Exhibit Number (1)
To 3/31/97/ Form 10-Q
NTC CAPITAL I
NTC CAPITAL II
NTC CAPITAL III
Preferred Securities
fully and unconditionally guaranteed
to the extent set forth in the Guarantee by
NORTHERN TRUST CORPORATION
Underwriting Agreement
April 22, 1997
Ladies and Gentlemen:
From time to time, NTC Capital I, NTC Capital II or NTC Capital III, each a
statutory business trust created under the laws of the State of Delaware (each a
"Trust" and collectively, the "Trusts"), and Northern Trust Corporation, a
Delaware corporation (the "Guarantor"), as depositor of each Trust and as
Guarantor, propose to enter into one or more Pricing Agreements (each a "Pricing
Agreement") in the form of Annex I hereto, with such additions and deletions as
the parties thereto may determine, and, subject to the terms and conditions
stated herein and therein, which shall provide that the Trust identified in the
applicable Pricing Agreement (such Trust being the "Designated Trust" with
respect to such Pricing Agreement) shall issue and sell to the firms (such firms
constituting the "Underwriters" with respect to such Pricing Agreement and the
securities specified therein) certain of its preferred securities (the
"Securities") identified in Schedule I to the applicable Pricing Agreement (with
respect to such Pricing Agreement, the "Firm Designated Securities")
representing undivided beneficial interests in the assets of the Designated
Trust, guaranteed by the Guarantor to the extent set forth in the guarantee
agreement (the "Guarantee") identified in such Pricing Agreement. If specified
in such Pricing Agreement, the Designated Trust may grant to the Underwriters
the right
to purchase at their election an additional number of Securities, specified in
such Pricing Agreement as provided in Section 3 hereof (the "Optional Designated
Securities"). The Firm Designated Securities and any Optional Designated
Securities are collectively called the "Designated Securities." The proceeds of
the sale of the Designated Securities and of common securities of the Designated
Trust (the "Common Securities") sold to the Guarantor are to be invested in
junior subordinated deferrable interest debentures of the Guarantor (the
"Subordinated Debentures"), to be issued pursuant to a junior subordinated
indenture (the "Indenture") identified in the Pricing Agreement. The Designated
Securities may be exchangeable into Subordinated Debentures, as specified in
Schedule II to such Pricing Agreement. Pursuant to the Guarantee Agreement
identified in the Pricing Agreement relating to any particular issuance of
Designated Securities, the Designated Securities will be guaranteed by the
Guarantor to the extent set forth in such Pricing Agreement (the "Guarantee").
The terms and rights of any particular issuance of Designated Securities
shall be as specified in the Pricing Agreement relating thereto and in or
pursuant to the amended and restated trust agreement (the "Trust Agreement")
among the Guarantor, the trustees named therein (the "Trustees") and the holders
from time to time of the Designated Trust's securities issued thereunder.
Particular sales of Designated Securities may be made from time to time to
the Underwriters of such Securities, for whom the firms designated as
representatives of the Underwriters of such Securities in the Pricing Agreement
relating thereto will act as representatives (the "Representatives"). The term
"Representatives" also refers to a single firm acting as sole representative of
the Underwriters and to Underwriters who act without any firm being designated
as their representative. This Underwriting Agreement shall not be construed as
an obligation of any Trust to sell any of the Securities or as an obligation of
any of the Underwriters to purchase any of the Securities. The obligation of any
Trust to issue and sell any of the Securities and the obligation of any of the
Underwriters to purchase any of the Securities shall be evidenced by the Pricing
Agreement with respect to the Securities specified therein. Each Pricing
Agreement shall specify the aggregate number of Firm Designated Securities, the
aggregate number of Optional Designated Securities, if any, the initial
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public offering price of such Firm and Optional Designated Securities or the
manner of determining such price, the terms of the Designated Securities,
including the terms on which and terms of the securities into which the
Designated Securities will be exchangeable, the purchase price to the
Underwriters of such Designated Securities, the names of the Underwriters of
such Designated Securities, the names of the Representatives of such
Underwriters and the number of such Designated Securities to be purchased by
each Underwriter and the commission, if any, payable to the Underwriters with
respect thereto and shall set forth the date, time and manner of delivery of
such Designated Securities and payment therefor. The Pricing Agreement shall
also specify (to the extent not set forth in the Trust Agreement or the
registration statement and prospectus with respect thereto) the terms of such
Designated Securities. A Pricing Agreement shall be in the form of an executed
writing (which may be in counterparts), and may be evidenced by an exchange of
telegraphic communications or any other rapid transmission device designed to
produce a written record of communications transmitted. The obligations of the
Underwriters under this Agreement and each Pricing Agreement shall be several
and not joint.
1. Each of the Guarantor and each Designated Trust jointly and severally
represents and warrants to, and agrees with, each of the Underwriters that:
(a) A registration statement on Form S-3 (File Nos. 333-18951, 333-
18951-01, 333-18951-02 and 333-18951-03) (the "Initial Registration
Statement") in respect of the Securities, the Subordinated Debentures and
the Guarantees has been filed with the Securities and Exchange Commission
(the "Commission"); the Initial Registration Statement and any post-
effective amendments thereto, each in the form heretofore delivered or to
be delivered to the Representatives and, excluding exhibits to such
registration statement, but including all documents incorporated by
reference in the prospectus contained therein, to the Representatives for
each of the other Underwriters, have been declared effective by the
Commission in such form; no other document (other than a registration
statement, if any, increasing the size of the offering (a "Rule 462(b)
Registration Statement"), filed pursuant to Rule 462(b) under the
Securities Act of 1933, as amended (the "Act"), which became effective
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upon filing) with respect to the Securities, the Subordinated Debentures
and the Guarantees offered pursuant to the Initial Registration Statement
or document incorporated by reference therein has heretofore been filed or
transmitted for filing with the Commission; and no stop order suspending
the effectiveness of the Initial Registration Statement or the Rule 462(b)
Registration Statement has been issued and no proceeding for that purpose
has been initiated or threatened by the Commission (any preliminary
prospectus included in the Initial Registration Statement or filed with the
Commission pursuant to Rule 424(a) of the rules and regulations of the
Commission under the Act, being hereinafter called a "Preliminary
Prospectus"; the various parts of the Initial Registration Statement,
including (i) the information contained in the form of final prospectus
filed with the Commission pursuant to Rule 424(b) under the Act in
accordance with Section 4(a) hereof and deemed by virtue of Rule 430A under
the Act to be part of the Initial Registration Statement at the time it was
declared effective or such part of the Rule 462(b) Registration Statement
that became or hereafter becomes effective, each as amended at the time
such part of a registration statement became effective, and (ii) all
exhibits thereto and the documents incorporated by reference in the
prospectus contained in a registration statement at the time such part of a
registration statement became effective, being hereinafter collectively
called a "Registration Statement"; the prospectus relating to the
Securities, the Subordinated Debentures and the Guarantees, in the form in
which it has most recently been filed, or transmitted for filing, with the
Commission on or prior to the date of this Agreement, being hereinafter
called the "Prospectus"; any reference herein to any Preliminary Prospectus
or the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to the applicable form under the
Act, as of the date of such Preliminary Prospectus or Prospectus, as the
case may be; any reference to any amendment or supplement to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include any documents filed after the date of such Preliminary Prospectus
or Prospectus, as the case may be, under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and incorporated by
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reference in such Preliminary Prospectus or Prospectus, as the case may be;
any reference to any amendment to a Registration Statement shall be deemed
to refer to and include any annual report of the Guarantor filed pursuant
to Section 13(a) or 15(d) of the Exchange Act after the effective date of
such Registration Statement that is incorporated by reference in such
Registration Statement; and any reference to the Prospectus, as amended or
supplemented, shall be deemed to refer to the Prospectus, as amended or
supplemented, in relation to the applicable Designated Securities in the
form in which it is filed with the Commission pursuant to Rule 424(b) under
the Act in accordance with Section 4(a) hereof, including any documents
incorporated by reference therein as of the date of such filing);
(b) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the Act and the rules and regulations of
the Commission thereunder, and 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 light of the
circumstances under which they were made, 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 a Designated Trust or the Guarantor by
an Underwriter of Designated Securities through the Representatives
expressly for use in the Prospectus, as amended or supplemented, relating
to such Securities.
