1,000,000 Shares
(plus 150,000 Shares to cover over-allotments, if any)
CRUSADER HOLDING CORPORATION
COMMON STOCK, PAR VALUE $0.01 PER SHARE
UNDERWRITING AGREEMENT
February , 1998
ADVEST, INC.
As Representative (the "Representative")
of the Several Underwriters
Named in Schedule I hereto
c/o Advest, Inc.
Xxx Xxxxxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Mesdames:
Crusader Holding Corporation, a Pennsylvania corporation (the
"Company"), proposes, subject to the terms and conditions stated herein, to sell
to the several Underwriters named in Schedule I hereto (the "Underwriters"), an
aggregate of 1,000,000 shares (the "Firm Shares") of the Company's common stock,
$0.01 par value (the "Common Stock").
In addition, in order to cover over-allotments in the sale of the Firm
Shares, the Underwriters may, at the Underwriters' election and subject to the
terms and conditions stated herein, purchase ratably, in proportion to the
amounts set forth opposite their respective names in Schedule I hereto, up to
150,000 additional shares of Common Stock from the Company (such additional
shares of Common Stock, the "Optional Shares"). The Firm Shares and the Optional
Shares are referred to collectively as the "Shares."
The Company, intending to be legally bound, hereby confirms its
agreement with the Underwriters as follows:
1. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, each of the Underwriters that:
(a) A registration statement on Form S-1 (File No.
333-42215) with respect to the Shares, including a prospectus subject to
completion, has been filed by the Company with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended (the
"Act"), and one or more amendments to such
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registration statement may have been so filed. After the execution of this
Agreement, the Company will file with the Commission either (i) if such
registration statement, as it may have been amended, has become effective under
the Act and information has been omitted therefrom in accordance with Rule 430A
under the Act, a prospectus in the form most recently included in an amendment
to such registration statement (or, if no such amendment shall have been filed,
in such registration statement) with such changes or insertions as are required
by Rule 430A or permitted by Rule 424(b) under the Act and as have been provided
to and approved by the Representative, or (ii) if such registration statement,
as it may have been amended, has not become effective under the Act, an
amendment to such registration statement, including a form of prospectus, a copy
of which amendment has been provided to and approved by the Representative prior
to the execution of this Agreement. As used in this Agreement, the term
"Registration Statement" means such registration statement, as amended at the
time when it was or is declared effective, including (A) all financial
statements, schedules and exhibits thereto, (B) all documents (or portions
thereof) incorporated by reference therein, and (C) any information omitted
therefrom pursuant to Rule 430A under the Act and included in the Prospectus (as
hereinafter defined); the term "Preliminary Prospectus" means each prospectus
subject to completion included in such registration statement or any amendment
or post-effective amendment thereto (including the prospectus subject to
completion, if any, included in the Registration Statement at the time it was or
is declared effective), including all documents (or portions thereof)
incorporated by reference therein; and the term "Prospectus" means the
prospectus first filed with the Commission pursuant to Rule 424(b) under the Act
or, if no prospectus is required to be so filed, such term means the prospectus
included in the Registration Statement, in either case, including all documents
(or portions thereof) incorporated by reference therein. As used herein, any
reference to any statement or information as being "made," "included,"
"contained," "disclosed" or "set forth" in any Preliminary Prospectus, a
Prospectus or any amendment or supplement thereto, or the Registration Statement
or any amendment thereto (or other similar references) shall refer both to
information and statements actually appearing in such document as well as
information and statements incorporated by reference therein.
(b) No order preventing or suspending the use of any
Preliminary Prospectus has been issued and no proceeding for that purpose has
been instituted or threatened by the Commission or the securities authority of
any state or other jurisdiction. If the Registration Statement has become
effective under the Act, no stop order suspending the effectiveness of the
Registration Statement or any part thereof has been issued and no proceeding for
that purpose has been instituted or threatened or, to the knowledge of the
Company, contemplated by the Commission or the securities authority of any state
or other jurisdiction.
(c) When any Preliminary Prospectus was filed with
the Commission it contained all statements required to be stated therein in
accordance with, and complied in all material respects with the requirements of,
the Act and the rules and regulations of the Commission thereunder. When the
Registration Statement or any amendment thereto was or is declared effective,
and at each Time of Delivery (as hereinafter defined), it (i) contained and will
contain all statements required to be stated therein in accordance with, and
complied or will comply in all material respects with the requirements of, the
Act and the rules and
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regulations of the Commission thereunder and (ii) did not and will not include
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading. When the Prospectus or
any amendment or supplement thereto is filed with the Commission pursuant to
Rule 424(b) (or, if the Prospectus or such amendment or supplement is not
required to be so filed, when the Registration Statement or the amendment
thereto containing such amendment or supplement to the Prospectus was or is
declared effective) and at each Time of Delivery, the Prospectus, as amended or
supplemented at any such time, (i) contained and will contain all statements
required to be stated therein in accordance with, and complied or will comply in
all material respects with the requirements of, the Act and the rules and
regulations of the Commission thereunder and (ii) did not and will not include
any 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, not misleading. The foregoing
provisions of this paragraph (c) do not apply to statements or omissions made in
the Registration Statement or any amendment thereto or the Prospectus or any
amendment or supplement thereto in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through you specifically
for use therein. It is understood that the statements set forth in the
Registration Statement or any amendment thereto or the Prospectus or any
amendment or supplement thereto (W) in the last paragraph of the cover page of
the Prospectus, (X) on the inside cover page with respect to stabilization, and
(Y) in the third and fifth paragraphs and the list of Underwriters under the
section entitled "Underwriting," constitute the only written information
furnished to the Company by or on behalf of any Underwriter through you
specifically for use in the Registration Statement or any amendment thereto or
the Prospectus and any amendment or supplement thereto, as the case may be.
(d) There are no legal or governmental proceedings
pending or threatened to which the Company or any of its directly or indirectly
held subsidiaries, as listed on Exhibit A hereto (the "Subsidiaries"), is a
party or to which any of the properties of the Company or any Subsidiary is
subject that are required to be described in the Registration Statement or the
Prospectus and are not so described or any statutes, regulations, contracts or
other documents that are required to be described in the Registration Statement
or the Prospectus or to be filed as exhibits to the Registration Statement that
are not described or filed as required.
(e) Each of the Company and the Subsidiaries has
been duly incorporated, is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation and has full power and
authority (corporate and other) to own or lease its properties and conduct its
business as described in the Prospectus. The Company has full power and
authority (corporate and other) to enter into this Agreement and to perform its
obligations hereunder. Each of the Company and the Subsidiaries is duly
qualified to transact business as a foreign corporation and is in good standing
under the laws of each other jurisdiction in which it owns or leases properties,
or conducts any business, so as to require such qualification, except where the
failure to so qualify would not have a material adverse effect on the financial
position, results of operations or business of the Company and the Subsidiaries
taken as a whole. The Company does not own or lease any property, or conduct any
business, in any jurisdiction (other than the state in which it is organized)
other than
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__________________ (collectively, the "Designated Company States"). None of the
Subsidiaries owns or leases any property, or conducts any business, in any
jurisdiction (other than the state in which it is organized) other than
_________________ (collectively, the "Designated Subsidiary States").
(f) The Company's authorized, issued and outstanding
capital stock is as disclosed in the Prospectus. All of the issued shares of
capital stock of the Company, have been duly authorized and validly issued, are
fully paid and nonassessable and conform to the descriptions of the Common Stock
contained in the Prospectus. None of the issued shares of capital stock of the
Company or any of the Subsidiaries has been issued or is owned or held in
violation of any statutory (or to the knowledge of the Company, any other)
preemptive rights of shareholders, and no person or entity (including any holder
of outstanding shares of capital stock of the Company or the Subsidiaries) has
any statutory (or to the knowledge of the Company, any other) preemptive or
other rights to subscribe for any of the Shares. None of the capital stock of
the Company has been issued in violation of applicable federal or state
securities laws.
(g) All of the issued shares of capital stock of
each Subsidiary have been duly authorized and validly issued, are fully paid and
nonassessable and the number, class and percentage of shares of capital stock of
each Subsidiary identified on Exhibit A hereto as being owned by the Company or
one of the Subsidiaries are owned beneficially by the Company or such
Subsidiary, free and clear of all liens, security interests, pledges, charges,
encumbrances, defects, shareholders' agreements (other than those shareholders'
agreements identified in the Prospectus), voting agreements, proxies, voting
trusts, equities or claims of any nature whatsoever. Other than the Subsidiaries
and the equity securities held in the investment portfolios of the Company and
the Subsidiaries (the composition of which is not materially different than as
contained in the Prospectus as of specific dates), the Company does not own,
directly or indirectly, any capital stock or other equity securities of any
other corporation or any ownership interest in any partnership, joint venture or
other association.
