the effectiveness of the Registration Statement or any
amendment thereof shall have been issued; no proceedings for the issuance of
such an order shall have been initiated or threatened; and any request of the
Commission for additional information (to be included in the Registration
Statement or the Prospectus or otherwise) shall have been complied with to your
satisfaction.
(b) Neither Underwriter shall have advised the Company that the
Registration Statement or the Prospectus, or any amendment thereof or
supplement thereto (including any term sheet within the meaning of Rule 434 of
the Rules and Regulations), contains an untrue statement of fact which, in
either Underwriter's opinion, is material, or omits to state a fact which, in
either Underwriter's opinion, is material and is required to be stated therein
or necessary to make the statements therein not misleading.
(c) Except as contemplated in the Prospectus, subsequent to the respective
dates as of which information is given in the Registration Statement and the
Prospectus, neither the Company nor any of its Subsidiaries shall have incurred
any material liabilities or obligations, direct or contingent, or entered into
any material transactions, or declared or paid any dividends or made any
distribution of any kind with respect to its capital stock; and there shall not
have been any change in the capital stock (other than a change in the number of
outstanding shares of Common Stock due to the issuance of shares upon the
exercise of outstanding options or warrants or pursuant to employee benefit
plans referred to in the Registration Statement), or any material change in the
short-term or long-term debt of the Company, or any issuance of options,
warrants, convertible securities or other rights to purchase the capital stock
of the Company or any of its Subsidiaries or pursuant to employee benefit plans
referred to in the Registration Statement or any Material Adverse Change or any
development involving a prospective Material Adverse Change (whether or not
arising in the ordinary course of business) that, in either Underwriter's
judgment, makes it impractical or inadvisable to offer or deliver the
Securities on the terms and in the manner contemplated in the Prospectus.
(d) On the Closing Date, there shall have been furnished to the
Underwriters the opinion of ▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇, counsel for the Company,
dated such Closing Date and addressed to you, to the effect that:
(i) 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 obtained all requisite approvals to become a registered bank
holding company under the BHC Act. The Bank is a state banking
corporation duly incorporated and validly existing and in good standing
under the laws of the State of Illinois. The Mortgage Company has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of the state of Delaware. The deposit accounts
maintained at the Bank are insured by the FDIC to the fullest extent
permitted by law, and, to the
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knowledge of such counsel, no proceedings for the termination or
revocation of such membership or insurance are pending or threatened.
The Bank is a member in good standing of the FRB. Each of the Company
and the Bank and the Mortgage Company (collectively the "Significant
Subsidiaries") has full corporate power and authority to own its
properties and conduct its business as described in the Registration
Statement and Prospectus, and the Company is duly qualified to do
business as a foreign corporation and is in good standing in the State of
Illinois.
(ii) The capital stock of the Company, as of the date specified in
the Prospectus, conforms in all material respects as to legal matters to
the description thereof contained in the Prospectus under the caption
"Description of Securities." All of the issued and outstanding shares of
the capital stock of the Company have been duly authorized and validly
issued and are fully paid and nonassessable. The holders thereof are not
subject to personal liability by reason of being such holders. The
Securities and Common Stock to be issued and sold by the Company
hereunder and in the Common Stock Offering have been duly authorized and,
when issued, delivered and paid for in accordance with the terms of this
Agreement and the Common Stock Offering, will have been validly issued
and will be fully paid and nonassessable, and the holders thereof will
not be subject to personal liability by reason of being such holders.
The outstanding shares of Common Stock of the Company have been, and the
shares of Common Stock to be issued and sold by the Company in the Common
Stock Offering will be, offered and sold in transactions exempt from the
registration, qualification and prospectus delivery requirements of the
Act and the securities laws of the State of Illinois. To the knowledge
of such counsel, and except as otherwise stated in the Registration
Statement and Prospectus, there are no preemptive rights or options,
warrants, agreements, contracts or other rights in existence to purchase
or acquire from the Company any shares of the capital stock of the
Company pursuant to the Company's charter, by-laws or any agreement or
other instrument to which the Company is a party or by which the Company
is bound. To such counsel's knowledge, neither the filing of the
Registration Statement nor the offering or sale of the Securities or
Common Stock as contemplated by this Agreement and the Common Stock
Offering gives rise to any rights for or relating to the registration of
any shares of Common Stock or other securities of the Company under the
Act.
