$100,000,000 AGGREGATE PRINCIPAL AMOUNT OF
____% SENIOR NOTES DUE 2004
ST. PAUL BANCORP, INC.
UNDERWRITING AGREEMENT
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________, 1997
KEEFE, BRUYETTE & WOODS, INC.
Two World Trade Center
85th Floor
New York, New York 10048
ABN AMRO CHICAGO CORPORATION
208 South LaSalle Street
Chicago, Illinois 60604
Ladies and Gentlemen:
St. Paul Bancorp, Inc., a Delaware corporation (the "Company"), proposes to
issue and sell to you (the "Underwriters") its ____% Senior Notes due 2004 in an
aggregate principal amount of $100,000,000 (the "Notes"). The Notes shall be
issued under an indenture, dated as of _________, 1997 (the "Indenture"),
between the Company and Harris Trust and Savings Bank, as Trustee (the
"Trustee"), and shall be substantially in the form filed as an exhibit to the
Registration Statement referred to in Section 1 hereof.
Prior to the purchase and public offering of the Notes by the Underwriters,
the Company and the Underwriters shall enter into an agreement substantially in
the form of Exhibit A hereto (the "Pricing Agreement"). The Pricing Agreement
may take the form of an exchange of any standard form of written
telecommunication between the Company and the Underwriters and shall specify
such applicable information as is indicated in Exhibit A. The offering of the
Notes will be governed by this Agreement, as supplemented by the Pricing
Agreement. From and after the date of the execution and delivery of the Pricing
Agreement, this Agreement shall be deemed to incorporate the Pricing Agreement.
The Company confirms the following agreement with the Underwriters,
relating to the purchase and sale of the Notes.
1. REGISTRATION STATEMENT AND PROSPECTUS. The Company has prepared and
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filed with the Securities and Exchange Commission (the "Commission") a
registration statement, and has filed one or more amendments thereto, on Form S-
3 (File No. 333-18677), including in such registration statement and each such
amendment a related prospectus
subject to completion, in accordance with the provisions of the Securities Act
of 1933, as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Act") and the Trust Indenture Act of 1939, as amended, and
the rules and regulations of the Commission thereunder (collectively, the "Trust
Indenture Act"), relating to the Notes. Copies of that registration statement as
amended to date have been delivered by the Company to the Underwriters. The
Company satisfies the conditions for the use of Form S-3 in connection with the
offer and sale of the Notes. The Company expects to file the prospectus
containing the information required by Rule 430A under the Act pursuant to Rule
424(b) under the Act. The registration statement as amended at the time when it
becomes effective, including all financial schedules and exhibits thereto, is
referred to in this Agreement as the "Registration Statement", and the
prospectus in the form filed with the Commission as part of the Registration
Statement at the time the Registration Statement becomes effective or, if
applicable, in the form first filed pursuant to Rule 424(b) after the
Registration Statement becomes effective, is referred to in this Agreement as
the "Prospectus." Any registration statement filed by the Company pursuant to
Rule 462(b) under the Act (a "Rule 462(b) Registration Statement") shall be
deemed to be part of the Registration Statement. Any prospectus included in the
Rule 462(b) Registration Statement shall be deemed to be part of the Prospectus.
Any reference herein to the Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the Act, as of the date of such Prospectus, and any reference to any
amendment of or supplement to the Prospectus or the Registration Statement shall
be deemed to refer to and include any documents filed after the date of such
Prospectus or Registration Statement, as the case may be, under the Securities
Exchange Act of 1934, as amended (together with the rules and regulations of the
Commission promulgated thereunder, the "Exchange Act"), and incorporated by
reference in such Prospectus or Registration Statement, as the case may be. If a
Rule 462(b) Registration Statement is required, such Rule 462(b) Registration
Statement shall have been transmitted to the Commission for filing and have
become effective within the prescribed time period, and, prior to the Closing
Date, the Company shall have provided to the Underwriters evidence of such
filing and effectiveness in accordance with Rule 462(b) under the Act.
2. AGREEMENT TO SELL AND PURCHASE. The Company hereby agrees to issue
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and sell to the Underwriters $100,000,000 principal amount of Notes and, on the
basis of the representations, warranties and agreements of the Company herein
contained and subject to the terms and conditions set forth herein, each
Underwriter agrees, severally and not jointly, to purchase from the Company the
principal amount of Notes set forth opposite the name of such Underwriter in
Schedule I hereto (or such principal amount of Notes as such Underwriter shall
be obligated to purchase pursuant to the provisions of Section 9 hereof).
3. TERMS OF PUBLIC OFFERING. The Company is advised by the Underwriters
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that they have agreed to make a public offering of their respective portions of
the Notes as soon after the Registration Statement has become effective and the
Pricing Agreement has been
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executed as in the Underwriters' judgment is advisable and to first offer the
Notes upon the terms set forth in the Prospectus.
4. DELIVERY OF THE NOTES AND PAYMENT THEREFOR.
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(a) Delivery to the Underwriters of the Notes shall be made at 9:00
a.m., Chicago time, on the fourth business day (or the third business day if
required under Rule 15c6-1 under the Act, or unless postponed in accordance with
the provisions of Section 9(b) hereof) following the date of the Pricing
Agreement (the "Closing Date") against payment therefor at the offices of
McDermott, Will & Emery, 227 West Monroe, Chicago, Illinois 60606, or through
the facilities of The Depository Trust Company. The place of closing and the
Closing Date may be varied by agreement between the Underwriters and the
Company.
(b) If the Underwriters and the Company have elected to enter into
the Pricing Agreement after the Registration Statement is effective, the
purchase price to be paid by the several Underwriters for the Notes shall be an
amount equal to the initial public offering price, less an amount to be
determined by agreement between the Underwriters and the Company. The initial
public offering price for the Notes shall be a fixed price to be determined by
agreement between the Underwriters and the Company. The interest rate, the
initial public offering price and the price to be paid by the Underwriters for
the Notes when so determined shall be set forth in the Pricing Agreement. If
such prices shall not have been agreed upon and the Pricing Agreement shall not
have been executed and delivered by all parties thereto by the close of business
on the fourth business day following the date of this Agreement, this Agreement
shall terminate forthwith, without liability of any party to any other party,
unless otherwise agreed to by the Company and the Underwriters and except as
otherwise provided in Section 5(l) and Section 7 hereof. If the Underwriters and
the Company have elected to enter into the Pricing Agreement prior to the
registration statement becoming effective, the initial public offering and the
price to be paid by the several Underwriters for the Notes shall have each been
determined and set forth in the Pricing Agreement, dated the date hereof, and an
amendment to the registration statement and the prospectus will be filed by the
Company before the registration statement becomes effective.
(c) The Notes shall be registered in such names and in such
authorized denominations as the Underwriters shall request prior to 11:00 a.m.,
Chicago time, on the second full business day preceding the Closing Date. The
Notes shall be made available to the Underwriters in definitive form for
inspection and packaging not later than 11:00 a.m., Chicago time, on the
business day next preceding the Closing Date. The Notes shall be delivered to
the Underwriters on the Closing Date, with any transfer taxes thereon duly paid
by the Company, for the respective accounts of the several Underwriters, against
payment of the purchase price therefor by wire transfer of immediately available
funds to the Company, subject to change by written agreement of the Company and
the Underwriters.
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5. AGREEMENTS OF THE COMPANY. The Company agrees with the several
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Underwriters as follows:
(a) The Company will endeavor to cause the Registration Statement to
become effective and will advise the Underwriters promptly, and if requested by
the Underwriters will confirm such advice in writing, (i) when the Registration
Statement has become effective and when any post-effective amendment to it
becomes effective, and of the filing of any final prospectus or supplement or
amendment to the Prospectus, (ii) of any request by the Commission for
amendments or supplements to the Registration Statement or Prospectus, (iii) of
the issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or of the suspension of qualification of the Notes
for offering or sale in any jurisdiction, or the initiation or contemplation
known to the Company of any proceeding for such purposes, and (iv) within the
period of time referred to in paragraph (f) below, of the happening of any event
which makes any statement made in the Registration Statement or Prospectus
untrue in any material respect or which requires the making of any additions to
or changes in the Registration Statement or Prospectus in order to make the
statements therein not misleading or of the necessity to amend or supplement the
Prospectus to comply with the Act or any other law. If at any time the
Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to obtain
the withdrawal of such order at the earliest possible moment. If a Rule 462(b)
Registration Statement is required in connection with the offering and sale of
the Notes, the Company has complied or will comply with the requirements of Rule
111 under the Act relating to the payment of filing fees therefor.
