Exhibit 1
130,000 SHARES
MID-ATLANTIC COMMUNITY BANKGROUP, INC.
COMMON STOCK
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UNDERWRITING AGREEMENT
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XXXXXXXXX & COMPANY LLC
Xxx Xxxxx Xxxxxx
X. X. Xxx 00000
Xxxxxxxx, Xxxxxxxx 00000-0000 ______________, 1997
Dear Sirs:
Mid-Atlantic Community Bankgroup, Inc., a Virginia corporation (the
"Company"), proposes, subject to the terms and conditions stated herein, to
issue and sell to Xxxxxxxxx & Company LLC (the "Underwriter" or "you") an
aggregate of 130,000 shares of common stock, $5.00 par value per share, of the
Company ("Common Stock") and, at the election of the Underwriter, up to 19,500
additional shares of Common Stock. The aggregate of 130,000 shares of Common
Stock to be sold by the Company are herein called the "Firm Securities," and the
aggregate of 19,500 additional shares of Common Stock to be sold by the Company
are herein called the "Optional Securities." The Firm Securities and the
Optional Securities which the Underwriter elects to purchase pursuant to Section
2 hereof are collectively called the "Securities."
1. Representations and Warranties.
The Company represents and warrants to, and agrees with, the
Underwriter that:
(a) A registration statement in respect of the Securities
on Form SB-2 (File No. 333 - 25557) under the Securities Act of 1933,
as amended (the "Act"), and as a part thereof a preliminary prospectus,
in respect of the Securities has been filed with the Securities and
Exchange Commission (the "Commission") in the form heretofore delivered
to you; such registration statement, as amended, has been declared
effective by the Commission; no other document with respect to such
registration statement has heretofore been filed with the Commission;
and no stop order suspending the effectiveness of such registration
statement has been issued and no proceeding for that purpose has been
instituted or threatened by the Commission (any preliminary prospectus
included in such registration statement or filed with the Commission
pursuant to Rule 424 of the rules and regulations of the Commission
under the Act, being hereinafter called a "Preliminary Prospectus",
the
various parts of such registration statement, including all exhibits
thereto, and including 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 5(a) of this Agreement and deemed by
virtue of Rule 430A under the Act to be part of the registration
statement at the time it was declared effective, together with any
related registration statement filed with the Commission for
registration of a portion of the Securities, which registration
statement became effective pursuant to Rule 462(b) under the Act,
being herein called collectively the "Registration Statement," and the
final prospectus, in the form first filed pursuant to Rule 424(b),
being hereinafter called the "Prospectus," provided, that if the
Company elects to rely on Rule 434 under the Act, all references to
the Prospectus shall be deemed to include, without limitation, the
form of prospectus and the abbreviated term sheet, taken together,
provided to the Underwriter by the Company in reliance on Rule 434);
(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 any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing
to the Company by the Underwriter for use therein;
(c) The Registration Statement conforms, and the Prospectus
and any amendments or supplements thereto will conform, in all material
respects to the requirements of the 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 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 the Company
by the Underwriter expressly for use therein;
(d) Except for the Company's wholly-owned subsidiary,
Peninsula Trust Bank, Incorporated, a Virginia-chartered commercial
bank (the "Bank"), the Company does not own more than 5% of the equity
interests of any other business entities other than shares of
publicly-held companies held solely for investment;
(e) Neither the Company nor the Bank has sustained since
the date of the latest audited financial statements included in the
Prospectus any material loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the
Prospectus; and, since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not
been any change in the outstanding capital stock 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 or
affecting the general affairs, management, financial position,
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stockholders' equity or results of operations of the Company or the
Bank, otherwise than as set forth or contemplated in the Prospectus;
(f) Each of the Company and the Bank has good and
marketable title in fee simple to all real property and good title to
all personal property owned by it, in each case free and clear of all
liens, encumbrances and defects except such as are described in the
Prospectus, or such as do not materially affect the value of such
property and do not interfere with the use made and proposed to be
made of such property by either the Company or the Bank; and any real
property and buildings held under lease by either the Company or the
Bank are held by it under valid, subsisting and enforceable leases
with such exceptions as are not material and do not interfere with the
use made and propose to be made of such property and buildings by
either the Company or the Bank;
(g) Each of the Company and the Bank has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of Virginia, with power and authority (corporate and
other) to own or lease its properties and conduct its business as
described in the Prospectus; the Company and the Bank do not conduct
