COMMUNITY FIRST BANCORP, INC.
COMMON STOCK
($0.01 PAR VALUE)
FORM OF
UNDERWRITING AGREEMENT
___________, 2006
XxXxxxxx & Company, Inc.
000 Xxxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Gentlemen:
Community First Bancorp, Inc., a corporation organized under Maryland law
(the "Company"), proposes to employ you ("you" or the "Underwriter"), to advise
the Company in the structure of a public offering of the Company's Common Stock,
par value $0.01 per share (the "Common Stock"), and, as agent of the Company, to
assist in the sale on a best efforts basis of up to ________ shares of the
Company's Common Stock in the public offering (the "Offering"). The shares of
Common Stock to be issued in the Offering are referred to herein as the
"Shares."
You have advised the Company (a) that you are authorized to enter into this
Agreement and (b) that you are willing to sell the Shares on a best efforts
basis as agent for the Company.
In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the Company
and the Underwriter hereby agree as follows:
1. Representations and Warranties of the Company. The Company represents
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and warrants as follows:
(a) The Company has prepared and filed with the Securities and
Exchange Commission (the "Commission") in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Securities Act"), a registration
statement on Form SB-2 (File No. 333-______), including a preliminary
prospectus, relating to the Shares to be sold in the Offering. Such registration
statement as amended at the time that it becomes effective is referred to
collectively in this Agreement as the "Registration Statement," and the
prospectus in the form filed with the Commission as part of the Registration
Statement or pursuant to Rule 424(b) under the Securities Act, if any, after the
Registration Statement becomes effective is referred to collectively as the
"Prospectus."
(b) Each preliminary Prospectus that is filed as part of the
Registration Statement as originally filed or as part of any amendment or
supplement thereto and distributed by the Underwriter or a selected dealer to
potential purchasers complied, when so filed, in all material respects with the
provisions of the Securities Act; except that this representation and warranty
does not apply to statements in or omissions from information relating to the
Underwriter in the fourth paragraph on the front cover of the Prospectus and in
the section of the Prospectus entitled "Plan of Distribution" that were made in
reliance
XxXxxxxx & Company, Inc.
____________, 2006
Page 2
upon and conformity with information furnished to the Company by such
Underwriter expressly for use therein.
(c) The Registration Statement in the form in which it becomes
effective and also in such form as it may be when any post-effective amendment
thereto shall become effective, and the Prospectus filed as part of such
Registration Statement and in the form first filed with the Commission under
Rule 424(b) under the Securities Act, if any, and when any supplement thereto is
filed with the Commission, will comply in all material respects with the
provisions of the Securities Act and will not contain at any such times 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,
except that this representation and warranty does not apply to statements in or
omissions from information relating to the Underwriter in the fourth paragraph
on the front cover of the Prospectus and in the section of the Prospectus
entitled "Plan of Distribution" that were made in reliance upon and conformity
with information furnished to the Company by the Underwriter expressly for use
therein.
(d) The Company has the capitalization set forth in the Prospectus
under the caption "Capitalization." All of the outstanding shares of Common
Stock are duly authorized and validly issued, fully paid and nonassessable and
free of preemptive or similar rights; and the Common Stock conforms in all
material respects to the description thereof in the Registration Statement and
the Prospectus (or any amendment or supplement thereto). The Shares to be issued
and sold by the Company have been duly authorized, and upon delivery to the
purchasers thereof against payment therefor in accordance with the terms hereof,
will have been validly issued and fully paid and will be nonassessable and free
of preemptive or similar rights. None of the Company's issued and outstanding
shares of Common Stock was issued in violation of the Securities Act.
(e) The Company is duly organized and validly existing and in good
standing under Maryland law. The Company's wholly owned subsidiary, Community
First Bank (the "Bank"), is duly organized and validly existing and in good
standing under federal law. There are no other subsidiaries of the Company, and
there are no subsidiaries of the Bank. The Company and the Bank are duly
qualified to do business and are in good standing in all jurisdictions that
require such qualification or in which the failure to qualify in such
jurisdictions could have, in the aggregate, any material adverse effect on the
business, condition (financial or otherwise) or properties of the Company or the
Bank. The Company and the Bank hold all material licenses, certificates, permits
and other authorizations from governmental authorities necessary for the conduct
of their businesses as described in the Prospectus and own, or possess adequate
rights to use, all material rights necessary for the conduct of their business
and have not received any notice of conflict with the asserted rights of others
in respect thereof; and the Company and the Bank have the corporate power and
authority to own their properties and conduct their businesses as described in
the Prospectus. The Company is duly registered as a thrift holding company under
the Home Owners Loan Act, as amended. The deposit accounts of the Bank are
insured by the Federal Deposit Insurance Corporation up to the maximum amount
provided by law, and no proceedings for the modification, termination or
revocation of any such insurance are pending or, to the knowledge of the
Company, threatened.
(f) All of the outstanding shares of capital stock of the Bank are
owned by the Company, have been duly authorized and are validly issued, fully
paid and nonassessable and, except for the liquidation account maintained as a
result of the conversion to a capital stock savings bank as described in the
Prospectus, are owned by the Company free and clear of any lien, claim, security
interest or other encumbrance.