(b) If, at the time that the Registration Statement becomes
effective, any information shall have been omitted therefrom in reliance upon
Rule 430A under the Act, then following the execution of the Pricing Agreement,
the Company will prepare and file with the Commission in accordance with Rule
430A and Rule 424(b) under the Act copies of an amended Prospectus, or, if
required by Rule 430A, a post-effective amendment to the Registration Statement
(including an amended Prospectus), containing all information so omitted.
(c) The Company will furnish to each of the Underwriters, without
charge, one signed copy of the Registration Statement and of each amendment
thereto, including all exhibits thereto, and will also furnish to each of the
Underwriters, without charge, such number of conformed copies of the
Registration Statement, each amendment thereto and documents incorporated
therein by references each Underwriter may reasonably request.
(d) The Company will not file any amendment to the Registration
Statement or make any amendment or supplement to the Prospectus of which the
Underwriters shall not previously have been advised or to which any of the
Underwriters promptly after being so advised shall reasonably have objected in
writing.
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(e) Prior to the effective date of the Registration Statement, the
Company will deliver to each Underwriter, without charge, copies of each form of
prospectus subject to completion in such quantities as such Underwriter has
reasonably requested or may hereafter reasonably request. The Company consents
to the use, prior to the effective date of the Registration Statement, of each
prospectus subject to completion so furnished by the Company in accordance with
the provisions of the Act and with the securities or Blue Sky laws of the
jurisdictions in which the Notes are lawfully offered by the several
Underwriters and by all dealers.
(f) On the effective date of the Registration Statement and
thereafter from time to time during such period as in the opinion of counsel for
the Underwriters a prospectus is required by law to be delivered in connection
with offers or sales of the Notes by an Underwriter or a dealer, the Company
will deliver to each Underwriter and dealer, without charge, as many copies of
the Prospectus including all documents from which information is incorporated by
reference (and any amendment or supplement thereto) as they may reasonably
request. During such period, if any event occurs which in the judgment of the
Company, or in the opinions of counsel for the Company and the Underwriters
after discussions among such counsel, should be set forth in the Prospectus in
order to ensure that the Prospectus does not contain an untrue statement of a
material fact or omits to state a material fact necessary to make the statements
therein, in the light of the circumstances at the time the Prospectus is
delivered to a purchaser, not misleading, the Company will forthwith prepare,
submit to the Underwriters, file with the Commission and deliver, without charge
to the Underwriters and dealers (whose names and addresses will be furnished by
the Underwriters to the Company) to whom Notes have been sold by the
Underwriters or to other dealers upon request, an amendment or supplement, as
appropriate (including, if applicable, an appropriate report under the Exchange
Act which is incorporated by reference in the Prospectus), to the Prospectus so
that the statements in the Prospectus, as so amended or supplemented, will
comply with the standards set forth in this sentence. The Company consents to
the use of such Prospectus (and of any amendments or supplements thereto) in
accordance with the provisions of the Act and with the securities or Blue Sky
laws of the jurisdictions in which the Notes are lawfully offered by the
Underwriters and by all dealers to whom Notes may be sold, both in connection
with the offering or sale of the Notes and for such period of time thereafter as
the Prospectus is required by law to be delivered in connection therewith. In
case any Underwriter is required to deliver a Prospectus more than nine months
after the first date upon which the Notes are offered to the public, the Company
will, upon request but at the expense of such Underwriter, furnish such
Underwriter with reasonable quantities of a Prospectus complying with Section
10(a)(3) of the Act.
(g) The Company will cooperate with the Underwriters and counsel for
the Underwriters in connection with the registration or qualification of the
Notes for offer and sale by the several Underwriters and by dealers under the
securities or Blue Sky laws of such jurisdictions as the Underwriters may
designate and will file such consents to service of process or other documents
as may be necessary in order to effect such registration or
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qualification; provided that in no event shall the Company be obligated to
qualify to do business in any jurisdiction where it is not now so qualified or
to take any action which would subject it to the service of process in suits,
other than those arising out of the offer and sale of the Notes, in any
jurisdiction where it is not now so subject, or to take any action to amend its
Certificate of Incorporation in order to make the Company's securities eligible
for registration or qualification in any jurisdiction.
(h) The Company will make generally available to its security holders
an earnings statement of the Company and its subsidiaries, which need not be
audited, as soon as practicable but not later than 18 months after the effective
date of the Registration Statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Act and the rules and regulations of the
Commission thereunder (including Rule 158).
(i) So long as any Notes are outstanding the Company will furnish:
(i) to its Noteholders generally and to the Underwriters (A)
at such time after the end of each fiscal year as provided in this
Indenture, copies of such financial statements of the Company as of
the end of and for such fiscal year, audited by independent public
accountants, as are specified in the Indenture and (B) at such time
after the end of each quarterly fiscal period, except for the last
quarterly fiscal period in each fiscal year, such financial statements
(which need not be audited) of the Company for such period as are
specified in the Indenture, which shall also be made publicly
available; and
(ii) to the Underwriters (A) as soon as available, a copy of
each report of the Company of general interest mailed to any class of
its security holders, (B) copies of all annual reports, quarterly
reports and current reports on Forms 10-K, 10-Q and 8-K or such other
similar forms as may be designated by the Commission or required to be
filed by the Company pursuant to Sections 13, 14 and 15 of the
Exchange Act, which the Company agrees to timely file with the
Commission for so long as may be required for the distribution of the
Notes, (C) a copy of each report required to be filed with the Trustee
pursuant to the Indenture concurrently with such filing, and (D) from
time to time, such other information concerning the Company as any
Underwriter may reasonably request.
If and so long as the Company shall have any subsidiaries, the financial
statements referred to above shall be consolidated to the extent the accounts of
the Company and such subsidiaries are consolidated, and separate financial
statements shall be furnished for each significant subsidiary, as defined in
Regulation S-X of the Commission, whose accounts are not so consolidated.
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(j) Prior to the Closing Date, the Company will issue no press
release or other public communication and hold no press conference with respect
to the Company's offering of the Notes without the Underwriters' prior written
consent, which consent will not be unreasonably withheld.
(k) The Company will pay, or reimburse if paid by the Underwriters,
whether or not the transactions contemplated hereby are consummated or this
Agreement is terminated, all costs and expenses incident to the performance by
it of its obligations under this Agreement and the Pricing Agreement, including,
without limiting the generality of the foregoing, (i) the fees and expenses of
the Trustee and any agent of the Trustee and the fees and disbursements of
counsel for the Trustee in connection with the Indenture and the Notes, (ii) the
fees charged by rating agencies in connection with any rating of the Notes, and
(iii) all costs of typesetting, printing, duplicating and filing (and all
preparation therefor) and all costs of distribution (including, without
limitation, postage, air freight charges and charges for counting and packaging)
of the registration statement as originally filed, the Registration Statement,
each prospectus subject to completion, the Prospectus, each amendment and/or
supplement to any of them, this Agreement, the Pricing Agreement, the Indenture,
any Selected Dealers Agreement, and all related documents, (iv) all costs, as
applicable, of furnishing to the Underwriters and dealers copies of the
foregoing materials (provided, however, that any such copies furnished by the
Company more than nine months after the first date upon which the Notes are
offered to the public shall be at the expense of the Underwriters or dealers so
requesting as provided in Section 5(f) above), (v) all costs of the
registrations or qualifications referred to in Section 5(g) above (including
reasonable fees of counsel in connection therewith), (vi) all costs of filings
made by the Underwriters with the National Association of Securities Dealers,
Inc. in connection with the offering of the Notes, (vii) all costs of the
performance by the Company of its other obligations under this Agreement,
including the fees of Company counsel and accountants, (viii) all costs of the
issuance, sale, delivery and performance of the Notes, including any transfer or
other taxes payable in connection with the original issuance of the Notes, and
(ix) all costs of furnishing to the Underwriters copies of all reports and
information required by Section 5(i) above, including costs of shipping and
mailing.