business in any jurisdiction other than the Commonwealth of Virginia;
the Company is duly registered as a bank holding company under the Bank
Holding Company Act of 1956, as amended, and the rules and regulations
promulgated thereunder; and each of the Company and the Bank holds all
material licenses, certificates, authorizations and permits from
governmental authorities necessary for the conduct of its business as
described in the Registration Statement and the Prospectus;
(h) The Company has an authorized capitalization as set
forth in the Prospectus; all of the issued shares of capital stock of
the Company have been duly and validly authorized and issued, are
fully paid and nonassessable and conform to the description of the
capital stock of the Company contained in the Prospectus; there are no
preemptive or other similar rights to subscribe for or to purchase any
securities of the Company; except as described in the Prospectus,
there are no warrants, options or other rights to purchase any
securities of the Company; neither the filing of the Registration
Statement nor the offering or sale of the Securities as contemplated
by this Agreement give rise to any rights for or relating to the
registration of any securities of the Company with respect to such
filing, offering or sale;
(i) The Securities have been duly and validly authorized
and, when issued and delivered against payment therefor as provided
herein, will be duly and validly issued and fully paid and
nonassessable and will conform to the description of the Securities
contained in the Prospectus as amended or supplemented;
(j) The issuance and sale of the Securities being issued at
each Delivery Date (as hereinafter defined) by the Company and the
performance of this Agreement and the consummation by the Company of
the other transactions herein contemplated will not conflict with or
result in a breach or violation of any terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company or
the Bank is a party or by which any of the property or assets of the
Company or the Bank is bound or to which any of the property or assets
of the Company or the Bank is subject, nor will such action result in
any violation of the
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provisions of the Articles of Incorporation, as amended, or By-laws,
as amended, of the Company or the Bank or any statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or the Bank or any of their 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 issuance and sale of the Securities or the
consummation by the Company of the transactions contemplated by this
Agreement, except such consents, approvals, authorizations,
registrations or qualifications as may be required under the Act and
under state securities or Blue Sky laws in connection with the
purchase and distribution of the Securities by the Underwriter;
(k) There are no legal or governmental proceedings pending
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 consolidated financial position,
stockholders' equity or results of operations of the Company or of the
Company and the Bank taken as a whole and, to the best of the Company's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or by others;
(l) Xxxxx & Xxxxxxxxx, P.C., which has certified certain
financial statements of the Company, are independent public accountants
as required by the Act and the rules and regulations of the Commission
thereunder;
(m) All employee benefit plans (as defined in Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) established, maintained or contributed to by the Company or
the Bank (except any such plan for which the principal sponsor or plan
administrator is an affiliate other than the Company or the Bank)
comply in all material respects with the requirements of ERISA and no
employee pension benefit plan (as defined in Section 3(2) of ERISA) has
incurred or assumed an "accumulated funding deficiency" within the
meaning of Section 302 of ERISA or has incurred or assumed any material
liability (other than for the payment of premiums) to the Pension
Benefit Guaranty Corporation;
(n) The consolidated financial statements of the Company
and the Bank, together with related notes, as set forth in the
Registration Statement present fairly the consolidated financial
position and the results of operations of the Company and the Bank at
the indicated dates and for the indicated periods; such financial
statements have been prepared in accordance with generally accepted
accounting principles, consistently applied throughout the periods
presented except as noted in the accountants' notes thereon, and all
adjustments necessary for a fair presentation of results for such
periods have been made; and the selected financial information
included in the Prospectus presents fairly the information shown
therein and has been compiled on a basis consistent with the financial
statements presented therein;
(o) The Company and the Bank have timely filed all
necessary federal, state and foreign income, franchise and excise tax
returns and have paid all taxes shown thereon as due, and there is no
tax deficiency that has been or, to the best knowledge of the Company,
might be asserted against the Company that might have a material
adverse effect on the business, properties, business prospects,
condition (financial or otherwise), earnings or
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results of operations of the Company, and all tax liabilities are
adequately provided for on the books of the Company and the Bank;
(p) The Company is not in violation of any federal or state