(iii) All of the issued and outstanding shares of capital stock of
each of the Significant Subsidiaries have been duly and validly
authorized and issued and are fully paid and nonassessable, and, to such
counsel's knowledge, except as otherwise described in the Registration
Statement and Prospectus and the Company owns, or will own upon
consummation of the Split-Off Transactions, of record and beneficially,
free and clear of any security interests, claims, liens, proxies,
equities or other encumbrances, all of the issued and outstanding shares
of such stock. To such counsel's knowledge, except as described in the
Registration Statement and Prospectus, there are no options, warrants,
agreements, contracts or other rights in existence to purchase or acquire
from either Significant Subsidiary any shares of the capital stock of
such Significant Subsidiary.
(iv) Such counsel has been advised by the Commission that the
Registration Statement has become effective under the Act and, to such
counsel's knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that purpose
has been instituted or, to the knowledge of such counsel, threatened by
the Commission.
(v) The descriptions in the Registration Statement and Prospectus of
statutes, legal and governmental proceedings or rulings, contracts and
other documents are accurate in all material respects and fairly present
the information required to be shown; and such counsel does
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not know of any statutes or legal or governmental proceedings required to
be described in the Prospectus that are not described as required, or of
any contracts or documents of a character required to be described in the
Registration Statement or Prospectus or included as exhibits to the
Registration Statement that are not described or included as required.
(vi) The Company and each Significant Subsidiary has the requisite
corporate power and authority to enter into this Agreement, the Split-Off
Transactions and Split-Off Agreements to which it is a party and to issue
the Securities, and each of this Agreement and the Split-Off Agreements
have been duly authorized, executed and delivered by the Company and each
Significant Subsidiary and, assuming the due authorization, execution and
delivery of such agreements by the other party or parties thereto other
than the ▇▇▇▇▇▇ Family, constitutes a valid, legal and binding obligation
of the Company and each Significant Subsidiary enforceable in accordance
with its terms (except as rights to indemnity may be limited by federal
or state securities laws and except as such enforceability may be limited
by bankruptcy, insolvency, reorganization or similar laws affecting the
rights of creditors generally and subject to general principles of
equity, as to which such counsel need express no belief); the execution,
delivery and performance of this Agreement and the Split-Off Agreements
and the consummation of the transactions herein or therein contemplated
or the Split-Off Transactions will not result in a breach or violation of
any of the terms and provisions of, or constitute a default under, any
statute, rule or regulation, any agreement or instrument known to such
counsel to which the Company or its Significant Subsidiaries is a party
or by which it is bound or to which any of its property is subject, and
which contravention or default would have a Material Adverse Effect, or
violate the Company's or its Significant Subsidiaries' charter or
by-laws, or any consent, approval, ruling, order, rule, regulation or
decree known to such counsel of any court or governmental agency or body
having jurisdiction over the Company or its Significant Subsidiaries or
any of their respective properties; and no consent, approval,
authorization or order of, or filing with, any court or governmental
agency or body is required for the execution, delivery and performance of
this Agreement or any of the Split-Off Agreements or for the consummation
of the transactions contemplated hereby or thereby or the Split-Off
Transactions, including the issuance or sale of the Securities and the
Common Stock in the Common Stock Offering by the Company, except such as
may be required under the Act, the Exchange Act or state securities laws,
or approvals of the FRB, the Internal Revenue Service and the Department
all of which have been obtained and except such approvals,
authorizations, registrations or qualifications as may be required under
state securities or blue sky laws (as to which such securities or blue
sky laws as to which such counsel need express no belief).