(l) If this Agreement shall be terminated pursuant to any of the
provisions hereof (otherwise than by notice given by the Underwriters
terminating this Agreement pursuant to Section 9 or Section 10 hereof), or if
this Agreement shall be terminated by the Underwriters because of any failure or
refusal on the part of the Company to comply with the terms or fulfill any of
the conditions of this Agreement, the Company agrees to reimburse the
Underwriters for all documented reasonable out-of-pocket expenses including
reasonable legal fees and expenses incurred by them in connection herewith but
without any further obligation of the Company for lost profits or otherwise. If
this Agreement is terminated pursuant to Section 9 or Section 10 hereof, the
Underwriters shall themselves bear any such out-of-pocket expenses incurred by
them.
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(m) The Company will apply the net proceeds from the sale of the
Notes to be sold by it under this Agreement and the Pricing Agreement for the
purposes set forth in the Prospectus under the caption "Use of Proceeds."
(n) The Company will comply with all registration, filing and
reporting requirements of the Exchange Act which may from time to time be
applicable to the Company.
(o) The Company will comply with all provisions of all undertakings
contained in the Registration Statement.
6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
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and warrants to each Underwriter that:
(a) Each prospectus subject to completion filed as part of the
Registration Statement as originally filed or as part of any amendment thereto
or filed pursuant to Rule 424(a) under the Act complied in all material respects
when so filed with the provisions of the Act; except that this representation
and warranty does not apply to statements in or omissions from the Registration
Statement or any prospectus subject to completion (or any supplement or
amendment thereto) made in reliance upon and in conformity with information
relating to any Underwriter furnished to the Company in writing by or on behalf
of such Underwriter specifically for use in the Registration Statement under the
caption "Underwriting." The Commission has not issued any order preventing or
suspending the use of any prospectus subject to completion.
(b) The Registration Statement in the form in which it becomes
effective and also in such form as it may be when the Pricing Agreement is
executed or any post-effective amendment to the Registration Statement shall
become effective, and the Prospectus, and any supplement or amendment thereto
when filed with the Commission, will each comply in all material respects with
the provisions of the Act and the Trust Indenture Act, and will not at any such
time 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
not misleading. This representation and warranty does not apply to statements in
or omissions from the Registration Statement or the Prospectus (or any
supplement or amendment thereto) (i) in the Statement of Eligibility on Form T-1
of the Trustee under the Trust Indenture Act except statements or omissions in
such Statement of Eligibility made in reliance upon information furnished to the
Trustee by or on behalf of the Company for inclusion therein, or (ii) made in
reliance upon and in conformity with information relating to any Underwriter
furnished to the Company in writing by or on behalf of such Underwriter
specifically for use in the Registration Statement under the caption
"Underwriting."
(c) The documents incorporated by reference in the Prospectus, when
they became effective or were filed or are filed with the Commission (or, if an
amendment with
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respect to any such document was filed, when such amendment was filed or became
effective), as the case may be, conformed and will conform in all material
respects to the requirements of the Act or the Exchange Act, as applicable, and,
when read together and with the other information in the Registration Statement
and the Prospectus, and any amendment thereof or supplement thereto, none of
such documents contained or will contain an untrue statement of a material fact
or omitted or will omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; provided, however,
that this representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information furnished in
writing to the Company by the Underwriters as herein stated expressly for use in
connection with the preparation of the Prospectus as amended or supplemented
relating to the Notes.
(d) Any contract, agreement, instrument, lease or license required to
be described in the Registration Statement or the Prospectus has been properly
described therein. Any contract, agreement, instrument, lease or license
required to be filed as an exhibit to the Registration Statement has been filed
with the Commission as an exhibit to the Registration Statement.
(e) Ernst & Young LLP, the Company's auditors, are independent public
accountants as required by the Act.
(f) The consolidated financial statements and schedules of the
Company and its consolidated subsidiaries and the financial information with
respect to the subsidiaries of the Company included in (whether through
incorporation by reference or otherwise) the Registration Statement and the
Prospectus present fairly the financial position of the Company and its
consolidated subsidiaries (including, without limitation, the allowance for
credit losses) as of the dates indicated, and the results of operations, cash
flows and changes in financial position of the Company and its consolidated
subsidiaries for the periods specified. Such financial statements and schedules
have been prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the entire period involved, except to
the extent disclosed therein.
(g) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware, is duly
registered as a savings and loan holding company under Section 10 of the Home
Owners' Loan Act, as amended, has corporate power and authority to own its
property and conduct its business as described in the Registration Statement and
the Prospectus and is qualified to do business as a foreign corporation in
Illinois. The Company does not own or lease property or transact business in
any other jurisdiction where the ownership of such property or the transaction
of such business would require it to qualify as a foreign corporation under the
laws of such jurisdiction, except where failure to qualify individually or in
the aggregate would not have a material adverse effect on the financial
condition, business or prospects of the Company and any Subsidiary (as defined
below) taken as a whole.
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(h) The only direct subsidiaries of the Company are St. Paul Federal
Bank For Savings (the "Bank"), Annuity Network, Inc. and St. Paul Financial
Development Corporation. The direct subsidiaries of the Company are collectively
referred to herein as the "Material Subsidiaries." The indirect subsidiaries of
the Company are SPF Insurance Agency, Inc., St. Paul Securities, Inc.,
Investment Network, Inc., Investment Network Advisors, Inc., Managed Properties,
Inc., MPI Illinois Corporation, Community Finance Corporation, St. Paul
Investment Corporation ("SPIC"), St. Paul Asset Management Company ("SPAM"), EFS
Service Corporation, EFS/San Diego Service Corporation, and Custom Source Realty
Corporation (collectively, the "Indirect Subsidiaries"). The Material
Subsidiaries, together with the Indirect Subsidiaries, are hereinafter
collectively referred to as the Subsidiaries and individually as a Subsidiary.
(i) Each Subsidiary except the Bank has been duly organized and is
validly existing as a corporation and is in good standing under the laws of its
jurisdiction of incorporation or charter, with full corporate power and
authority to own, lease and operate its properties and conduct its business as
described in the Registration Statement and Prospectus. The Bank is a federal
savings bank duly organized and chartered and in good standing under the laws of
the United States and is duly authorized and has full corporate power and
authority to own, lease and operate its properties and conduct its business as
described in the Registration Statement and Prospectus. Each Subsidiary is duly
qualified to do business as a foreign corporation or association under the
corporation or banking law of, and is in good standing in each jurisdiction in
which the ownership or lease of its properties, or the conduct of its business,
requires such qualification, except where the failure to be so qualified or in
good standing would have a material adverse effect on the business of the
Company and the Subsidiaries taken as a whole.
(j) Each of the Company and each Subsidiary has all necessary and
material authorizations, approvals, licenses, certificates, permits and orders
of and from all governmental regulatory officials and bodies to own its
properties and to conduct its business as described in the Registration
Statement and Prospectus except where failure to have such items would not have
a material adverse effect on the business of the Company and the Subsidiaries
taken as a whole, and is conducting its business in all material respects with
applicable laws, rules and regulations of the jurisdictions in which it is
conducting business including, but not limited to, all applicable federal and
state laws and regulations that relate to or are concerned in any way with the
business of banking. The Bank is a member in good standing of the Federal Home
Loan Bank of Chicago, deposit accounts in the Bank are insured up to applicable
limits by the Federal Deposit Insurance Corporation, and no proceedings for the
termination or revocation of such membership or insurance are pending or
threatened.
(k) The Company has an authorized and outstanding capitalization as
set forth in the Prospectus. All of the issued and outstanding shares of Common
Stock of the Company and all of the issued and outstanding shares of capital
stock of each Subsidiary have been duly authorized, validly issued and are fully
paid and non-assessable and, in the
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case of the Subsidiaries, are owned of record and beneficially by the Company or
a Subsidiary of the Company as set forth in Exhibit 21 to the Company's Annual
Report on Form 10-K for the year ended December 31, 1995 (except that St. Paul
Service, Inc. has changed its name to SPF Insurance Agency, Inc., SPIC is owned
by the Bank, all of the outstanding common shares of SPAM ("SPAM Common") are
owned by SPIC and all of the Series A Cumulative Preferred Shares of SPAM (the
"SPAM Preferred") are owned by the Bank and certain officers of the Company),
and, except as set forth in the Registration Statement, are free and clear of
any liens, claims, security interests, pledges, charges, encumbrances,
stockholders' agreements and voting trusts or rights of others. Except as set
forth in the Registration Statement, there are no options, agreements, contracts
or other rights in existence (i) to acquire from the Company any shares of
Common Stock or (ii) to acquire from the Company or any Subsidiary any of the
capital stock of any Subsidiary.