(c) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the Act or
the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder, and none of such documents 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; and any further documents so filed and incorporated by
reference in the Prospectus or any further amendment or supplement
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thereto, when such documents become effective or are filed with the
Commission, as the case may be, will conform in all material respects to
the requirements of the Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder and will 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
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 a Designated Trust or
the Guarantor by an Underwriter of Designated Securities through the
Representatives expressly for use in the Prospectus, as amended or
supplemented, relating to such Securities;
(d) The Initial Registration Statement, any Rule 462(b) Registration
Statement and the Prospectus conform, and any further amendments or
supplements to the Initial Registration Statement, any Rule 462(b)
Registration Statement or the Prospectus will conform, in all material
respects to the requirements of the Act and the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"), and the rules and regulations
of the Commission thereunder and do not and will not, as of the applicable
effective date as to the Initial Registration Statement and any Rule 462(b)
Registration Statement and any amendment thereto and as of the applicable
filing date as to the Prospectus and any amendment or supplement thereto,
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; 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 a
Designated Trust or the Guarantor by an Underwriter of Designated
Securities through the Representatives expressly for use in the Prospectus,
as amended or supplemented, relating to such Securities;
(e) Since the respective dates as of which information is given in
the Initial Registration Statement, any Rule 462(b) Registration Statement
and the Prospectus, there has not been any material adverse
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change, or any development involving a prospective material adverse change,
in or affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Guarantor and its
subsidiaries, considered as a whole, otherwise than as set forth or
contemplated in the Prospectus; and, since the respective dates as of which
information is given in the Initial Registration Statement, any Rule 462(b)
Registration Statement and the Prospectus and except as otherwise set forth
therein, there has not been any change in the capital stock (other than the
Guarantor's purchase of treasury stock in connection with its buy back
program and the issuance of stock upon the exercise of employee stock
options, director stock awards, bonus stock awards and earn-outs of
performance shares) or long-term debt in excess of $10 million of the
Guarantor or any of its subsidiaries, otherwise than as set forth or
contemplated in the Prospectus;
(f) The Guarantor has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the jurisdiction of its
incorporation, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus, and has
been duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other jurisdiction
in which it owns or leases properties or conducts any business so as to
require such qualification, or is subject to no material liability or
disability by reason of the failure to be so qualified in any such
jurisdiction; each subsidiary of the Guarantor has been duly incorporated
and is validly existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, except where such failure to be in
good standing would not have a material adverse effect on the financial
condition, operating results or business prospects of such subsidiary; and
The Northern Trust Company (the "Bank") has the power and authority
(corporate and other) to own its properties and conduct its business as
described in the Prospectus;
(g) The Guarantor is duly registered under the Bank Holding Company
Act of 1956, as amended; and each subsidiary of the Guarantor which
conducts business as
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a bank is duly authorized to conduct such banking business in each
jurisdiction in which such banking business is conducted;
(h) The Guarantor has an authorized capitalization as set forth in the
Prospectus, and all the issued shares of capital stock of the Guarantor
have been duly and validly authorized and issued and are fully paid and
non-assessable; and all of the issued shares of capital stock of each
subsidiary of the Guarantor have been duly and validly authorized and
issued, are fully paid and non-assessable, except as provided in 12 U.S.C.
Section 55, and (except for directors' qualifying shares and except as set
forth in the Prospectus) are owned directly or indirectly by the Guarantor,
free and clear of all liens, encumbrances, equities or claims;
(i) The Designated Trust has been duly created and is validly
existing as a statutory business trust in good standing under the Delaware
Business Trust Act with the power and authority to own its properties and
conduct its business as described in the Prospectus, and the Designated
Trust has conducted no business to date other than as contemplated by this
Agreement and any Pricing Agreement, and it will conduct no business in the
future that would be inconsistent with the Trust Agreement and the
description of the Designated Trust set forth in the Prospectus; the
Designated Trust is not a party to or bound by any agreement or instrument
other than this Agreement, any Pricing Agreement, the Trust Agreement and
the agreements and instruments contemplated by the Trust Agreement; the
Designated Trust has no liabilities or obligations other than those arising
out of the transactions contemplated by this Agreement, any Pricing
Agreement and the Trust Agreement and described in the Prospectus; based on
expected operations and current law, the Designated Trust is not and will
not be classified as an association taxable as a corporation for United
States federal income tax purposes; and the Designated Trust is not a party
to or subject to any action, suit or proceeding of any nature;
(j) The Designated Securities have been duly and validly authorized
by the Designated Trust, and, when issued and delivered against payment
therefor as
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provided herein, will be duly and validly issued and fully paid and non-
assessable undivided beneficial interests in the assets of the Designated
Trust and will conform to the description of the Designated Securities
contained in the Prospectus; the issuance of the Designated Securities is
not subject to preemptive or other similar rights; the Designated
Securities will have the rights set forth in the Trust Agreement, and the
terms of the Designated Securities are valid and binding on the Designated
Trust; and the holders of the Designated Securities (the "Securityholders")
will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware;
(k) The Common Securities of the Designated Trust have been duly and
validly authorized by the Designated Trust and, upon delivery by the
Designated Trust to the Guarantor against payment therefor as described in
the Prospectus, will be duly and validly issued undivided beneficial
interests in the assets of the Designated Trust and will conform in all
material respects to the description thereof contained in the Prospectus;
the issuance of the Common Securities is not subject to preemptive or other
similar rights; and at the Time of Delivery, all of the issued and
outstanding Common Securities of the Designated Trust will be directly
owned by the Guarantor free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity;
(l) The Guarantee, the Subordinated Debentures, the Trust Agreement,
the Indenture and the Agreement as to Expenses and Liabilities between the
Guarantor and the Designated Trust (the "Expense Agreement"); the
Guarantee, the Subordinated Debentures, the Trust Agreement, the Indenture
and the Expense Agreement being collectively referred to as the "Guarantor
Agreements"), when validly executed and delivered by the Guarantor and, in
the case of the Guarantee, by the Guarantee Trustee, in the case of the
Trust Agreement, by the Trustees and, in the case of the Indenture, by the
Debenture Trustee, will constitute valid and legally binding obligations of
the Guarantor, enforceable in accordance with their respective terms,
except as such enforcement may be limited by (i) bank-
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ruptcy, insolvency, moratorium, receivership, reorganization, liquidation,
fraudulent conveyance or transfer and other laws relating to or affecting
creditors' rights generally, (ii) by general equitable principles and
(iii), with respect to the Expense Agreement, the effect of public policy
on the enforceability of provisions relating to indemnification and
contribution; the Subordinated Debentures are entitled to the benefits of
the Indenture; and the Guarantor Agreements will conform to the
descriptions thereof in the Prospectus;
(m) The execution and delivery of this Agreement, any Pricing
Agreement and the Guarantor Agreements, and the consummation of the
transactions contemplated herein and therein, have been duly authorized by
all necessary corporate action and when executed by the Guarantor and the
other parties thereto will not result in a breach or violation of any of
the terms or provisions of, or constitute a default under, or result in the
creation or imposition of any security interest, lien, charge or
encumbrance upon any property or assets of the Guarantor (other than the
Designated Trust), pursuant to any indenture, mortgage, deed of trust, loan
agreement, contract or other agreement or instrument to which the Guarantor
is a party or by which the Guarantor is bound or to which any of its
property or assets is subject, or to which any subsidiary of the Guarantor
is a party or by which any subsidiary of the Guarantor is bound or to which
any of its assets or property is subject where such subsidiary's breach or
violation would have a material adverse effect on the Guarantor and its
subsidiaries, considered as a whole, or would materially impair the ability
of the Guarantor to perform any of its obligations hereunder, under any
Pricing Agreement or in the Guarantor Agreements, nor will such action
result in any violation of the provisions of the Restated Certificate of
Incorporation, as amended, or the By-laws of the Guarantor or any statute
or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Guarantor, its subsidiaries or any of
their respective properties; and no consent, approval, authorization,
order, registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of the
Designated Securities or the
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consummation by the Guarantor or the Designated Trust of the transactions
contemplated by this Agreement, any Pricing Agreement or the Guarantor
Agreements, except such as have been, or will have been, obtained or
received prior to the applicable First Time of Delivery (as defined in
Section 3 hereof) and such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities
or Blue Sky laws in connection with the purchase and distribution of the
Designated Securities by the Underwriters;
(n) Neither the Designated Trust nor the Guarantor is, and after
giving effect to the offering and sale of the Designated Securities,
neither the Designated Trust nor the Guarantor will be, an "investment
company", or an entity "controlled" by an "investment company", as such
terms are defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
(o) Except as set forth or contemplated in the Prospectus, there is
not pending or, to the Guarantor's knowledge, threatened, any actions,
suits or proceedings to which the Guarantor or any of its subsidiaries is a
party, before or by any court or governmental agency or body, which, taking
into account the likelihood of the outcome, the damages or other relief
sought and other relevant factors, individually and in the aggregate, would
reasonably be expected to result in any material adverse change, or any
development involving a prospective material adverse change, in or
affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Guarantor and its
subsidiaries taken as a whole;
(p) The statements set forth in the Prospectus under the captions
"Description of Junior Subordinated Debentures", "Description of Preferred
Securities", "Description of Guarantees" and "Relationship Among the
Preferred Securities, the Corresponding Junior Subordinated Debentures, the
Expense Agreement and the Guarantees", insofar as they constitute a summary
of the terms of the Securities, the Subordinated Debentures, the Guarantees
and the Guarantor Agreements, are accurate and complete in all material
respects;
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(q) To the Guarantor's knowledge, Arthur Andersen LLP, who certified
the financial statements of the Guarantor and its subsidiaries included in
or incorporated by reference in the Prospectus, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder; and
(r) The Guarantor and its affiliates have complied, and as of the
date of any Pricing Agreement will comply, with all of the provisions of
Section 517.075, Florida Statutes, and all rules and regulations
promulgated thereunder, relating to issuers doing business in Cuba.
2. Upon the execution of the Pricing Agreement applicable to any
Designated Securities and authorization by the Representatives of the release of
such Designated Securities, the several Underwriters propose to offer the Firm
Designated Securities for sale upon the terms and conditions set forth in the
Prospectus, as amended or supplemented.
The Designated Trust may specify in the Pricing Agreement applicable
to any Designated Securities that the Designated Trust thereby grants to the
Underwriters the right (an "Over-allotment Option") to purchase at their
election up to the number of Optional Designated Securities set forth in such
Pricing Agreement, on the terms set forth in the paragraph above, for the sole
purpose of covering over-allotments in the sale of the Firm Designated
Securities. Any such election to purchase Optional Designated Securities may be
exercised only by written notice from the Representatives to the Designated
Trust and the Guarantor, given within a period specified in the Pricing
Agreement, setting forth the aggregate number of Optional Designated Securities
to be purchased and the date on which such Optional Designated Securities are to
be delivered, as determined by the Representatives but in no event earlier than
the First Time of Delivery or, unless the Representatives, the Guarantor and the
Designated Trust otherwise agree in writing, earlier than or later than the
respective number of business days after the date of such notice set forth in
such Pricing Agreement.