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Page 3
(g) The Company and the Bank have good and marketable title to all
property described in the Prospectus as being owned by them, free and clear of
all liens, claims, security interests or other encumbrances except such as are
described in the Registration Statement and the Prospectus (or any amendment or
supplement thereto or in a document filed as an exhibit to the Registration
Statement) or such as are not material and do not interfere in any material
respect with the use of the property or the conduct of the business of the
Company and the Bank taken as a whole, and the property held under lease by the
Company or the Bank is held by them under valid and enforceable leases with only
such exceptions as in the aggregate are not material and do not interfere in any
material respect with the conduct of the business of the Company and the Bank
taken as a whole; provided that no representation or warranty is made hereby to
the title of the lessor of any such property.
(h) There are no legal or governmental proceedings pending, or to the
knowledge of the Company threatened, required to be described in the
Registration Statement or the Prospectus (or any amendment or supplement
thereto) that are not described as required, and there is no contract or
document of a character required to be described in the Registration Statement
or the Prospectus or to be filed as an exhibit to the Registration Statement
that is not described or filed as required.
(i) Neither the Company nor the Bank is in violation of its articles
of incorporation or bylaws or in default in any material respect in the
performance of any obligation, agreement or condition contained in any bond,
debenture, note or any other evidence of indebtedness or in any agreement,
indenture, lease or other instrument to which the Company or the Bank is a party
or by which its assets are bound, or in violation of any law, administrative
regulation or ruling or court decree applicable to the Company or the Bank or
any of their properties. Neither the issuance nor the sale of the Shares nor the
execution and delivery of this Agreement nor the performance of the obligations
of the Company set forth herein nor the consummation of the transactions herein
contemplated requires any consent, approval, authorization or other order of any
court, regulatory body, administrative agency or other governmental body (except
such as may be required under the Securities Act or other securities laws or
Blue Sky laws or rules of the National Association of Securities Dealers, Inc.
(the "NASD") that may be applicable to the Underwriter) or will conflict with
the articles of incorporation or bylaws of the Company or the Bank, or
constitute a breach or default under any agreement, indenture or other
instrument to which the Company or the Bank is a party or by which either of
them or their property is bound, or any law, administrative regulation or ruling
or court decree applicable to the Company or the Bank or any of their
properties, which conflict, breach or default would have a material adverse
effect on the business, condition (financial or otherwise) or property of the
Company and the Bank taken as a whole.
(j) Except as disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), subsequent to the
respective dates as of which such information is given in the Registration
Statement and the Prospectus (or any amendment or supplement thereto), the
Company has not incurred any liability or obligation, direct or contingent, or
entered into any transaction, not in the ordinary course of business, that is
material to the Company and the Bank taken as a whole, and there has not been
any material change in the capital stock, or material increase in the short-term
debt or long-term debt, of the Company or the Bank, or any material adverse
change, or any development involving a prospective material adverse change, in
the condition (financial or otherwise), business, property, net worth or results
of operations of the Company and the Bank taken as a whole.
(k) King + Company, PSC, who have certified certain of the financial
statements filed with the Commission as part of the Registration Statement and
the Prospectus, have consented in writing to the inclusion of their report in
the Prospectus and are independent public accountants as
XxXxxxxx & Company, Inc.
____________, 2006
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required by the Securities Act. BKD, LLP, who have certified certain of the
financial statements filed with the Commission as part of the Registration
Statement and the Prospectus, have consented in writing to the inclusion of
their report in the Prospectus and are independent public accountants as
required by the Securities Act.
(l) The Company's consolidated financial statements, together with
related schedules and notes, forming part of the Registration Statement and the
Prospectus, present fairly the financial position and the results of operations
of the Company and the Bank at the respective dates or for the respective
periods to which they apply; such statements and related notes have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as disclosed
therein; and the financial and statistical information and data set forth in the
Registration Statement and the Prospectus is fairly presented and prepared on a
basis consistent with such financial statements and the books and records of the
Company and the Bank; provided, however, that any interim unaudited financial
statements of the Company included in the Registration Statement and the
Prospectus are subject to normal year-end adjustments and lack footnotes and
other presentation items. The Company and the Bank have no material contingent
obligations that are not disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement thereto).
(m) The Common Stock (including the Shares) is registered pursuant to
Section 12(g) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act").
(n) No holders of securities of the Company have rights to the
registration of such securities for sale in the Offering.
(o) The Company and the Bank have filed all federal, state and foreign
income tax returns that have been required to be filed and have paid all taxes
indicated by such returns and all assessments received by them or any of them to
the extent that such taxes have become due, and are not being contested in good
faith.
(p) The Company and the Bank hold all material licenses, certificates
and permits from governmental authorities that are necessary to the conduct of
their businesses; and neither the Company nor the Bank has infringed any
patents, patent rights, trade names, trademarks or copyrights in any manner
material to the business of the Company and the Bank taken as a whole.
(q) The Company and the Bank hold all material licenses, certificates
and permits from governmental authorities that are necessary to the conduct of
their business, and neither the Company nor the Bank has received any notice of
proceedings relating to revocation or modification of any such license,
certificate or permit.
(r) The Company and the Bank are insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts as
are prudent and customary in the business in which it is engaged; all policies
of insurance and fidelity or surety bonds insuring the Company and the Bank and
their businesses, assets, employees, officers and directors, if any, are in full
force and effect; the Company and the Bank are in compliance with the terms of
any such policies and instruments in all material respects; and there are no
claims by the Company or the Bank under any such policy or instrument as to
which any insurance company is denying liability or defending under a
reservation of rights clause; the Company and the Bank have not been refused any
insurance coverage sought or applied for; and the Company and the Bank have no
reason to believe that they will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage
XxXxxxxx & Company, Inc.