(l) The execution and delivery of this Agreement and the Pricing
Agreement, the consummation of the transactions contemplated herein and in the
Registration Statement and compliance with the terms of this Agreement and the
Pricing Agreement have been duly authorized by all necessary corporate action
and will not result in any violation of the Certificate of Incorporation or by-
laws of the Company, and will not conflict with or result in a breach of any of
the terms or provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any Subsidiary under, any contract, indenture,
mortgage, loan agreement, note, lease or other agreement or instrument to which
the Company or any Subsidiary is a party or by which the Company or any
Subsidiary or any of their respective properties is bound, except where such
would not have any material adverse effect on the financial condition, business
or prospects of the Company and the Subsidiaries taken as a whole, or constitute
a violation of any existing applicable law, rule, regulation, judgment, order or
decree of any government, governmental instrumentality or court, domestic or
foreign, having jurisdiction over the Company or any Subsidiary or any of their
respective properties except where such would not have any material adverse
effect on the financial condition, business or prospects of the Company and the
Subsidiaries taken as a whole.
(m) The Notes conform to the descriptions thereof contained in the
Prospectus and will be in substantially the form filed as an exhibit to the
Registration Statement, have been duly and validly authorized and, when
authenticated by the Trustee in the manner set forth in the Indenture and
issued, sold and delivered in accordance with this Agreement, the Pricing
Agreement and the Indenture against payment therefor, will have been duly and
validly executed, authenticated, issued and delivered and will constitute valid
and binding obligations of the Company, entitled to the benefits provided by the
Indenture and enforceable against the Company in accordance with their terms,
except as the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization or similar laws relating to or affecting the rights of creditors,
and by equitable principles.
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(n) The Indenture conforms to the description thereof contained in
the Prospectus and will be substantially in the form filed as an exhibit to the
Registration Statement, has been duly and validly authorized and, when executed
and delivered by the Company and the Trustee, will constitute a valid and
binding instrument of the Company, enforceable against the Company in accordance
with its terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization or similar laws relating to or affecting
the rights of creditors and by equitable principles. Upon execution by the
Company, the Indenture will comply with the Trust Indenture Act and will have
been duly qualified under the Trust Indenture Act at the time the Registration
Statement is declared effective.
(o) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as otherwise stated or
contemplated therein, there has not been (i) any material adverse change in the
financial condition, business or prospects of the Company and the Subsidiaries
taken as a whole, whether or not arising in the ordinary course of business,
(ii) any transaction entered into, or any liability or obligation incurred, by
the Company or any Subsidiary which is material to the Company and the
Subsidiaries taken as a whole, other than in the ordinary course of business,
(iii) any change in the capital stock (other than the issuance of shares of
Common Stock upon exercise of options under the Company's stock option plans
described in the Registration Statement and the repurchase of Common Stock
pursuant to a repurchase plan announced by the Company on January 17, 1996), or
material increase in the short-term debt or long-term debt of the Company or any
Subsidiary, or (iv) any dividend or distribution of any kind declared, paid or
made by the Company on its capital stock, except for regular quarterly dividends
declared, paid or made by the Company in accordance with past practice.
(p) The Company and the Subsidiaries have good and marketable title
to all properties and assets described in the Prospectus as owned by them, free
and clear of all liens, charges, encumbrances or restrictions, except such as
are referred to in the Prospectus or are not materially significant in relation
to the respective businesses of the Company and the Subsidiaries taken as a
whole; all of the leases and subleases material to the business of the Company
under which the Company or any Subsidiary holds properties described in the
Prospectus are in full force and effect; and neither the Company nor any
Subsidiary has any notice of any material claim of any sort which has been
asserted by anyone adverse to the rights of the Company or such Subsidiary as
owner or as lessee or sublessee under any of the leases or subleases mentioned
above, or affecting or questioning the rights of the Company or the Subsidiary
to the continued possession of the leased or subleased premises under any such
lease or sublease, except where such notice or claim would not have a material
adverse effect on the financial condition, business or prospects of the Company
and its Subsidiaries taken as a whole.
(q) The Company has no agreement with any security holder as to which
the Company has not obtained a waiver which gives such security holder the right
to require
-12-
the Company to register under the Act any securities of any nature owned or held
by such person in connection with the transactions contemplated by this
Agreement.
(r) Neither the Company nor any Subsidiary is in default nor will the
performance of this Agreement or the issuance and sale of the Notes result in a
default in the observance of any provision of its charter, certificate or
articles of incorporation or by-laws, or in the performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease, license or other agreement or
instrument to which it is a party or by which it or any of its respective
properties are subject or may be bound, the effect of which could be materially
adverse to the financial condition, business or prospects of the Company and the
Subsidiaries taken as a whole. No consent of any party to any material
contract, indenture, mortgage, loan agreement, note, lease, license or other
agreement or instrument to which the Company or any Subsidiary is a party, or by
which it or any of its respective properties or assets are subject or may be
bound, is required for the execution, delivery or performance of this Agreement
or the Indenture or the issuance and sale of the Notes.
(s) No approval, authorization or consent of any court, governmental
authority or agency having jurisdiction over the Company or any Subsidiary is
required in connection with the issuance and sale of the Notes except filings
under the Act and the Trust Indenture Act which have been or will be made before
the Closing Date.
(t) Neither the Commission nor the Blue Sky or securities authority
of any jurisdiction has issued an order (a "Stop Order") suspending the
effectiveness of the Registration Statement, preventing or suspending the use of
any prospectus subject to completion, the Prospectus, the Registration
Statement, or any amendment or supplement thereto, refusing to permit the
effectiveness of the Registration Statement, suspending the registration or
qualification of the Notes or suspending the qualification of the Indenture, nor
has any of such authorities instituted or, to the knowledge of the Company,
threatened to institute, any proceedings with respect to a Stop Order.
(u) Except as disclosed in the Prospectus, there is no action, suit
or proceeding before or by any court or governmental agency or body, domestic or
foreign, or any arbitrator or arbitration panel, now pending or, to the
knowledge of the Company, threatened against or affecting the Company or any
Subsidiary which might result in any material adverse change in the financial
condition, earnings, business or prospects of the Company and its Subsidiaries
taken as a whole; and there is no decree, judgment or order of any kind in
existence against or restraining the Company or any Subsidiary or any of the
officers, employees or directors of either, from taking any actions of any kind
in connection with the business of the Company or any Subsidiary.
(v) The Bank has not received any notice of proceedings and has no
knowledge of any threatened regulatory action relating to revocation or
modification of any licenses, permits, consents, orders, approvals or
authorizations which singly or in the
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aggregate, if the subject of an unfavorable ruling or finding, would materially
and adversely affect the financial condition, earnings or business of the Bank.
(w) The Company and the Subsidiaries own or possess, or can acquire
on reasonable terms, trademarks, service marks and trade names necessary to
conduct the businesses, in all material respects, now operated by them, and
neither the Company nor any Subsidiary has received any notice of infringement
of or conflict with asserted rights of others with respect to any trademarks,
service marks or trade names which, singly or in the aggregate, if the subject
of any unfavorable decision, ruling or finding, would materially adversely
affect the financial condition, earnings or business of the Company and the
Subsidiaries taken as a whole.
(x) The Company and each of its Subsidiaries has filed all necessary
federal and state income and franchise tax returns and paid all taxes shown as
due thereon or timely filed for extensions thereof. Except as is otherwise
expressly stated in the Registration Statement, the Company has no knowledge of
any tax deficiency which might be asserted against it which would materially and
adversely affect the financial condition, business or prospects of the Company
and the Subsidiaries taken as a whole.
(y) No labor disturbance by the employees of the Company or any
Subsidiary exists or, to the best of the Company's knowledge, is imminent which
could reasonably be expected to have a material adverse effect on the financial
condition, business or prospects of the Company and the Subsidiaries taken as a
whole.
(z) The Company has not taken and will not take, directly or
indirectly, any action (and does not know of any action by its directors,
officers or stockholders or by others) designed to or which has constituted or
which might reasonably be expected to cause or result in, under the Exchange Act
or otherwise, stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Notes.
(aa) At all times since April 30, 1996, SPAM has been organized and
operated in conformity with the requirements for qualification as a real estate
investment trust under the Internal Revenue Code of 1986, as amended (the
"Code"), and its proposed method of operation will enable it to continue to meet
the requirements for taxation as a real estate investment trust under the Code.