The number of Optional Designated Securities to be added to the number
of Firm Designated Securities to be
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purchased by each Underwriter as set forth in Schedule I to the Pricing
Agreement applicable to such Designated Securities shall be, in each case, the
number of Optional Designated Securities which each of the Guarantor and the
Designated Trust has been advised by the Representatives have been attributed to
such Underwriter, provided that, if each of the Guarantor and the Designated
Trust has not been so advised, the number of Optional Designated Securities to
be so added shall be, in each case, that proportion of Optional Designated
Securities which the number of Firm Designated Securities to be purchased by
such Underwriter under such Pricing Agreement bears to the aggregate number of
Firm Designated Securities (rounded as the Representatives may determine to the
nearest 100 securities). The total number of Designated Securities to be
purchased by all the Underwriters pursuant to such Pricing Agreement shall be
the aggregate number of Firm Designated Securities set forth in Schedule I to
such Pricing Agreement plus the aggregate number of Optional Designated
Securities which the Underwriters elect to purchase.
3. Designated Securities to be purchased by each Underwriter pursuant to
the Pricing Agreement relating thereto, in definitive form to the extent
practicable, and in such authorized denominations and registered in such names
as the Representatives may request upon at least forty-eight hours' prior notice
to the Designated Trust, shall be delivered by or on behalf of the Designated
Trust to the Representatives for the account of such Underwriter, against
payment by such Underwriter or on its behalf of the purchase price therefor by
certified or official bank check or checks, payable to the order of the
Designated Trust in the funds specified in such Pricing Agreement, all in the
manner and at the place and time and date specified in such Pricing Agreement or
at such other place and time and date as the Representatives and the Designated
Trust may agree upon in writing. Such time and date for delivery of Firm
Designated Securities pursuant to the Pricing Agreement relating thereto is
herein called the "First Time of Delivery," such time and date for delivery of
Optional Designated Securities, if not the First Time of Delivery, is herein
called the "Second Time of Delivery," and each such time and date is herein
called the "Time of Delivery."
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4. The Designated Trust and the Guarantor jointly and severally agree
with each of the Underwriters of any Designated Securities:
(a) To prepare the Prospectus as amended and supplemented in relation
to the applicable Designated Securities in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b) under
the Act not later than the Commission's close of business on the second
business day following the execution and delivery of the Pricing Agreement
relating to the applicable Designated Securities or, if applicable, such
earlier time as may be required by Rule 424(b); to make no further
amendment or any supplement to the Initial Registration Statement or any
Rule 462(b) Registration Statement or Prospectus, as amended or
supplemented, after the date of the Pricing Agreement relating to such
Securities and prior to the Time of Delivery for such Securities which
shall be disapproved by the Representatives for such Securities promptly
after reasonable notice thereof, to advise you promptly after it receives
notice thereof of the time when the Initial Registration Statement or any
Rule 462(b) Registration Statement, or any amendment thereto, has been
filed or becomes effective or any supplement to the Prospectus or any
amended Prospectus has been filed and to furnish the Representatives with
copies thereof; to advise the Representatives promptly of any such
amendment or supplement after such Time of Delivery and furnish the
Representatives with copies thereof; to file promptly all reports and any
definitive proxy or information statements required to be filed by the
Guarantor with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act subsequent to the date of the Prospectus and for so
long as the delivery of a prospectus is required in connection with the
offering or sale of such Securities, and during such same period to advise
the Representatives, promptly after it receives notice thereof, of the time
when any amendment to the Initial Registration Statement or any Rule 462(b)
Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed with
the Commission, of the issuance by the Commission of any stop order or of
any order preventing or suspending the use of any prospectus relating to
the Securities, of the suspension of the
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qualification of such Securities or the Subordinated Debentures issuable
upon exchange of the Securities for offering or sale in any jurisdiction,
of the initiation or threatening of any proceeding for any such purpose, or
of any request by the Commission for the amending or supplementing of the
Initial Registration Statement or any Rule 462(b) Registration Statement or
Prospectus or for additional information; and, in the event of the issuance
of any such stop order or of any such order preventing or suspending the
use of any prospectus relating to the Securities or suspending any such
qualification, to use promptly its best efforts to obtain its withdrawal;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify such Securities or the
Subordinated Debentures issuable upon exchange of the Securities for
offering and sale under the securities laws of such jurisdictions as the
Representatives may request and to comply with such laws so as to permit
the continuance of sales and dealings therein in such jurisdictions for as
long as may be necessary to complete the distribution of such Designated
Securities, provided that in connection therewith neither the Designated
Trust nor the Guarantor shall be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction;
(c) To furnish the Underwriters with copies of the Prospectus, as
amended or supplemented, in such quantities as the Representatives may from
time to time reasonably request, and, if the delivery of a prospectus is
required at any time prior to the expiration of nine months after the time
of issue of the Prospectus in connection with the offering or sale of the
Securities or the Subordinated Debentures issuable upon exchange of the
Securities and if at such time any event shall have occurred as a result of
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is delivered,
not misleading, or, if for any other reason it shall be necessary during
such same period to amend or supplement the Prospectus or to file
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under the Exchange Act any document incorporated by reference in the
Prospectus in order to comply with the Act, the Exchange Act or the Trust
Indenture Act, to notify the Representatives and upon the request of the
Representatives to file such document and to prepare and furnish without
charge to each Underwriter and to any dealer in securities as many copies
as the Representatives may from time to time reasonably request of an
amended Prospectus or a supplement to the Prospectus which will correct
such statement or omission or effect such compliance, and in case any
Underwriter is required to deliver a prospectus in connection with the
offering or sale of the Securities or the Subordinated Debentures issuable
upon exchange of the Securities at any time nine months or more after the
time of issue of the Prospectus, upon an Underwriter's request but at the
expense of such Underwriter, to prepare and deliver to such Underwriter as
many copies as such Underwriter may request of an amended or supplemented
Prospectus complying with Section 10(a)(3) of the Act;
(d) In the case of the Guarantor, to make generally available to its
security holders as soon as practicable, but in any event not later than
eighteen months after the effective date of the Initial Registration
Statement (as defined in Rule 158(c)), an earnings statement of the
Guarantor and its subsidiaries (which need not be audited) complying with
Section 11(a) of the Act and the rules and regulations of the Commission
thereunder (including, at the option of the Guarantor, Rule 158);
(e) During the period beginning from the date of the Pricing
Agreement for such Designated Securities and continuing to and including
the later of (i) the termination of trading restrictions for such
Designated Securities, as notified to the Guarantor by the Representatives
and (ii) the last Time of Delivery for such Designated Securities, not to
offer, sell, contract to sell or otherwise dispose of, except as provided
hereunder, any Securities, any other beneficial interests in the assets of
the Designated Trust, or any preferred securities or any other securities
of the Designated Trust or the Guarantor, as the case may be, that are
substantially similar to such Designated Securities (including any
guarantee of such
-16-
securities) or any securities that are convertible into or exchangeable
for, or that represent the right to receive securities, preferred
securities or any such substantially similar securities of either the
Designated Trust or the Guarantor without the prior written consent of the
Representatives;
(f) Not to have the Designated Trust be or become, at any time prior
to the expiration of three years after the Time of Delivery, an open-end
investment company, unit investment trust, closed-end investment company or
face-amount certificate company that is or is required to be registered
under Section 8 of the Investment Company Act;
(g) In the case of the Guarantor, to issue the Guarantee concurrently
with the issue and sale of the Designated Securities as contemplated herein
or in the Pricing Agreement;
(h) If provided in the applicable Pricing Agreement, to use its best
efforts to list, subject to notice of issuance, the Designated Securities
on the Nasdaq Stock Market; and
(i) If the Guarantor and the Designated Trust elect to rely upon Rule
462(b) under the Act, the Guarantor and the Designated Trust shall file a
Rule 462(b) Registration Statement with the Commission in compliance with
Rule 462(b) under the Act by 10:00 P.M., Washington, D.C. time, on the date
of the applicable Pricing Agreement, and the Guarantor and the Designated
Trust shall at the time of filing either pay to the Commission the filing
fee for the Rule 462(b) Registration Statement or give irrevocable
instructions for the payment of such fee pursuant to Rule 111(b) under the
Act.
