1,500,000 Shares
YARDVILLE NATIONAL BANCORP
Common Stock
UNDERWRITING AGREEMENT
________, 2002
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated
Sandler X'Xxxxx & Partners, L.P.
c/x Xxxx Xxxxx Xxxx Xxxxxx, Incorporated
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, XX 00000-0000
Dear Ladies and Gentlemen:
Yardville National Bancorp, a New Jersey corporation (the "Company"),
proposes to sell to you as the underwriters named in Schedule I hereto (the
"Underwriters") an aggregate of 1,500,000 shares (the "Firm Stock") of the
Company's common stock, no par value per share (the "Common Stock"). In
addition, the Company proposes to grant to the Underwriters an option to
purchase up to an additional 225,000 shares of Common Stock on the terms and for
the purposes set forth in Section 2 hereof (the "Option Stock"). The Firm Stock
and the Option Stock, if purchased, are hereinafter called the "Stock." This is
to confirm the agreement concerning the purchase of the Stock from the Company
by the Underwriters.
1. Company Representations and Warranties. The Company represents, warrants and
agrees that:
(a) A Registration Statement (as defined below) on Form S-3 (File No.
333-99269), with respect to the Stock (i) has been prepared by the Company in
conformity with the requirements of the Securities Act of 1933, as amended (the
"Act"), and the Rules and Regulations (as defined below) of the Securities and
Exchange Commission (the "Commission") thereunder, (ii) has been filed by the
Company with the Commission under the Act and (iii) has become effective under
the Act. If any post-effective amendment to such Registration Statement has been
filed with the Commission prior to the execution and delivery of this Agreement,
the most recent such amendment has been declared effective by the Commission.
Copies of such Registration Statement as amended to date (including all forms of
the Preliminary Prospectus (as defined below) heretofore delivered to you) have
been delivered by the Company to you. The Commission has not issued any order
suspending the effectiveness of the Registration Statement or preventing or
suspending the use of any Preliminary Prospectus or Prospectus (as defined
below), and no proceedings for that purpose have been instituted or, to the
Company's knowledge, threatened. The Company has complied in all material
respects with all requests of the Commission for additional information to be
included in the Registration Statement or in any Preliminary Prospectus or the
Prospectus. As used in this Agreement, "Effective Time" means the date and the
time as of which such Registration Statement, or the most recent post-effective
amendment thereto, if any, was declared effective by the Commission; "Effective
Date" means the date of the Effective Time; "Preliminary Prospectus" means each
prospectus included in such Registration Statement, or amendments thereto,
before the Effective Time and any Prospectus filed with the Commission by the
Company with the consent of the Underwriters pursuant to Rule 424(a) of the
Rules and Regulations; "Registration Statement" means such registration
statement, including all exhibits and financial schedules thereto and any
documents incorporated by reference therein, as amended at the Effective Time,
including all information deemed to be a part thereof as of the Effective Time
pursuant to paragraph (b) of Rule 430A of the Rules and Regulations; "Rules and
Regulations" means the rules and regulations adopted by the Commission under
either the Act or the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), as applicable; and "Prospectus" means the form of prospectus relating to
the Stock as first filed with the Commission by the Company with the consent of
the Underwriters pursuant to Rule 424(b) ("Rule 424(b)") of the Rules and
Regulations. Reference made herein to any Preliminary Prospectus or to the
Prospectus, as amended or supplemented, shall include all documents and
information incorporated by reference therein. If the Company has filed an
abbreviated registration statement to register additional Common Stock pursuant
to Rule 462(b) under the Act (the "Rule 462 Registration Statement"), then any
reference herein to the term "Registration Statement" shall be deemed to include
such Rule 462 Registration Statement.