law, regulation, or treaty relating to the storage, handling,
transportation, treatment or disposal of hazardous substances (as
defined in 42 U.S.C. Section 9601) or hazardous materials (as defined
by any federal or state law or regulation) or other waste products,
which violation may have a material adverse effect on the financial
condition or business operations or properties of the Company; the
Company has received all permits, licenses or other approvals as may be
required of it under applicable federal and state environmental laws
and regulations to conduct its business as described in the Prospectus,
and the Company is in compliance in all material respects with the
terms and conditions of any such permit, license or approval; the
Company has not received any notices or claims that it is a responsible
party or a potentially responsible party in connection with any claim
or notice asserted pursuant to 42 U.S.C. Section 9601 et seq. or any
state superfund law; and the disposal of all of the Company's hazardous
substances, hazardous materials and other waste products has been
lawful;
(q) No material relationship, direct or indirect, exists
between or among the Company or the Bank, on the one hand, and the
directors, officers, stockholders, customers or suppliers of the
Company or the Bank on the other hand, that is required by the Act, or
by the rules and regulations under such Act to be described in the
Registration Statement and the Prospectus that is not so described;
(r) Neither the Company nor the Bank has taken and neither
of such entities will take, directly or indirectly, any action which
is designed to or which has constituted or which might reasonably be
expected to cause or result in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale
of the Securities;
(s) Each of the Company and the Bank holds and is operating
in compliance, in all material respects, with all franchises, grants,
authorizations, licenses, permits, easements, consents, certificates
and orders of any governmental or self-regulatory body required for
the conduct of its business as presently being conducted ("licenses")
and all licenses are valid and in full force and effect; and each of
the Company and the Bank is in compliance, in all material respects,
with all laws, regulations, orders and decrees applicable to it;
(t) Each of the Company and the Bank maintains insurance of
the types and in the amounts that are reasonable or required for the
business operated by it, all of which insurance is in full force and
effect;
(u) This Agreement has been duly authorized, executed and
delivered by the Company;
(v) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets; (iii) access to assets is
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permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences;
(w) There is no document or contract 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
which is not described or filed as required. All such contracts to
which the Company or the Bank is a party constitute valid and binding
agreements of the Company or the Bank and are enforceable against the
Company or the Bank in accordance with the terms thereof, except as
may be limited by bankruptcy, insolvency, fraudulent transfer or other
similar laws affecting the rights and remedies of creditors generally
and subject to general principles of equity, and except to the extent
that any such contract contains provisions for indemnification for
liabilities under the Act; and
(x) The Company and the Bank are in compliance in all
material respects with all applicable laws administered by and
regulations of the Board of Governors of the Federal Reserve System
(the "Board of Governors"), the Federal Deposit Insurance Corporation
(the "FDIC") and any state bank regulatory authority with jurisdiction
over the Bank, the failure to comply with which would have a material
adverse effect on the Company and the Bank taken as a whole.
2. Purchase and Sale.
Subject to the terms and conditions herein set forth, (a) the Company
agrees to sell to the Underwriter, and the Underwriter agrees to purchase from
the Company at a purchase price per share of $____, the Firm Securities and (b)
in the event and to the extent that the Underwriter shall exercise the election
to purchase Optional Securities as provided below, the Company agrees to sell to
the Underwriter, and the Underwriter agrees to purchase from the Company at the
purchase price set forth in clause (a) of this Section 2, that portion of the
number of Optional Securities as to which such election shall have been
exercised.
The Company hereby grants to the Underwriter the right to purchase at
its election up to 19,500 Optional Securities, at the purchase price per share
of $____, for the sole purpose of covering over-allotments in the sale of the
Firm Securities. Any such election to purchase Optional Securities may be
exercised not more than once by written notice from you to the Company, given
within a period of 30 calendar days after the date of this Agreement, setting
forth the aggregate amount of Optional Securities to be purchased and the date
on which such Optional Securities are to be delivered, as determined by you but
in no event earlier than the First Delivery Date (as defined in Section 4
hereof) or, unless you and the Company otherwise agree in writing, earlier than
two or later than 10 business days after the date of such notice.
3. Offering by the Underwriter.
Upon the authorization by you of the release of the Firm Securities,
the Underwriter proposes to offer the Firm Securities for sale upon the terms
and conditions set forth in the Prospectus.