5. The Guarantor and the Designated Trust jointly and severally covenant
and agree with the several Underwriters that the Guarantor and the Designated
Trust will pay or cause to be paid the following: (i) the fees, disbursements
and expenses of the Guarantor's or the Designated Trust's counsel and
accountants in connection with the issue of the Designated Securities and all
other expenses in connection with the preparation, printing and distribution of
any Registration Statement, any Preliminary Prospectus and the
-17-
Prospectus and any amendments and supplements thereto and the mailing and
delivering of copies thereof to the Underwriters and dealers; (ii) the cost of
printing or producing any Agreement among Underwriters, this Agreement, any
Pricing Agreement, any Guarantor Agreement, any Blue Sky and Legal Investment
Memoranda, closing documents (including any compilations thereof) and any other
documents in connection with the offering, purchase, sale and delivery of the
Designated Securities; (iii) all expenses in connection with the qualification
of the Designated Securities and the Subordinated Debentures issuable upon
exchange of the Securities for offering and sale under state securities laws as
provided in Section 4(b) hereof, including the reasonable fees and disbursements
of counsel for the Underwriters in connection with such qualification and in
connection with the Blue Sky and legal investment surveys; (iv) any fees charged
by securities rating services for rating the Designated Securities and the
Subordinated Debentures; (v) any filing fees incident to, and the fees and
disbursements of counsel for the Underwriters in connection with, any required
reviews by the National Association of Securities Dealers, Inc. of the terms of
the sale of the Designated Securities and the issuance of the Guarantees and the
Subordinated Debentures; (vi) the cost of preparing certificates for the
Designated Securities and the Subordinated Debentures; (vii) the fees and
expenses of the Trustees, the Debenture Trustee and the Guarantee Trustee and
any agent of the Guarantee Trustee and the Debenture Trustee and the fees and
disbursements of counsel for the Trustees in connection with the Trust Agreement
and the Designated Securities, counsel for the Guarantee Trustee in connection
with the Guarantee and counsel for the Debenture Trustee in connection with the
Indenture and the Subordinated Debentures; (viii) the cost of qualifying the
Designated Securities with The Depository Trust Company; (ix) all fees and
expenses, if any, in connection with the listing of the Designated Securities on
the Nasdaq Stock Market and the cost of registering the Designated Securities
under Section 12 of the Exchange Act; and (x) all other costs and expenses
incident to the performance of its obligations hereunder and under any Over-
allotment Option which are not otherwise specifically provided for in this
Section. It is understood, however, that, except as provided in this Section,
Section 7 and Section 10 hereof, the Underwriters will pay all of their own
costs and expenses, including the fees of their counsel, transfer taxes on
resale of any of the Designated Securities by them,
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and any advertising expenses connected with any offers they may make.
6. The obligations of the Underwriters of any Designated Securities under
the Pricing Agreement relating to such Designated Securities shall be subject,
in the discretion of the Representatives, to the condition that all
representations and warranties and other statements of the Designated Trust and
the Guarantor in or incorporated by reference in the Pricing Agreement relating
to such Designated Securities are, at and as of the respective Time of Delivery
for such Designated Securities, true and correct, the condition that the
Designated Trust and the Guarantor shall have performed all of their respective
obligations hereunder theretofore to be performed, and the following additional
conditions:
(a) The Prospectus, as amended or supplemented, in relation to the
applicable Designated Securities shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed for
such filing by the rules and regulations under the Act and in accordance
with Section 4(a) hereof; if the Guarantor and the Designated Trust have
elected to rely upon Rule 462(b) under the Act, the Rule 462(b)
Registration Statement shall have become effective by 10:00 P.M.,
Washington, D.C. time, on the date of the applicable Pricing Agreement; no
stop order suspending the effectiveness of any Registration Statement or
any part thereof shall have been issued and no proceeding for that purpose
shall have been initiated or threatened by the Commission; and all requests
for additional information on the part of the Commission shall have been
complied with to the Representatives' reasonable satisfaction;
(b) Sullivan & Cromwell shall have furnished to the Representatives
such opinion or opinions, dated the respective Time of Delivery for such
Designated Securities, with respect to such matters as the Representatives
may reasonably request, and such counsel shall have received such papers
and information as they may reasonably request to enable them to pass upon
such matters. In giving such opinion, Sullivan & Cromwell may rely, as to
all matters governed by the laws of jurisdictions in which such counsel is
not qualified, upon opinions of other counsel, who shall be
-19-
counsel satisfactory to counsel for the Representatives, in which case the
opinion or opinions shall state that they believe you and they are entitled
to rely on such opinions;
(c) Peter L. Rossiter, Esq., or the then General Counsel for the
Guarantor, shall have furnished to the Representatives his or her written
opinion, dated the respective Time of Delivery for such Designated
Securities, in form and substance satisfactory to the Representatives, to
the effect that:
(i) All of the issued shares of capital stock of the Guarantor
have been duly and validly authorized and issued and are fully paid
and non-assessable;
(ii) Each subsidiary of the Guarantor which conducts business
as a bank is duly authorized to conduct such banking business and/or
trust business as it conducts in each jurisdiction in the United
States in which it maintains offices for the conduct of such banking
and/or trust business (such counsel being entitled to rely in respect
of the opinion in this clause upon opinions of local counsel and in
respect of matters of fact upon certificates of officers of the
Guarantor, provided that such counsel shall state that he believes
that both you and he are justified in relying upon such opinions and
certificates);
(iii) All of the issued and outstanding shares of capital stock
of each of the "significant subsidiaries" of the Guarantor, as defined
in Regulation S-X adopted by the Commission, have been duly and
validly authorized and issued and are fully paid and non-assessable,
except as provided in 12 U.S.C. Section 55; and all of such shares of
capital stock are owned directly or indirectly by the Guarantor free
and clear of any liens, claims, encumbrances or rights of others
(except for directors' qualifying shares and except as set forth in
the Prospectus, as amended or supplemented); and
-20-
(iv) The documents, as amended prior to the date hereof,
incorporated by reference in the Prospectus (other than the financial
statements and related financial information and schedules therein, as
to which such counsel need express no opinion), when they were filed
with the Commission or as so amended, complied as to form in all
material respects with the requirements of the Exchange Act and the
rules and regulations of the Commission thereunder; and he has no
reason to believe that any such documents, when such documents were so
filed, contained an untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made when
such documents were so filed, not misleading.
(d) Schiff Hardin & Waite, counsel for the Designated Trust and the
Guarantor, shall have furnished to the Representatives their written
opinion, dated the respective Time of Delivery for such Designated
Securities, in form and substance satisfactory to the Representatives, to
the effect that:
(i) The Guarantor has been duly incorporated and is validly
existing as a corporation in good standing under the laws of Delaware,
with corporate power and authority to own its properties and conduct
its business as described in the Prospectus, as amended or
supplemented;
(ii) The Guarantor has an authorized capitalization as set
forth in the Prospectus, as amended or supplemented;
(iii) The Guarantor has been duly qualified as a foreign
corporation for the transaction of business and is in good standing
under the laws of each jurisdiction in which it owns or leases
properties or conducts any business so as to require such
qualification or is subject to no material liability or disability by
reason of the failure to be so qualified in any such jurisdiction
(such counsel being entitled to rely in respect of the opinion in this
clause upon
-21-
opinions of local counsel and in respect of matters of fact upon
certificates of officers of the Guarantor, provided that such counsel
shall state that they believe both you and they are justified in
relying upon such opinions or certificates);
(iv) The Bank has been duly incorporated and is validly
existing as a banking corporation in good standing under the laws of
Illinois, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus, as
amended or supplemented;
(v) The Guarantor is duly registered under the Bank Holding
Company Act of 1956, as amended;
(vi) This Agreement and the Pricing Agreement with respect to
the Designated Securities have been duly authorized, executed and
delivered by the Designated Trust and the Guarantor;
(vii) The Guarantor Agreements have each been duly authorized,
executed and delivered by the Guarantor and/or the Designated Trust,
as the case may be, and the Guarantor Agreements (other than the Trust
Agreement, as to which such counsel need express no opinion)
constitute valid and legally binding instruments and obligations of
the Guarantor and/or the Designated Trust, as the case may be,
enforceable against the Guarantor and/or the Designated Trust, as the
case may be, in accordance with their respective terms, except as such
enforcement may be limited by (a) bankruptcy, insolvency, moratorium,
receivership, reorganization, liquidation, fraudulent conveyance or
transfer and other laws relating to or affecting creditors' rights
generally, (b) by general equitable principles and (c), with respect
to the Expense Agreement, the effect of public policy on the
enforceability of provisions relating to indemnification and
contribution; and the Subordinated Debentures are entitled to the
benefits provided by the Indenture;
-22-
(viii) No consent, approval, authorization, order, registration
or qualification of or with any court or governmental agency or body
is required for the issue and sale of the Guarantee or the
Subordinated Debentures or consummation by the Guarantor of the
transactions contemplated by this Agreement or the Guarantor
Agreements, except such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution of the Designated Securities by the Underwriters;
(ix) The issue by the Guarantor of the Guarantee and the
Subordinated Debentures, the compliance by the Guarantor with all of
the provisions of this Agreement and the Guarantor Agreements, the
execution, delivery and performance by the Guarantor of this Agreement
and the Guarantor Agreements and the consummation of the transactions
herein and therein contemplated will not result in a breach or
violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument filed by the Guarantor as an exhibit