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(b) The Registration Statement contains, and any post-effective
amendment to the Registration Statement filed with the Commission after the
Effective Time, the Prospectus and the Prospectus as amended or supplemented
will contain, in all material respects, all statements which are required by the
Act and the Rules and Regulations. On the Effective Date, the Registration
Statement did not, and any post-effective amendment to the Registration
Statement filed with the Commission after the Effective Time, the Prospectus and
the Prospectus as amended or supplemented will not, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading; provided
that the Company makes no representation or warranty as to information contained
in or omitted from the Registration Statement or the Prospectus in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of any Underwriter specifically for use in the preparation thereof. The
documents which are incorporated by reference in the Registration Statement or
any Preliminary Prospectus or the Prospectus or from which information is so
incorporated by reference, when they became effective or were filed with the
Commission, as the case may be (or, if an amendment with respect to any such
documents was filed or became effective, when such amendment was filed or became
effective), complied in all material respects with the requirements of the Act
or the Exchange Act, as applicable, and the Rules and Regulations and did not
contain any untrue statement of material fact or omit to state a material fact
required to be stated therein, or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
(c) Neither the Company nor any of its subsidiaries (as defined in
Section 11) is, or with the giving of notice or lapse of time or both, will be,
in violation of its corporate charter or by-laws or in default under any
agreement, indenture or instrument to which the Company or any of its
subsidiaries is a party or to which any of them is bound, or in violation of any
law, rule or regulation, the effect of which violation or default would be
material to the Company and its subsidiaries taken as a whole; the execution,
delivery and performance of this Agreement will not conflict with, result in the
creation or imposition of any lien, charge or encumbrance upon any of the assets
of the Company or any of its subsidiaries pursuant to the terms of, or
constitute a default under, any agreement, indenture or instrument, or result in
a violation of the corporate charter or by-laws of the Company or any of its
subsidiaries or any order, rule or regulation of any court or governmental
agency having jurisdiction over the Company, any of its subsidiaries or any of
their properties, the effect of which conflict, lien, default or violation would
be material to the Company and its subsidiaries taken as a whole; and except as
required by the Act, the Exchange Act, applicable state securities laws, The
Nasdaq Stock Market, Inc. and the National Association of Securities Dealers,
Inc., no consent, authorization or order of or filing or registration with, any
court or governmental agency (including the Comptroller of the Currency, the
Board of Governors of the Federal Reserve System, the Federal Deposit Insurance
Corporation and any state regulatory agency having jurisdiction over the Company
or any of its subsidiaries) is required for the execution, delivery and
performance of this Agreement by the Company.
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(d) Subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus and except as described
therein, neither the Company nor its subsidiaries has incurred any material
liability or obligation, direct or contingent, or entered into any material
transaction, whether or not in the ordinary course of its business (other than
loans made in the ordinary course of business), and there has not been any
material change on a consolidated basis in the capital stock, or any increase in
the short-term and long-term debt, or any issuance of options, warrants,
convertible securities or other rights to purchase capital stock of the Company
or its subsidiaries (except for options granted under the Company's existing
stock option plans) or any material adverse change in, or any adverse
development which materially affects, the business, franchises, assets,
properties, condition (financial or other), results of operations or prospects
of the Company or the Company and its subsidiaries taken as a whole.
(e) Each of the Company and its subsidiaries holds good and marketable
title to, or valid and enforceable leasehold interests in, all items of real and
personal property which are material to the business of the Company and its
subsidiaries taken as a whole, free and clear of all liens, encumbrances and
claims which might materially interfere with the conduct of the business of the
Company or the Company and its subsidiaries taken as a whole, and the Company
and its subsidiaries own or have the right to use in accordance with the terms
thereof all licenses, permits, consents, approvals or authorizations of and
certificates from any public or governmental authority that are necessary for
the ownership, maintenance and operation of the properties, assets and business
operations of the Company or the Company and its subsidiaries taken as a whole,
and that, if not obtained, could have a material adverse effect on the business,
franchises, assets, properties, condition (financial or other), results of
operations or prospects of the Company or the Company and its subsidiaries taken
as a whole. Except as described in the Prospectus, each of the foregoing is
valid and in full force and effect and no event has occurred and is continuing
which permits, or after notice or lapse of time or both would permit,
modifications or terminations of the foregoing which, in the aggregate, would
have a material adverse effect on the business, franchises, assets, properties,
condition (financial or other), results of operations or prospects of the
Company or the Company and its subsidiaries taken as a whole.
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(f) KPMG LLP, whose report appears in the Prospectus, are independent
public accountants as required by the Act and the Rules and Regulations.