7. INDEMNIFICATION AND CONTRIBUTION.
--------------------------------
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls such Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act from and
against any and all losses, claims, damages, liabilities and reasonable expenses
whatsoever (including any investigation and legal or other expenses incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claim asserted) to which they, or any of them, may
-14-
become subject, arising out of or based upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement, any
prospectus subject to completion or the Prospectus or in any amendment or
supplement thereto or arising out of or based upon any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages, liabilities or expenses arise out of or are based upon
any such untrue statement or omission or allegation thereof which has been made
therein or omitted therefrom in reliance upon and in conformity with information
relating to such Underwriter furnished in writing to the Company by or on behalf
of such Underwriter expressly for use therein; provided, however, that the
indemnification contained in this paragraph with respect to any prospectus
subject to completion shall not inure to the benefit of an Underwriter (or of
any person controlling such Underwriter) with respect to any action or claim
arising from the sale of the Notes by such Underwriter brought by any person who
purchased Notes from such Underwriter if (i) a copy of the Prospectus (as
amended or supplemented if any amendments or supplements thereto shall have been
furnished to the Underwriter prior to the written confirmation of the sale
involved) shall not have been given or sent to such person by or on behalf of
the Underwriter with or prior to the written confirmation of the sale involved
and (ii) the untrue statement or omission of a material fact contained in such
prospectus subject to completion was corrected in the Prospectus (as amended or
supplemented, if amended or supplemented, as aforesaid).
(b) If any action or claim shall be brought against any Underwriter
or any person controlling such Underwriter in respect of which indemnity may be
sought against the Company, such Underwriter shall promptly notify the Company
(the "indemnifying party") in writing, and the indemnifying party shall assume
the defense thereof, including the employment of counsel and the payment of all
fees and expenses. The Underwriter or any such person controlling such
Underwriter shall have the right to employ separate counsel in any such action
and participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such Underwriter or such controlling person
unless (i) the Company has agreed in writing to pay such fees and expenses, (ii)
the indemnifying party has failed to assume the defense and employ counsel, or
(iii) the named parties to any such action (including any impleaded party)
include such Underwriter or controlling person and the Company and such
Underwriter or controlling person shall have been advised by such counsel that
there may be one or more legal defenses available to it which are different from
or additional to those available to the Company (in which case if such
Underwriter or controlling person notifies the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such Underwriter or controlling person, it being understood,
however, that the indemnifying party shall not, in connection with any one such
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of more than one separate firm of
attorneys for all such Underwriters and controlling persons, which firm shall be
designated in writing by the Underwriters). The indemnifying party shall not be
liable for any settlement of any such action effected without the written
consent of the Company, but
-15-
if settled with the written consent of the Company, or if there shall be a final
judgment for the plaintiff in any such action and the time for filing all
appeals shall have expired, the indemnifying party agrees to indemnify and hold
harmless the Underwriters and any such controlling persons from and against any
loss or liability by reason of such settlement or judgment.
(c) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement and any person controlling the Company to the same extent
as the foregoing indemnity from the Company to each Underwriter, but only with
respect to (i) information relating to such Underwriter furnished in writing to
the Company by or on behalf of such Underwriter expressly for use in any
prospectus subject to completion or the Registration Statement or the Prospectus
or in any amendment or supplement thereto; or (ii) any gross negligence or
willful misconduct of such Underwriter in connection with such Underwriter's
actions taken pursuant to this Agreement. If any action or claim shall be
brought or asserted against the Company, any of its directors, any such officers
or any such controlling persons based on the Registration Statement, the
Prospectus or any prospectus subject to completion or any amendment or
supplement thereto and in respect of which indemnity may be sought against an
Underwriter, such Underwriter shall have the rights and duties given to the
indemnifying party by Section 7(b) hereof (except that if the Company shall have
assumed the defense thereof, such Underwriter shall not be required to do so,
but may employ separate counsel therein and participate in the defense thereof,
but the fees and expenses of such counsel shall be at the expense of such
Underwriter), and the Company, its directors, any such officers and any such
controlling persons shall have the rights and duties given to the Underwriters
by Section 7(b) hereof.
(d) (i) If the indemnification of the Underwriters or the
Company provided for in this Section 7 is unavailable as a matter of
law to the Underwriters or the Company, as the case may be, in respect
of any losses, claims, damages, liabilities or expenses referred to
therein, then the indemnifying party, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or
payable in damages, liabilities or expenses (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 Notes 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 of the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims,
damages, liabilities or expenses, 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
-16-
total underwriting discount received by the Underwriters, in each case
as set forth in the table on the cover page of the Prospectus (or any
amendment or supplement thereto). The relative fault of the Company on
the one hand and of the Underwriters on the other shall be determined
by reference to, among other things, whether the untrue or alleged
untrue statement or the omission or alleged omission relates to
information supplied by the Company on the one hand or by the
Underwriters on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such
statement or omission.
(ii) The Company and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 7 were
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 immediately preceding paragraph. The amount paid or
payable by an indemnified party as a result of the losses, claims,
damages, liabilities and expenses referred to in the immediately
preceding paragraph shall be deemed to include, subject to the
limitations set forth in this Section 7, any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding
the provisions of this Section 7, no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price
at which the Notes underwritten by it and distributed to the public
exceeds the amount of any damages which such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute pursuant to this Section 7 are several in
proportion to the number of Notes set forth opposite their respective
names in Schedule I to this Agreement and not joint.
(e) The indemnity and contribution agreements contained in this
Section 7 and the representations and warranties of the Company set forth in
this Agreement shall remain operative and in full force and effect, regardless
of (i) any investigation made by or on behalf of any Underwriter or any persons
controlling such Underwriter, the Company or its directors or officers (or any
persons controlling the Company), (ii) acceptance of any Notes and payment
therefor hereunder and (iii) any termination of this Agreement. A successor or
assign of an Underwriter, the Company or its directors or officers and their
legal and personal representatives (or of any persons controlling an Underwriter
or the Company) shall be entitled to the benefits of the indemnity, contribution
and reimbursement agreements contained in this Section 7.
-17-
8. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The several obligations
-------------------------------------------
of the Underwriters to purchase and pay for the Notes hereunder are subject to
the performance by the Company of its obligations hereunder, and to the
following conditions:
(a) That the Registration Statement shall have become effective not
later than 4:30 p.m., Chicago time, on the date hereof, or at such later date
and time as shall be consented to in writing by the Underwriters and, if the
Underwriters and the Company have elected to rely upon Rule 430A under the Act,
the price of the Notes and any price-related or other information previously
omitted from the Registration Statement pursuant to such Rule 430A shall have
been transmitted to the Commission for filing pursuant to Rule 424(b) under the
Act within the prescribed time period, and, on or prior to the Closing Date, the
Company shall have provided evidence satisfactory to the Underwriters of such
timely filing, or a post-effective amendment providing such information shall
have been promptly filed and declared effective in accordance with the
requirements of Rule 430A.
(b) That subsequent to the effective date of the Registration
Statement, (i) there shall not have occurred any material change, or any
material development involving a prospective change, in or affecting
particularly the business or properties of the Company not contemplated by the
Prospectus, which, in the Underwriters' reasonable opinion, after discussion
with the Company, would materially adversely affect the market for the Notes or
make it unpracticable or inadvisable to proceed with the offering or the
delivery of the Notes, as contemplated herein and in the Prospectus, or to
attempt to enforce contracts for the purchase of Notes, and (ii) the business
and operations of the Company and its Subsidiaries, taken as a whole, shall not
have been materially interfered with by strike, fire, flood, accident or other
calamity (whether or not insured).
(c) That the Underwriters shall have received from Hogan & Hartson
L.L.P., special counsel for the Company, a favorable opinion dated the Closing
Date and satisfactory to the Underwriters and the Underwriters counsel to the
effect that:
(i) This Agreement and the Pricing Agreement have been duly
authorized, executed and delivered by the Company and are the legal,
valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms, except as may be limited by
bankruptcy, reorganization, insolvency, moratorium or other laws
affecting creditors' rights, and except as may be limited by the
exercise of judicial discretion in applying general principles of
equity (regardless of whether this Agreement and the Pricing
Agreement are considered in a proceeding in equity or at law); it
being understood, however, that the foregoing shall mean only that if
there is a default in performance of an obligation (i) if a failure
to pay or other damage can be shown and (ii) if the defaulting party
can be brought into a court which will hear the case and apply the
governing law, then, subject to the availability of defenses and the
aforesaid exceptions, the court will provide a money damage (or
perhaps injunctive or specific performance)
-18-
remedy. Notwithstanding the above, such counsel need express no
opinion as to the enforceability of the indemnity and contribution
provisions contained in Section 7 of this Agreement.