to any report filed pursuant to the Act or Exchange Act on or after
the filing of the Annual Report on Form 10-K for the year ended
December 31, 1996, where such subsidiary's breach or violation would
have a material adverse effect on the Guarantor and its subsidiaries,
considered as a whole, or would materially impair the ability of the
Guarantor to perform any of its obligations hereunder or under the
Guarantor Agreements, nor will such actions result in any violation of
the provisions of the Restated Certificate of Incorporation, as
amended, or By-Laws of the Guarantor or, to the knowledge of such
counsel, any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Guarantor or
any of its subsidiaries or any of their properties;
(x) The statements set forth in the Prospectus under the
caption "Description of Junior Subordinated Debentures", "Description
of
-23-
Preferred Securities", "Description of Guarantees", "Description of
Corresponding Junior Subordinated Debentures" and "Relationship Among
the Preferred Securities, the Corresponding Junior Subordinated
Debentures, the Expense Agreement and the Guarantees" insofar as they
purport to summarize certain provisions of documents specifically
referred to therein, are accurate summaries of such provisions in all
material respects;
(xi) Neither the Designated Trust nor the Guarantor is an
"investment company" or an entity controlled by an "investment
company" required to be registered under the Investment Company Act;
(xii) The documents, as amended prior to the date hereof,
incorporated by reference in the Prospectus, as amended or
supplemented (other than the financial statements and related
financial information and schedules therein, as to which such counsel
need express no opinion), when they became effective or were filed
with the Commission, as the case may be, complied as to form in all
material respects with the requirements of the Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder; and nothing has come to such counsel's attention that
would lead such counsel to believe that any of such documents, when
they became effective or were so filed, as the case may be, contained,
in the case of a registration statement which became effective under
the Act, 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, and, in the case of other documents
which were filed under the Act or the Exchange Act with the
Commission, an untrue statement of a material fact or omitted to state
a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made when such
documents were so filed, not misleading; it being understood that such
counsel need express no opinion as to the financial statements or
other financial information included in any of the
-24-
documents mentioned in this clause and that such counsel may state
that they have not independently verified factual statements in any
such documents; and
(xiii) The Initial Registration Statement, any Rule 462(b)
Registration Statement and the Prospectus, as amended or supplemented,
and any further amendments and supplements thereto made by the
Guarantor or the Designated Trust prior to the Time of Delivery for
the Designated Securities (other than the financial statements and
related financial information and schedules therein, as to which such
counsel need express no opinion) comply as to form in all material
respects with the requirements of the Act and the Trust Indenture Act
and the rules and regulations thereunder; and nothing has come to such
counsel's attention that would lead such counsel to believe that, as
of its effective date, any Registration Statement or any further
amendment thereto made by the Guarantor or the Designated Trust prior
to the Time of Delivery (other than the financial statements and
related financial information and schedules therein, as to which such
counsel need express no opinion) 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, as of its date, the Prospectus, as amended or
supplemented, or any further amendment or supplement thereto made by
the Guarantor or the Designated Trust prior to the Time of Delivery
(other than the financial statements and related financial information
and schedules therein, as to which such counsel need express no
opinion) contained an untrue statement of a material fact or omitted
to state a material fact necessary in order to make the statements
therein, in light of the circumstances in which they were made, not
misleading or that, as of the Time of Delivery, either any
Registration Statement or the Prospectus, as amended or supplemented,
or any further amendment or supplement thereto made by the Guarantor
or the Designated Trust prior to the Time of Delivery (other than the
financial statements and related financial information and schedules
therein, as to
-25-
which such counsel need express no opinion) contains an untrue
statement of a material fact or omits to state a material fact
necessary in order to make the statements therein, in light of the
circumstances in which they were made, not misleading; and such
counsel does not know of any amendment to any Registration Statement
required to be filed or any contracts or other documents of a
character required to be filed as an exhibit to any Registration
Statement or required to be incorporated by reference into the
Prospectus, as amended or supplemented, or required to be described in
any Registration Statement or the Prospectus, as amended or
supplemented, which are not filed or incorporated by reference or
described as required;
(e) Richards, Layton & Finger, special Delaware counsel to the
Designated Trust and the Guarantor, shall have furnished to you, the
Guarantor and the Designated Trust their written opinion, dated the
respective Time of Delivery, in form and substance satisfactory to you, to
the effect that:
(i) The Designated Trust has been duly created and is validly
existing as a business trust in good standing under the Delaware
Business Trust Act and, under the Trust Agreement and the Delaware
Business Trust Act, has the trust power and authority to own its
properties and conduct its business, all as described in the
Prospectus, and all filings required under the laws of the State of
Delaware with respect to the creation and valid existence of the
Designated Trust as a business trust have been made;
(ii) The Trust Agreement constitutes a valid and binding
obligation of the Guarantor and the Trustees, and is enforceable
against the Guarantor and the Trustees, in accordance with its terms,
and the terms of the Designated Securities as set forth in the Trust
Agreement are valid and binding obligations of the Designated Trust in
accordance with the terms of the Trust Agreement, all subject to the
effect upon the Trust Agreement of (a) bankruptcy, insolvency,
moratorium, receivership, reorganization, liquidation, fraudulent
conveyance
-26-
or transfer and other similar laws relating to or affecting the rights
and remedies of creditors generally, (b) principles of equity,
including applicable law relating to fiduciary duties (regardless of
whether considered and applied in a proceeding in equity or at law),
and (c) the effect of applicable public policy on the enforceability
of provisions relating to indemnification or contribution;
(iii) Under the Trust Agreement and the Delaware Business Trust
Act, the Designated Trust has the trust power and authority to (a)
execute and deliver this Agreement and the Pricing Agreement and to
perform its obligations under this Agreement and the Pricing
Agreement, and (b) issue and perform its obligations under the
Designated Securities and the Common Securities;
(iv) Under the Trust Agreement and the Delaware Business Trust
Act, the execution and delivery by the Designated Trust of this
Agreement and the Pricing Agreement and the performance by the
Designated Trust of its obligations hereunder and thereunder have been
duly authorized by all necessary trust action on the part of the
Designated Trust;
(v) The Designated Securities have been duly and validly
authorized by the Trust Agreement, and, when issued and delivered
against payment therefor as provided herein, will be duly and validly
issued and, subject to the qualifications set forth herein, fully paid
and non-assessable undivided beneficial interests in the assets of the
Designated Trust; under the Trust Agreement and the Delaware Business
Trust Act, the issuance of the Designated Securities is not subject to
preemptive or other similar rights; the Designated Securities will
have the rights set forth in the Trust Agreement (subject to the terms
of the Trust Agreement); the Securityholders, as beneficial owners of
the Designated Trust, will be entitled to the same limitation of
personal liability extended to stockholders of private corporations
for profit organized under the General Corporation Law of the State of
Delaware; provided that such
-27-
counsel may note that the Securityholders may be obligated, pursuant
to the Trust Agreement, to (a) provide indemnity and/or security in
connection with and pay taxes or governmental charges arising from
transfers or exchanges of Preferred Securities Certificates (as
defined in the Trust Agreement) and the issuance of replacement
Preferred Securities Certificates and (b) provide security and
indemnity in connection with requests of or directions to the Property
Trustee (as defined in the Trust Agreement) to exercise its rights and
remedies under the Trust Agreement;
(vi) The Common Securities of the Designated Trust and the
Expense Agreement have been duly and validly authorized by the Trust
Agreement; under the Trust Agreement and the Delaware Business Trust
Act, the issuance of the Common Securities is not subject to
preemptive or other similar rights;
(vii) The issue and sale of the Designated Securities and the
Common Securities by the Designated Trust, the execution and delivery
of this Agreement by the Designated Trust, the compliance by the
Designated Trust with all of the provisions of the Designated
Securities, the Trust Agreement, this Agreement and the Pricing
Agreement, the purchase by the Designated Trust of the Subordinated
Debentures and the consummation of the transactions herein and therein
contemplated do not violate (a) the Trust Agreement or the Certificate
of Trust of the Designated Trust or (b) any applicable Delaware law,
rule or regulation;
(viii) No authorization, approval, consent or order of any
Delaware court or Delaware governmental authority or Delaware agency
is required to be obtained by the Designated Trust solely in
connection with the issuance and sale of the Designated Securities and
the Common Securities; and
(ix) Assuming that the Designated Trust derives no income from
or connected with sources
-28-
within the State of Delaware and has no assets, activities (other than
having a Delaware trustee as required by the Delaware Business Trust
Act and filing documents with the Delaware Secretary of State) or
employees in the State of Delaware and that the Designated Trust is
treated as a grantor trust for United States federal income tax
purposes, the Securityholders (other than those holders of the
Designated Securities who reside or are domiciled in the State of
Delaware) will have no liability for income taxes imposed by the State
of Delaware solely as a result of their participation in the
Designated Trust, and the Designated Trust will not be liable for any
income tax imposed by the State of Delaware.
In giving such opinion, Richards, Layton & Finger may rely, as to all
matters governed by the laws of jurisdictions in which such counsel is not
qualified, upon opinions of other counsel, who shall be counsel
satisfactory to counsel for the Representatives, in which case the opinion
shall state that they believe you and they are entitled to rely on such
opinions.