(g) At the date or dates indicated in the Prospectus, the Company had
the duly authorized and outstanding capitalization set forth under the caption
"Capitalization" in the Prospectus and will have, as of the issuance of the Firm
Shares on the First Delivery Date (as defined below), the as adjusted
capitalization set forth under that heading. All the authorized shares of Common
Stock, including the Stock, have been duly authorized, and all the issued and
outstanding shares of Common Stock are, and all the shares of the Stock, when
issued, delivered and paid for in the manner described in the Prospectus on the
First Delivery Date and the Second Delivery Date (as defined below), if any
(each as hereinafter defined), will be, validly issued and outstanding, fully
paid and nonassessable with no personal liability attaching to the ownership
thereof. None of the shares of the Stock to be sold by the Company when issued,
sold and delivered in accordance with this Agreement will be subject to any
lien, claim, encumbrance, preemptive rights or any other claim of any third
party; and the Stock will conform to the description thereof contained in the
Registration Statement under the caption "Description of Capital Stock." On the
Effective Date, the First Delivery Date and Second Delivery Date, if any, there
will be no options or warrants or other outstanding rights to purchase,
agreements or obligations to issue or agreements or other rights to convert or
exchange any obligation or security into, capital stock of the Company or
securities convertible into or exchangeable for capital stock of the Company,
except as described in the Prospectus or the grant of options after the date of
the Prospectus under option plans of the Company. The information in the
Prospectus insofar as it relates to all outstanding options and other rights to
acquire securities of the Company as of the Effective Date is, and immediately
prior to the First Delivery Date and the Second Delivery Date, if any, will be,
complete and correct in all material respects. All previous offers and sales of
the outstanding shares of capital stock of the Company were made in conformity
with applicable federal, state or foreign securities laws (except where the
failure to so conform would not, in the aggregate, have a material adverse
effect on the business, franchises, assets, properties, condition (financial or
other), results of operations or prospects of the Company or the Company and its
subsidiaries taken as a whole). The certificates representing the Stock are in
proper legal form under, and conform in all material respects to the
requirements of, New Jersey corporate law.
(h) The Common Stock (including the Stock) is registered pursuant to
Section 12(g) of the Exchange Act. The issued and outstanding shares of Common
Stock are included for quotation on the Nasdaq National Market. Neither the
Company nor, to the knowledge of the Company, any other person has taken any
action designed to cause, or likely to result in, the termination of the
registration of the Common Stock under the Exchange Act. The Company has not
received any notification from the Commission or The Nasdaq Stock Market, Inc.
that either that agency or entity is contemplating terminating such registration
or inclusion.
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(i) Each of the Company and its subsidiaries has been duly
incorporated, and is validly existing and in good standing under the laws of its
respective jurisdiction of incorporation. Each of the Company and its
subsidiaries is duly qualified to do business and is in good standing as a
foreign corporation in each jurisdiction in which its ownership of property or
the conduct of its business requires such qualification (except where the
failure so to qualify would not have a material adverse effect on the business,
franchises, assets, properties, condition (financial or other), results of
operations or prospects of the Company or the Company and its subsidiaries taken
as a whole) and has all power and authority necessary to own or hold its
properties and to conduct the business in which it is engaged. All of the
outstanding shares of capital stock of the subsidiaries of the Company have been
duly authorized and validly issued, are fully paid and nonassessable, and are
owned by the Company directly, or indirectly through wholly-owned subsidiaries,
free and clear of any lien, pledge or encumbrance; provided, however, Yardville
Capital Trust, Yardville Capital Trust II, Yardville Capital Trust III and YNB
Realty, Inc. are owned in part by third parties other than the Company or any of
its subsidiaries. The Yardville National Bank (the "Bank"), Yardville Capital
Trust, Yardville Capital Trust II, Yardville Capital Trust III, Yardville
National Investment Corporation, YNB Real Estate Holding Co., Inc., Brendan,
Inc., YNB Financial Services, Inc., Xxxxx-Xxxx, Inc., YNB Realty, Xxx Xxxx, Inc.
and YNB Capital Development, Inc. are the only direct or indirect subsidiaries
of the Company. The Company is duly registered as a financial holding company
under the Xxxxx-Xxxxx-Xxxxxx Act. The deposit accounts of the Bank are insured
up to the applicable limits by the Federal Deposit Insurance Corporation (the
"FDIC") to the fullest extent permitted by law and the rules and regulations of
the FDIC, and no proceeding for the revocation or termination of such insurance
is pending or, to the knowledge of the Company or the Bank, threatened.
(j) Except as described in the Registration Statement and the
Prospectus, there is no material litigation or governmental proceeding, action
or order pending or, to the knowledge of the Company, threatened against the
Company or any of its subsidiaries which might result in any material adverse
change in the business, franchises, assets, properties, condition (financial or
other), results of operations or prospects of the Company or the Company and its
subsidiaries taken as a whole or which is required to be disclosed in the
Registration Statement and the Prospectus.
(k) The consolidated financial statements and schedules (including the
related notes) of the Company and its subsidiaries included or incorporated by
reference in the Registration Statement, any Preliminary Prospectus or the
Prospectus present fairly, in all material respects, the financial condition and
results of operations of the Company and its consolidated subsidiaries, at the
dates and for the periods indicated, and have been prepared in conformity with
generally accepted accounting principles applied, except as set forth in the
Registration Statement and the Prospectus, on a consistent basis throughout the
periods involved except as specified therein. The financial information included
in the Prospectus under the caption "Financial Summary" presents fairly the
information shown therein and has been compiled on a basis consistent with that
of the audited financial statements incorporated by reference in the Prospectus.