____________, 2006
Page 5
from similar insurers as may be necessary to continue their businesses at a cost
that would not have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of them taken as a
whole, whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus (exclusive of
any amendment or supplement thereto).
(s) The Company and the Bank maintain a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific authorizations;
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(t) The Company has not taken, directly or indirectly, any action
designed to or that would constitute or that might reasonably be expected to
cause or result in, under the Exchange Act or otherwise, stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Shares.
(v) The Company and the Bank own, possess, license or have other
rights to use, on reasonable terms, all patents, patent applications, trade and
service marks, trade and service xxxx registrations, trade names, copyrights,
licenses, inventions, trade secrets, technology, know-how and other intellectual
property (collectively, the "Intellectual Property") necessary for the conduct
of their business as now conducted or as proposed in the Prospectus to be
conducted. Except as set forth in the Prospectus, (i) there are no rights of
third parties to any such Intellectual Property; (ii) there is no material
infringement by third parties of any such Intellectual Property; (iii) there is
no pending or, to the knowledge of the Company or the Bank, threatened action,
suit, proceeding or claim by others challenging their rights in or to any such
Intellectual Property, and the Company and the Bank are unaware of any facts
that would form a reasonable basis for any such claim; (iv) there is no pending
or, to the knowledge of the Company and the Bank, threatened action, suit,
proceeding or claim by others challenging the validity or scope of any such
Intellectual Property, and the Company and the Bank are unaware of any facts
that would form a reasonable basis for any such claim; and (v) there is no
pending or, to the knowledge of the Company and the Bank, threatened action,
suit, proceeding or claim by others that the Company or the Bank infringes or
otherwise violates any patent, trademark, copyright, trade secret or other
proprietary rights of others, and the Company and the Bank are unaware of any
other fact that would form a reasonable basis for any such claim.
(u) No relationship, direct or indirect, exists between or among the
Company on the one hand, and the directors, officers, stockholders, customers or
suppliers of the Company on the other hand, that is required to be described in
the Prospectus that is not so fully and accurately described.
(v) The Company is not and, after giving effect to the offer and sale
of the Shares, will not 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.
(w) Any statistical and market-related data included in the Prospectus
are based on or derived from sources that the Company believes to be reliable
and accurate, and the Company has obtained the written consent to the use of
such data from such sources to the extent required.
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____________, 2006
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(x) All employee benefit plans established, maintained or contributed
by the Company and the Bank comply in all material respects with requirements of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and
no such plan incurred or assumed any "accumulated funding deficiency" within the
meaning of Section 302 of ERISA or has incurred or assumed any material
liability to the Pension Benefit Guaranty Corporation.
(y) This Agreement has been duly authorized, executed and delivered by
the Company and is a valid and binding obligation of the Company, enforceable in
accordance with its terms.
2. Sale of the Shares. On the basis of the representations, warranties and
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covenants herein contained, and subject to the conditions herein set forth, the
Company agrees to issue and sell up to __________ Shares in the Offering. All
Shares to be offered and sold in the Offering shall be issued and sold through
the Underwriter, as agent for the Company, to the public and the Underwriter
agrees to use its best efforts to sell the Shares as agent for the Company, at
the price per share set forth on the cover page of the Final Prospectus for the
Offering (the "Offering Price"). The Company agrees to pay the Underwriter a
commission (the "Selling Commission") equal to six percent of the Offering Price
of all Shares sold through the Underwriter in the Offering (including Shares
sold through selected dealers). It shall be the Underwriter's responsibility to
compensate any selected dealers out of the commissions that it receives from the
Company. The Underwriter may reject any offer to purchase the Shares made
through the Underwriter or a selected dealer, in whole or in part, and any such
rejection shall not be deemed a breach of the Underwriter's agreement contained
herein.
3. Sales by the Underwriter. It is understood that, after the Registration
-----------------------
Statement becomes effective, the Underwriter proposes to sell the Shares to the
public as agent for the Company upon the terms and conditions set forth in the
Prospectus. The escrow procedures established by the Underwriter shall comply
with Commission Rule 15c2-4 promulgated under the Exchange Act. All purchasers
to whom the Underwriter directly sells Shares shall be instructed to make their
check for payment of the Shares payable to "Community First Bancorp, Inc. Escrow
Account." In addition, the Underwriter shall comply with Rule 15c2-4. The
Underwriter shall transmit all funds that it receives from purchasers to
SunTrust Bank, the escrow agent (the "Escrow Agent") by noon of the next
business day following receipt thereof. Only broker/dealers who are either (i)
members in good standing of the NASD that are registered with the NASD and
maintain net capital pursuant to Rule 15c3-1 promulgated under the Exchange Act
of not less than $25,000 or (ii) dealers with their principal places of business
located outside the United States, its territories and its possessions and not
registered as brokers or dealers under the Exchange Act, who have agreed not to
make any sales within the United States, its territories or its possessions or
to persons who are nationals thereof or residents therein shall be designated
selected dealers by the Underwriter. The Underwriter shall require all selected
dealers to comply with Rule 15c2-4.