(vii) To such counsel's knowledge, neither the Company nor any of
its Significant Subsidiaries is in violation of its respective charter or
by-laws.
(viii) Based on conferences with officers of CTFG and
representatives of the ▇▇▇▇▇▇ Family and its participation in preparation
of the Ruling Request and the Tax Ruling, nothing has come to the
attention of such counsel that causes such counsel to believe that the
Ruling Request or the Tax Ruling contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein. The Split-Off Transactions as described in the Registration
Statement do, and when consummated in accordance with the Share Exchange
Agreement will, conform in all respects with the Tax Ruling, except for
such differences as do not affect the validity of the Tax Ruling.
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(ix) The Registration Statement and the Prospectus, and any
amendment thereof or supplement thereto (including any term sheet within
the meaning of Rule 434 of the Rules and Regulations but excluding the
financial statements and related schedules and financial or statistical
information and data included therein, as to which no opinion need be
rendered), comply as to form in all material respects with the
requirements of the Act and the Rules and Regulations.
(x) To such counsel's knowledge, there is no pending or threatened
action or proceeding arising out of or relating to the Split-Off
Transactions or the Split-Off Agreements to which CTFG, the Company or
any of their respective officers or directors is a party or to which any
property thereof is subject.
(xi) Prior to the consummation of the Split-Off Transactions and the
issuance of the Securities hereunder and the Common Stock in the Common
Stock Offering, the Board of Directors of the Company owed its fiduciary
obligations as directors of the Company only to the Company's then
existing shareholder, CTFG.
(xii) In the case Anadarko Petroleum Corp. v. Panhandle E. Corp.,
545 A.2d 1171 (Del. 1988), a parent corporation decided to spin-off its
wholly-owned subsidiary through a stock dividend. The parent and the
subsidiary board of directors subsequently modified certain contracts
between the parent and subsidiary, which modifications had an adverse
effect on the subsidiary, prior to the spin-off but subsequent to
establishment of a record date for the stock dividend and third-party
trading of interests in the subsidiary's stock. The Supreme Court of
Delaware held that, in this case, the parent and directors of the
subsidiary owed no fiduciary duty to prospective stockholders of the
subsidiary not to modify contracts even after the parent declared its
intention to spin-off the subsidiary because the interests held by the
subsidiary's prospective stockholders were insufficient to impose
fiduciary obligations on the parent and the subsidiary's directors.
Based on the foregoing and such review of Delaware law as it deemed
necessary or appropriate, it is such counsel's opinion that in
considering whether to approve the Split-Off Agreements to which it is a
party, the board of directors of the Company owed their fiduciary
obligations only to the Company's then-existing shareholder, CTFG.
In rendering such opinion such counsel may rely as to matters of fact, to
the extent such counsel deems reasonable upon certificates of officers of the
Company and its Subsidiaries provided that the extent of such reliance is
specified in such opinion. As to matters of state law other than Illinois and
Delaware, such counsel may assume that the law of such other jurisdiction is
identical to Illinois law.