(f) Schiff Hardin & Waite, tax counsel for the Designated Trust and
the Guarantor, shall have furnished to you their written opinion, dated the
respective Time of Delivery, in form and substance satisfactory to you, to
the effect that such firm confirms its opinion set forth in the Prospectus
under the caption "Certain Federal Income Tax Consequences";
(g) At the respective Time of Delivery for such Designated
Securities, and, if so specified in the Pricing Agreement, on the date of
the Pricing Agreement, Arthur Andersen LLP, the independent accountants of
the Guarantor who have certified the financial statements of the Guarantor
and its subsidiaries included or incorporated by reference in the Initial
Registration Statement and any Rule 462(b) Registration Statement, shall
have furnished to the Representatives a letter, dated such Time of Delivery
and, if applicable, such date of the Pricing Agreement, respectively, to
the effect set forth in Annex II hereto, and with respect to such letter
dated such Time of Delivery, as to such other matters as the
-29-
Representatives may reasonably request and in form and substance
satisfactory to the Representatives;
(h) Since the respective dates as of which information is given in
the Prospectus, as amended or supplemented, there shall not have been (i)
any change in the capital stock (other than the Guarantor's purchase of
treasury stock in connection with its buy back program and the issuance of
stock upon the exercise of employee stock options, director stock awards,
bonus stock awards and earn-outs of performance shares) or long-term debt
in excess of $10 million of the Guarantor or any of its subsidiaries or
(ii) any change, or any development involving a prospective change, in or
affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Guarantor and its
subsidiaries, in each case, otherwise than as set forth or contemplated in
the Prospectus, as amended or supplemented, the effect of which, in any
such case described in Clause (i) or (ii), is in the judgment of the
Representatives so material and adverse as to make it impracticable or
inadvisable to proceed with the offering or the delivery of the Designated
Securities on the terms and in the manner contemplated in the Prospectus,
as amended or supplemented;
(i) On or after the date hereof (i) no downgrading shall have
occurred in the rating accorded the Guarantor's or the Bank's debt
securities or preferred stock by any "nationally recognized statistical
rating organization," as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the Act, and (ii) no such organization
shall have publicly announced that it has under surveillance or review,
with possible negative implications, its rating of any of the Guarantor's
or the Bank's debt securities or preferred stock;
(j) On or after the date hereof, there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange or the Nasdaq Stock
Market; (ii) a suspension or material limitation in trading in the
Guarantor's securities on the Nasdaq Stock Market; (iii) a general
moratorium on commercial banking activities in Illinois or New York
declared by
-30-
federal, Illinois or New York State authorities; or (iv) the outbreak or
escalation of hostilities involving the United States or the declaration by
the United States of a national emergency or war, if the effect of any such
event specified in this clause (iv) in the judgment of the Representatives
makes it impracticable or inadvisable to proceed with the offering or the
delivery of the Designated Securities on the terms and in the manner
contemplated by the Prospectus, as amended and supplemented;
(k) If provided in the applicable Pricing Agreement, the Designated
Securities to be sold by the Designated Trust at the respective Time of
Delivery shall have been duly listed, subject to notice of issuance, on the
Nasdaq Stock Market; and
(l) The Designated Trust and the Guarantor shall have furnished or
caused to be furnished to the Representatives at the respective Time of
Delivery for the Designated Securities certificates of officers of the
Designated Trust and the Guarantor satisfactory to the Representatives as
to the accuracy of the representations and warranties of the Designated
Trust and the Guarantor herein at and as of such Time of Delivery, as to
the performance by the Designated Trust and the Guarantor of all of their
obligations hereunder to be performed at or prior to such Time of Delivery,
as to the matters set forth in subsections (a) and (h) of this Section and
as to such other matters as the Representatives may reasonably request.
7. (a) The Designated Trust and the Guarantor jointly and severally
will 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, 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 any Preliminary Prospectus, any preliminary
prospectus supplement, any Registration Statement, the Prospectus, as
amended or supplemented, and any other prospectus relating to any
Designated Securities, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein
-31-
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 such Underwriter in
connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that neither the Designated Trust
nor the Guarantor shall be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged
omission made in any Preliminary Prospectus, any preliminary prospectus
supplement, any Registration Statement, the Prospectus, as amended or
supplemented, and any other prospectus relating to the Designated
Securities, or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Designated Trust or
the Guarantor by any Underwriter of Designated Securities through the
Representatives expressly for use in the Prospectus, as amended or
supplemented, relating to such Securities.
(b) Each Underwriter will indemnify and hold harmless the Designated
Trust and the Guarantor against any losses, claims, damages or liabilities
to which the Designated Trust or the Guarantor may become subject, under
the Act or otherwise, 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 any Preliminary Prospectus, any preliminary prospectus
supplement, any Registration Statement, the Prospectus, as amended or
supplemented, and any other prospectus relating to the Securities, or any
amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged
omission was made in any Preliminary Prospectus, any preliminary prospectus
supplement, any Registration Statement, the Prospectus, as amended or
supplemented, and any other prospectus relating to the Securities, or any
such amendment or supplement in reliance upon and in conformity with
-32-
written information furnished to the Designated Trust or the Guarantor by
such Underwriter through the Representatives expressly for use therein; and
will reimburse the Designated Trust or the Guarantor for any legal or other
expenses reasonably incurred by the Designated Trust or the Guarantor in
connection with investigating or defending any such action or claim as such
expenses are incurred.
(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 will, 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 it from any liability which it may
have to any indemnified party otherwise than under such subsection. In any
such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the
expense of such indemnified party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified
party and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them.
It is understood that the indemnifying party shall not, in connection with
any proceeding or related proceedings in the same jurisdiction, be liable
for the reasonable fees and expenses of more than one separate firm for all
such indemnified parties. Such firm shall be designated in writing by the
Representatives in the case of parties indemnified pursuant to subsection
(a) above and by the Guarantor in the case of parties indemnified pursuant
to subsection (b) above.
(d) If the indemnification provided for in this Section 7 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party
-33-
as a result of such losses, claims, damages or liabilities (or actions in
respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Designated Trust and the Guarantor on the
one hand and the Underwriters of the Designated Securities on the other
from the offering of the Designated Securities to which such loss, claim,
damage or liability (or action in respect thereof) relates. If, however,
the allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the indemnified party failed to give the
notice required under subsection (c) above, then each indemnifying party
shall contribute to such amount paid or payable by such indemnified party
in such proportion as is appropriate to reflect not only such relative
benefits but also the relative fault of the Designated Trust and the
Guarantor on the one hand and the Underwriters of the Designated Securities
on the other in connection with the statements or omissions which resulted
in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Designated Trust and the Guarantor on the
one hand and such Underwriters on the other shall be deemed to be in the
same proportion as the total net proceeds from such offering (before
deducting expenses) received by the Designated Trust bear to the total
compensation (before deducting expenses) received or realized by the
Underwriters from the underwriting of the Designated Securities. 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 Designated Trust and the Guarantor on the one
hand or such Underwriters on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Designated Trust, the Guarantor and the
Underwriters agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were determined by pro rata allocation or
by any other method of allocation (even if the Underwriters were treated as
one entity for such purpose) which does not take account of the equitable
considerations referred to above in this subsection (d). The amount paid or
payable by an
-34-
indemnified party as a result of the losses, claims, damages or liabilities
(or actions in respect thereof) referred to above in 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 any
such action or claim. 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 applicable Designated
Securities underwritten by it and distributed to the public were offered to
the public exceeds the amount of any damages which such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The obligations of the Underwriters of
Designated Securities in this subsection (d) to contribute are several in
proportion to their respective underwriting obligations with respect to
such Securities and not joint. For purposes of this Section 7, each person
who controls an Underwriter within the meaning of the Act shall have the
same rights to contribution as such Underwriter, and each person who
controls the Guarantor or the Designated Trust within the meaning of the
Act, and each director of the Guarantor and each administrative trustee of
the Designated Trust, shall have the same rights to contribution as the
Guarantor and the Designated Trust, subject in each case to the limitation
described in the preceding sentence.
(e) The obligations of the Designated Trust and the Guarantor under
this Section 7 shall be in addition to any liability which the Designated
Trust and the Guarantor 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 7 shall be in addition to any liability which the
respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Guarantor, to
each administrative trustee of the Designated Trust and to
-35-
each person, if any, who controls the Designated Trust or the Guarantor
within the meaning of the Act.
8.(a) If any Underwriter shall default in its obligation to purchase
the Firm Designated Securities or the Optional Designated Securities which
it has agreed to purchase under the Pricing Agreement relating to such
Designated Securities, the Representatives may in their discretion arrange
for themselves or another party or other parties to purchase such
Designated Securities on the terms contained herein and in such Pricing
Agreement. If within thirty-six hours after such default by any Underwriter
the Representatives do not arrange for the purchase of such Firm Designated
Securities or such Optional Designated Securities, as the case may be, then
the Designated Trust and the Guarantor shall be entitled to a further
period of thirty-six hours within which to procure another party or other
parties satisfactory to the Representatives to purchase such Designated
Securities on such terms. In the event that, within the respective
prescribed period, the Representatives notify the Designated Trust and the
Guarantor that they have so arranged for the purchase of such Designated
Securities, or the Designated Trust and the Guarantor notifies the
Representatives that they have so arranged for the purchase of such
Designated Securities, the Representatives or the Designated Trust and the
Guarantor shall have the right to postpone the Time of Delivery for such
Designated Securities for a period of not more than seven days, in order to
effect whatever changes may thereby be made necessary in any Registration
Statement or the Prospectus, as amended or supplemented, or in any other
documents or arrangements, and the Designated Trust and the Guarantor agree
to file promptly any amendments or supplements to any Registration
Statement or the Prospectus which in the opinion of the Representatives may
thereby be made necessary. The term "Underwriter" as used in this Agreement
shall include any person substituted under this Section with like effect as
if such person had originally been a party to the Pricing Agreement with
respect to such Designated Securities.