4. Delivery and Payment.
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Certificates in definitive form for the Securities to be purchased by
the Underwriter hereunder, and in such denominations and registered in such
names as the Underwriter may request upon at least two business days' prior
notice to the Company, shall be delivered by or on behalf of the Company to the
Underwriter against payment of the purchase price therefor. Payment of the
purchase price for the Securities shall be made by certified or official bank
check in immediately available funds or, at the option of the Underwriter, by
wire transfer of immediately available funds, all at the offices of Xxxxxxxxx &
Company LLC, Xxx Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx. The time and date of such
delivery and payment shall be, with respect to the Firm Securities, 10:00 a.m.,
Richmond, Virginia time, on ________, 1997, or at such other time and date as
the Underwriter and the Company may agree upon in writing, and, with respect to
the Optional Securities, 10:00 a.m., Richmond, Virginia time, on the date
specified by the Underwriter in the written notice of the Underwriter's election
to purchase such Optional Securities, or at such other time and date as the
Underwriter and the Company may agree upon in writing. Such time and date for
delivery of the Firm Securities is herein called the "First Delivery Date," such
time and date for delivery of the Optional Securities, if not the First Delivery
Date, is herein called the "Second Delivery Date," and each such time and date
for delivery is herein called a "Delivery Date." Such certificates will be made
available for checking and packaging at least twenty-four hours prior to each
Delivery Date in Richmond, Virginia or such other location designated by the
Underwriter to the Company.
5. Agreements of the Company.
The Company agrees with the Underwriter:
(a) To prepare the Prospectus in a form reasonably approved by you
and to file such Prospectus (or a term sheet as permitted by Rule 434(c))
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 this
Agreement or, if applicable, such earlier time as may be required by Rule
430A(a)(3) under the Act; to make no amendment or supplement to the Registration
Statement or Prospectus prior to any Delivery Date which shall be reasonably
disapproved by you promptly after reasonable notice thereof; to advise you,
promptly after it receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any supplement to
the Prospectus or any amended Prospectus has been filed and to furnish you with
copies thereof; to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the Commission
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 the
Securities; to advise you, promptly after it receives notice thereof, of the
issuance by the Commission of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus, of the
suspension of the qualification of the Securities for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any such
purpose, of any request by the Commission for the amending or supplementing of
the Registration Statement or Prospectus or for additional information and, in
the event of the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus or suspending
any such qualification, to use promptly its best efforts to obtain its
withdrawal;
(b) Promptly from time to time to take such actions as you may
reasonably request to qualify the Securities for offering and sale under the
securities laws of such jurisdictions as you may
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reasonably 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 the Securities, provided that in
connection therewith the Company shall not 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 Underwriter with copies of the Registration
Statement and the Prospectus in such quantities as you may from time to time
reasonably request during such period following the date hereof that a
prospectus is required to be delivered in connection with offers or sales of
Securities, and, if the delivery of a prospectus is required during this period
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 period to amend or supplement the
Prospectus to comply with the Act, to notify you and upon your request to file
such document and to prepare and furnish without charge to you and to any dealer
in securities as many copies as you 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;
(d) As soon as practicable after the effective date of the
Registration Statement, to make generally available to its stockholders and to
deliver to you, an earnings statement of the Company, conforming with the
requirements of Section 11(a) of the Act and Rule 158 under the Act, covering a
period of at least 12 months beginning after the effective date of the
Registration Statement;
(e) For a period of 90 days from the date of the Prospectus, not to
offer, sell, contract to sell or otherwise dispose of any shares of the
Company's Common Stock or securities exercisable for or convertible into shares
of Common Stock (other than the Securities or pursuant to employee stock option
or stockholder dividend reinvestment plans or pursuant to options, warrants or
rights outstanding on the date of this Agreement or pursuant to bona fide gifts
to persons who agree in writing with the donor to be bound by this restriction)
without your prior written consent, which consent shall not be unreasonably
withheld;
(f) During a period of three years from the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to stockholders, and deliver to
you (i) as soon as they are available, copies of any reports and financial
statements furnished to or filed with the Board of Governors, the FDIC, the
Commission, any national securities exchange or quotation system on which any
class of securities of the Company is listed or included; and (ii) such
additional information concerning the business and financial condition of the
Company as you may from time to time reasonably request; and
(g) To apply the net proceeds from the sale of the Securities for the
purposes set forth in the Prospectus.