(ii) The Notes have been duly and validly authorized by the
Company and, when duly authenticated by the Trustee and issued,
delivered and sold in accordance with this Agreement and the
Indenture, will have been duly and validly executed, authenticated,
issued and delivered and will constitute valid and binding
obligations of the Company, entitled to the benefits provided by the
Indenture (subject to the exceptions hereinafter set forth)
enforceable against the Company in accordance with their terms and
the terms of the Indenture, except as the enforceability thereof may
be limited by bankruptcy, reorganization, insolvency, moratorium or
other laws affecting creditors' rights, and as such as may be limited
by the exercise of judicial discretion in applying general principles
of equity (regardless of whether the Notes are considered in a
proceeding in equity or at law); it being understood, however, that
the foregoing shall mean only that if there is a default in
performance of an obligation (i) if a failure to pay or other damage
can be shown and (ii) if the defaulting party can be brought into a
court which will hear the case and apply the governing law, then,
subject to the availability of defenses and the aforesaid exceptions,
the court will provide a money damage (or perhaps injunctive or
specific performance) remedy. The Notes conform in all material
respects to the description thereof contained in the Prospectus under
the caption "Description of the Notes" and conform in all material
respects to the applicable provisions of the Indenture.
(iii) The Indenture has been duly qualified under the Trust
Indenture Act, conforms in all material respects to the description
thereof contained in the Prospectus under the caption "Description of
the Notes," has been duly authorized and, when duly executed and
delivered by the Company and the Trustee, will constitute a valid and
binding instrument of the Company, enforceable against the Company in
accordance with its terms, except as the enforceability thereof may
be limited by bankruptcy, reorganization, insolvency, moratorium or
other laws affecting creditors' rights, and as such as may be limited
by the exercise of judicial discretion in applying general principles
of equity (regardless of whether the Indenture is considered in a
proceeding in equity or at law); it being understood, however, that
the foregoing shall mean only that if there is default in performance
of an obligation (i) if a failure to pay or other damage can be shown
and (ii) if the defaulting party can be brought into a court which
will hear the case and apply the governing law, then, subject to the
availability of defenses and the aforesaid exceptions, the court will
provide a money damage (or perhaps injunctive or specific
performance) remedy.
-19-
(iv) The Indenture has been qualified under the Trust Indenture
Act.
(v) The Registration Statement has become effective under the
Act and, to the knowledge of such counsel, no Stop Order suspending
the effectiveness of the Registration Statement has been issued, nor
has any proceeding for the issuance of such an order been initiated
or threatened by the Commission.
(vi) The Registration Statement and the Prospectus (other than
the financial statements, supporting schedules and other financial
and statistical data included therein or omitted therefrom, as to
which no opinion need be rendered) comply in all material respects as
to form with the requirements of the Act and the rules and
regulations of the Commission thereunder and the Indenture complies
in all material respects as to form with the Trust Indenture Act.
(vii) The summaries of the provisions of statutes and
regulations included in the Company's Annual Report on Form 10-K for
the year ended December 31, 1995 under the caption "Regulation" are,
as of the date of filing of such report, in all material respects
accurate summaries of the information purported to be summarized.
(viii) The documents filed pursuant to the Exchange Act which are
incorporated by reference in the Prospectus (except for any financial
statements, schedules and other financial and statistical data
included in or omitted from such documents, as to which such counsel
need express no opinion), when they were filed with the Commission
(or, if an amendment with respect to any such document was filed,
when such amendment was filed), complied as to form in all material
respects with the requirements of the Exchange Act and the rules and
regulations of the Commission thereunder.
Such counsel shall also state that, on the basis of such counsel's
participation in conferences with officers and other representatives of the
Company, the Company's auditors, the Subsidiaries, the Underwriters, and counsel
for the Underwriters at which the contents of the Registration Statement and the
Prospectus were discussed, (i) no facts have come to such counsel's attention
that have caused them to believe that the Registration Statement, at the time it
became effective with the Commission, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or that the
Prospectus, at the time the Registration Statement became effective with the
Commission (unless the term "Prospectus" refers to a Rule 424(b) prospectus, in
which case at the time it was filed or transmitted to the Commission for filing)
and at the Closing Date, contained an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements made,
in light of the circumstances under which they were made, not
-20-
misleading (except that they need express no view as to financial statements,
supporting schedules and other financial and statistical data included therein
or omitted therefrom) and (ii) such counsel does not know of any legal or
governmental proceedings pending or threatened against the Company, or any
Subsidiary, required to be described in the Prospectus which are not described
as required, nor of any material contracts of other documents of a character
required to be described in the Registration Statement or to be filed as an
exhibit to the Registration Statement by the Act, which have not been described
or filed (either physically or by incorporation by reference as permitted under
the Act), as required.
In rendering such opinion, counsel for the Company may rely as to
matters of fact, to the extent they deem proper, on certificates of responsible
officers of the Company and the Subsidiaries. In rendering such opinion, such
counsel also may state that they express no opinion as to the laws of any
jurisdiction other than federal securities laws, federal banking, thrift and
thrift holding company laws and the General Corporation Law of the State of
Delaware. In addition, such counsel may state that they express no opinion as to
the application of any rating agency guidelines or initiatives.
(d) That the Underwriters shall have received from Clifford M.
Sladnick, counsel to the Company, a favorable opinion dated the Closing Date and
satisfactory to the Underwriters and the Underwriters' counsel to the effect
that:
(i) Each of the Company and each Material Subsidiary has been
duly organized and is validly existing as a corporation or federal
savings bank in good standing under the laws of its jurisdiction of
incorporation or charter; has the requisite corporate power to own,
lease and operate its properties and conduct its business as
described in the Registration Statement and each is duly qualified to
do business as a foreign corporation or association under the
corporation or banking law of, and is in good standing as such in,
every jurisdiction wherein the ownership or leasing of its properties
or the conduct of its business requires such qualification, except
where the failure to be qualified or in good standing would not have
a material adverse effect on the financial condition, business or
prospects of the Company and its Subsidiaries taken as a whole. Each
of the Material Subsidiaries is wholly-owned by the Company and the
Material Subsidiaries are the Company's only direct subsidiaries.
(ii) The Company has the authorized capitalization set forth in
the Prospectus. Each outstanding share of Common Stock of the Company
and each outstanding share of capital stock of the Bank is duly
authorized, validly issued, fully paid and non-assessable, has not
been issued and is not owned or held in violation of any preemptive
right of stockholders, and in the case of the Bank is owned of record
and beneficially by the Company and, except as disclosed in the
Registration Statement, is held free and clear of all liens,
-21-
claims, security interests, pledges, charges, encumbrances,
stockholders' agreements, voting trusts or claims of others. Except
as set forth in the Prospectus, there is no commitment, plan or
arrangement to issue, and no outstanding option, warrant or other
right calling for the issuance or sale of, any share of capital stock
of the Company or of any Material Subsidiary or any security or other
instrument which by its terms is convertible into, exercisable for or
exchangeable for capital stock of the Company or of any Material
Subsidiary. Except as described in the Registration Statement, there
are no options, agreements, contracts or other rights in existence to
purchase or acquire from any Material Subsidiary or the Company any
issued and outstanding shares of the Common Stock of any Material
Subsidiary.
(iii) The Bank is a federally chartered savings bank, duly
authorized and with full corporate power to own its properties and
carry on its business in all material respects as described in the
Registration Statement. The Bank is a member in good standing of the
Federal Home Loan Bank of Chicago and is an institution, the deposit
accounts in which are insured to applicable limits by the Federal
Deposit Insurance Corporation, and no proceedings for the termination
or revocation of such membership or insurance are pending or, to the
knowledge of such counsel, threatened.