(e) On the Closing Date, there shall have been furnished to the
Underwriters the opinion of ▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇, counsel for the ▇▇▇▇▇▇
Family, dated the Closing Date and addressed to you, to the effect that:
(i) Each of this Agreement and the Split-Off Agreements to which any
▇▇▇▇▇▇ Family Member is a party have been duly executed and delivered by
such ▇▇▇▇▇▇ Family Member and, assuming due authorization, execution and
delivery of such agreements by the other party or parties thereto other
than the Company and other ▇▇▇▇▇▇ Family Members, constitutes a valid,
legal and binding obligation of such ▇▇▇▇▇▇ Family Member enforceable in
accordance with its terms (except as rights to indemnity may be limited
by federal or state securities laws and except as such enforceability may
be limited by bankruptcy, insolvency, reorganization or similar laws
affecting the rights of creditors generally and subject to general
principles of equity); to such counsel's knowledge, the execution,
delivery and performance of this Agreement and the Split-Off
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Agreements and the consummation of the transactions herein or therein
contemplated or of the Split-Off Transactions will not result in a breach
or violation of any of the terms and provisions of, or constitute a
default under, any statute, rule or regulation, any agreement or
instrument to which a ▇▇▇▇▇▇ Family Member is a party or by which a
▇▇▇▇▇▇ Family Member is bound or to which any of the property of a ▇▇▇▇▇▇
Family Member is subject, or any consent, approval, ruling, order, rule,
regulation or decree known to such counsel of any court or governmental
agency or body having jurisdiction [over a ▇▇▇▇▇▇ Family Member or any of
the respective shares of CTFG Common Stock owned by a ▇▇▇▇▇▇ Family
Member]; and, except for regulatory approvals required under the Share
Exchange Agreement, all of which have been obtained, no consent,
approval, authorization or order of, or filing with, any court or
governmental agency or body is required of the ▇▇▇▇▇▇ Family for the
execution, delivery and performance of this Agreement or any of the
Split-Off Agreements or for the consummation of the transactions
contemplated hereby or thereby or of the Split-Off Transactions.
(ii) To such counsel's knowledge, there is no pending or threatened
action or proceeding arising out of or relating to the Split-Off
Transactions or the Split-Off Agreements to which any ▇▇▇▇▇▇ Family
Member is a party or to which any property of a ▇▇▇▇▇▇ Family Member is
subject.
In rendering such opinion, such counsel may rely as to matters of fact, to
the extent such counsel deems reasonable upon certificates of ▇▇▇▇▇▇ Family
Members provided that the extent of such reliance is specified in such opinion.
As to matters of state law other than Illinois and Delaware, such counsel may
assume that the law of such other jurisdiction is identical to Illinois law.
As to the matters set forth in clause (i) above, such counsel may rely (within
the meaning of Section 8(d) of the Legal Opinion Accord) on the opinion of
▇▇▇▇▇▇ ▇▇▇▇▇▇ & Zavis (which shall also be addressed to you and dated the
Closing Date).
(f) In giving their opinions required by subsections (d) and (e) of this
Section, ▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇ as counsel for the Company and as counsel for
the ▇▇▇▇▇▇ Family, respectively shall additionally state that such counsel has,
in connection with the preparation of the Registration Statement and the
Prospectus, examined various documents and participated in conferences with
representatives of the Company and its independent auditors, the ▇▇▇▇▇▇ Family
and such other parties as applicable, at which conferences the contents of the
Registration Statement and the Prospectus and related matters were discussed
and, on the basis of the foregoing, nothing has come to their attention that
would lead them to believe that the Registration Statement at the time it
became effective (except for the financial statements and related schedules and
other financial and statistical information included therein, as to which such
counsel need express no belief) contained an untrue statement of 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 of
its respective dates, contained or at the Closing Date contains (except for the
financial and statistical information included therein, as to which such
counsel need express no belief) any untrue statement of a material fact or
omitted or omits to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. Such counsel need not verify or assume
any responsibility for, the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus, except as
otherwise set forth in its opinions delivered on the Closing Date pursuant to
subsection (d) above.
(g) On the Closing Date, there shall have been furnished such opinion or
opinions from Faegre & ▇▇▇▇▇▇ LLP, counsel for the Underwriters, dated
the Closing Date and addressed to you, with respect to the formation of the
Company, the validity of the Securities, the Registration Statement, the
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Prospectus and other related matters as you reasonably may request, and
such counsel shall have received such papers and information as they request to
enable them to pass upon such matters.