6. Payment of Expenses.
The Company covenants and agrees with you that it will pay or cause to
be paid the following: (i) the fees, disbursements and expenses of the Company's
counsel and accountants in connection
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with the registration of the Securities under the Act and all other expenses in
connection with the preparation, printing and filing of the Registration
Statement, any Preliminary Prospectus and the Prospectus and any amendments or
supplements thereto, and the mailing and delivering of copies thereof to the
Underwriter and dealers; (ii) the cost of printing or reproducing this
agreement, the Blue Sky Survey, any dealer agreements and any other documents in
connection with the offering, purchase, sale and delivery of the Securities;
(iii) all expenses in connection with the qualification of the Securities for
offering and sale under state securities laws as provided in Section 5(b)
hereof, including the reasonable fees and disbursements of counsel for the
Underwriter in connection with such qualification and in connection with the
Blue Sky Survey; (iv) the filing fees incident to securing any required review
by the National Association of Securities Dealers, Inc. of the terms of the sale
of the Securities; (v) the cost of preparing stock certificates; (vi) the costs
or expenses of any transfer agent or registrar; (vii) all fees relating to the
inclusion of the Common Stock on The Nasdaq SmallCap Market; and (viii) all
other costs and expenses incident to the performance of its obligations
hereunder which are not otherwise specifically provided for in this Section.
Except as provided in this Section, Section 8 and Section 10 hereof, the
Underwriter will pay all of its own costs and expenses, including the fees of
its counsel, stock transfer taxes on resale of any of the Securities by it, and
any advertising expenses connected with any offers it may make.
7. Conditions to Obligations of Underwriter.
The obligations of the Underwriter hereunder, as to the Securities to
be delivered at each Delivery Date, shall be subject, in its discretion, to the
condition that all representations and warranties and other statements of the
Company are, at and as of such Delivery Date, true and correct in all material
respects and the condition that the Company shall have performed in all material
respects all of its obligations hereunder theretofore to be performed, and the
following additional conditions:
(a) The Prospectus shall have been filed with the Commission pursuant
to Rule 424(b) under the Act within the applicable time period prescribed for
such filing by the rules and regulations under the Act and in accordance with
Section 5(a) of this Agreement; no stop order suspending the effectiveness of
the Registration Statement 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 your reasonable satisfaction;
(b) Hunton & Xxxxxxxx, counsel for the Underwriter, shall have
furnished to you such opinion or opinions, dated such Delivery Date, with
respect to the incorporation of the Company, the validity of the Securities
being issued at such Delivery Date, the Registration Statement, the Prospectus,
and other related matters as you 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;
(c) Williams, Mullen, Christian & Xxxxxxx, .C., counsel for the
Company, shall have furnished to you their written opinion, dated such Delivery
Date, in form and substance satisfactory to you, to the effect that:
(i) Each of the Company and the Bank has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the Commonwealth of Virginia, with corporate power
and authority to own or lease its properties and conduct its business
as
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described in the Prospectus;
(ii) Each of the Company and the Bank 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, except where the failure to so qualify will not
result in a material adverse effect on the Company (such counsel being
entitled to rely in respect of the opinion in this clause upon
certificates of appropriate governmental authorities in such
jurisdictions, opinions of local counsel and, in respect of matters of
fact, upon certificates of officers of the Company);
(iii) The Company has an authorized capitalization as set
forth in the Prospectus under the caption "Capitalization," and all of
the issued shares of capital stock of the Company have been duly and
validly authorized and issued, are fully paid and nonassessable and
conform to the description of the capital stock contained in the
Prospectus; there are no preemptive or other similar rights to
subscribe for or to purchase any securities of the Company; except as
described in the Prospectus, there are no warrants or options to
purchase any securities of the Company; to the best of such counsel's
knowledge, neither the filing of the Registration Statement nor the
offering or sale of the Securities as contemplated by this Agreement
gives rise to any rights for or relating to the registration of any
securities of the Company with respect to such filing, offering or
sale; and the form of the certificates evidencing the Securities
complies with all formal requirements of Virginia law;
(iv) The Securities have been duly and validly authorized
and issued and, when issued and delivered against payment therefor,
will be fully paid and nonassessable, and the Securities conform to