(iv) The execution, delivery and performance of this Agreement,
the Pricing Agreement and the Indenture, and the execution,
authentication, issuance, sale, delivery and performance of the
Notes, will not violate, conflict with, result in a breach of or
(with or without the giving of notice or the passage of time or both)
constitute a default under, the Company's certificate of
incorporation or by-laws or any material indenture, mortgage, deed of
trust or other instrument or agreement to which the Company or a
Material Subsidiary is a party or by which it is bound, or any order,
rule or regulation applicable to the Company or a Material Subsidiary
of any court or other governmental authority, except where such would
not have a material adverse effect on the financial condition,
business or prospects of the Company and its Subsidiaries taken as a
whole. The foregoing references to orders, rules or regulations shall
not be deemed to include any orders, rules or regulations under
federal or state securities laws, certain matters with respect to
which are addressed elsewhere in this opinion.
(v) Such counsel does not know of (A) any pending or
threatened litigation which would impair the enforceability of this
Agreement or the Pricing Agreement, (B) any pending or threatened
litigation or governmental proceedings against the Company or any
Material Subsidiary required to be described in the Prospectus which
are not so described, or (C) any contracts or documents required to
be described in or filed as a part of the Registration Statement
which are not so described or filed.
-22-
(vi) The Company meets the requirements for the use of Form S-3
under the Act in connection with the offer and sale of the Notes. The
Registration Statement and the Prospectus comply in all material
respects as to form with the requirements of the Act and the Trust
Indenture Act and, on the basis of such counsel's participation in
conferences with representatives of the Company, the Company's
auditors, the Subsidiaries, the Underwriters and counsel for the
Underwriters at which conferences the contents of the Registration
Statement, the Prospectus and each prospectus subject to completion
and related matters were discussed, nothing has come to the attention
of such counsel that causes such counsel to believe that the
Registration Statement (including the documents incorporated by
reference therein), at the time it became effective, at the time the
Pricing Agreement was executed and at the Closing Date, contained or
contains any untrue statement of a material fact or omitted or omits
to state any material fact required to be stated therein or necessary
to make the statements therein not misleading, or that the Prospectus
(including the documents incorporated by reference therein), at the
time the Registration Statement became effective (or, if applicable,
at the time the Prospectus was first filed with the Commission
pursuant to Rule 424(b)) and at the Closing Date, contained or
contains any untrue statement of any material fact or omitted or
omits to state any material fact required to be stated therein or
necessary in order to make the statements made therein, in the light
of the circumstances under which they were made, not misleading,
except in each case as to the financial statements and schedules and
other financial and statistical data contained therein, as to which
such counsel need not express any opinion.
(vii) The statements in the Prospectus in the sections captioned
"The Company," "Recent Developments," "Certain Regulatory Matters,"
and "Description of Notes," in each case insofar as such statements
reflect a summary of the legal matters or the documents referred to
therein, fairly and accurately present the information called for by
the Act in all material respects.
(viii) The Bank's only direct subsidiaries are SPF Insurance
Agency, Inc., St. Paul Securities, Inc., Managed Properties, Inc.,
MPI Illinois Corporation, Community Finance Corporation, SPIC,
EFS/San Diego Service Corporation, and EFS Service Corporation, each
of which is wholly owned by the Bank and each of which has been duly
organized and is validly existing as a corporation in good standing
under the laws of the State of Illinois.
(ix) Investment Network, Inc. is the sole direct subsidiary of
St. Paul Securities, Inc., Investment Network Advisors, Inc. is the
sole subsidiary of Investment Network, Inc., and each of Investment
Network, Inc. and Investment Network Advisors, Inc. have been duly
organized and are validly
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existing as a corporation in good standing under the laws of the
State of Illinois.
(x) SPAM, a Maryland real estate investment trust, is the sole
subsidiary of SPIC and has been duly organized and is validly
existing as a real estate investment trust under the laws of the
State of Maryland.
(xi) At all times since April 30, 1996, SPAM has been organized
and operated in conformity with the requirements for qualification as
a real estate investment trust under the Internal Revenue Code of
1986, as amended (the "Code"), and its proposed method of operation
will enable it to continue to meet the requirements for taxation as a
real estate investment trust under the Code.
(xii) The Custom Source Realty Corporation is the sole
subsidiary of St. Paul Financial Development Corporation and has been
duly organized and is validly existing as a corporation in good
standing under the laws of the State of Illinois.
(xiii) Each of the Subsidiaries has the requisite corporate power
to own, lease and operate its properties and conduct its business as
described in the Registration Statement and each is duly qualified to
do business as a foreign corporation under the corporation law of,
and is in good standing as such in, every jurisdiction wherein the
ownership or leasing of its properties or the conduct of its business
requires such qualification and in which the failure to be qualified
or in good standing would have a material adverse effect on the
business of the Company and its Subsidiaries considered as a whole.
(xiv) Each outstanding share of capital stock of each Subsidiary
is duly authorized, validly issued, fully paid and nonassessable, has
not been issued and is not owned or held in violation of any
preemptive right of stockholders, and is, (A) in the case of the
Material Subsidiaries, owned of record and beneficially by the
Company; (B) in the case of SPF Insurance Agency, Inc., St. Paul
Securities, Inc., Managed Properties, Inc., MPI Illinois Corporation,
Community Finance Corporation, SPIC, EFS/San Diego Services
Corporation, and EFS Service Corporation, owned of record and
beneficially by the Bank; (C) in the case of Investment Network, Inc.
owned of record and beneficially by St. Paul Securities, Inc.; (D) in
the case of Investment Network Advisors, Inc. owned of record and
beneficially by Investment Network, Inc.; (E) in the case of SPAM
Common owned of record and beneficially by SPIC; (F) in the case of
SPAM Preferred owned of record and beneficially by the Bank and
certain officers of the Company and (G) in the case of The Custom
Source Realty Corporation owned of
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record and beneficially by St. Paul Financial Development
Corporation. Except as disclosed in the Registration Statement each
outstanding share of capital stock of each Subsidiary is held free
and clear of all liens, claims, security interests, pledges, charges,
encumbrances, stockholders' agreements, voting trusts or claims of
others. There is no commitment, plan or arrangement to issue, and no
outstanding option, agreement, contract, warrant or other right
calling for the issuance or sale of, any share of capital stock of
any Subsidiary or any security or other instrument which by its terms
is convertible into, exercisable for or exchangeable for capital
stock of any Subsidiary.
(xv) The summaries of the provisions of statutes and
regulations included in the Company's Annual Report on Form 10-K for
the year ended December 31, 1995 under the caption "Regulations" are,
as of the date of filing of such report, in all material respects
accurate summaries of the information purported to be summarized and
such summaries, when read together with any superseding information
contained or incorporated by reference in the Prospectus, remain
accurate summaries in all material respects as of the date the
Registration Statement became effective and as of the Closing Date.
(xvi) No authorization, approval or consent of any governmental
authority or agency is required for the execution, delivery or
performance by the Company of this Agreement, the Pricing Agreement
or the Indenture or for the execution, authentication, issuance,
sale, delivery or performance of the Notes, except such as have been
received or as may be required under the Act or state securities
laws.
(e) The favorable opinion dated as of the Closing Date of counsel for
the Trustee, with respect to the status of the Trustee as an Illinois banking
corporation, the due authorization, execution and delivery and enforceability of
the Indenture by and against the Trustee, the due authentication, execution and
delivery of the Notes and such other legal matters as the Underwriters may
require.
(f) That the Underwriters shall have received on the Closing Date an
opinion dated the Closing Date from McDermott, Will & Emery, counsel for the
Underwriters, as to such matters as the Underwriters may reasonably require.
(g) That the Underwriters shall have received letters addressed to
the Underwriters and dated the date hereof and the Closing Date from Ernst &
Young LLP, independent public accountants for the Company, substantially in the
forms heretofore approved by the Underwriters.
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(h) That (i) no Stop Order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been taken or, to the knowledge of the Company, shall be
contemplated by the Commission at or prior to the Closing Date; (ii) there shall
not have been any change in the capital stock of the Company or any Subsidiary
nor any material increase in the short or long-term debt of the Company and its
Subsidiaries taken as a whole from that set forth or contemplated in the
Registration Statement and Prospectus (except pursuant to the exercise of any
option described in the Registration Statement); (iii) there shall not have
been, since the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as may otherwise be set forth
or contemplated in the Registration Statement and the Prospectus, any material
adverse change in the financial condition or results of operations of the
Company and its Subsidiaries, taken as a whole; (iv) the Company and the
Material Subsidiaries shall not have incurred any material liabilities or
obligations, direct or contingent (whether or not in the ordinary course of
business), other than those reflected in the Registration Statement and
Prospectus, and (v) all of the representations and warranties of the Company
contained in this Agreement shall be true and correct in all material respects
on and as of the date hereof and on and as of the Closing Date as if made on and
as of such date, and the Underwriters shall have received a certificate, dated
the Closing Date and signed by the President, Vice President or Secretary of the
Company (or such other officers as are acceptable to the Underwriters) to the
effect set forth in this Section 8(h) and in Sections 8(i) and 8(j) hereof.