(b) If, after giving effect to any arrangements for the purchase of
the Firm Designated Securities or Optional Designated Securities, as the
case may be, of
-36-
a defaulting Underwriter or Underwriters by the Representatives and the
Designated Trust and the Guarantor as provided in subsection (a) above, the
aggregate number of such Designated Securities which remains unpurchased
does not exceed one-eleventh of the aggregate number of the Firm Designated
Securities or Optional Designated Securities, as the case may be, to be
purchased at the respective Time of Delivery, then the Designated Trust and
the Guarantor shall have the right to require each non-defaulting
Underwriter to purchase the number of Firm Designated Securities or
Optional Designated Securities, as the case may be, which such Underwriter
agreed to purchase under the Pricing Agreement relating to such Designated
Securities and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the number of Firm Designated
Securities or Optional Designated Securities, as the case may be, which
such Underwriter agreed to purchase under such Pricing Agreement) of the
Firm Designated Securities or Optional Designated Securities, as the case
may be, of such defaulting Underwriter or Underwriters for which such
arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of
the Firm Designated Securities or Optional Designated Securities, as the
case may be, of a defaulting Underwriter or Underwriters by the
Representatives and the Designated Trust and the Guarantor as provided in
subsection (a) above, the aggregate number of Firm Designated Securities or
Optional Designated Securities, as the case may be, which remains
unpurchased exceeds one-eleventh of the aggregate number of the Firm
Designated Securities or Optional Designated Securities, as the case may
be, to be purchased at the respective Time of Delivery, as referred to in
subsection (b) above, or if the Designated Trust and the Guarantor shall
not exercise the right described in subsection (b) above to require non-
defaulting Underwriters to purchase Firm Designated Securities or Optional
Designated Securities, as the case may be, of a defaulting Underwriter or
Underwriters, then the Pricing Agreement relating to such Firm Designated
Securities or Optional Designated Securities, as the case may be, shall
thereupon
-37-
terminate, without liability on the part of any non-defaulting Underwriter,
the Designated Trust or the Guarantor, except for the expenses to be borne
by the Designated Trust, the Guarantor and the Underwriters as provided in
Section 5 hereof and the indemnity and contribution agreements in Section 7
hereof; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
9. The respective indemnities, agreements, representations, warranties
and other statements of the Designated Trust, the Guarantor and the several
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of any Underwriter or any controlling person of any
Underwriter, or the Designated Trust, the Guarantor, or any officer or director
or controlling person of the Designated Trust or the Guarantor, and shall
survive delivery of and payment for the Designated Securities.
10. If any Pricing Agreement or Over-allotment Option shall be
terminated pursuant to Section 8 hereof, neither the Designated Trust nor the
Guarantor shall then be under any liability to any Underwriter with respect to
the Firm Designated Securities or Optional Designated Securities covered by such
Pricing Agreement except as provided in Section 5 and Section 7 hereof; but, if
for any other reason, Designated Securities are not delivered by or on behalf of
the Designated Trust as provided herein, the Designated Trust and the Guarantor
will reimburse the Underwriters through the Representatives for all out-of-
pocket expenses approved in writing by the Representatives, including fees and
disbursements of counsel, reasonably incurred by the Underwriters in making
preparations for the purchase, sale and delivery of such Designated Securities,
but the Designated Trust and the Guarantor shall then be under no further
liability to any Underwriter with respect to such Designated Securities except
as provided in Section 5 and Section 7 hereof.
11. In all dealings hereunder, the Representatives of the Underwriters
of Designated Securities shall act on behalf of each of such Underwriters, and
the parties hereto shall be entitled to act and rely upon any statement,
request, notice or agreement on behalf of any Underwriter
-38-
made or given by such Representatives jointly or by such of the Representatives,
if any, as may be designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Representatives as set forth in the
Pricing Agreement; and if to the Designated Trust or the Guarantor shall be
delivered or sent by mail, telex or facsimile transmission to the address of the
Designated Trust or the Guarantor set forth in the Initial Registration
Statement: Attention: Corporate Secretary, with a copy to Northern Trust
Corporation, Fifty South LaSalle Street, Chicago, Illinois 60675, Attention:
General Counsel, Facsimile Transmission No. (312) 630-1596; provided, however,
that any notice to an Underwriter pursuant to Section 7(c) hereof shall be
delivered or sent by mail, telex or facsimile transmission to such Underwriter
at its address set forth in its Underwriters' Questionnaire, or telex
constituting such Questionnaire, which address will be supplied to the
Designated Trust and the Guarantor by the Representatives upon request. Any such
statements, requests, notices or agreements shall take effect upon receipt
thereof.
12. This Agreement and each Pricing Agreement shall be binding upon, and
inure solely to the benefit of, the Underwriters, the Designated Trust and the
Guarantor and, to the extent provided in Section 7 and Section 9 hereof, the
officers and directors of the Designated Trust or the Guarantor and each person
who controls the Designated Trust, the Guarantor or any Underwriter, and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement or any such Pricing Agreement. No purchaser of any of the Designated
Securities from any Underwriter shall be deemed a successor or assign by reason
merely of such purchase.
13. Time shall be of the essence of each Pricing Agreement. As used herein,
"business day" shall mean any day when the Commission's office in Washington,
D.C. is open for business.
-39-
14. This Agreement and each Pricing Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
15. This Agreement and each Pricing Agreement may be executed by any one or
more of the parties hereto and thereto in any number of counterparts, each of
which shall be deemed to be an original, but all such respective counterparts
shall together constitute one and the same instrument.
-40-
If the foregoing is in accordance with your understanding, please sign and
return to us six counterparts hereof.
Very truly yours,
NORTHERN TRUST CORPORATION
By:
-----------------------------------
Name: Perry R. Pero
Title: Senior Executive Vice
President and Chief
Financial Officer
NTC CAPITAL I
By: Northern Trust Corporation,
as Depositor
By:
-----------------------------------
Name: Perry R. Pero
Title: Senior Executive Vice
President and Chief
Financial Officer
NTC CAPITAL II
By: Northern Trust Corporation,
as Depositor
By:
-----------------------------------
Name: Perry R. Pero
Title: Senior Executive Vice
President and Chief
Financial Officer
NTC CAPITAL III
By: Northern Trust Corporation,
as Depositor
By:
-----------------------------------
Name: Perry R. Pero
Title: Senior Executive Vice
President and Chief
Financial Officer
-41-
Accepted on behalf of ourselves and the other Underwriters listed in Schedule I
to the Pricing Agreement:
Salomon Brothers Inc
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By: Salomon Brothers Inc
By:
--------------------------------
Name:
Title:
On behalf of each of the Underwriters
-42-
ANNEX I
Pricing Agreement
-----------------
Salomon Brothers Inc,
Merrill Lynch, Pierce, Fenner & Smith
Incorporated,
[As Representatives of the several
Underwriters named in Schedule I hereto,]
c/o Salomon Brothers Inc,
Seven World Trade Center,
New York, New York 10048.
_________ __, ____
Dear Sirs:
NTC Capital ___, a statutory business trust created under the laws of the
State of Delaware (the "Designated Trust"), and Northern Trust Corporation, a
Delaware corporation (the "Guarantor"), propose, subject to the terms and
conditions stated herein and in the Underwriting Agreement, dated April 22, 1997
(the "Underwriting Agreement"), among the Guarantor and the Designated Trust on
the one hand and the Underwriters named in Schedule I to the Underwriting
Agreement, on the other hand, to issue and sell to the Underwriters named in
Schedule I hereto (the "Underwriters") the Securities specified in Schedule II
hereto (the "Designated Securities", consisting of Firm Designated Securities
and any Optional Designated Securities the Underwriters may elect to purchase).
Each of the provisions of the Underwriting Agreement is incorporated herein by
reference in its entirety, and shall be deemed to be a part of this Agreement to
the same extent as if such provisions had been set forth in full herein; and
each of the representations and warranties set forth therein shall be deemed to
have been made at and as of the date of this Pricing Agreement, except that each
representation and warranty which refers to the Prospectus in Section 2 of the
Underwriting Agreement shall be deemed to be a representation or warranty as of
the date of the Underwriting Agreement in relation to the Prospectus (as therein
defined), and also a representation and warranty as of the date of this Pricing
Agreement in relation to the Prospectus, as amended or supplemented,
-43-
relating to the Designated Securities which are the subject of this Pricing
Agreement. Each reference to the Representatives herein and in the provisions of
the Underwriting Agreement so incorporated by reference shall be deemed to refer
to you. Unless otherwise defined herein, terms defined in the Underwriting
Agreement are used herein as therein defined. Any Representatives designated to
act on behalf of the Representatives and on behalf of each of the Underwriters
of the Designated Securities pursuant to Section 11 of the Underwriting
Agreement and the address of the Representatives referred to in such Section 11,
if any, are set forth at the end of Schedule II hereto.
An amendment to the Initial Registration Statement, a Rule 462(b)
Registration Statement or a supplement to the Prospectus, as the case may be,
relating to the Designated Securities, in the form heretofore delivered to you
is now proposed to be filed with the Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, (a) the Designated
Trust agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Designated
Trust, at the time and place and at the purchase price to the Underwriters set
forth in Schedule II hereto, the number of Firm Designated Securities set forth
opposite the name of such Underwriter in Schedule I hereto, and (b) in the event
and to the extent that the Underwriters shall exercise the election to purchase
Optional Designated Securities, as provided below, the Designated Trust agrees
to issue and sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Designated Trust at the
purchase price to the Underwriters set out in Schedule II hereto that portion of
the number of Optional Designated Securities as to which such election shall
have been exercised.
The Designated Trust hereby grants to each of the Underwriters the right to
purchase at their election up to the number of Optional Designated Securities
set forth opposite the name of such Underwriter in Schedule I hereto on the
terms referred to in the paragraph above for the sole purpose of covering over-
allotments in the sale of the Firm Designated Securities. Any such election to
purchase Optional Designated Securities may be exercised by written
-44-
notice from the Representatives to the Designated Trust and the Guarantor given
within a period of 30 calendar days after the date of this Pricing Agreement,
setting forth the aggregate number of Optional Designated Securities to be
purchased and the date on which such Optional Designated Securities are to be
delivered, as determined by the Underwriters, but in no event earlier than the
First Time of Delivery or, unless the Underwriters, the Guarantor and the
Designated Trust otherwise agree in writing, no earlier than two or later than
ten business days after the date of such notice.