(h) Except as disclosed in the Prospectus, there are
no outstanding (i) securities or obligations of the Company or any of the
Subsidiaries convertible into or exchangeable for any capital stock of the
Company or any of the Subsidiaries, (ii) warrants, rights or options to
subscribe for or purchase from the Company or any of the Subsidiaries any such
capital stock or any such convertible or exchangeable securities or obligations
or (iii) obligations of the Company or any of the Subsidiaries to issue any
shares of capital stock, any such convertible or exchangeable securities or
obligations, or any such warrants, rights or options.
(i) Since the respective dates as of which
information is given in the Registration Statement and the Prospectus, (i)
neither the Company nor any of the Subsidiaries has incurred any liabilities or
obligations, direct or contingent, or entered into any transactions, not in the
ordinary course of business, that are material to the Company and the
Subsidiaries, (ii) the Company has not purchased any of its outstanding capital
stock or declared, paid or otherwise made any dividend or distribution of any
kind on its capital stock, (iii) there has not been any change in the capital
stock, long-term debt or short-term debt of the Company or any
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of the Subsidiaries, and (iv) there has not been any material adverse change, or
any development involving a prospective material adverse change, in or affecting
the financial position, results of operations or business of the Company and the
Subsidiaries, in each case other than as disclosed in or contemplated by the
Prospectus.
(j) There are no contracts, agreements or
understandings between the Company and any person granting such person the right
to require the Company to file a registration statement under the Act with
respect to any securities of the Company owned or to be owned by such person or,
requiring the Company to include such securities in the securities registered
pursuant to the Registration Statement (or any such right has been effectively
waived) or requiring the registration of any securities pursuant to any other
registration statement filed by the Company under the Act. Neither the filing of
the Registration Statement nor the offering or sale of Shares as contemplated by
this Agreement gives any security holder of the Company any rights for or
relating to the registration of any shares of Common Stock or any other capital
stock of the Company, except such as have been satisfied or waived.
(k) Neither the Company nor any of the Subsidiaries
is, or with the giving of notice or passage of time or both would be, in
violation of its articles of incorporation or bylaws or other organizational
documents or in default under any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which the Company or any of
the Subsidiaries is a party or to which any of their respective properties or
assets are subject.
(l) The Company and the Subsidiaries have good and
marketable title in fee simple to all real property, if any, and good title to
all personal property owned by them, in each case free and clear of all liens,
security interests, pledges, charges, encumbrances, mortgages and defects,
except such as are disclosed in the Prospectus or such as would not have a
material adverse effect on the financial position, results of operations or
business of the Company and the Subsidiaries taken as a whole and do not
interfere with the use made or proposed to be made of such property by the
Company and the Subsidiaries; and any real property and 7uildings held under
lease by the Company or any of the Subsidiaries are held under valid, subsisting
and enforceable leases, with such exceptions as are disclosed in the Prospectus
or are not material and do not interfere with the use made or proposed to be
made of such property and buildings by the Company or any Subsidiary.
(m) The Company does not require any consent,
approval, authorization, order or declaration of or from, or registration,
qualification or filing with, any court or governmental agency or body
(including, without limitation, the OTS or the FDIC (as each is defined below))
in connection with the sale of the Shares or the consummation of the
transactions contemplated by this Agreement, except the registration of the
Shares under the Act (which, if the Registration Statement is not effective as
of the time of execution hereof, shall be obtained as provided in this
Agreement) and of the Common Stock under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and such as may be required by the National
Association of Securities Dealers, Inc. (the "NASD") or under state
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securities or blue sky laws in connection with the offer, sale and distribution
of the Shares by the Underwriters.
(n) Other than as disclosed in the Prospectus, there
is no litigation, arbitration, claim, proceeding (formal or informal) or
investigation (including without limitation, any banking regulatory proceeding)
pending or, to the Company's knowledge, threatened in which the Company or any
of the Subsidiaries is a party or of which any of their respective properties or
assets are the subject which, if determined adversely to the Company or any
Subsidiary, would individually or in the aggregate have a material adverse
effect on the financial position, results of operations or business of the
Company and the Subsidiaries taken as a whole. Neither the Company nor any
Subsidiary is in violation of, or in default with respect to, any law, statute,
rule, regulation, order, judgment or decree, except as described in the
Prospectus or such as do not and will not individually or in the aggregate have
a material adverse effect on the financial position, results of operations or
business of the Company and the Subsidiaries taken as a whole, and neither the
Company nor any Subsidiary is required to take any action in order to avoid any
such violation or default.
(o) Xxxxx Xxxxxxxx LLP, which has certified certain
financial statements of the Company and its consolidated Subsidiaries included
in the Registration Statement and the Prospectus, are independent public
accountants as required by the Act, the Exchange Act and the respective rules
and regulations of the Commission thereunder.
(p) The consolidated financial statements and
schedules (including the related notes) of the Company and its consolidated
Subsidiaries included or incorporated by reference in the Registration
Statement, the Prospectus and/or any Preliminary Prospectus were prepared in
accordance with generally accepted accounting principles consistently applied
throughout the periods involved and fairly present the financial position and
results of operations of the Company and the Subsidiaries, on a consolidated
basis, at the dates and for the periods presented. The selected financial data
set forth under the captions "Summary Consolidated Financial Data," "Selected
Consolidated Financial Data" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in the Prospectus fairly present,
on the basis stated in the Prospectus, the information included therein, and
have been compiled on a basis consistent with that of the audited financial
statements included in the Registration Statement. The supporting notes and
schedules included in the Registration Statement, the Prospectus and/or any
Preliminary Prospectus fairly state in all material respects the information
required to be stated therein in relation to the financial statements taken as a
whole. The unaudited interim consolidated financial statements included or
incorporated by reference in the Registration Statement comply as to form in all
material respects with the applicable accounting requirements of Rule 10-01 of
Regulation S-X under the Act.
(q) This Agreement has been duly authorized,
executed and delivered by the Company and, assuming due execution by the
Representative of the Underwriters, constitutes the valid and binding agreement
of the Company, enforceable against the Company in accordance with its terms,
subject, as to enforcement, to applicable bankruptcy, insolvency, reorganization
and moratorium laws and other laws relating to or affecting the enforcement of
creditors' rights generally and to general equitable principles and except as
the enforceability
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of rights to indemnity and contribution under this Agreement may be limited
under applicable securities laws or the public policy underlying such laws.
(r) The sale of the Shares and the performance of
this Agreement and the consummation of the transactions herein contemplated will
not (with or without the giving of notice or the passage of time or both) (i)
conflict with or violate any term or provision of the articles of incorporation
or bylaws or other organizational documents of the Company or any Subsidiary,
(ii) result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which the Company or any
Subsidiary is a party or to which any of their respective properties or assets
is subject, (iii) conflict with or violate any law, statute, rule or regulation
or any order, judgment or decree of any court or governmental agency or body
having jurisdiction over the Company or any Subsidiary or any of their
respective properties or assets or (iv) result in a breach, termination or lapse
of the corporate power and authority of the Company or any Subsidiary to own or
lease and operate their respective assets and properties and conduct their
respective business as described in the Prospectus.
(s) When the Shares to be sold by the Company
hereunder have been duly delivered against payment therefor as contemplated by
this Agreement, the Shares will be validly issued, fully paid and nonassessable,
and the holders thereof will not be subject to personal liability solely by
reason of being such holders. The certificates representing the Shares are in
proper legal form under, and conform in all respects to the requirements of, the
Pennsylvania Business Corporation Law of 1988, as amended, and the requirements
of The Nasdaq Stock Market, Inc.
(t) The Company has not distributed and will not
distribute any offering material in connection with the offering and sale of the
Shares other than the Registration Statement, a Preliminary Prospectus, the
Prospectus and other material, if any, permitted by the Act.
(u) Neither the Company nor any of its officers,
directors or affiliates has (i) taken, directly or indirectly, any action
designed to cause or result in, or that has constituted or might reasonably be
expected to constitute, the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares or (ii)
since the filing of the Registration Statement (A) sold, bid for, purchased or
paid anyone any compensation for soliciting purchases of, the Shares or (B) paid
or agreed to pay to any person any compensation for soliciting another to
purchase any other securities of the Company.