4. Payment and Delivery. The Underwriter shall direct the Escrow Agent to
--------------------
make payment for the Shares sold hereunder by wire transfer. Such payment is to
be made at the offices of Community First Bancorp, Inc., 0000 Xxxxx Xxxx Xxxxxx,
Xxxxxxxxxxxx, Xxxxxxxx, at noon local time, on or about _________, 2006, or at
such other time, date and place as you and the Company shall agree upon, such
time and date being referred to herein as the "Closing Date." Unless the
transaction is closed book-entry through The Depository Trust Company and no
certificates are requested, in which case the procedures applicable thereto
shall be complied with, the certificates for the Shares will be delivered in
such denominations and in such registrations as the Underwriter requests in
writing not later than the third (3rd) full business day prior to the Closing
Date, and will be made available for inspection by the Underwriter at least
twenty-four (24) hours prior to the Closing Date. Any such certificates will be
XxXxxxxx & Company, Inc.
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Page 7
delivered by the Company to its transfer agent, or the Depository Trust Company,
as applicable, by 12:00 p.m. on the day prior to the Closing Date, along with
addressed labels to be used to mail the certificates to the purchasers thereof.
The Company shall direct the Escrow Agent to deliver (i) payment of the portion
of the Selling Commission due to the Underwriter by wire transfer or certified
or bank cashier's check drawn to the order of the Underwriter in next day funds,
to the Underwriter on the Closing Date and (ii) payment of the portion of the
Selling Commission due to each selected dealer by wire transfer or certified or
bank cashier's check drawn to the order of such selected dealer in next day
funds, to each selected dealer on the Closing Date.
5. Covenants of the Company. The Company covenants and agrees with the
------------------------
Underwriter as follows:
(a) The Company will endeavor to cause the Registration Statement to
become effective and will advise you promptly and, if requested by you, will
confirm such advice in writing (i) when the Registration Statement has become
effective and when any amendment thereto thereafter becomes effective, (ii) of
any request by the Commission for amendments or supplements to the Registration
Statement or the Prospectus or for additional information, (iii) of the issuance
by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of the suspension of qualification of the Shares for
offering or sale in any jurisdiction, or the initiation or contemplation of any
proceeding for such purposes, and (iv) within the period of time referred to in
Section 5(e) below, of the happening of any event that makes any statement made
in the Registration Statement or the Prospectus (as then amended or
supplemented) untrue in any material respect or that requires the making of any
addition to or change in the Registration Statement or the Prospectus (as then
amended or supplemented) to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or of the necessity
to amend or supplement the Prospectus (as then amended or supplemented) to
comply with the Securities Act or any other law. If at any time the Commission
shall issue any stop order suspending the effectiveness of the Registration
Statement, the Company will make every reasonable effort to obtain the
withdrawal of such order at the earliest possible time.
(b) The Company will furnish you, without charge, three signed copies
of the Registration Statement as originally filed with the Commission and of
each amendment to it, including financial statements and all exhibits thereto,
and will also furnish to you, such number of conformed copies of the
Registration Statement (without exhibits) as originally filed and of each
amendment thereto as you may reasonably request.
(c) The Company will not file any amendment to the Registration
Statement or make any amendment or supplement to the Prospectus of which you
shall not have been advised previously or to which you shall reasonably object
in writing promptly after being so advised.
(d) Prior to the effective date of the Registration Statement, the
Company has delivered or will deliver to you, without charge, in such quantities
as you have requested or may hereafter reasonably request, copies of each form
of preliminary prospectus. The Company consents to the use, in accordance with
the provisions of the Securities Act and with the securities or Blue Sky laws of
the jurisdictions in which the Shares are offered by the Underwriter and by
dealers to whom Shares may be sold, prior to the effective date of the
Registration Statement, of each preliminary prospectus so furnished by the
Company.
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(e) On the effective date of the Registration Statement and thereafter
from time to time, for such period as in the opinion of counsel for the
Underwriter a prospectus is required by law to be delivered in connection with
sales by an Underwriter or a dealer, the Company will deliver to you and each
dealer through whom Shares may be sold without charge (except as provided below)
as many copies of the Prospectus (and of any amendment or supplement thereto) as
they may reasonably request. The Company consents to the use of such Prospectus
(and of any amendment or supplement thereto) in accordance with the provisions
of the Securities Act and with the securities or Blue Sky laws of the
jurisdictions in which the Shares are offered by the Underwriter and by dealers
through whom Shares may be sold, both in connection with the offering or sale of
the Shares and for such period of time thereafter as the Prospectus is required
by law to be delivered in connection therewith. If during such period of time
any event shall occur that in the judgment of the Company, or in the opinion of
counsel for the Underwriter, requires that a material fact be stated in the
Prospectus (as then amended or supplemented) in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, or if it is necessary to amend or supplement the Prospectus to
comply with the Securities Act or any other law, the Company at its own expense
(except as provided below) will forthwith prepare and file with the Commission
an appropriate amendment or supplement thereto, and will furnish to the
Underwriter and each dealer through whom Shares may be sold without charge
(except as provided below), a reasonable number of copies thereof.
(f) The Company will cooperate with you and your counsel in connection
with the registration or qualification of the Shares for offer and sale by you
and by dealers through whom Shares may be sold under the securities or Blue Sky
laws of such jurisdictions as you may reasonably designate and will file such
consents to service of process or other documents as may be necessary in order
to effect such registration or qualification; provided that in no event shall
the Company be obligated to qualify to do business in any jurisdiction where it
is not now so qualified or to take any action that would subject it to the
service of process in suits, other than those arising out of the offer and sale
of the Shares, in any jurisdiction where it is not now so subject.
(g) The Company will file all reports and other information that it is
required to file after the Closing Date pursuant to Section 13 or Section 15(d),
as the case may be, of the Exchange Act as necessary to permit the Underwriter
to serve, in its sole discretion, as a market maker with respect to the Common
Stock.