the description of the Securities contained in the Prospectus as
amended or supplemented;
(v) To such counsel's knowledge, there is no legal or
governmental proceeding pending to which either the Company or the Bank
is a party or of which any property of either the Company or the Bank
is the subject, other than as set forth or contemplated in the
Prospectus, that, if determined adversely to the Company or the Bank,
would individually or in the aggregate have a material adverse effect
on the financial position, stockholders' equity or results of
operations of the Company; and, to such counsel's knowledge, no such
proceedings are threatened or contemplated by governmental authorities
or threatened by others;
(vi) The issuance and sale of the Securities being issued at
such Delivery Date by the Company and the performance of this Agreement
by the Company and the consummation by the Company of the other
transactions herein contemplated will not conflict with or result in a
breach or violation of any terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument known to such counsel to which the
Company is a party or by which the Company is bound or to which any of
the property or assets of the Company is subject, nor will such action
result in any violation of the provisions of the Articles of
Incorporation, as amended, or By-laws, as amended, of the Company or of
any statute or any order, rule or regulation known to such counsel of
any court or governmental agency or body having
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jurisdiction over the Company or any of its properties;
(vii) No consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the issuance and sale of
the Securities by the Company or the consummation by the Company of
the other transactions contemplated by this Agreement, except such as
have been obtained under the Act and such as may be required under
state securities or Blue Sky laws in connection with the purchase and
distribution of the Securities by the Underwriter;
(viii) The Registration Statement and the Prospectus and any
further amendments and supplements thereto made by the Company prior to
such Delivery Date (other than the financial statements and related
schedules and such other financial and statistical data included
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
rules and regulations thereunder; such counsel does not know of any
contracts or other documents of a character required to be filed as an
exhibit to the Registration Statement or required to be described in
the Registration Statement or the Prospectus which are not filed or
described as required;
(ix) The descriptions in the Registration Statement and
Prospectus under the captions "Business--Supervision and Regulation"
and "Description of Capital Stock" and any further amendments or
supplements thereto, insofar as such descriptions constitute a summary
of documents referred to therein or matters of law, are accurate and
fairly present the information required to be shown;
(x) The descriptions in the Prospectus and any further
amendments or supplements thereto of statutes, legal and governmental
proceedings and contracts and other documents are accurate and fairly
present such information in all material respects; and
(xi) This Agreement has been duly authorized, executed and
delivered by the Company.
Such counsel shall also provide a written statement to the effect that
such counsel participated in conferences with officers and other representatives
of the Company, representatives of the independent public accountants of the
Company and representatives of the Underwriter at which the contents of the
Registration Statement and Prospectus were discussed and, although such counsel
is not passing upon and does not assume responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or Prospectus (except as and to the extent stated in subparagraphs
(iii), (iv) and (ix) above with respect to certain descriptions contained
therein), on the basis of the foregoing (relying as to materiality where
appropriate upon the opinions of officers and other representatives of the
Company) nothing has come to the attention of such counsel that causes them to
believe that the Registration Statement or any amendment thereto at the time
such Registration Statement or amendment became effective contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
that the Prospectus, at the date of such Prospectus, and at all times up to and
including the date of such counsel's 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, in light of the circumstances under
which they were made, not misleading (it being understood that such counsel need
express no opinion with respect to
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the financial statements and schedules and other financial and statistical data
included in the Registration Statement or Prospectus).
Where any of the foregoing opinions refers to the knowledge of counsel,
such counsel may state that their opinion is limited to the actual knowledge of
attorneys actively involved in the transactions contemplated by this agreement
or in the preparation of the opinion letter required by this subsection (c).
(d) At 10:00 a.m., Richmond time, on the date of this Agreement and
the effective date of the most recently filed post-effective amendment to the
Registration Statement and also at each Delivery Date, Xxxxx & Xxxxxxxxx, P.C.