(h) On the Closing Date the Underwriters, shall have received a letter of
KPMG Peat Marwick LLP, dated the Closing Date and addressed to you, confirming
that they are independent public accountants within the meaning of the Act and
are in compliance with the applicable requirements relating to the
qualifications of accountants under Rule 2-01 of Regulation S-X of the
Commission, and stating, as of the date of such letter (or, with respect to
matters involving changes or developments since the respective dates as of
which specified financial information is given in the Prospectus, as of a date
not more than five days prior to the date of such letter), the conclusions and
findings of said firm with respect to the financial information and other
matters covered by its letter delivered to you concurrently with the execution
of this Agreement, and the effect of the letter so to be delivered on such
Closing Date shall be to confirm the conclusions and findings set forth in such
prior letter.
(i) On the Closing Date, there shall have been furnished to the
Underwriters a certificate, dated the Closing Date and addressed to you, signed
by the chief executive officer, the president and the chief financial officer
of the Company, to the effect that:
(i) The representations and warranties of the Company in this
Agreement are true and correct, in all material respects, as if made at
and as of such Closing Date, 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;
(ii) No stop order or other order suspending the effectiveness of
the Registration Statement or any amendment thereof or the qualification
of the Securities or the Common Stock for offering or sale has been
issued, and no proceeding for that purpose has been instituted or, to
their knowledge, is contemplated by the Commission or any state or
regulatory body; and
(iii) The signers of said certificate have carefully examined the
Registration Statement and the Prospectus, and any amendments thereof
or supplements thereto (including any term sheet within the meaning of
Rule 434 of the Rules and Regulations), and (A) such documents contain
all statements and information required to be included therein, the
Registration Statement, or any amendment thereof, does not contain 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, and the Prospectus, as amended or supplemented, does not
include any untrue statement of material fact or omit to state a material
fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, (B) 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, (C) subsequent to the respective dates as of
which information is given in the Registration Statement and the
Prospectus, neither the Company nor any of its Subsidiaries has incurred
any material liabilities or obligations, direct or contingent, or entered
into any material transactions, not in the ordinary course of business,
or declared or paid any dividends or made any distribution of any kind
with respect to its capital stock, and except as disclosed in the
Prospectus, there has not been any change in the capital stock (other
than a change in the number of outstanding shares of Common Stock due to
the issuance of shares upon the exercise of outstanding options or
warrants), or any material change in the short-term or long-term debt, or
any issuance of options, warrants, convertible securities or other rights
to purchase the capital stock, of the Company, or any of its
Subsidiaries, or any
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Material Adverse Change or any development involving a prospective
Material Adverse Change (whether or not arising in the ordinary course of
business), and (D) except as stated in the Registration Statement and the
Prospectus, there is not pending, or, to the knowledge of the Company,
threatened or contemplated, any action, suit or proceeding to which the
Company or any of its Subsidiaries is a party before or by any court or
governmental agency, authority or body, or any arbitrator, which might
result in any Material Adverse Change.
(j) On the Closing Date, there shall have been furnished to the
Underwriters a certificate, dated such Closing Date and addressed to the
Underwriters, signed by the ▇▇▇▇▇▇ Family Representatives, in form identical to
the certificate (collectively, the "▇▇▇▇▇▇ Family Certificates") dated the date
hereof and delivered to the Underwriters concurrently with the execution of
this Agreement (the form of which certificate is attached hereto as Exhibit 1);
(k) The Company and the ▇▇▇▇▇▇ Family shall have furnished to the
Underwriters and counsel for the Underwriters such additional documents,
certificates and evidence as you or they may have reasonably requested.
(l) The Split-Off Transactions shall close prior to, or concurrently with,
the closing of the offering of the Securities contemplated hereby.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to the Underwriters and their counsel. The Company and the ▇▇▇▇▇▇
Family will furnish you with such conformed copies of such opinions,
certificates, letters and other documents as you shall reasonably request.
6. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise (including in
settlement of any litigation if such settlement is effected with the written
consent of the Company), insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, including the information deemed to be a part of the
Registration Statement at the time of effectiveness pursuant to Rules 430A and
434(d) of the Rules and Regulations, if applicable, any Preliminary Prospectus,
the Prospectus, or any amendment or supplement thereto (including any term
sheet within the meaning of Rule 434 of the Rules and Regulations), 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 for any legal or
other expenses reasonably incurred by it in connection with investigating or
defending against such loss, claim, damage, liability or action; provided,
however, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage, liability or action 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 such amendment or supplement, in reliance
upon and in conformity with written information furnished to the Company by an
Underwriter, specifically for use in the preparation thereof.
In addition to its other obligations under this Section 6(a), the
Company agrees that, as an interim measure during the pendency of any claim,
action, investigation, inquiry or other proceeding arising out of or based upon
any statement or omission, or any alleged statement or omission, described in
this
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Section 6(a), it will reimburse each Underwriter on a monthly basis for all
reasonable legal fees or other expenses incurred in connection with
investigating or defending any such claim, action, investigation, inquiry or
other proceeding, notwithstanding the absence of a judicial determination as to
the propriety and enforceability of the Company's obligation to reimburse the
Underwriters for such expenses and the possibility that such payments might
later be held to have been improper by a court of competent jurisdiction. To
the extent that any such interim reimbursement payment is so held to have been
improper, the Underwriter that received such payment shall promptly return it
to the Company, together with interest, compounded daily, determined on the
basis of the prime rate (or other commercial lending rate for borrowers of the
highest credit standing) announced from time to time by Norwest Bank Minnesota,
N.A. (the "Prime Rate"). Any such interim reimbursement payments which are not
made to an Underwriter within 30 days of a request for reimbursement shall bear
interest at the Prime Rate from the date of such request. This indemnity
agreement shall be in addition to any liabilities which the Company may
otherwise have.
(b) Each Underwriter will indemnify and hold harmless the Company against
any losses, claims, damages or liabilities to which the Company may become
subject, under the Act 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 an untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, any
Preliminary Prospectus, the Prospectus, or any amendment or supplement thereto
(including any term sheet within the meaning of Rule 434 of the Rules and
Regulations), 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 such amendment or
supplement, in reliance upon and in conformity with written information
furnished to the Company by the Underwriters specifically for use in the
preparation thereof, and will reimburse the Company for any legal or other
expenses reasonably incurred by the Company in connection with investigating or
defending against any such loss, claim, damage, liability or action.
(c) Promptly after receipt by an indemnified party under subsection (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 subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve the indemnifying party from any liability
that it may have to any indemnified party. 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 the indemnifying party's
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation; provided,
however, that if, in the sole judgment of the Underwriters, it is advisable for
the Underwriters to be represented as a group by separate counsel, the
Underwriters shall have the right to employ a single counsel to represent the
Underwriters who may be subject to liability arising from any claim in respect
of which indemnity may be sought by the Underwriters under subsection (a) of
this Section 6, in which event the reasonable fees and expenses of such
separate counsel shall be borne by the indemnifying party or parties and
reimbursed to the Underwriters as incurred (in accordance with the provisions
of the second paragraph in subsection (a) above). An indemnifying party
-19-
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shall not be obligated under any settlement agreement relating to any
action under this Section 6 to which it has not agreed in writing.
(d) If the indemnification provided for in this Section 6 is unavailable
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above, (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company on
the one hand and the Underwriters on the other from the offering of the
Securities 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 on the one hand and the Underwriters on the other
in connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting expenses)
received by the Company bear to the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth in the
table on the cover page of the Prospectus. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Company or the
Underwriters and the parties' relevant intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. The
Company and the Underwriters agree that it would not be just and equitable if
contributions pursuant to this subsection (d) were to be determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of
the equitable considerations referred to in the first sentence of this
subsection (d). The amount paid by an indemnified party as a result of the
losses, claims, damages or liabilities referred to in the first sentence of
this subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending against any action or claim which is the subject of this
subsection (d). Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages that 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 Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations in
this subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Company under this Section 6 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 any Underwriter within the meaning of the Act; and the obligations of
the Underwriters under this Section 6 shall be in addition to any liability
that the respective Underwriters may otherwise have and shall extend, upon the
same terms and conditions, to each director of the Company (including any
person who, with his consent, is named in the Registration Statement as about
to become a director of the Company), to each officer of the Company who has
signed the Registration Statement and to each person, if any, who controls the
Company within the meaning of the Act.