(h) The Company will make generally available to its security holders
an earnings statement, which need not be audited, covering a 12-month period
commencing after the effective date of the Registration Statement and ending no
later than 15 months thereafter, as soon as practicable after the end of such
period, which earnings statement shall satisfy the provisions of Section 11(a)
of the Securities Act and any applicable regulation.
(i) During the period of five years after the Closing Date, the
Company will furnish to you without charge (i) as soon as available, a copy of
each report of the Company mailed to shareholders or filed with the Commission
and (ii) from time to time such other proper information concerning the business
and financial condition of the Company as you may reasonably request.
6. Costs and Expenses.
------------------
(a) The Company will pay all costs and expenses incident to the
performance by it of its obligations hereunder, including (i) the preparation,
printing and filing of the Registration Statement (including financial
statements and exhibits), each preliminary prospectus, the Prospectus and all
XxXxxxxx & Company, Inc.
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Page 9
amendments and supplements to any of the foregoing, during the period specified
in Section 5(e) above but not exceeding nine months after the date on which the
Shares are first offered to the public, (ii) the preparation, printing,
authentication, issuance and delivery of certificates for the Shares, including
any stamp tax in connection with the original issuance of the Shares, (iii) the
preparation and delivery by counsel of the preliminary and supplemental Blue Sky
Memoranda (including the reasonable fees and disbursements of counsel relating
thereto), (iv) the registration or qualification, if required, of the Shares for
offer and sale under the securities or Blue Sky laws of the several states as
provided in Section 5(f) above (including the fees and disbursements of counsel
for the Underwriter relating thereto), (v) the fees and expenses of the
Company's accountants and the fees and expenses of counsel for the Company, (vi)
the fees and expenses of counsel for the Underwriter, which shall not exceed
$30,000, (vii) during the period specified in Section 5(e) above but not
exceeding nine months after the date on which the Shares are first offered to
the public, delivery to the Underwriter and dealers through whom Shares may be
sold (including postage, air freight and the expenses of counting and packaging)
of such copies of the Registration Statement, the Prospectus, each preliminary
prospectus and amendments or supplements to the Registration Statement and the
Prospectus as may be requested for use by the Underwriter or by dealers through
whom Shares may be sold in connection with the offering and sale of the Shares
and during such period of time thereafter as the Prospectus is required, in the
judgment of the Company or in the opinion of counsel for the Underwriter, to be
delivered in connection with the offer and sale of the Shares by you and by
dealers, (viii) filing fees with the NASD in connection with the Offering, (ix)
the costs of all informational and/or investor due diligence meetings, which
shall not exceed $30,000 and (x) the performance by the Company of its other
obligations under this Agreement. The Underwriter shall pay its own costs and
expenses except as otherwise provided in this Agreement. The total reimbursement
of the Underwriter by the Company shall not exceed $60,000.
(b) If this Agreement shall be terminated pursuant to any of the
provisions hereof (other than by notice given by you terminating this Agreement
pursuant to Section 11 below), or if this Agreement shall be terminated by you
because of any failure or refusal on the part of the Company to comply in any
material respect with the terms, or fulfill in any material respect any of the
conditions, of this Agreement, the Company agrees without further obligation to
reimburse you for all out-of-pocket expenses (including fees and expenses of
your counsel, as provided in Section 6(a) above), but only to the extent that
these expenses are actual out-of-pocket accountable expenses reasonably incurred
by you under normal circumstances.
7. Conditions to the Obligations of the Underwriter. Your obligations
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hereunder are subject to the following conditions:
(a) That the Registration Statement shall have become effective not
later than 5:00 p.m., on the date hereof, or at such later date and time as
shall be consented to by you.
(b) That subsequent to the effective date of the Registration
Statement, there shall not have occurred any change, or any development
involving a prospective change, in or affecting particularly the condition
(financial or otherwise), business, properties, net worth or results of
operations of the Company or the Bank not contemplated by the Prospectus (or any
amendment or supplement thereto) that, in your opinion, would materially
adversely affect the market for the Shares.
(c) That you shall have received on the Closing Date an opinion dated
the Closing Date, from Xxxxxxx Spidi & Fish, PC, counsel to the Company, to the
effect that:
XxXxxxxx & Company, Inc.