If the foregoing is in accordance with your understanding, please sign and
return to us six counterparts hereof, and upon acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement between each of the
Underwriters, the Designated Trust and the Guarantor. It is understood that your
acceptance of this letter on behalf of each of the Underwriters is or will be
pursuant to the authority set forth in a form of Agreement among Underwriters,
the form of which shall be submitted to the Guarantor for examination upon
request, but without warranty on the part of the Underwriters as to the
authority of the signers thereof.
Very truly yours,
NORTHERN TRUST CORPORATION
By:
-------------------------
Name:
Title:
NTC CAPITAL _____
By: Northern Trust Corporation,
as Depositor
By:
-------------------------
Name:
Title:
-45-
Accepted as of the date hereof:
Salomon Brothers Inc
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
[As Representatives of the Underwriters
named in Schedule I hereto]
By: Salomon Brothers Inc
By:
------------------------
Name:
Title:
On behalf of each of the Underwriters
named on Schedule I hereto
-46-
SCHEDULE I
Number of
Maximum
Number of Firm Optional
Designated Designated
Securities to be Securities to
Underwriter Purchased be Purchased
- ----------- ---------------- --------------
[Names of Underwriters] ...
Total
---------------- --------------
================ ==============
-47-
SCHEDULE II
Designated Trust:
NTC Capital __
Title of Designated Securities:
___% Preferred Securities, Series ___
Aggregate principal amount:
Aggregate principal amount of Firm Designated Securities:
$_________________________
Maximum aggregate principal amount of Optional Designated Securities:
$_________________________
Price to Public
______% of the principal amount of the Designated Securities
Purchase Price by Underwriters:
______% of the principal amount of the Designated Securities
Underwriters' Compensation:
$_____ per Designated Security
Specified funds for payment of purchase price:
New York Clearing House same-day funds
Accountants' Letter to be delivered on date of Pricing Agreement:
Yes.
Trust Agreement:
Amended and Restated Trust Agreement dated __________________, among the
Guarantor, the Trustees named therein and the holders from time to time of
undivided beneficial interests of the Designated Trust.
-48-
Indenture:
Junior Subordinated Indenture dated as of January 1, 1997, between the
Guarantor and The First National Bank of Chicago, as Debenture Trustee (the
"Indenture")
Guarantee:
Guarantee Agreement, dated as of _________________, between Guarantor and
Guarantee Trustee
Maturity:
Interest Rate:
_____%
Interest Payment Dates:
Extension Period:
[20 quarters]
Redemption Provisions:
[The redemption provisions set forth in Section 4.2 of the Trust Agreement
shall apply to the Designated Securities.]
Sinking Fund Provisions:
No sinking fund provisions.
[First] Time of Delivery:
10:00 a.m., New York City time _______ ___, ____
Closing Location:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
-49-
[Names and addresses of Representatives:]
-50-
ANNEX II
Accountants' Letter
-------------------
Pursuant to Section 6(g) of the Underwriting Agreement, the Guarantor's
independent certified public accountants shall furnish letters to the effect
that:
(i) they are independent certified public accountants with respect to
the Guarantor and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) in their opinion, the financial statements and any supplementary
financial information and schedules (and, if applicable, prospective
financial statements and/or pro forma financial information) examined by
them and included or incorporated by reference in any Registration
Statement or the Prospectus comply as to form in all material respects with
the applicable accounting requirements of the Act or the Exchange Act, as
applicable, and the related published rules and regulations thereunder;
and, if reasonably requested by the Representatives, they have made a
review in accordance with standards established by the American Institute
of Certified Public Accountants of the unaudited consolidated interim
financial statements, selected financial data, pro forma financial
information, prospective financial statements and/or condensed financial
statements derived from audited financial statements of the Guarantor for
the periods specified in such letter, as indicated in their reports
thereon, copies of which have been furnished to the representatives of the
Underwriters (the "Representatives");
(iii) they have made a review in accordance with standards established
by the American Institute of Certified Public Accountants of the unaudited
condensed consolidated statements of income, consolidated balance sheets
and consolidated statements of cash flows included in the Prospectus and/or
included in the Guarantor's quarterly reports on Form 10-Q incorporated by
reference into the Prospectus as indicated in their reports thereon copies
of which have been separately
-51-
furnished to the Representatives; and on the basis of specified procedures
including inquiries of officials of the Guarantor who have responsibility
for financial and accounting matters regarding whether the unaudited
condensed consolidated financial statements referred to in paragraph (v)(A)
below comply as to form in all material respects with the applicable
accounting requirements of the Act and the Exchange Act and the related
published rules and regulations, nothing came to their attention that
caused them to believe that the unaudited condensed consolidated financial
statements do not comply as to form in all material respects with the
applicable accounting requirements of the Act and the Exchange Act and the
related published rules and regulations;
(iv) the unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Guarantor
for the five most recent fiscal years included in the Prospectus and
included or incorporated by reference in Item 2 of the Guarantor's
Registration Statement on Form 10 or Item 6 of the Guarantor's Annual
Report on Form 10-K for the most recent fiscal year, as applicable, agrees
with the corresponding amounts (after restatement where applicable) in the
audited consolidated financial statements for the five such fiscal years
which were included or incorporated by reference in the Guarantor's
Registration Statement on Form 10 or the Guarantor's Annual Reports on Form
10-K for such fiscal years, as applicable;
(v) on the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of the Guarantor and its subsidiaries, inspection of
the minute books of the Guarantor and its subsidiaries since the date of
the latest audited financial statements included or incorporated by
reference in the Prospectus, inquiries of officials of the Guarantor and
its subsidiaries responsible for financial accounting matters and such
other inquiries and procedures as may be specified in such letter, nothing
came to their attention that caused them to believe that:
-52-
(A) the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included or incorporated by reference in the Guarantor's Quarterly
Reports on Form 10-Q incorporated by reference in the Prospectus (if
any) do not comply as to form in all material respects with the
applicable accounting requirements of the Exchange Act as it applies
to Form 10-Q and the related published rules and regulations
thereunder or are not in conformity with generally accepted accounting
principles applied on a basis substantially consistent with the basis
for the audited consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows included or
incorporated by reference in the Guarantor's Registration Statement on
Form 10 or the Guarantor's Annual Report on Form 10-K for the most
recent fiscal year, as applicable;
(B) any other unaudited income statement data and balance sheet
items included in the Prospectus do not agree with the corresponding
items in the unaudited consolidated financial statements from which
such data and items were derived, and any such unaudited data and
items were not determined on a basis substantially consistent with the
basis for the corresponding amounts in the audited consolidated
financial statements included or incorporated by reference in the
Guarantor's Registration Statement on Form 10 or the Guarantor's
Annual Report on Form 10-K for the most recent fiscal year, as
applicable;
(C) the unaudited financial statements which were not included
in the Prospectus but from which were derived the unaudited condensed
financial statements referred to in Clause (A) and any unaudited
income statement data and balance sheet items included in the
Prospectus and referred to in Clause (B) were not determined on a
basis substantially consistent with the basis for the audited
financial statements included or incorporated by reference in the
Guarantor's Registration Statement on Form 10 or the
-53-
Guarantor's Annual Report on Form 10-K for the most recent fiscal
year, as applicable;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus do
not comply as to form in all material respects with the applicable
accounting requirements of the Act and the published rules and
regulations thereunder or the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of those
statements;
(E) as of a specified date not more than five days prior to the
date of such letter, there have been any changes in the consolidated
capital stock (other than the Guarantor's purchase of treasury stock
in connection with its buy back program and the issuance of stock upon
the exercise of employee stock options, director stock awards, bonus
stock awards and earn-outs of performance shares) or any increase in
the consolidated long-term debt of the Guarantor and its subsidiaries
or any decreases in total assets, in each case as compared with
amounts shown in the latest balance sheet included or incorporated by
reference in the Prospectus, except in each case for changes,
increases or decreases which the Prospectus discloses have occurred or
may occur or which are described in such letter; and
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectus to
the specified date referred to in Clause (E) there were any decreases
in consolidated net interest income, non-interest income or the total
or per share amounts of consolidated net income, in each case as
compared with the comparable period of the preceding year and with any
other period of corresponding length specified by the Representatives,
except in each case for increases or decreases which the Prospectus
discloses have occurred or may occur or which are described in such
letter; and
-54-
(vi) in addition to the examination referred to in their report(s)
included or incorporated by reference in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other procedures
referred to in paragraphs (iii) and (v) above, they have carried out
certain specified procedures, not constituting an examination in accordance
with generally accepted auditing standards, with respect to certain
amounts, percentages and financial information specified by the
Representatives which are derived from the general accounting records of
the Guarantor and its subsidiaries, which appear in the Prospectus
(excluding documents incorporated by reference), or in Part II of, or in
exhibits and schedules to, any Registration Statement specified by the
Representatives or in documents incorporated by reference in the Prospectus
specified by the Representatives, and have compared certain of such
amounts, percentages and financial information with the accounting records
of the Guarantor and its subsidiaries and have found them to be in
agreement.
All references in this Annex II to the Prospectus shall be deemed to
refer to the Prospectus (including the documents incorporated by reference
therein) as defined in the Underwriting Agreement as of the date of the letter
delivered on the date of the Pricing Agreement, if so delivered, for purposes of
such letter and to the Prospectus, as amended or supplemented, (including the
documents incorporated by reference therein) in relation to the applicable
Designated Securities for purposes of the letter delivered at the Time of
Delivery for such Designated Securities.
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