(v) The operations of the Company and the
Subsidiaries with respect to any real property currently leased or owned or by
any means controlled by the Company or any Subsidiary (the "Real Property") are
in compliance in all material respects with all federal, state, and local laws,
ordinances, rules, and regulations relating to occupational health and safety
and the environment (collectively, "Laws"), and the Company and the Subsidiaries
have not violated any Laws in a way which would have a material adverse effect
on the financial position, results of operations or business of the Company and
the Subsidiaries taken as a
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whole. Except as disclosed in the Prospectus, there is no pending or, to the
Company's knowledge, threatened claim, litigation or any administrative agency
proceeding, nor has the Company or any Subsidiary received any written or oral
notice from any governmental entity or third party, that: (i) alleges a
violation of any Laws by the Company or any Subsidiary or (ii) alleges the
Company or any Subsidiary is a liable party under the Comprehensive
Environmental Response, Compensation, and Liability Act, 42 U.S.C. ss. 9601 et
seq. or any state superfund law.
(w) Neither the Company nor any Subsidiary owns or
has the right to use patents, patent applications, trademarks, trademark
applications, trade names, service marks, copyrights, franchises, trade secrets,
proprietary or other confidential information and intangible properties and
assets (collectively, "Intangibles"), the loss of any of which would have a
material adverse effect on the financial position, results of operations or
business of the Company and the Subsidiaries taken as a whole; and, to the best
knowledge of the Company, neither the Company nor any Subsidiary has infringed
or is infringing, and neither the Company nor any Subsidiary has received notice
of infringement with respect to, asserted Intangibles of others.
(x) Each of the Company and the Subsidiaries makes
and keeps accurate books and records reflecting its assets and maintains
internal accounting controls which provide reasonable assurance that (i)
transactions are executed in accordance with management's authorization, (ii)
transactions are recorded as necessary to permit preparation of the Company's
consolidated financial statements in accordance with generally accepted
accounting principles and to maintain accountability for the assets of the
Company, (iii) access to the assets of the Company and each of the Subsidiaries
is permitted only in accordance with management's authorization, and (iv) the
recorded accountability for assets of the Company and each of the Subsidiaries
is compared with existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(y) The Company and the Subsidiaries have filed all
foreign, federal, state and local tax returns that are required to be filed by
them and have paid all taxes shown as due on such returns as well as all other
taxes, assessments and governmental charges that are due and payable; and no
material deficiency with respect to any such return has been assessed or
proposed.
(z) Except for such plans that are expressly
disclosed in the Prospectus, the Company and the Subsidiaries do not maintain,
contribute to or have any material liability with respect to any employee
benefit plan, profit sharing plan, employee pension benefit plan, employee
welfare benefit plan, equity-based plan or deferred compensation plan or
arrangement ("Plans") that are subject to the provisions of the Employee
Retirement Income Security Act of 1974, as amended, or the rules and regulations
thereunder ("ERISA"). All Plans are in compliance in all material respects with
all applicable laws, including but not limited to ERISA and the Internal Revenue
Code of 1986, as amended (the "Code"), and have been operated and administered
in all material respects in accordance with their terms. No Plan is a defined
benefit plan or multi employer plan. The Company does not provide retiree life
and/or retiree health benefits or coverage for any employee or any
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beneficiary of any employee after such employee's termination of employment,
except as required by Section 4980B of the Code or under a Plan which is
intended to be "qualified" under Section 401(a) of the Code. No material
liability has been, or could reasonably be expected to be, incurred under Title
IV of ERISA or Section 412 of the Code by any entity required to be aggregated
with the Company or any of the Subsidiaries pursuant to Section 4001(b) of ERISA
and/or Section 414(b) or (c) of the Code (and the regulations promulgated
thereunder) with respect to any "employee pension benefit plan" which is not a
Plan. As used in this subsection, the terms "defined benefit plan," "employee
benefit plan," "employee pension benefit plan," "employee welfare benefit plan"
and "multi employer plan" shall have the respective meanings assigned to such
terms in Section 3 of ERISA.
(aa) No material labor dispute exists with the
Company's or any Subsidiary's employees, and no such labor dispute is
threatened. The Company has no knowledge of any existing or threatened labor
disturbance by the employees of any of its principal agents, suppliers,
contractors or customers that would have a material adverse effect on the
financial position, results of operations or business of the Company and the
Subsidiaries taken as a whole.
(bb) The Company and the Subsidiaries have received
all permits, licenses, franchises, authorizations, registrations, qualifications
and approvals (collectively, "Permits") of governmental or regulatory
authorities (including, without limitation, state and/or other banking
regulatory authorities) as may be required of them to own their properties and
conduct their businesses in the manner described in the Prospectus, subject to
such qualifications as may be set forth in the Prospectus; and the Company and
the Subsidiaries have fulfilled and performed all of their material obligations
with respect to such Permits, and no event has occurred which allows or, after
notice or lapse of time or both, would allow revocation or termination thereof
or result in any other material impairment of the rights of the holder of any
such Permit, subject in each case to such qualification as may be set forth in
the Prospectus; and, except as described in the Prospectus, such Permits contain
no restrictions that materially affect the ability of the Company and the
Subsidiaries to conduct their businesses and no banking regulatory agency or
body has issued any order or decree impairing, restricting or prohibiting the
payment of dividends by any of the Subsidiaries to the Company.
(cc) The Company and each of the Subsidiaries has
filed, or has had filed on its behalf, on a timely basis, all materials,
reports, documents and information, including but not limited to annual reports
and reports of examination with each applicable banking regulatory authority,
board or agency, which are required to be filed by it, except where the failure
to have timely filed such materials, reports, documents and information would
not have a material adverse effect on the financial position, results of
operations or business of the Company and the Subsidiaries taken as a whole.
(dd) Neither the Company, nor any Subsidiary is an
"investment company" or a company "controlled" by an investment company as such
terms are defined in Sections 3(a) and 2(a)(9), respectively, of the Investment
Company Act of 1940, as amended (the "Investment Company Act"), and, if the
Company or any Subsidiary conducts its business
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as set forth in the Registration Statement and the Prospectus, will not become
an "investment company" and will not be required to register under the
Investment Company Act.
(ee) The Company and each of the Subsidiaries are
conducting their respective businesses in compliance in all material respects
with all applicable federal, state and local laws, rules, regulations,
decisions, directives and orders (including without limitation, the rules,
regulations, decisions, directives and orders of the Office of Thrift
Supervision (the "OTS") and the Federal Deposit Insurance Corporation (the
"FDIC") and the laws governing consumer lending activities of the Company and
the Subsidiaries).
(ff) Crusader Savings Bank, FSB (the "Bank") is duly
chartered as a federal savings bank and is in good standing under the laws of
the United States. The deposit accounts and investment certificates of the Bank
are duly insured by the FDIC to the fullest extent permitted by law. The Bank is
a member in good standing with the Federal Home Loan Bank of Pittsburgh (the
"FHLB"). No charge, investigation or proceeding for the termination or
revocation of such charter, FHLB membership, good standing or FDIC insurance is
pending or, to the Company's knowledge, threatened.
(gg) The Company is a "savings and loan holding
company" within the meaning of the Home Owners Loan Act, as amended.
(hh) Neither the Company nor the Bank nor any other
Subsidiary is subject to any cease-and-desist order, civil money penalty,
supervisory agreement, memorandum of understanding, consent cease-and-desist
order or other regulatory action of the OTS, the FDIC or any other federal or
state regulatory agency.
(ii) The Bank is in compliance with all applicable
regulatory capital requirements, is "well-capitalized" as defined in the OTS
regulations and is not, to the Company's knowledge, threatened with or being
considered for receivership or any special supervision by the OTS or the FDIC.
(jj) The Company and each of the Subsidiaries have
in place and effective such policies of insurance, with limits of liability in
such amounts, as are normal and prudent in the ordinary scope of business
similar to that of the Company and each of the Subsidiaries in the respective
jurisdictions in which they conduct business.
(kk) The Common Stock is qualified for listing on
the Nasdaq National Market and, upon notice to The Nasdaq Stock Market, Inc. of
issuance of the Shares, the Shares will be included thereon.