____________, 2006
Page 10
(i) the Company and the Bank have been duly organized, are
validly existing under the laws of their respective state or other jurisdiction
of incorporation or organization, are in good standing under applicable law and
are duly qualified to do business and are in good standing in all jurisdictions
that require such qualification or in which the failure to qualify in such
jurisdictions could, in the aggregate, have any material adverse effect on the
business, condition or properties of the Company or the Bank;
(ii) all of the shares of Common Stock of the Company outstanding
prior to the issuance of the Shares to be issued and sold by the Company
hereunder have been duly authorized and validly issued and are fully paid and
nonassessable;
(iii) all of the outstanding shares of capital stock of the Bank
are owned by the Company, have been duly authorized and validly issued, and are
fully paid and nonassessable and, to the knowledge of such counsel, are owned by
the Company free and clear of any lien, claim, security interest or other
encumbrance, except as otherwise described in the Registration Statement and the
Prospectus (or any amendment or supplement thereto) or such as are not material;
(iv) the Shares to be issued and sold by the Company hereunder
have been duly authorized, and when issued and delivered in accordance with the
terms of this Agreement, will have been validly issued and will be fully paid
and nonassessable, and the issuance of such Shares is not subject to any
preemptive rights or, to the knowledge of such counsel, similar rights;
(v) except as described in the Prospectus, there are no warrants
or options to purchase any securities of the Company; to the knowledge of such
counsel, the offering or sale of the Shares as contemplated by this Agreement
does not give rise to any rights for the offering or sale of other shares of
capital stock of the Company;
(vi) if certificates are used to evidence the Shares, then the
certificates for the Shares are in proper legal form;
(vii) this Agreement has been duly authorized, executed and
delivered by the Company and (assuming due authorization, execution and delivery
by the Underwriter) is a valid and binding agreement of the Company enforceable
in accordance with its terms, except in all cases as rights of indemnity or
contribution hereunder may be limited under applicable law and except as the
enforceability hereof may be limited by bankruptcy, receivership, moratorium,
conservatorship, reorganization or other laws of general application affecting
the rights of creditors generally or general equitable principles;
(viii) neither the Company nor the Bank, to the knowledge of such
counsel, is in violation of its articles of incorporation or bylaws, in default
in any material respect in the performance of any obligation, agreement or
condition contained in any bond, debenture, note or other evidence of
indebtedness or in any agreement, indenture or other instrument known to such
counsel that is material to the conduct of the business of the Company and the
Bank taken as a whole, or in violation of any law, administrative regulation or
ruling or court decree applicable to the Company or the Bank or any of their
respective properties, and the execution, delivery and performance of this
Agreement, compliance by the Company with all provisions hereof and the
consummation of the transactions contemplated hereby will not conflict with or
constitute a breach of any of the terms or provisions of, or a default under,
the articles of incorporation or bylaws of the Company or the Bank or, to the
knowledge of such counsel, any material agreement, indenture or other instrument
to which the Company or the Bank is a party or by
XxXxxxxx & Company, Inc.
____________, 2006
Page 11
which either of them is bound, or (assuming compliance with the Securities Act
and other securities or Blue Sky laws) violate any law, administrative
regulation or ruling (except as the indemnification or contribution provisions
in this Agreement may be limited by applicable law) or, to the knowledge of such
counsel, court decree applicable to the Company or the Bank or any of their
respective properties;
(ix) the Registration Statement has been declared effective by
the Commission under the Securities Act and, to the knowledge of such counsel,
no stop order suspending the effectiveness of the Registration Statement has
been issued under the Securities Act and no proceedings for such purpose have
been instituted or are pending or are contemplated or threatened by the
Commission;
(x) except for the order of the Commission making the
Registration Statement effective and any permits and similar authorizations
required under other securities or Blue Sky laws, no consent, approval,
authorization or other order of any court, regulatory body, administrative
agency or other governmental body is required for the consummation of the sale
of the Shares to the purchasers through the Underwriter as contemplated by this
Agreement;
(xi) the Company is not and, after giving effect to the offer and
sale of the Shares, will not 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.
(xii) the statements in the Prospectus under "Business--Legal
Proceedings", "Description of Capital Stock" and "Supervision and Regulation"
insofar as such statements constitute a summary of the documents, legal matters
or proceedings referred to therein, fairly and accurately present in all
material respects the information with respect to such documents, legal matters
or proceedings;
(xiii) to the knowledge of such counsel, there are no pending or
threatened legal or governmental proceedings to which the Company or the Bank is
a party or of which any property of the Company or the Bank is the subject,
which, if determined adversely to the Company or the Bank, would individually or
in the aggregate have a material adverse effect on the financial position or
results of operations of the Company and the Bank taken as a whole.
Subject to its customary practices and limitations relating to
the scope of such counsel's participation in the preparation of the Prospectus
and its investigation or verification of information contained therein, Xxxxxxx
Spidi & Fish, PC also shall state that nothing has come to its attention to
cause it to believe that the Prospectus (except for financial statements,
schedules and other financial data included therein, as to which such counsel
need not express any belief) contained any untrue statement of any material fact
or omitted to state any material fact required to be stated therein or necessary
to make the statements therein not misleading or that the Prospectus and any
amendment or supplement thereto (except as aforesaid) as of their respective
dates contains any untrue statement of a material fact or omits to state any
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
In rendering the opinions required by this Section 7(c), such
counsel, with the consent of the Underwriter's counsel, may rely, as to matters
of fact, upon certificates and representations of officers of the Company and
the Bank and on certificates of public officials.
XxXxxxxx & Company, Inc.
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(d) That you shall have received on the Closing Date the opinion of
Xxxxxx Xxxxxxxxx LLP, as special counsel to you, dated the Closing Date,
covering such matters as you may have reasonably requested.
(e) That you shall have received letters addressed to you and dated
the date hereof and the Closing Date from King + Company, PSC, independent
registered public accountants, substantially in the form heretofore approved by
you.
(f) That (i) no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been instituted or, to the knowledge of the Company, shall be
contemplated by the Commission at or prior to the Closing Date; (ii) there shall
not have been any material change in the capital stock of the Company nor any
material increase in long-term debt of the Company or the Bank from that set
forth or contemplated in the Registration Statement and the Prospectus (or any
amendment or supplement thereto); (iii) there shall not have been, since the
respective dates as of which information is given in the Registration Statement
and the Prospectus (or any amendment or supplement thereto), except as may
otherwise be stated in the Registration Statement and the Prospectus (or any
amendment or supplement thereto), any material adverse change in the condition
(financial or otherwise), business, properties, net worth or results of
operations of the Company and the Bank, taken as a whole; (iv) neither the
Company nor the Bank shall have any material liability or obligation, direct or
contingent, other than those liabilities or obligations reflected in the
Registration Statement and the Prospectus (or any amendment or supplement
thereto) or incurred or arising in the ordinary course of business; and (v) all
of the representations and warranties of the Company contained in this Agreement
shall be true and correct in all material respects on and as of the date hereof
and the Closing Date as if made on and as of such date, and you shall have
received a certificate, dated the Closing Date and signed by the principal
executive officer and the principal financial officer of the Company, to the
effect set forth in this Section 7(f) and Section 7(g) below.