7. Representations and Agreements to Survive Delivery. All
representations, warranties, and agreements of the Company and the
▇▇▇▇▇▇ Family Representatives herein or in certificates delivered pursuant
hereto, and the agreements of the Underwriters and the Company contained in
Section 6 hereof,
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shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any Underwriter or any controlling person
thereof, or the Company or any of its officers, directors, or controlling
persons or any ▇▇▇▇▇▇ Family Member and shall survive delivery of, and payment
for, the Securities to and by the Underwriters hereunder; provided, however,
that the representations, warranties and agreements of the ▇▇▇▇▇▇ Family
Representatives made herein or in the ▇▇▇▇▇▇ Family Certificates shall so
survive for a period of three years from the Closing Date; and provided further
that neither ▇▇▇▇▇▇ Family Representative shall be liable to the Underwriters
for money damages in excess of $1 million each arising out of any inaccuracy
in, or breach of, any such representation, warranty or agreement.
8. Substitution of Underwriters. If any Underwriter or Underwriters shall
fail to take up and pay for the amount of Firm Shares agreed by such
Underwriter to be purchased hereunder, upon tender of such Firm Shares in
accordance with the terms hereof and arrangements satisfactory to you for the
purchase of such Firm Shares by other persons are not made within 36 hours
thereafter, this Agreement shall terminate. In the event of any such
termination neither the Company nor the ▇▇▇▇▇▇ Family Representatives shall be
under any liability to either Underwriter (except to the extent provided in
Section 4(a)(viii), Section 4(b)(ii) and Section 6 hereof) nor shall any
Underwriter (other than the Underwriter who shall have failed, otherwise than
for some reason permitted under this Agreement, to purchase the amount of Firm
Shares agreed by such Underwriter to be purchased hereunder) be under any
liability to the Company (except to the extent provided in Section 6 hereof).
If Firm Shares to which a default relates are to be purchased by the
non-defaulting Underwriter or by any other party or parties, the non-defaulting
Underwriter or the Company shall have the right to postpone the 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 herein, the term "Underwriter"
includes any person substituted for an Underwriter under this Section 8.
9. Effective Date of this Agreement and Termination.
(a) This Agreement shall become effective at 10:00 a.m., Central time, on
the first full business day following the effective date of the Registration
Statement, or at such earlier time after the effective time of the Registration
Statement as you in your discretion shall first release the Securities for sale
to the public; provided, that if the Registration Statement is effective at the
time this Agreement is executed, this Agreement shall become effective at such
time as you in your discretion shall first release the Securities for sale to
the public. For the purpose of this Section, the Securities shall be deemed to
have been released for sale to the public upon release by you of the
publication of a newspaper advertisement relating thereto or upon release by
you of telexes offering the Securities for sale to securities dealers,
whichever shall first occur. By giving notice as hereinafter specified before
the time this Agreement becomes effective, either Underwriter or the Company
may prevent this Agreement from becoming effective without liability of any
party to any other party, except that the provisions of Section 4(a)(viii),
Section 4(b)(ii) and Section 6 hereof shall at all times be effective.