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(l) There is no contract or other document which is required by the Act
or by the Rules and Regulations to be described in the Registration Statement,
any Preliminary Prospectus or the Prospectus, to be filed as an exhibit to the
Registration Statement, or to be incorporated by reference into the Prospectus
which has not been described, filed or incorporated by reference as required.
(m) There are no holders of securities of the Company who, by reason of
the filing of the Registration Statement under the Act or the execution by the
Company of this Agreement, have the right (other than a right which has been
waived or satisfied) to request or demand that the Company register under the
Act securities held by them except as set forth in the Registration Statement
and the Prospectus.
(n) The Company has not taken within the 90 day period preceding the
date of this Agreement, and agrees that during the 90 day period following the
date of this Agreement it will not take, directly or indirectly, any action
which might reasonably be expected to cause or result in stabilization or
manipulation of the price of the Common Stock of the Company.
(o) The Company has all corporate power and authority necessary to
execute and deliver this Agreement and to perform its obligations hereunder.
This Agreement has been duly authorized, executed and delivered by the Company
and constitutes the valid and legally binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws relating to creditors' rights generally or by equitable
principles (whether considered in an action at law or in equity) and except as
the rights to indemnification or contribution hereunder may be limited by
federal or state securities laws.
(p) The conditions for use of Form S-3, set forth in the General
Instructions thereto, have been satisfied, with respect to the offering of the
Stock.
(q) The documents incorporated or deemed to be incorporated by
reference in the Registration Statement and Prospectus at the time they were
filed with the Commission complied in all material respects with the
requirements of the Exchange Act and the Rules and Regulations and did not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, not
misleading.
(r) The documents incorporated or deemed to be incorporated by
reference in the Registration Statement and Prospectus when read together with
the other information in the Prospectus and at the time the Registration
Statement became effective, did not include an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, not misleading.
(s) The Company and its subsidiaries have timely and properly prepared
and filed all necessary federal, state, local and foreign tax returns which are
required to be filed and have paid all taxes shown as due thereon and have paid
all other taxes and assessments to the extent that the same shall have become
due, except such as are being contested in good faith. The Company has no
knowledge of any tax deficiency which has been or might be assessed against the
Company or any of its subsidiaries which, if the subject of an unfavorable
decision, ruling or finding, would have a material adverse effect on the
business, franchises, assets, properties, condition (financial or otherwise),
results of operations or prospects of the Company or the Company and its
subsidiaries taken as a whole.
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(t) Other than as contemplated by this Agreement and as disclosed in
the Prospectus, the Company has not incurred any liability for any finder's or
broker's fee or agent's commission in connection with the execution and delivery
of this Agreement or the consummation of the transactions contemplated herein.
(u) None of the Company or any of its subsidiaries, or any other
person, if any, who controls the Company or any of its subsidiaries, within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, has,
directly or indirectly, while acting on behalf of such Company or subsidiary (i)
used any corporate funds for unlawful contributions, gifts, entertainment, or
other unlawful expenses relating to political activity; (ii) made any unlawful
contribution to any candidate for foreign or domestic office, or to any foreign
or domestic government officials or employees or other persons charged with
similar public or quasi-public duties, other than payments required or permitted
by the laws of the United States or any jurisdiction thereof or to foreign or
domestic political parties or campaigns from corporate funds, or failed to
disclose fully any contribution in violation of law; (iii) violated any
provision of the Foreign Corrupt Practices Act of 1977, as amended; or (iv) made
any other payment of funds of the Company or any of its subsidiaries or retained
any funds which (1) constitute a violation of any law, rule or regulation, (2)
was or is required to be disclosed in the Prospectus pursuant to the
requirements of the Act or the applicable Rules and Regulations and (3) would
have a material adverse effect on the business, franchises, assets, properties,
condition (financial or other), results of operations or prospects of the
Company or the Company and its subsidiaries taken as a whole.
(v) The Company and its subsidiaries maintain insurance covering in all
respects their properties, personnel and business. Such insurance insures
against such losses and risks as are adequate to protect in all material
respects the Company and its subsidiaries and their businesses. Neither the
Company nor any of its subsidiaries has received notice from any insurer or
agent of such insurer that substantial capital improvements or other
expenditures shall have to be made in order to continue such insurance. All such
insurance is outstanding and duly in force and with such exceptions as would not
have a material adverse effect on the business, franchises, assets, properties,
condition (financial or other), results of operations or prospects of the
Company or the Company and its subsidiaries taken as a whole.