2. Purchase and Sale of Shares.
(a) Subject to the terms and conditions herein set
forth, the Company agrees to sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company, at
a purchase price of Dollars and
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cents ($ ) per share (the "Per Share Price"), the number of
Firm Shares (to be adjusted by you so as to eliminate fractional shares)
determined by multiplying the aggregate number of Firm Shares to be sold by the
Company as set forth in the first paragraph of this Agreement by a fraction, the
numerator of which is the aggregate number of Firm Shares to be purchased by
such Underwriter as set forth opposite the name of such Underwriter in Schedule
I hereto, and the denominator of which is the aggregate number of Firm Shares to
be purchased by the several Underwriters hereunder.
(b) The Company hereby grants to the Underwriters
the right to purchase at their election in whole or in part from time to time up
to 150,000 Optional Shares, at the Per Share Price, for the sole purpose of
covering over-allotments in the sale of the Firm Shares. Any such election to
purchase Optional Shares may be exercised by written notice from the
Representative to the Company, given from time to time within a period of 30
calendar days after the date of this Agreement and setting forth the aggregate
number of Optional Shares to be purchased and the date on which such Optional
Shares are to be delivered, as determined by you but in no event earlier than
the First Time of Delivery (as hereinafter defined) or, unless the
Representative otherwise agrees in writing, earlier than two or later than ten
business days after the date of such notice. In the event the Underwriters elect
to purchase all or a portion of the Optional Shares, the Company agrees to
furnish or cause to be furnished to the Representative the certificates, letters
and opinions, and to satisfy all conditions, set forth in Section 7 hereof at
each Subsequent Time of Delivery (as hereinafter defined).
(c) In making this Agreement, each Underwriter is
contracting severally, and not jointly, and except as provided in Sections 2(b)
and 9 hereof, the agreement of each Underwriter is to purchase only that number
of shares specified with respect to that Underwriter in Schedule I hereto. No
Underwriter shall be under any obligation to purchase any Optional Shares prior
to an exercise of the option with respect to such Shares granted pursuant to
Section 2(b) hereof.
3. Offering by the Underwriters. Upon the authorization by the
Representative of the release of the Shares, the several Underwriters propose to
offer the Shares for sale upon the terms and conditions disclosed in the
Prospectus.
4. Delivery of Shares; Closing. Certificates in definitive
form for the Shares to be purchased by each Underwriter hereunder, and in such
denominations and registered in such names as the Representative may request
upon at least 48 hours' prior notice to the Company, shall be delivered by or on
behalf of the Company to the Representative for the account of such Underwriter,
against payment by such Underwriter on its behalf of the purchase price therefor
by wire transfer of immediately available funds to such accounts as the Company
shall designate in writing. The closing of the sale and purchase of the Shares
shall be held at the offices of Wolf, Block, Xxxxxx and Xxxxx-Xxxxx LLP, Twelfth
Floor Packard Building, 000 Xxxxx 00xx Xxxxxx, Xxxxxxxxxxxx, XX 00000-0000,
except that physical delivery of such certificates shall be made at the office
of The Depository Trust Company, 00 Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000. The time and date of such delivery and payment shall be, with respect to
the Firm Shares: (i) at 10:00 a.m., New York, New York time, on the
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third (3rd) full business day after this Agreement is executed, or (ii) in the
event that pricing of the Firm Shares occurs after 4:30 p.m. on the day on which
this Agreement is executed, at 10:00 a.m., New York, New York time, on the
fourth (4th) full business day after this Agreement is executed, or (iii) at
such other time and date as the Representative and the Company may agree upon in
writing, and, with respect to the Optional Shares, at 10:00 a.m., New York, New
York time, on the date specified by the Representative in the written notice
given by the Representative of the Underwriters' election to purchase all or
part of such Optional Shares or at such other time and date as the
Representative and the Company may agree upon in writing. Such time and date for
delivery of the Firm Shares is herein called the "First Time of Delivery," such
time and date for delivery of any Optional Shares, if not the First Time of
Delivery, is herein called a "Subsequent Time of Delivery," and each such time
and date for delivery is herein called a "Time of Delivery." The Company will
make such certificates available for checking and packaging at least 24 hours
prior to each Time of Delivery at the office of The Depository Trust Company, 00
Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or at such other location specified
by you in writing at least 48 hours prior to such Time of Delivery.
5. Covenants of the Company. The Company covenants and agrees
with each of the Underwriters that:
(a) The Company will use its best efforts to cause
the Registration Statement, if not effective prior to the execution and delivery
of this Agreement, to become effective. If the Registration Statement has been
declared effective prior to the execution and delivery of this Agreement, the
Company will file the Prospectus with the Commission pursuant to and in
accordance with subparagraph (1) (or, if applicable and if consented to by you,
subparagraph (4)) of Rule 424(b) within the time period required under Rule
424(b) under the Act. The Company will advise you promptly of any such filing
pursuant to Rule 424(b). For five years from the date hereof, the Company will
file timely all reports and any definitive proxy or information statements
required to be filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act.
(b) The Company will not file with the Commission
the Prospectus or the amendment referred to in Section 1(a) hereof, any
amendment or supplement to the Prospectus or any amendment to the Registration
Statement unless you have received a reasonable period of time to review any
such proposed amendment or supplement and consented to the filing thereof and
will use its best efforts to cause any such amendment to the Registration
Statement to be declared effective as promptly as possible. Upon the request of
the Representative or counsel for the Underwriters, the Company will promptly
prepare and file with the Commission, in accordance with the rules and
regulations of the Commission, any amendments to the Registration Statement or
amendments or supplements to the Prospectus that may be necessary or advisable
in connection with the distribution of the Shares by the several Underwriters
and will use its best efforts to cause any such amendment to the Registration
Statement to be declared effective as promptly as possible. If required, the
Company will file any amendment or supplement to the Prospectus with the
Commission in the manner and within the time period required by Rule 424(b)
under the Act. The Company will advise the Representative, promptly after
receiving notice thereof, of the time when the
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Registration Statement or any amendment thereto has been filed or declared
effective or the Prospectus or any amendment or supplement thereto has been
filed and will provide evidence to the Representative of each such filing or
effectiveness.
(c) The Company will advise the Representative
promptly after receiving notice or obtaining knowledge of (i) when any
post-effective amendment to the Registration Statement is filed with the
Commission, (ii) the receipt of any comments from the Commission concerning the
Registration Statement, (iii) when any post-effective amendment to the
Registration Statement becomes effective, or when any supplement to the
Prospectus or any amended Prospectus has been filed, (iv) the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or any part thereof or any order preventing or suspending the use of
any Preliminary Prospectus or the Prospectus or any amendment or supplement
thereto, (v) the suspension of the qualification of the Shares for offer or sale
in any jurisdiction or of the initiation or threatening of any proceeding for
any such purpose, (vi) any request made by the Commission or any securities
authority of any other jurisdiction for amending the Registration Statement, for
amending or supplementing the Prospectus or for additional information. The
Company will use its best efforts to prevent the issuance of any such stop order
or suspension and, if any such stop order or suspension is issued, to obtain the
withdrawal thereof as promptly as possible.
(d) If the delivery of a prospectus relating to the
Shares is required under the Act at any time prior to the expiration of nine
months after the date of the Prospectus and if at such time any events 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, not misleading, or if for any
reason it is necessary during such same period to amend or supplement the
Prospectus, the Company will promptly notify the Representative and upon their
request (but at the Company's expense) prepare and file with the Commission an
amendment or supplement to the Prospectus that corrects such statement or
omission or effects such compliance and will furnish without charge to each
Underwriter and to any dealer in securities as many copies of such amended or
supplemented Prospectus as the Representative may from time to time reasonably
request.
(e) The Company promptly from time to time will take
such action as the Representative may reasonably request to qualify the Shares
for offering and sale under the securities or blue sky laws of such
jurisdictions as the Representative may request and will continue such
qualifications in effect for as long as may be necessary to complete the
distribution of the Shares, 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. The Company will file such
statements and reports as may be required by the laws of each jurisdiction in
which the Shares have been qualified as above provided.
(f) The Company will promptly provide the
Representative, without charge, (i) two manually executed copies of the
Registration Statement as originally filed with the Commission and of each
amendment thereto, including all exhibits and all documents or information
incorporated by reference therein, (ii) for each other Underwriter, a conformed
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copy of the Registration Statement as originally filed and of each amendment
thereto, without exhibits but including all documents or information
incorporated by reference therein and (iii) so long as a prospectus relating to
the Shares is required to be delivered under the Act, as many copies of each
Preliminary Prospectus or the Prospectus or any amendment or supplement thereto
as the Representative may reasonably request.