(i) Within 24 hours after the Registration Statement becomes
effective, or within such longer period as to which the Underwriters shall have
consented, the Notes shall have been qualified for sale or be exempt from such
qualification under the securities laws of such jurisdictions as the
Underwriters shall have designated prior to the time of execution of the Pricing
Agreement, and such qualification or exemption shall continue in effect to and
including the Closing Date.
(j) That the Company shall not have failed at or prior to the Closing
Date to have performed or complied with any of the agreements herein contained
and required to be performed or complied with by it at or prior to the Closing
Date.
9. EFFECTIVE DATE OF AGREEMENT.
---------------------------
(a) This Agreement shall become effective when notice of the
effectiveness of the Registration Statement has been released by the Commission
and the Pricing Agreement has been executed. Until such time as this Agreement
shall have become effective, it may be terminated by the Company by notifying
the Underwriters or by the Underwriters notifying the Company.
(b) If any one or more of the Underwriters shall fail or refuse to
purchase Notes which it or they have agreed to purchase under this Agreement and
the Pricing Agreement and the aggregate principal amount of Notes which such
defaulting Underwriter
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or Underwriters agreed but failed or refused to purchase is not more than one-
tenth of the aggregate principal amount of Notes, each non-defaulting
Underwriter shall be obligated, severally, in the proportion which the principal
amount of Notes set forth opposite its name in Schedule I bears to the aggregate
principal amount of Notes set forth opposite the names of all non-defaulting
Underwriters or in such other proportion as such non-defaulting Underwriters may
determine, to purchase the Notes which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase. If any Underwriter or
Underwriters shall fail or refuse to purchase Notes and the aggregate principal
amount of Notes with respect to which such default occurs is more than one-tenth
of the aggregate principal amount of Notes and arrangements satisfactory to the
non-defaulting Underwriters and the Company for the purchase of such Notes are
not made within 36 hours after such default, this Agreement will terminate
without liability on the part of any non-defaulting Underwriter or the Company.
In any such case which does not result in termination of this Agreement, either
the non-defaulting Underwriters or the Company shall have the right to postpone
the Closing Date, but in no event for longer than seven days, in order that the
required changes, if any, in the Registration Statement and the Prospectus or
any other documents or arrangements may be effected. Any action taken under this
paragraph shall not relieve any defaulting Underwriter from liability in respect
of any such default of any such Underwriter under this Agreement.
(c) Any notice under this Section 9 may be made by any standard form
of written telecommunication or telephone but shall be subsequently confirmed by
letter.
10. TERMINATION OF AGREEMENT. This Agreement and the Pricing Agreement
------------------------
shall be subject to termination in the Underwriters' absolute discretion,
without liability on the part of any Underwriter to the Company, by notice given
to the Company, if after the date hereof and prior to the Closing Date (i)
trading in securities generally on the New York Stock Exchange, the American
Stock Exchange or the National Association of Securities Dealers Automated
Quotation System shall have been suspended or materially limited, (ii) a general
moratorium on commercial banking activities in the United States or in Illinois
shall have been declared by either federal or state authorities or (iii) there
shall have occurred any outbreak or escalation of hostilities or other
international or domestic calamity, crisis or change in political, financial or
economic conditions the effect of which on the financial markets of the United
States is such as to make it, in the Underwriters' judgment, impracticable or
inadvisable to market the Notes or to enforce contracts for the purchase of
Notes. Notice of such cancellation shall be given to the Company by any standard
form of written telecommunication or telephone but shall be subsequently
confirmed by letter.
11. MISCELLANEOUS.
-------------
(a) Except as otherwise provided in Sections 9 and 10 hereof, notice
given pursuant to any of the provisions of this Agreement shall be in writing
and shall be delivered (a) if to the Company, at the office of the Company at
6700 West North Avenue,
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Chicago, Illinois 60707, Attention: Clifford M. Sladnick, or (b) if to the
Underwriters, at the offices of Keefe, Bruyette & Woods, Inc., Two World Trade
Center, 85th Floor, New York, New York 10048, Attention: Robert J. Stapleton,
and ABN AMRO Chicago Corporation, 208 South LaSalle Street, 4th Floor, Chicago,
Illinois 60604, Attention: Robert C. Douglas or in any case to such other
address as the person to be notified may have requested in writing.
(b) The Agreement herein set forth and the Pricing Agreement are made
solely for the benefit of the Underwriters, the Company, their directors and
officers and other controlling persons referred to in Section 7 hereof and their
respective successors, assigns and personal and legal representatives to the
extent provided herein, and no other person shall acquire or have any right
under or by virtue of this Agreement or the Pricing Agreement. The term
"successors and assigns" as used in this Agreement shall not include a purchaser
from the Underwriters of any of the Notes in his, her or its status as such
purchaser.
12. APPLICABLE LAW. This Agreement and the Pricing Agreement shall be
--------------
governed by and construed in accordance with the laws of the State of Illinois.
13. COUNTERPARTS. This Agreement may be signed in various counterparts
------------
which together shall constitute one and the same instrument.
* * *
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Please confirm that the foregoing correctly sets forth the agreement among the
Company and the Underwriters.
Very truly yours,
ST. PAUL BANCORP, INC.
By:__________________________________
Name:
Title:
CONFIRMED AND ACCEPTED AS OF
THE DATE FIRST ABOVE WRITTEN:
KEEFE, BRUYETTE & WOODS, INC.
By:__________________________
Name:
Title:
ABN AMRO CHICAGO CORPORATION
By:__________________________
Name:
Title:
-29-
ST. PAUL BANCORP, INC.
SCHEDULE I
UNDERWRITERS
------------
PRINCIPAL
AMOUNT OF
NAME NOTES
- ---- ---------
Keefe, Bruyette & Woods, Inc............................
ABN AMRO Chicago Corporation............................
Total................................................... $100,000,000
============
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EXHIBIT A
---------
$100,000,000 AGGREGATE PRINCIPAL AMOUNT OF
_____% SENIOR NOTES DUE 2004
ST. PAUL BANCORP, INC.
PRICING AGREEMENT
-----------------
___________, 1997
KEEFE, BRUYETTE & WOODS, INC.
Two World Trade Center
85th Floor
New York, New York 10048
ABN AMRO CHICAGO CORPORATION
208 South LaSalle Street
Chicago, Illinois 60604
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement dated _________, 1997
(the "Underwriting Agreement"), relating to the purchase by Keefe, Bruyette &
Woods, Inc. and ABN AMRO Chicago Corporation (collectively, the "Underwriters")
of the above referenced senior notes (the "Notes"), of St. Paul Bancorp, Inc.
(the "Company").
Pursuant to the Underwriting Agreement, the Company agrees with the
Underwriters as follows:
1. The initial public offering price for the Notes shall be 100% of
the principal amount thereof.
2. The purchase price per Note to be paid by the Underwriters shall
be______% (or $_______per $1,000) of the principal amount thereof, being an
amount equal to the initial public offering price set forth above
less______% of the principal amount thereof.
3. The concession which may be offered by the Underwriters to
certain dealers shall not exceed______% of the principal amount of the Notes.
The concession which may be offered by the Underwriters or such dealers to
certain other brokers and dealers shall not exceed______% of the principal
amount of the Notes.
This agreement shall be governed by the laws of the State of Illinois
applicable to agreements made and to be performed in said State.
If the foregoing is in accordance with the understanding of the
Underwriters and the Company, please sign and return to the Company a
counterpart hereof, whereupon
A-1
this instrument along with all counterparts will become a binding agreement
between the Underwriters and the Company in accordance with its terms.
Very truly yours,
ST. PAUL BANCORP, INC.
By____________________________________
Name:
Title:
CONFIRMED AND ACCEPTED AS OF
THE DATE FIRST ABOVE WRITTEN:
KEEFE, BRUYETTE & WOODS, INC.
By:____________________________
Name:
Title:
ABN AMRO CHICAGO CORPORATION
By:____________________________
Name:
Title:
A-2