(w) Neither the Company nor any entity that, together with the Company,
is or was at any time treated as a single employer under Section 414 of the
Internal Revenue Code of 1986, as amended (the "Code") or Section 4001 of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")
(collectively, an "ERISA Affiliate") has any liability under any "employee
benefit plan" as defined in Section 3(3) of ERISA or any other benefit
arrangement, obligation or practice, including employment agreements, severance
policies, bonus plans, stock option plans or agreements, stock grants or stock
purchase plans (the "Employee Plans"), other than liability for contributions
to, provision of benefits under and/or administration of such Employee Plans in
the ordinary course of business or liability that would not, in the aggregate,
have a material adverse effect on the business, franchises, assets, properties,
condition (financial or other), results of operations or prospects of the
Company or the Company and its subsidiaries taken as a whole. The Employee Plans
of the Company and each of its ERISA Affiliates, if any, have been operated in
compliance with the applicable provisions of ERISA, the Code, all regulations,
rulings and announcements promulgated or issued thereunder and all other
applicable governmental laws and regulations (the "Authorities"), except where
the failure to be in compliance would not, in the aggregate, have a material
adverse effect on the business, franchises, assets, properties, condition
(financial or other), results of operations or prospects of the Company or the
Company and its subsidiaries taken as a whole, or may be brought into compliance
with such Authorities without having a material adverse effect on the business,
franchises, assets, properties, condition (financial or other), results of
operations or prospects of the Company or the Company and its subsidiaries taken
as a whole. No reportable event under Section 4043(c) of ERISA has occurred with
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respect to any Employee Plan of the Company or any of its ERISA Affiliates for
which the reporting requirements have not been waived by the Pension Benefit
Guaranty Corporation. Neither the Company nor any of its ERISA Affiliates have
contributed to or had any liability with respect to a multiemployer plan within
the meaning of Section 4001(a)(3) of ERISA. No prohibited transaction under
Section 406 of ERISA or Section 4975 of the Code, for which an exemption does
not apply or which has not been corrected in accordance with procedures
promulgated by the Internal Revenue Service and the Department of Labor, has
occurred with respect to any Employee Plan of the Company or any of its ERISA
Affiliates. There are no pending or, to the knowledge of the Company, threatened
claims by or on behalf of any Employee Plan, by any employee or beneficiary
covered under any such Employee Plan or by any governmental authority or
otherwise involving such Employee Plans or any of their respective fiduciaries
(other than for routine claims for benefits). All Employee Plans that are group
health plans have been operated in material compliance with the group health
plan continuation coverage requirements of Section 4980B of the Code.
(x) No labor dispute with the employees of the Company or any of its
subsidiaries exists or, to the knowledge of the Company, is imminent or has been
threatened, which may reasonably be expected to result in a material adverse
effect on the business, franchises, assets, properties, condition (financial or
other), results of operations or prospects of the Company or the Company and its
subsidiaries taken as a whole, or which is required to be disclosed in the
Prospectus. None of the Company's or any of its subsidiaries' employees is
covered by a collective bargaining agreement and, to the Company's knowledge, no
union organizing activity exists with respect to such employees.
(y) Neither the Company nor any of its subsidiaries is an "investment
company" or an entity "controlled" by an "investment company" within the meaning
of such terms under the Investment Company Act of 1940 and the rules and
regulations thereunder.