(g) That the Company shall not have failed at or prior to the Closing
Date to have performed or complied in any material respect with any of the
agreements or covenants herein contained and required to be performed or
complied with by it at or prior to the Closing Date.
(h) The Company shall have furnished you such further certificates and
documents confirming the representations and warranties contained herein and
related matters as you may reasonably have requested.
8. Conditions to the Obligations of the Company. The obligations of the
---------------------------------------------
Company to sell and deliver the portion of the Shares required to be delivered
as and when specified in this Agreement are subject to the conditions that at or
before 5:00 p.m., on the date of this Agreement, or such later time and date to
which the Company and the Underwriter may from time to time consent, the
Registration Statement shall have become effective; at the Closing Date, no stop
order suspending the effectiveness of the Registration Statement shall have been
issued and be then in effect or proceedings therefor initiated or threatened;
and the Escrow Agent shall have tendered to the Company payment for the Shares.
9. Indemnification and Contribution.
--------------------------------
(a) The Company agrees to indemnify and hold harmless the Underwriter
and each person, if any, who controls the Underwriter within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act from and
against any and all losses, claims, damages, liabilities or expenses (including
reasonable costs of investigation) arising out of or based upon any untrue
statement
XxXxxxxx & Company, Inc.
____________, 2006
Page 13
or alleged untrue statement of a material fact contained in any preliminary
prospectus or in the Registration Statement or the Prospectus or in any
amendment or supplement thereto, or arising out of or based upon any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages, liabilities or expenses arise out of or are based
upon any untrue statement or omission or alleged untrue statement based upon
information relating to the Underwriter in the fourth paragraph on the front
cover of the Prospectus and in the section of the Prospectus entitled "Plan of
Distribution" that was made in reliance upon and conformity with information
furnished to the Company by or on behalf of the Underwriter expressly for use in
connection therewith; provided that the indemnification contained in this
paragraph with respect to any preliminary prospectus shall not inure to the
benefit of the Underwriter (or any person controlling the Underwriter) on
account of any such loss, claim, damage, liability or expense arising from the
sale of the Shares by the Underwriter to any person if a copy of the Prospectus
shall not have been delivered or sent to such person with or prior to the
written confirmation of the sale involved (or any supplement to the Prospectus
at the time of such confirmation was not so delivered or sent) and the statement
or omission giving rise to such loss, claim, damage, liability or expense was
contained in the preliminary prospectus and corrected in the Prospectus (or any
supplement thereto at the time such confirmation was delivered or sent).
(b) If any action or claim shall be brought against the Underwriter or
any person controlling the Underwriter, in respect of which indemnity may be
sought against the Company in accordance with Section 9(a) above, the
Underwriter shall promptly notify the Company in writing, and the Company shall
assume the defense thereof, including the employment of counsel and payment of
all reasonable fees and expenses. The Underwriter or any such person controlling
the Underwriter shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the reasonable fees and
expenses of such counsel shall be at the expense of the Underwriter or such
controlling person unless (i) the Company has agreed in writing to pay such fees
and expenses, (ii) the Company has failed to assume the defense and employ
counsel or (iii) the named parties to any such action (including any impleaded
party) include both the Underwriter or controlling person and the Company and
representations of both parties by the same counsel would be inappropriate due
to actual or potential differing interests between them (in which case, if the
Underwriter or controlling person notifies the Company in writing that it elects
to employ separate counsel at the expense of the Company, the Company shall not
have the right to assume the defense of such action on behalf of the Underwriter
or such controlling person, it being understood, however, that the Company shall
not, in connection with any such action or separate but substantially related
actions in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of more than one
separate firm of attorneys at any time for the Underwriter and controlling
persons, which firm shall be designated in writing by you). The Company shall
not be liable for any settlement of any such action effected without the written
consent of the Company, but if settled with such written consent, or if there be
a final judgment for the plaintiff in any such action, the Company agrees to
indemnify and hold harmless the Underwriter and any such controlling person from
and against any loss, liability, damage or expense by reason of such settlement
or judgment.
(c) The Underwriter agrees to indemnify and hold harmless the Company,
its directors and its officers who sign the Registration Statement and any
person controlling the Company to the same extent as the foregoing indemnity
from the Company to the Underwriter, but only with respect to information in the
fourth paragraph on the front cover of the Prospectus and in the section of the
Prospectus entitled "Plan of Distribution" that was furnished by or on behalf of
the Underwriter expressly for use in the Registration Statement, the Prospectus
or any preliminary prospectus, or any amendment or supplement thereto. If any
action or claim shall be brought or asserted against the Company, its directors,
XxXxxxxx & Company, Inc.
____________, 2006
Page 14
any such officer or any such controlling person based on the Registration
Statement, the Prospectus or any preliminary prospectus, or any amendment or
supplement thereto and in respect of which indemnity may be sought against the
Underwriter, the Underwriter shall have the rights and duties given to the
Company by Section 9(b) above (except that if the Company shall have assumed the
defense thereof, the Underwriter shall not be required to do so, but may employ
separate counsel therein and participate in the defense thereof but the fees and
expenses of such counsel shall be at the expense of the Underwriter), and the
Company, its directors, any such officer and any such controlling person shall
have the rights and duties given to the Underwriter by Section 9(b) above.