(g) As soon as practicable, but not later than the
Availability Date (as defined below), the Company will make generally available
to its security holders an earnings statement of the Company and the
Subsidiaries, if any, covering a period of at least 12 months beginning after
the effective date of the Registration Statement (which need not be audited)
complying with Section 11(a) of the Act and the rules and regulations
thereunder. "Availability Date" means the forty-fifth (45th) day after the end
of the fourth fiscal quarter following the fiscal quarter in which the
Registration Statement went effective, except that if such fourth fiscal quarter
is the last quarter of the Company's fiscal year, "Availability Date" means the
ninetieth (90th) day after the end of such fourth fiscal quarter.
(h) During the period beginning from the date hereof
and continuing to and including the date 180 days after the date of the
Prospectus, the Company will not, and will cause its officers and directors not
to, without the prior written consent of the Representative, directly or
indirectly (i) offer, sell, contract to sell or otherwise dispose of, any shares
of Common Stock or securities convertible into or exercisable or exchangeable
for shares of Common Stock or (ii) enter into any swap or other agreement or any
transaction that transfers, in whole or in part, the economic consequences of
ownership of shares of Common Stock whether any such swap or other agreement is
to be settled by delivery of shares of Common Stock, other securities, cash or
otherwise; except for the sale of the Shares hereunder and except for the
issuance of Common Stock upon the exercise of stock options or warrants or the
conversion of convertible securities outstanding on the date of this Agreement
to the extent that such stock options, warrants and convertible securities are
disclosed in the Prospectus or except for the grant to employees and directors
of options to purchase Common Stock which are not exercisable within such 180
days.
(i) During the period of five years after the
effective date of the Registration Statement, the Company will furnish to the
Representative and, upon request, to each of the other Underwriters, without
charge, (i) copies of all reports or other communications (financial or other)
furnished to shareholders and (ii) as soon as they are available, copies of any
reports and financial statements furnished to or filed with the Commission, the
NASD or any national securities exchange.
(j) Prior to the termination of the underwriting
syndicate contemplated by this Agreement, neither the Company nor any of its
officers, directors or affiliates will (i) take, directly or indirectly, any
action designed to cause or to result in, or that might reasonably be expected
to cause or result in, the stabilization or manipulation of the price of any
security of the Company or (ii) sell, bid for, purchase or pay anyone any
compensation for soliciting purchases of, the Shares.
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(k) In case of any event, at any time within the
period during which a prospectus is required to be delivered under the Act, as a
result of which any Preliminary Prospectus or the Prospectus, as then amended or
supplemented, would contain an untrue statement of a material fact, or omit 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, or, if it
is necessary at any time to amend any Preliminary Prospectus or the Prospectus
to comply with the Act or any applicable securities or blue sky laws, the
Company promptly will prepare and file with the Commission, and any applicable
state securities commission, an amendment, supplement or document that will
correct such statement or omission or effect such compliance and will furnish to
the several Underwriters such number of copies of such amendment(s),
supplement(s) or document(s) as the Representative may reasonably request. For
purposes of this subsection (k), the Company will provide such information to
the Representative, the Underwriters' counsel and counsel to the Company as
shall be necessary to enable such persons to consult with the Company with
respect to the need to amend or supplement the Registration Statement, any
Preliminary Prospectus or the Prospectus or file any document, and shall furnish
to the Representative and the Underwriters' counsel such further information as
each may from time to time reasonably request.
(l) The Company will use its best efforts to obtain,
and thereafter maintain, the qualification of the Common Stock for listing on
the Nasdaq National Market and the inclusion thereon of the Shares.
6. Expenses.
(a) The Company will pay all costs and expenses
incident to the performance of the obligations of the Company under this
Agreement, whether or not the transactions contemplated hereby are consummated
or this Agreement is terminated pursuant to Section 10 hereof, including,
without limitation, all costs and expenses incident to (i) the printing of and
mailing expenses associated with the Registration Statement, the Preliminary
Prospectus and the Prospectus and any amendments or supplements thereto except
as provided in Section 9(a) hereof, this Agreement, the Agreement among
Underwriters, the Underwriters' Questionnaire submitted to each of the
Underwriters by the Representative in connection herewith, the power of attorney
executed by each of the Underwriters in favor of the Representative in
connection herewith, the Dealer Agreement and related documents (collectively,
the "Underwriting Documents") and the preliminary Blue Sky memorandum relating
to the offering prepared by Wolf, Block, Xxxxxx and Xxxxx-Xxxxx LLP, counsel to
the Underwriters (collectively with any supplement thereto, the "Preliminary
Blue Sky Memorandum"); (ii) the fees, disbursements and expenses of the
Company's counsel and accountants in connection with the registration of the
Shares under the Act and all other expenses in connection with the preparation
and, if applicable, filing of the Registration Statement (including all
amendments thereto), any Preliminary Prospectus, the Prospectus and any
amendments and supplements thereto, the Underwriting Documents and the
Preliminary Blue Sky Memorandum; (iii) the delivery of copies of the foregoing
documents to the Underwriters; (iv) the filing fees of the Commission and the
NASD relating to the Shares; (v) the preparation, issuance and delivery to the
Underwriters of any certificates evidencing the Shares, including transfer
agent's and registrar's fees; (vi) the qualification of the Shares for
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offering and sale under state securities and blue sky laws, including filing
fees and fees and disbursements of counsel for the Underwriters (and local
counsel therefor) relating thereto; (vii) any listing of the Shares on the
Nasdaq National Market; (viii) any expenses for travel, lodging and meals
incurred by the Company and any of its officers, directors and employees in
connection with any meetings with prospective investors in the Shares; (ix) the
costs of advertising the offering, including, without limitation, with respect
to the placement of "tombstone" advertisements in publications selected by the
Representative; and (x) all other costs and expenses reasonably incident to the
performance of the Company's obligations hereunder that are not otherwise
specifically provided for in this Section 6.
(b) The Representative and the Underwriters will pay
their own expenses, including the fees of their counsel (except as provided in
Section 6(a)(vi) hereof), public advertisement of the offering, and their own
marketing and due diligence expenses.
(c) At the First Time of Delivery, the Company shall
pay to the Representative the sum of Seventy Five Thousand Dollars ($75,000) as
a financial advisory fee.
7. Conditions of the Underwriters' Obligations. The
obligations of the Underwriters hereunder to purchase and pay for the Shares to
be delivered at each Time of Delivery shall be subject, in their discretion, to
the accuracy of the representations and warranties of the Company contained
herein as of the date hereof and as of such Time of Delivery, to the accuracy of
the statements of the Company's officers made pursuant to the provisions hereof,
to the performance by the Company of its covenants and agreements hereunder, and
to the following additional conditions precedent:
(a) If the registration statement as amended to date
has not become effective prior to the execution of this Agreement, such
registration statement shall have been declared effective not later than 11:00
a.m., New York, New York time, on the date of this Agreement or such later date
and/or time as shall have been consented to by you in writing. If required, the
Prospectus and any amendment or supplement thereto shall have been filed with
the Commission pursuant to Rule 424(b) within the applicable time period
prescribed for such filing and in accordance with Section 5(a) of this
Agreement; no stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceedings for that
purpose shall have been instituted, threatened or, to the knowledge of the
Company and the Representative, contemplated 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) The Representative shall have received a copy of
an executed lock-up agreement from the Company and each of the Company's
officers and directors and certain shareholders of Common Stock.
(c) You shall have received an opinion, dated such
Time of Delivery, of Xxxxxxx Xxxxx Xxxxxxx & Ingersoll, LLP counsel for the
Company, in form and substance satisfactory to you and your counsel, to the
effect that:
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(i) The Company has been duly
incorporated, is validly subsisting as a corporation under the laws of the
Commonwealth of Pennsylvania and has the corporate power and authority to own or
lease its properties and conduct its business as described in the Registration
Statement and the Prospectus and to enter into this Agreement and perform its
obligations hereunder. Based solely on certificates of officials of the
Designated Company States, the Company is duly qualified to transact business as
a foreign corporation and is in good standing under the laws of each Designated
Company State.
(ii) Each of the Subsidiaries is
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation and has the corporate power and authority to own
or lease its properties and conduct its business as described in the
Registration Statement and the Prospectus. Based solely on certificates of
officials of the Designated Subsidiary States, each Subsidiary is duly qualified
to transact business as a foreign corporation and is in good standing under the
laws of each Designated Subsidiary State in which it owns any property or
conducts any business.