(z) The Company and each of its subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurances that in
all material respects (i) transactions are executed in accordance with
management's general or specific authorization; (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with management's
general or specific authorization; and (iv) the recorded accountability for
assets is compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
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(aa) The Company and each of its subsidiaries each own or possess the
right to use all patents, patent rights, trademarks, trade names, service marks,
service names, copyrights, license rights, know-how (including trade secrets and
other unpatented and unpatentable proprietary or confidential information,
systems or procedures) and other intellectual property rights ("Intellectual
Property") necessary to carry on each of their businesses as currently
conducted. Neither the Company nor any of its subsidiaries has received notice
of violation of any Intellectual Property of any other person or entity, and, to
the Company's knowledge, neither the Company nor any of its subsidiaries has
infringed any Intellectual Property of any other person or entity. The Company
and its subsidiaries have taken all reasonable steps necessary to protect the
Company's and its subsidiaries' interest in their trade secrets and confidential
information, except for the failure to take reasonable steps that would not have
a material adverse effect on the business, franchises, assets, properties,
condition (financial or other), results of operations or prospects of the
Company or the Company and its subsidiaries taken as a whole. There are no
outstanding options, licenses or agreements of any kind relating to the
Intellectual Property of the Company and its subsidiaries that are required to
be described in the Prospectus and are not so described. The Company and its
subsidiaries are not a party to or bound by any options, licenses or agreements
with respect to the Intellectual Property of any other person or entity that are
required to be set forth in the Prospectus and are not so set forth. No
technology employed by the Company or any of its subsidiaries has been obtained
or is being used by the Company or any of its subsidiaries in material violation
of any contractual obligation binding the Company or any of its subsidiaries or,
to the Company's knowledge, binding any of the Company's or its subsidiaries'
officers, directors or employees or, to the Company's knowledge, does such use
violate in any material respects the rights of any third parties. None of the
Company or any of its subsidiaries have received any written or oral
communications alleging that the Company or any subsidiary has violated,
infringed or conflicted with, or, by conducting its business as currently
conducted, would violate, infringe or conflict with, any of the Intellectual
Property of any other person or entity. The Company knows of no infringement by
others of the Intellectual Property owned by the Company or any of its
subsidiaries.
2. Purchase of the Stock by the Underwriters. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell the Firm Stock to the
Underwriters, and each of the Underwriters, severally and not jointly, agrees to
purchase the number of shares of the Firm Stock set forth opposite that
Underwriter's name in Schedule I hereto.
In addition, the Company grants to the Underwriters, solely for the
purpose of covering over-allotments in the sale of the Firm Stock, an option to
purchase all or any portion of the Option Stock exercisable as provided in
Section 4 hereof. Shares of Option Stock shall be purchased severally for the
account of each Underwriter in the proportion that the number of shares of Firm
Stock set forth opposite the name of such Underwriter in Schedule I hereto bears
to the total number of shares of the Firm Stock to be purchased by the
Underwriters pursuant to this Agreement, except that the respective purchase
obligations of each Underwriter shall be adjusted so that no Underwriter shall
be obligated to purchase Option Stock other than in full share amounts. The
price of both the Firm Stock and the Option Stock to be paid by the Underwriters
to the Company shall be $______ per share.
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The Underwriters are to make a public offering of the Firm Stock and
such of the Option Stock as the Underwriters may determine on or as soon after
the Effective Date as the Underwriters deem it advisable for the Underwriters so
to do. The Stock is to be initially offered to the public at the public offering
price set forth on the cover page of the Prospectus (such price being
hereinafter called the "public offering price"). The Underwriters may from time
to time increase or decrease the public offering price after the initial public
offering to such extent as the Underwriters, in their sole discretion, deem
advisable. The Underwriters may enter into one or more agreements as the
Underwriters, in their sole discretion deem advisable, with one or more
broker-dealers who shall act as dealers in connection with such public offering.
3. Default by the Underwriters. If, on the First Delivery Date or the Second
Delivery Date, as the case may be, any Underwriter defaults in the performance
of its obligations under this Agreement and the total number of shares of the
Firm Stock or Option Stock, as the case may be, which the defaulting Underwriter
or Underwriters agreed but failed to purchase does not exceed 15% of the number
of shares of Firm Stock or Option Stock, as the case may be, covered hereby, the
remaining non-defaulting Underwriters shall be obligated, severally, to purchase
the Firm Stock or the Option Stock, as the case may be, which the defaulting
Underwriter agreed but failed to purchase on such date in the respective
proportions which the number of shares of the Firm Stock set forth opposite the
name of each remaining non-defaulting Underwriter in Schedule I hereto bears to
the total number of shares of the Firm Stock set forth opposite the names of all
the remaining non-defaulting Underwriters in Schedule I hereto.
If the aggregate number of shares of Firm Stock or Option Stock, as the
case may be, with respect to which such default shall occur exceeds 15% of the
Firm Stock or Option Stock, as the case may be, covered hereby, the remaining
non-defaulting Underwriters, or those other underwriters satisfactory to the
non-defaulting Underwriters who so agree, shall have the right, but shall not be
obligated, to purchase, in such proportion as may be agreed upon among them, all
the Firm Stock or all the Option Stock, as the case may be, to be purchased
under this Agreement on such date. If the remaining Underwriters or other
underwriters satisfactory to the remaining Underwriters do not elect to purchase
the Stock which the defaulting Underwriter or Underwriters agreed but failed to
purchase, then this Agreement shall terminate without liability on the part of
any non-defaulting Underwriter or the Company (except that the Company will
continue to be liable for the payment of expenses as set forth in Section 5(l)
and the indemnity and contribution provisions contain in Section 6), unless the
Company and the remaining non-defaulting Underwriters make an election in
writing within 24 hours after the First Delivery Date or the Second Delivery
Date, as the case may be, to proceed with the offering contemplated by this
Agreement notwithstanding such default. In the event that the Company and the
remaining non-defaulting Underwriters so elect, each such remaining
non-defaulting Underwriter shall continue to be obligated, upon the conditions
set forth in this Agreement and subject to the provisions of the next paragraph,
to purchase (severally and not jointly) the number of shares of Firm Stock and
Option Stock, as the case may be, provided for by Section 2 hereof.