(d) If the indemnification of the Underwriter or the Company provided
for in this Section 9 is unavailable as a matter of law to the Underwriter or
the Company, as the case may be, in respect of any loss, claim, damage,
liability or expense referred to therein, then the indemnifying party, in lieu
of indemnifying such indemnified party thereunder, shall contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim, damage, liability or expense (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company, as the case may be, on
the one hand and the Underwriter on the other from the Offering or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and of the Underwriter on the other in connection with the
statements or omissions that resulted in such loss, claim, damage, liability or
expense, as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the Underwriter on the
other shall be deemed to be in the same proportion as the total net proceeds
from the Offering (before deducting expenses) received by the Company, bear to
the total underwriting commissions received by the Underwriter as set forth in
the table on the cover page of the Prospectus (as amended or supplemented) and
in the section entitled "Plan of Distribution" in the Prospectus (as amended or
supplemented). The relative fault of the Company on the one hand and of the
Underwriter on the other 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 related to information
supplied by the Company on the one hand or by the Underwriter on the other and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
The Company and the Underwriter agree that it would not be just and
equitable if contribution pursuant to this Section 9(d) were determined by pro
rata allocation or by any other method of allocation that does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities and expenses referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses actually and reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 9(d), the
Underwriter shall not be required to contribute any amount in excess of the
amount by which the total price at which the Shares sold by it as agent for the
Company exceeds the amount of any damages that the 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 Securities Act) shall be entitled to
contribution pursuant to this Section 9 from any person who was not guilty of
such fraudulent misrepresentations.
(e) In any proceeding relating to the Registration Statement, any
preliminary prospectus, the Prospectus or any supplement or amendment thereto,
each party against whom contribution may be sought under this Section 9 hereby
consents to the jurisdiction of any court having
XxXxxxxx & Company, Inc.
____________, 2006
Page 15
jurisdiction over any other contributing party, agrees that process issuing from
such court may be served upon him or it by any other contributing party and
consents to the service of such process and agrees that any other contributing
party may join him or it as an additional defendant in any such proceeding in
which such other contributing party is a party.
(f) The indemnity and contribution agreements contained in this
Section 9 and the respective agreements, representations, warranties and other
statements of the Company or its officers and the Underwriter set forth in or
made pursuant to this Agreement shall remain operative and in full force and
effect, regardless of (i) any investigation made by or on behalf of the
Underwriter or the Company or any person controlling the Underwriter, the
Company or its directors or officers (or any person controlling the Company),
(ii) acceptance of any Shares and payment therefor hereunder and (iii) any
termination of this Agreement. A successor of the Underwriter or the Company or
its directors or officers referred to above (or of any person controlling the
Underwriter or the Company) shall be entitled to the benefits of the indemnity,
contribution and reimbursement agreements contained in this Section 9.
10. Effective Date of Agreement. This Agreement shall become effective when
---------------------------
signed by the parties to it.
11. Termination of Agreement. This Agreement shall be subject to
--------------------------
termination in your sole discretion, without liability on your part, by notice
given to the Company, if prior to the Closing Date (i) trading in securities
generally on the New York Stock Exchange or Nasdaq shall have been suspended or
materially limited, (ii) a general moratorium on commercial banking or thrift
activities in Kentucky or the United States shall have been declared by either
federal or state authorities or (iii) there shall have occurred any major
outbreak or escalation of hostilities or other international or domestic
calamity or crisis or major change in political, financial or economic
conditions, the effect of which on the financial markets of the United States is
such as to make it, in your reasonable judgment, impracticable or inadvisable to
proceed with the Offering. Notice of such cancellation shall be given to the
Company by telegraph or telephone but shall be subsequently confirmed by letter.
12. Notices. All communications hereunder shall be in writing and, except
-------
as otherwise provided herein, will be mailed, delivered or telecopied and
confirmed as follows: if to the Underwriter, to XxXxxxxx & Company, Inc., 000
Xxxxxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxxx X.
XxXxxxxx, Xx.; if to the Company, to Community First Bancorp, Inc., 0000 Xxxxx
Xxxxx Xxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxxx X. Xxxxx,
President.
13. Successors. This Agreement has been and is made solely for the benefit
----------
of the Underwriter, the Company and their respective successors, executors,
administrators, heirs and assigns, and the officers, directors and controlling
persons referred to herein, and no other person will have any right or
obligation hereunder. The term "successor" shall not include any purchaser of
the Shares merely because of such purchase.
14. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
15. Governing Law. This Agreement shall be governed by, and construed in
-------------
accordance with, the laws of the Commonwealth of Virginia without reference to
the conflict of laws principles thereof.
[SIGNATURES ON NEXT PAGE]
XxXxxxxx & Company, Inc.
____________, 2006
Page 16
If the foregoing letter is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement between the Company and the
Underwriter in accordance with its terms.
Very truly yours,
COMMUNITY FIRST BANCORP, INC.
By:
--------------------------------------------------
Xxxxxxx X. Xxxxx
President & Chief Executive Officer
The foregoing Underwriting Agreement is hereby confirmed and accepted as of the
date first above written.
XxXXXXXX & COMPANY, INC.
By:
----------------------------------
Xxxxxxx X. XxXxxxxx, Xx.
President