(iii) The Company's authorized,
issued and outstanding capital stock is as disclosed in the Prospectus. All of
the issued shares of capital stock of the Company have been duly authorized and
validly issued, are fully paid and nonassessable and conform to the description
of the Common Stock contained in the Prospectus. None of the issued shares of
Common Stock of the Company or capital stock of any of the Subsidiaries has been
issued or, to the extent owned or held by the Company or any of the
Subsidiaries, is owned or held in violation of any statutory (or, to the
knowledge of such counsel, any other) preemptive rights of shareholders, and no
person or entity (including any holder of outstanding shares of Common Stock of
the Company or capital stock of the Subsidiaries) has any statutory (or, to the
knowledge of such counsel, any other) preemptive or other rights to subscribe
for any of the Shares.
(iv) All of the issued shares of
capital stock of each of the Subsidiaries have been duly authorized and validly
issued, are fully paid and nonassessable, and, to such counsel's knowledge, the
number, class and percentage of shares of capital stock of each Subsidiary
identified on Exhibit A hereto as being owned by the Company or one of the
Subsidiaries are owned beneficially by the Company or such Subsidiary, free and
clear of all security interests created under Article 9 of the Uniform
Commercial Code, shareholders' agreements known to such counsel (other than
those shareholders' agreements identified in the Prospectus), voting agreements,
proxies, voting trusts, or defects, equities or claims known to such counsel of
any nature whatsoever, any indenture, mortgage, deed of trust, loan agreement,
lease or other agreement known by such counsel to have been entered into by the
Company or the Subsidiaries. To such counsel's knowledge, other than the
Subsidiaries and the equity securities held in the investment portfolios of the
Company and the Subsidiaries, the Company does not own, directly or indirectly,
any capital stock or other equity securities of any other corporation or any
ownership interest in any partnership, joint venture or other association.
(v) Except as disclosed in the
Prospectus, there are, to such counsel's knowledge, no outstanding (A)
securities or obligations of the Company or any of the Subsidiaries convertible
into or exchangeable for any capital stock of the Company or
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any Subsidiary, (B) warrants, rights or options to subscribe for or purchase
from the Company or any of the Subsidiaries any such capital stock or any such
convertible or exchangeable securities or obligations or (C) obligations of the
Company or any of the Subsidiaries to issue any shares of capital stock, any
such convertible or exchangeable securities or obligations, or any such
warrants, rights or options.
(vi) When the Shares to be sold by
the Company have been duly delivered against payment therefor as contemplated by
this Agreement, the Shares will be duly authorized, validly issued and fully
paid and nonassessable, the holders thereof will not be subject to personal
liability solely by reason of being such holders and the Shares will conform to
the description of the Common Stock contained in the Prospectus; the
certificates evidencing the Shares will comply with all applicable requirements
of Pennsylvania law.
(vii) There are no contracts,
agreements or understandings known to such counsel between the Company and any
person granting such person the right to require the Company to file a
registration statement under the Act with respect to any securities of the
Company owned or to be owned by such person or, requiring the Company to include
such securities in the securities registered pursuant to the Registration
Statement (or any such right has been effectively waived) or requiring the
registration of any securities pursuant to any other registration statement
filed by the Company under the Act.
(viii) To such counsel's knowledge,
neither the Company nor any of the Subsidiaries is, or with the giving of notice
or passage of time or both, would be, in violation of its articles of
incorporation or bylaws or other organizational documents, in each case as
amended to date.
(ix) The sale of the Shares being
sold at such Time of Delivery and the performance of this Agreement and the
consummation of the transactions herein contemplated will not conflict with or
violate any provision of the articles of incorporation or bylaws or other
organizational documents of the Company or any of the Subsidiaries, in each case
as amended to date, or to such counsel's knowledge, any existing law, statute,
rule or regulation of the Commonwealth of Pennsylvania or the United States, or
in any material respect, conflict with, or (with or without the giving of notice
or the passage of time or both) result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement, lease or other agreement or instrument known to
such counsel to which the Company or any of the Subsidiaries is a party or to
which any of their respective properties or assets is subject, or, conflict with
or violate any order, judgment or decree known to such counsel, of any court or
governmental agency or body of the Commonwealth of Pennsylvania or the United
States having jurisdiction over the Company or any of the Subsidiaries or any of
their respective properties or assets.
(x) To such counsel's knowledge, no
consent, approval, authorization, order or declaration of or from, or
registration, qualification or filing with, any court or governmental agency or
body is required for the sale of the Shares or the
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consummation of the transactions contemplated by this Agreement, except such as
have been or will have been obtained and are or will be in effect, and except
the registration of the Shares under the Act, of Common Stock under the Exchange
Act and such as may be required by the NASD or under state securities or blue
sky laws in connection with the offer, sale and distribution of the Shares by
the Underwriters.
(xi) Such counsel confirms that to
its knowledge, other than as disclosed in or contemplated by the Prospectus,
there is no litigation, arbitration, claim, proceeding (formal or informal) or
investigation pending or threatened, in which the Company or any of the
Subsidiaries is a party or of which any of their respective properties or assets
is the subject, that is required to be disclosed in the Registration Statement.
(xii) The statements in the
Prospectus under "Prospectus Summary," "Dividends," "Business," "Supervision and
Regulation," "Certain Restrictions on Acquisition of the Company and the Bank,"
"Certain Anti-Takeover Provisions in the Articles of Incorporation and Bylaws,"
"Description of the Capital Stock" and "Shares Eligible for Future Sale" have
been reviewed by such counsel, and insofar as they refer to statements of law,
descriptions of statutes, licenses, rules or regulations, or legal conclusions,
are correct in all material respects.
(xiii) This Agreement has been duly
authorized, executed and delivered by the Company and, assuming due execution by
the Representative of the Underwriters, constitutes the valid and binding
agreement of the Company, enforceable against the Company in accordance with its
terms, subject, as to enforcement, to applicable bankruptcy, insolvency,
reorganization and moratorium laws and other laws relating to or affecting the
enforcement of creditors' rights generally and to general equitable principles
and except as the enforceability of rights to indemnity and contribution under
this Agreement may be limited under applicable securities laws or the public
policy underlying such laws.
(xiv) Neither the Company nor any of
the Subsidiaries is an "investment company" or a company "controlled" by an
investment company as such terms are defined in Sections 3(a) and 2(a)(9),
respectively, of the Investment Company Act.
(xv) To such counsel's knowledge,
the Company and the Subsidiaries have received all permits, licenses,
franchises, authorizations, registrations, qualifications and approvals
(collectively, "permits") of governmental or regulatory authorities (including,
without limitation, bank, savings and loan, state, and/or other regulatory
authorities) as may be required of them to own their properties and to conduct
their businesses in the manner described in the Prospectus, subject to such
qualification as may be set forth in the Prospectus; to such counsel's
knowledge, the Company and the Subsidiaries have fulfilled and performed all of
their material obligations with respect to such permits and no event has
occurred which allows, or after notice or lapse of time or both would allow,
revocation or termination thereof or result in any other material impairment of
the rights of the holder of any such permits, subject in each case to such
qualifications as may be set forth in the Prospectus; and other than as
described in the Prospectus, such permits contain no restrictions that
materially affect the ability of the Company and the Subsidiaries to conduct
their businesses.
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(xvi) The Common Stock is qualified
for listing on the Nasdaq National Market and, upon notice to The Nasdaq Stock
Market, Inc. of issuance of the Shares, the Shares will be included thereon.
(xvii) The Registration Statement
and the Prospectus and each amendment or supplement thereto (other than the
financial statements, the notes and schedules thereto and other financial data
included therein, to which such counsel need express no opinion), as of their
respective effective or issue dates, complied as to form in all material
respects with the requirements of the Act and the respective rules and
regulations thereunder. The descriptions in the Registration Statement and the
Prospectus of contracts and other documents are accurate and fairly present the
information required to be shown; and such counsel do not know of any contracts
or documents of a character required to be described in the Registration
Statement or Prospectus or to be filed as exhibits to the Registration Statement
which are not described and filed as required.
(xviii) Based on the advice of the
Division of Corporate Finance of the Commission, the Registration Statement was
declared effective under the Act as of the date and time specified in such
opinion and, to such counsel's knowledge and information, based on the advice of
the Office of the Secretary of the Commission, no stop order suspending the
effectiveness of the Registration Statement has been issued under the Act and no
proceedings therefor have been initiated or threatened by the Commission.