shall have furnished to you a letter or letters, dated the respective date of
delivery thereof, in form and substance satisfactory to you, containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements and
certain financial information relating to the Company contained in the
Registration Statement and the Prospectus;
(e) (i) Neither the Company nor the Bank shall have sustained, since
the date of the latest audited financial statements included in the Prospectus,
any loss or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus, and (ii) since the respective dates as of which
information is given in the Prospectus there shall not have been any change in
the capital stock or long-term debt of the Bank or 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
either the Company or the Bank otherwise than as set forth or contemplated in
the Prospectus, the effect of which, in any such case described in clause (i) or
(ii) is in your reasonable judgment so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Securities being delivered at such Delivery Date on the terms and in the
manner contemplated by the Prospectus;
(f) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading of any of the
equity securities of the Company on the Nasdaq SmallCap Market; (ii) any United
States federal or state statute, regulation, rule or order of any court,
legislative body, agency or other governmental authority shall have been
enacted, published, decreed or promulgated or any proceeding or investigation
shall have been commenced which, in your reasonable judgment, materially and
adversely affects the business or operations of the Company; (iii) a suspension
or material limitation in trading in securities generally on the New York Stock
Exchange or in the publication of quotations on The Nasdaq SmallCap Market; (ii)
a general moratorium on commercial banking activities in New York or Virginia
declared by either federal or New York or Virginia authorities; (iii) the
outbreak or escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war if any such
event specified in this clause (iii) would have such a materially adverse
effect, in your judgment, as to make it impracticable or inadvisable to proceed
with the public offering or the delivery of the Securities being delivered at
such Delivery Date on the terms and in the manner contemplated in the
Prospectus; or (iv) such a material adverse change in general economic,
political, financial or international conditions affecting financial markets in
the United States having a material adverse impact on trading prices of
securities in general, as, in your judgment, makes it inadvisable to proceed
with the payment for and delivery of the Securities;
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(g) The Company shall have furnished to you copies of agreements
between the Company and each of the executive officers and directors of the
Company specified by you, in form and content satisfactory to you, pursuant to
which such persons agree not to offer, sell, or contract to sell, or otherwise
dispose of, any shares of Common Stock beneficially owned by them or any
securities convertible into, or exchangeable for, Common Stock, on or before the
90th day after the date of this Agreement without your prior written consent;
and
(h) The Company shall have furnished or caused to be furnished to you
at such Delivery Date certificates of officers of the Company satisfactory to
you as to the accuracy of the representations and warranties of the Company
herein at and as of such Delivery Date, as to the performance by the Company of
all of its obligations hereunder to be performed at or prior to such Delivery
Date, as to the matters set forth in subsections (a) and (e) of this Section and
as to such other matters as you may reasonably request.
8. Indemnification and Contribution.
(a) The Company will indemnify and hold harmless the Underwriter
against any losses, claims, damages or liabilities to which the 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, the Registration Statement or the
Prospectus, 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,
and will promptly reimburse the Underwriter for any legal or other expenses
reasonably incurred by it in connection with investigating, preparing to defend
or defending, or appearing as a third party witness in connection with, any such
action or claim; provided, however, that the Company shall not be liable in any
such case to the extent that any such loss, claim, damage or liability arises
out of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in any Preliminary Prospectus, the
Registration Statement or Prospectus or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by the Underwriter expressly for use therein.
(b) The Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities, joint or several, to which
the Company 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, the Registration
Statement or the Prospectus 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 or Prospectus or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by you expressly for use therein; and will
promptly reimburse the Company for any legal or other expenses reasonably
incurred by the Company in connection with investigating, preparing to defend or
defending, or appearing as a third party witness in connection with, any such
action or claim. The Company acknowledges that the statements set forth in the
last paragraph of the cover page, the second paragraph on the inside
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front cover page and the first, second, third, fourth, seventh and eighth
paragraphs under the heading "Underwriting" in the Preliminary Prospectus and
the Prospectus constitute the only information furnished in writing by the
Underwriter for inclusion in the Preliminary Prospectus or the Prospectus, and
the Underwriter confirms that such statements are correct.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party; provided, however,
that if the defendants in any such action include both the indemnified party and
the indemnifying party and the indemnified party shall have been advised by
counsel that representation of such indemnified party and the indemnifying party
may be inappropriate under applicable standards of professional conduct due to
actual or potential differing interests between them, the indemnified party or
parties shall have the right to select separate counsel to defend such action on
behalf of such indemnified party or parties. It is understood that the
indemnifying party shall, in connection with any such action or separate but
substantially similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the reasonable fees
and expenses of only one separate firm of attorneys together with appropriate
local counsel at any time for all indemnified parties unless such firm of
attorneys shall have reasonably concluded that one or more indemnified parties
has actual differing interests with any other indemnified party. Upon receipt of
notice from the indemnifying party to such indemnified party of its election so
to appoint counsel to defend such action and approval by the indemnified party
of such counsel, the indemnifying party will not be liable for any settlement
entered into without its consent and will not be liable to such indemnified
party under this Section 8 for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence, (ii) the indemnifying party shall not
have employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
commencement of the action or (iii) the indemnifying party has authorized the
employment of counsel for the indemnified party at the expense of the
indemnifying party; and except that, if clause (i) or (iii) is applicable, such
liability shall be only in respect of the counsel referred to in such clause (i)
or (iii). Notwithstanding the immediately preceding sentence and the third
preceding sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by such indemnifying
party of the aforesaid request and (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior to the
date of such settlement.