(b) The Underwriters, shall have the right to terminate this Agreement by
giving notice as hereinafter specified at any time at or prior to the
Closing Date, if (i) the Company or any ▇▇▇▇▇▇ Family Representative shall have
failed, refused or been unable, at or prior to such Closing Date, to perform
any agreement on its part to be performed hereunder, (ii) any other condition
of the Underwriters' obligations hereunder is not fulfilled, (iii) trading on
the New York Stock Exchange or the American Stock Exchange shall have been
wholly suspended or limited or minimum prices shall have been established on
such Exchange or System (iv) minimum or maximum prices for trading shall have
been fixed, or maximum
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ranges for prices for securities shall have been required, on the New
York Stock Exchange or the American Stock Exchange, by such Exchange or by
order of the Commission or any other governmental authority having
jurisdiction, (v) a banking moratorium shall have been declared by Federal, New
York or Illinois authorities, or (vi) there has occurred any material adverse
change in the financial markets in the United States or an outbreak of major
hostilities (or an escalation thereof) in which the United States is involved,
a declaration of war by Congress, any other substantial national or
international calamity or any other event or occurrence of a similar character
shall have occurred since the execution of this Agreement that, in your
judgment, makes it impractical or inadvisable to proceed with the completion of
the sale of and payment for the Securities. Any such termination shall be
without liability of any party to any other party except that the provisions of
Section 4(a)(viii), Section 4(b)(ii) and Section 6 hereof shall at all times be
effective.
(c) If you elect to prevent this Agreement from becoming effective or to
terminate this Agreement as provided in this Section, the Company shall be
notified promptly by you by telephone or telegram, confirmed by letter. If the
Company elects to prevent this Agreement from becoming effective, you shall be
notified by the Company by telephone or telegram, confirmed by letter.
If the Company shall fail at the Closing Date to sell and deliver the
number of Securities which it is obligated to sell hereunder, then this
Agreement shall terminate without any liability on the part of any
non-defaulting party.
No action taken pursuant to this Section shall relieve the Company so
defaulting from liability, if any, in respect of such default.
10. Information Furnished by Underwriters. The statements set forth in
the last paragraph of the cover page and under the caption "Underwriting" in
any Preliminary Prospectus and in the Prospectus constitute the written
information furnished by or on behalf of the Underwriters referred to in
Section 2 and Section 6 hereof.
11. Notices. Except as otherwise provided herein, all communications
hereunder shall be in writing or by telegraph and, if to the Underwriters,
shall be mailed, telegraphed or delivered to the Underwriters c/o ▇▇▇▇▇ ▇▇▇▇▇▇▇
Inc., ▇▇▇▇▇ ▇▇▇▇▇▇▇ Tower, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, if to the Company or to any ▇▇▇▇▇▇ Family Representative, shall be
mailed, telegraphed or delivered to it at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇; or in each case to such other
address as the person to be notified may have requested in writing. All
notices given by telegram shall be promptly confirmed by letter. Any party to
this Agreement may change such address for notices by sending to the parties to
this Agreement written notice of a new address for such purpose.
12. Persons Entitled to Benefit of Agreement. This Agreement shall inure
to the benefit of and be binding upon the parties hereto and their respective
successors and assigns and the controlling persons, officers and directors
referred to in Section 6. Nothing in this Agreement is intended or shall be
construed to give to any other person, firm or corporation any legal or
equitable remedy or claim under or in respect of this Agreement or any
provision herein contained. The term "successors and assigns" as herein used
shall not include any purchaser, as such purchaser, of any of the Securities
from the Underwriters.
13. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota.
[Signature Page Follows]
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Please sign and return to the Company the enclosed duplicates of this
letter whereupon this letter will become a binding agreement between the
Company, the ▇▇▇▇▇▇ Family Representatives and the Underwriters in accordance
with its terms.
Very truly yours,
▇▇▇▇▇▇ CAPITAL GROUP, INC.
By
-------------------------
Its
-------------------------
-----------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
24
Confirmed as of the date first above mentioned
▇▇▇▇▇ ▇▇▇▇▇▇▇ INC.
By
--------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & CO. INCORPORATED
By
--------------------------------
25
SCHEDULE I
Underwriter Number of Firm Shares
----------- ---------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated
---------------------
Total. . . . . . . . . . . . . . . . . . . . . . . . . . 1,530,000
=====================