(xix) The Bank is duly chartered as
a federal savings bank and is in good standing under the laws of the United
States. The deposit accounts and investment certificates of the Bank are duly
insured by the FDIC to the fullest extent permitted by law. The Bank is a member
in good standing with the FHLB. To the knowledge of such counsel, no charge,
investigation or proceeding for the termination or revocation of such charger,
FHLB membership, good standing or FDIC insurance is pending or, to the Company's
knowledge, threatened.
(xx) The Company is a "savings and
loan holding company" within the meaning of the Home Owners Loan Act, as
amended.
(xxi) To the knowledge of such
counsel, neither the Company nor the Bank nor any other Subsidiary is subject to
any cease-and-desist order, civil money penalty, supervisory agreement,
memorandum of understanding, consent cease-and-desist order or other regulatory
action of the OTS, the FDIC or any other federal or state regulatory agency.
Such counsel shall also state that they have participated in
the preparation of the Registration Statement and the Prospectus and in
conferences with officers and other representatives of the Company,
representatives of the independent public accountants for the Company, and
representatives of and counsel to the Underwriters at which the contents of the
Registration Statement, the Prospectus and related matters were discussed and,
although such counsel has not passed upon or assumed any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus, and
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although such counsel has not undertaken to verify independently the accuracy or
completeness of the statements in the Registration Statement or the Prospectus,
nothing has come to such counsel's attention to lead them to believe that the
Registration Statement, or any further amendment thereto made prior to such Time
of Delivery, on its effective date and as of such Time of Delivery, contained or
contains any untrue statement of a material fact or omitted or omits to state
any material fact required to be stated therein or necessary to make the
statements therein, not misleading, or that the Prospectus, or any amendment or
supplement thereto made prior to such Time of Delivery, as of its issue date and
as of such Time of Delivery, contained or contains any untrue statement of a
material fact or omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading (provided that such counsel need express no belief
regarding the financial statements, the notes and schedules thereto and other
financial data contained in the Registration Statement, any amendment thereto,
or the Prospectus, or any amendment or supplement thereto).
In rendering any such opinion, such counsel may rely, as to
matters of fact, to the extent such counsel deem proper, on certificates of
officers of the Company, public officials and letters from officials of the
NASD. Copies of such certificates of officers of the Company and other opinions
shall be addressed and furnished to the Underwriters and furnished to counsel
for the Underwriters.
(d) Wolf, Block, Xxxxxx and Xxxxx-Xxxxx LLP, counsel
for the Underwriters, shall have furnished to you such opinion or opinions,
dated such Time of Delivery, with respect to the incorporation of the Company,
the validity of the Shares being delivered at such Time of Delivery, the
Registration Statement, the Prospectus, and other related matters as you may
reasonably request, and the Company shall have furnished to such counsel such
documents as they request for the purpose of enabling them to pass upon such
matters.
(e) The Representative shall have received, on each
of the date hereof and the First Time of Delivery, as the case may be, in form
and substance satisfactory to the Representative, from Xxxxx Xxxxxxxx LLP,
independent public accountants, a letter or letters, as the case may be,
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 contained in the Registration
Statement and Prospectus; provided that the letter or letters, as the case may
be, delivered on the First Time of Delivery shall use a "cut-off date" not
earlier than the date hereof.
(f) Since the date of the latest audited financial
statements included in the Prospectus, neither the Company nor any of the
Subsidiaries shall have sustained any change, or any development involving a
prospective change (including, without limitation, a change in management or
control of the Company), in or affecting the position (financial or otherwise),
results of operations, net worth or business prospects of the Company and the
Subsidiaries, otherwise than as disclosed in or contemplated by the Prospectus,
the effect of which, in either such case, in your sole judgment makes it
impracticable or inadvisable to
-21-
proceed with the purchase, sale and delivery of the Shares being delivered at
such Time of Delivery as contemplated by the Registration Statement, as amended
as of the date hereof.
(g) Subsequent to the date hereof, there shall not
have occurred any of the following: (i) any suspension or limitation in trading
in securities generally on the New York Stock Exchange, and/or the American
Stock Exchange or any setting of minimum prices for trading on such exchange, or
in the Common Stock of the Company by the Commission or the Nasdaq National
Market; (ii) a moratorium on commercial banking activities in New York,
Pennsylvania or Connecticut declared by either federal or state authorities; or
(iii) any outbreak or escalation of hostilities involving the United States,
declaration by the United States of a national emergency or war or any other
national or international calamity or emergency if the effect of any such event
specified in this clause (iii) in your sole judgment makes it impracticable or
inadvisable to proceed with the purchase, sale and delivery of the Shares being
delivered at such Time of Delivery as contemplated by the Registration
Statement, as amended as of the date hereof.
(h) The Company shall have furnished to you at such
Time of Delivery certificates of the chief executive and chief financial
officers of the Company satisfactory to you, as to the accuracy of the
respective representations and warranties of the Company herein at and as of
such Time of Delivery with the same effect as if made at such Time of Delivery,
as to the performance by the Company of all of its respective obligations
hereunder to be performed at or prior to such Time of Delivery, and as to such
other matters as you may reasonably request, and the Company shall have
furnished or caused to be furnished certificates of such officers as to such
matters as you may reasonably request.
(i) The representations and warranties of the
Company in this Agreement and in the certificates delivered by the Company
pursuant to this Agreement shall be true and correct in all material respects
when made and on and as of each Time of Delivery as if made at such time, and
the Company shall have performed all covenants and agreements and satisfied all
conditions contained in this Agreement required to be performed or satisfied by
the Company at or before such Time of Delivery.
(j) The Common Stock shall continue to qualify for
listing on the Nasdaq National Market and the Shares shall continue to be listed
thereon.
8. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold
harmless each Underwriter against any losses, claims, damages or liabilities,
joint or several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon: (i) any untrue statement or
alleged untrue statement made by the Company in Section 1 of this Agreement;
(ii) any untrue statement or alleged untrue statement of any material fact
contained in (A) the Registration Statement or any amendment thereto, any
Preliminary Prospectus or the Prospectus or any amendment or supplement thereto,
or (B) any application or other document, or amendment or supplement thereto,
executed by the Company or based upon written
-22-
information furnished by or on behalf of the Company filed in any jurisdiction
in order to qualify the Shares under the securities or blue sky laws thereof or
filed with the Commission or any securities association or securities exchange
(each an "Application"); or (iii) the omission of or alleged omission to state
in the Registration Statement or any amendment thereto, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto, or any
Application of a material fact required to be stated therein or necessary to
make the statements therein not misleading; and will reimburse each Underwriter
for any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating, defending against or appearing as a third-party
witness in connection with any such loss, claim, damage, liability or action;
provided, however, that the Company shall not be liable in any such case to the
extent that any such loss, claim, damage, liability or action arises out of or
is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in the Registration Statement or any amendment thereto,
any Preliminary Prospectus, the Prospectus or any amendment or supplement
thereto or any Application in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through you expressly
for use therein (which information is solely as set forth in Section 1(c)
hereof). The Company will not, without the prior written consent of the
Representative of the Underwriters, settle or compromise or consent to the entry
of any judgment in any pending or threatened claim, action, suit or proceeding
(or related cause of action or portion thereof) in respect of which
indemnification may be sought hereunder (whether or not any Underwriter is a
party to such claim, action, suit or proceeding), unless such settlement,
compromise or consent includes an unconditional release of each Underwriter from
all liability arising out of such claim, action, suit or proceeding (or related
cause of action or portion thereof).
(b) Each Underwriter, severally but not jointly,
agrees to indemnify and hold harmless the Company against any losses, claims,
damages or liabilities to which the Company may become subject under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Registration Statement or
any amendment thereto, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto, or any Application 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 reliance
upon and in conformity with written information furnished to the Company by such
Underwriter through you expressly for use therein (which information is solely
as set forth in Section 1(c) hereof); and will reimburse the Company for any
legal or other expenses reasonably incurred by the Company in connection with
investigating or defending any such loss, claim, damage, liability or action.