(d) If the indemnification provided for in this Section 8 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 or proceedings in respect thereof) referred to therein,
then
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each indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) in such proportion as is appropriate
to reflect the relative benefits received by the Company on the one hand and the
Underwriter on the other from the offering of the Securities. 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 Company on the one hand and the Underwriter on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof),
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 (after deducting the total underwriting discount, but before deducting
expenses) received by the Company bear to the total underwriting discounts and
commissions received by the Underwriter, in each case as set forth in the table
on the cover page of the Prospectus. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company on the one hand or 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
contributions pursuant to this subsection (d) were determined by pro rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to above in this subsection (d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions or proceedings 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), the Underwriter shall not be required to
contribute any amount in excess of the amount by which the total price at which
the Securities underwritten by it and distributed to the public were offered to
the public exceeds the amount of damages which 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 Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls the
Underwriter within the meaning of the Act; and the obligations of the
Underwriter under this Section 8 shall be in addition to any liability which the
Underwriter may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company and to each person, if
any, who controls the Company within the meaning of the Act.
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9. Representations and Indemnities to Survive.
The respective indemnities, agreements, representations, warranties and
other statements of the Company and the Underwriter, 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 termination
or cancellation of this Agreement or any investigation (or any statement as to
the results thereof) made by or on behalf of the Underwriter, or any controlling
person of the Underwriter, or the Company, or any officer or director or
controlling person of the Company, and shall survive delivery of and payment for
the Securities.
10. Termination and Payment of Expenses.
If for any reason any Securities are not delivered by or on behalf of
the Company as provided herein, the Company will reimburse the Underwriter for
all out-of-pocket expenses, including fees and disbursements of counsel,
reasonably incurred by the Underwriter in making preparations for the purchase,
sale and delivery of the Securities not so delivered, but the Company shall then
be under no further liability to the Underwriter except as provided in Section 6
and Section 8 hereof.
11. Notices.
All statements, requests, notices and agreements hereunder shall be in
writing or by telegram if promptly confirmed in writing, and if to the
Underwriter shall be sufficient in all respects if delivered or sent by reliable
courier, first class mail, telex or facsimile transmission to Xxxxxxxxx &
Company LLC, Xxx Xxxxx Xxxxxx, X.X. Xxx 00000, Xxxxxxxx, Xxxxxxxx 00000-0000
Attention: Corporate Finance Department; and if to the Company shall be
sufficient in all respects if delivered or sent by reliable courier, first class
mail, telex or facsimile transmission to the address of the Company set forth in
the Prospectus, Attention: President. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
12. Successors.
This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriter and the Company and, to the extent provided in Sections 8
and 9 hereof, the officers and directors of the Company and each person who
controls the Company, or the 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. No purchaser of any of the
Securities from the Underwriter shall be deemed a successor or assign by reason
merely of such purchase.
13. Time of the Essence.
Time shall be of the essence in this Agreement.
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14. Business Day.
As used herein, the term "business day" shall mean any day when the
Commission's office in Washington, D.C. is open for business.
15. Applicable Law.
This Agreement shall be construed in accordance with the laws of the
Commonwealth of Virginia.
16. Captions.
The captions included in this Agreement are included solely for
convenience of reference and shall not be deemed to be a part of this Agreement.
17. Counterparts.
This Agreement may be executed by any one or more of the parties in any
number of counterparts, each of which shall be deemed to be an original, but all
such counterparts shall together constitute one and the same instrument.
18. Pronouns.
All pronouns used herein shall be deemed to refer to the masculine,
feminine or neuter gender as the context requires.
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If the foregoing is in accordance with your understanding, please sign
and return to us two counterparts hereof, and upon the acceptance hereof by you,
this letter and such acceptance hereof shall constitute a binding agreement
between us.
Very truly yours,
MID-ATLANTIC COMMUNITY BANKGROUP,
INC.
By:
---------------------------------
Name:
---------------------------------
Title:
---------------------------------
Accepted as of the date hereof
at Richmond, Virginia:
XXXXXXXXX & COMPANY LLC
By:
--------------------------------
Name:
--------------------------------
Title:
--------------------------------
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