-10-
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company for damages caused by its default. If other
underwriters are obligated or agree to purchase the Stock of a defaulting or
withdrawing Underwriter, or the Company and the remaining non-defaulting
Underwriters elect to proceed with the offering contemplated hereby
notwithstanding such default, either the remaining Underwriters or the Company
may postpone the First Delivery Date or the Second Delivery Date, as the case
may be, for up to seven full business days in order to effect any changes that,
in the opinion of counsel for the Company or counsel for the Underwriters, may
be necessary in the Registration Statement, the Prospectus or in any other
document or agreement, and to file promptly any necessary amendments or
supplements to the Registration Statement or the Prospectus.
4. Delivery of Stock. Payment for the Firm Stock shall be made in Federal (Same
day) funds to an account designated by the Company against delivery of
certificates therefor to the Underwriters. Such payments and delivery are to be
made through the facilities of The Depository Trust Company at 10:00 a.m., New
York time, on the third business day after the date of this Agreement, such date
and time are sometimes referred to as the "First Delivery Date". Time shall be
of the essence, and delivery at the time and place specified pursuant to this
Agreement is a further condition of the obligation of each Underwriter
hereunder. Notwithstanding any other provision to the contrary, the First
Delivery Date and the place of delivery of and payment for the Firm Stock may be
varied by agreement between the Company and the Underwriters.
At any time on or before the thirtieth day after the date on which this
Agreement becomes effective, the option granted in Section 2 may be exercised by
written notice being given by the Underwriters to the Company. Such notice shall
set forth the aggregate number of shares of Option Stock as to which the option
is being exercised, the names in which the shares of Option Stock are to be
registered, the denominations in which the shares of Option Stock are to be
issued and the date and time, as determined by the Underwriters, when the shares
of Option Stock are to be delivered (the "Second Delivery Date"); provided,
however, that the Second Delivery Date shall not be earlier than the First
Delivery Date nor earlier than the second business day after the date on which
the option shall have been exercised nor later than the third business day after
the date on which the option shall have been exercised.
Delivery of and payment for the Option Stock shall be made in Federal
(Same day) funds to an account designated by the Company against delivery of
certificates therefor to the Underwriters through the facilities of The
Depository Trust Company at 10:00 a.m., New York time, on the Second Delivery
Date. Time shall be of the essence, and delivery at the time and place specified
pursuant to this Agreement is a further condition of the obligation of each
Underwriter hereunder. Notwithstanding any other provision to the contrary, the
Second Delivery Date and the place of delivery of and payment for the Option
Stock may be varied by agreement between the Company and the Underwriters.
-11-
5. Covenants. The Company covenants and agrees with the Underwriters:
(a) To furnish promptly to each of the Underwriters and to counsel for
the Underwriters a signed copy of the Registration Statement as originally
filed, and each amendment thereto filed with the Commission, including all
consents and exhibits filed therewith and any document filed under the Exchange
Act and deemed to be incorporated by reference into any Preliminary Prospectus
or the Prospectus;
(b) To deliver promptly to the Underwriters and to each Underwriter
such number of conformed copies of the Registration Statement as originally
filed and each amendment thereto (in each case excluding exhibits other than
this Agreement), and of each Preliminary Prospectus, the Prospectus and any
amended or supplemented Prospectus as the Underwriters may reasonably request;
(c) To file promptly with the Commission the Prospectus pursuant to
Rule 424(b)(l) of the Rules and Regulations (or, if consented to by the
Underwriters, pursuant to Rule 424(b)(4)) and any amendment to the Registration
Statement or the Prospectus or any supplement to the Prospectus and file any
document under the Exchange Act before the termination of the offering of the
Stock by the Underwriters if such document would be deemed to be incorporated by
reference into any Preliminary Prospectus or the Prospectus that may, in the
reasonable judgment of the Company and the Underwriters, be required by the Act
or requested by the Commission and approved by the Underwriters;
(d) Prior to filing with the Commission any Preliminary Prospectus, any
amendment to the Registration Statement, any supplement to the Prospectus, any
Prospectus pursuant to Rule 424 of the Rules and Regulations, or any other
document under the Exchange Act if such document would be deemed to be
incorporated by reference into any Preliminary Prospectus or the Prospectus, to