(c) Promptly after receipt by an indemnified party
under subsection (a) or (b) above of notice of the commencement of any action,
such indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify the indemnifying
party in writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve the indemnifying party from any liability
which it may have to any indemnified party otherwise than under such subsection
(a) or (b). In case
-23-
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 (who
shall not, except with the consent of the indemnified party, be counsel to the
indemnifying 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 reasonably concluded that there may be one or more
legal defenses available to it or other indemnified parties which are different
from or additional to those available to the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such indemnified party and such indemnified party shall have the
right to select separate counsel to defend such action on behalf of such
indemnified party. After such notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof and approval
by such indemnified party of counsel appointed to defend such action, the
indemnifying party will not be liable to such indemnified party under this
Section 8 for any legal or other expenses, other than reasonable costs of
investigation, subsequently incurred by such indemnified party in connection
with the defense thereof. Nothing in this Section 8(c) shall preclude an
indemnified party from participating at its own expense in the defense of any
such action so assumed by the indemnifying party.
(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 in respect thereof) referred to therein, then
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 in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other hand from the offering of the Shares. 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 Underwriters on the other hand in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other hand shall be deemed
to be in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters. 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 Underwriters on the other hand and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Underwriters agree that it would not
be just and equitable if contributions pursuant to this subsection (d) were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
-24-
take account of 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 in respect thereof)
referred to above in this subsection (d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Shares underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages which such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company under this
Section 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 officer,
director and employee of the Underwriters and to each person, if any, who
controls any Underwriter within the meaning of the Act or the Exchange Act; and
the obligations of the Underwriters under this Section 8 shall be in addition to
any liability which the respective Underwriters may otherwise have and shall
extend, upon the same terms and conditions, to each officer, trustee and
director of the Company and to each person, if any, who controls the Company
within the meaning of the Act or the Exchange Act.
9. Default of Underwriters.
(a) If any Underwriter defaults in its obligation to
purchase Shares at a Time of Delivery, you may in your discretion arrange for
you or another party or other parties to purchase such Shares on the terms
contained herein within thirty-six (36) hours after such default by any
Underwriter. In the event that, within the respective prescribed period, you
notify the Company that you have so arranged for the purchase of such Shares,
you shall have the right to postpone a Time of Delivery for a period of not more
than seven (7) days in order to effect whatever changes may thereby be made
necessary in the Registration Statement or the Prospectus, or in any other
documents or arrangements, and the Company agrees to file promptly any
amendments to the Registration Statement or the Prospectus that in your opinion
may thereby be made necessary. The cost of preparing, printing and filing any
such amendments shall be paid for by the Underwriters. The term "Underwriter" as
used in this Agreement shall include any person substituted under this Section
with like effect as if such person had originally been a party to this Agreement
with respect to such Shares.
(b) If, after giving effect to any arrangements for
the purchase of the Shares of a defaulting Underwriter or Underwriters by you as
provided in subsection (a) above, if any, the aggregate number of such Shares
which remains unpurchased does not exceed one-eleventh (1/11) of the aggregate
number of Shares to be purchased at such Time of Delivery, then the Company
shall have the right to require each non-defaulting Underwriter to
-25-
purchase the number of Shares which such Underwriter agreed to purchase
hereunder at such Time of Delivery and, in addition, to require each
non-defaulting Underwriter to purchase its pro rata share (based on the number
of Shares which such Underwriter agreed to purchase hereunder) of the Shares of
such defaulting Underwriter or Underwriters for which such arrangements have not
been made.
10. Termination.
(a) This Agreement may be terminated in the sole
discretion of the Representative by notice to the Company given prior to the
First Time of Delivery or any Subsequent Time of Delivery, respectively, in the
event that (i) any condition to the obligations of the Underwriters set forth in
Section 7 hereof has not been satisfied, or (ii) the Company shall have failed,
refused or been unable to deliver such party's respective Shares or the Company
shall have failed, refused or been unable to perform all obligations and satisfy
all conditions on its respective part to be performed or satisfied hereunder at
or prior to such Time of Delivery, in either case other than by reason of a
default by any of the Underwriters. If this Agreement is terminated pursuant to
this Section 10(a), the Company will reimburse the Underwriters severally upon
demand for all out-of-pocket expenses (including counsel fees and disbursements)
that shall have been incurred by them in connection with the proposed purchase
and sale of the Shares.
(b) If, after giving effect to any arrangements for
the purchase of the Shares of a defaulting Underwriter or Underwriters by you as
provided in Section 9(a), the aggregate number of such Shares which remains
unpurchased exceeds one-eleventh (1/11) of the aggregate number of Shares to be
purchased at such Time of Delivery, then this Agreement (or, with respect to a
Subsequent Time of Delivery, the obligations of the Underwriters to purchase and
of the Company to sell the Optional Shares) shall thereupon terminate, without
liability on the part of any non-defaulting Underwriter or the Company, except
for the expenses to be borne by the Company and the Underwriters as provided in
Section 6 hereof and the indemnity and contribution agreements in Section 8
hereof; but nothing herein shall relieve a defaulting Underwriter from liability
for its default.
11. Survival. The respective indemnities, agreements,
representations, warranties and other statements of the Company, its officers
and the several Underwriters, as set forth in this Agreement or made by or on
behalf of them, respectively, pursuant to this Agreement, shall remain in full
force and effect, regardless of any investigation (or any statement as to the
results thereof) made by or on behalf of any Underwriter or any controlling
person referred to in Section 8(e) or the Company, or any officer, trustee or
director or controlling person of the Company referred to in Section 8(e), and
shall survive delivery of and payment for the Shares. The respective agreements,
covenants, indemnities and other statements set forth in Sections 6 and 8 hereof
shall remain in full force and effect, regardless of any termination or
cancellation of this Agreement.
12. Notices. All communications hereunder shall be in writing
and, if sent to any of the Underwriters, shall be mailed, delivered or
telegraphed and confirmed in writing to you in care of Advest, Inc., Xxx
Xxxxxxxxxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx
-26-
10020, Attention: Xxxxxxx X. Xxxxxxxx (with a copy to Wolf, Block, Xxxxxx and
Xxxxx-Xxxxx LLP, Twelfth Floor Packard Building, 000 Xxxxx 00xx Xxxxxx,
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, Attention: Xxxx X. Xxxxxxx, Esquire); if to
the Company shall be sufficient in all respects if mailed, delivered or
telegraphed and confirmed in writing to Crusader Holding Corporation, 0000
Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, Attention: Xxxxx X. Xxxx (with
a copy to Xxxxxxx Xxxxx Xxxxxxx & Ingersoll, LLP, 0000 Xxxxxx Xxxxxx, 00xx
Xxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, Attention: Xxxxxx X. Xxxxx, Esquire).
13. Binding Effect. This Agreement shall be binding upon, and
inure solely to the benefit of, the Underwriters, the Company, and to the extent
provided in Sections 8 and 10 hereof, the officers, trustees, directors and
employees and controlling persons referred to therein 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 Shares from any Underwriter shall be deemed a successor
or assign by reason merely of such purchase.
14. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without giving
effect to any provisions regarding conflicts of laws.
15. Counterparts. This Agreement may be executed by any one or
more of the parties hereto 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.
-27-
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us one of the counterparts hereof, and
upon the acceptance hereof by Advest, Inc., on behalf of each of the
Underwriters, this letter will constitute a binding agreement among the
Underwriters and the Company. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is pursuant to the authority set
forth in the Agreement among Underwriters, a copy of which shall be submitted to
the Company for examination, upon request, but without warranty on your part as
to the authority of the signers thereof.
Very truly yours,
CRUSADER HOLDING CORPORATION
By:
------------------------------
Name:
Title:
The foregoing Agreement is hereby confirmed and accepted as of the date first
written above at New York, New York.
ADVEST, INC.
By: ADVEST, INC.
By:
--------------------------------
Name:
Title:
On behalf of each of the Underwriters.
-28-
SCHEDULE I
Number of Optional
Total Number of Shares to be Purchased if
Underwriter Firm Shares to be Purchased Maximum Option Exercised
----------- --------------------------- ------------------------
Advest, Inc.
---------- --------
Total 1,000,000 150,000
========== ========
-29 -
EXHIBIT A
SUBSIDIARIES
Class of Number of Percentage
Subsidiary Shares Held Shares Held Ownership
---------- ----------- ----------- ---------
Crusader Bank, FSB 100%
Crusader Mortgage Corporation * 100%
Crusader Servicing Corporation * 60%
Asset Investment Corporation * 100%
Quest Holding Corporation * 100%
Crusader Mortgage Corporation of
Delaware * 51%
National Chinese Mortgage Corporation * 51%
---------------------------------------
* Shares owned by Crusader Bank, FSB