furnish a copy thereof to the Underwriters and counsel for the Underwriters and
obtain the consent of the Underwriters to the filing, which consent shall not be
unreasonably withheld;
(e) To advise the Underwriters promptly (i) when any post-effective
amendment to the Registration Statement becomes effective, (ii) of any request
or proposed request by the Commission for an amendment to the Registration
Statement, a supplement to the Prospectus or for any additional information,
(iii) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or preventing or suspending the use
of any Preliminary Prospectus or the Prospectus or the initiation or threat of
any stop order proceeding, (iv) of receipt by the Company of any notification
with respect to the suspension of the qualification of the Stock for sale in any
jurisdiction or the initiation or threat of any proceeding for that purpose, and
(v) during the period when the Prospectus is required to be delivered under the
Act or the Exchange Act, of the happening of any event which makes untrue any
statement of a material fact made in the Registration Statement or the
Prospectus, or which requires the making of a change in the Registration
Statement or the Prospectus in order to make any material statement therein not
misleading;
(f) If the Commission shall issue a stop order suspending the
effectiveness of the Registration Statement, to make every reasonable effort to
obtain the lifting of that order at the earliest possible time;
-12-
(g) As soon as practicable after the Effective Date, but not later than
the 45th day following the end of the fiscal quarter first occurring after the
first anniversary of the Effective Date, to make generally available to its
security holders and to deliver to the Underwriters an earning statement,
conforming with the requirements of Section 11(a) of the Act, covering a period
of at least twelve months beginning after the effective date of the Registration
Statement;
(h) For a period of five years from the Effective Date, to furnish to
the Underwriters copies of all reports and financial statements filed with the
Commission pursuant to the Exchange Act or any rule or regulation of the
Commission thereunder;
(i) To apply the net proceeds of the sale of the Stock as set forth in
the Prospectus;
(j) To cause each officer and each director of the Company and use its
best efforts to cause each shareholder who owns beneficially two percent or more
of the outstanding Common Stock of the Company to furnish to you, on or prior to
the date of this Agreement, a letter or letters, substantially in the form
attached hereto as Exhibit 1 hereto (the "Lock-up Letters");
(k) Without the prior written consent of the Underwriters (which
consent shall not be unreasonably withheld), not to sell or otherwise dispose
of, or offer or contract to sell any shares of Common Stock or sell or grant any
rights, options, warrants or securities convertible with respect to Common Stock
within 180 days after the Effective Date except for (i) the sale of the Stock to
the Underwriters pursuant to this Agreement, (ii) the sale of shares of Common
Stock and/or the grant or exercise of options pursuant to the Company's stock
option and other employee benefit plans, (iii) the issuance of shares of Common
Stock in connection with the exercise of outstanding warrants to purchase Shares
of Common Stock and (iv) the issuance by the Company of its securities in
connection with a merger, acquisition or similar transaction; and
(l) To pay (i) the costs incident to the authorization, issuance, sale
and delivery of the Stock and any taxes payable in that connection; (ii) the
costs incident to the preparation, printing and filing under the Act, and
mailing and delivery, of the Registration Statement and any amendments and
exhibits thereto, including fees payable to the Commission; (iii) the costs of
printing and distributing the Registration Statement as originally filed and
each amendment and post-effective amendment thereof (including exhibits), any
Preliminary Prospectus, the Prospectus and any amendment or supplement to the
Prospectus as provided in this Agreement and the costs of printing and
distributing this Agreement and other underwriting documents, including
Underwriters' Questionnaires, Underwriters' Powers of Attorney, Agreements Among
Underwriters and Selected Dealer Agreements; (iv) the costs of the listing or
qualification of the Stock on the Nasdaq National Market and related filing fees
with the National Association of Securities Dealers, Inc. (excluding fees and
disbursements of counsel to the Underwriters); (v) the expenses associated with
the issuance, transfer and delivery of the Stock including issue and transfer
taxes, if any; (vi) the travel expenses of the Company in connection with
informational meetings and presentations for the brokerage community and
institutional investors; (vii) reimbursement of the legal fees and expenses of
-13-
counsel to the Underwriters in an amount not to exceed $50,000; (viii) the costs
associated with settlement in same day funds, if desired by the Company; (ix)
registrar and transfer agent costs and fees; (x) the fees and expenses, if any,
of qualifying the Stock under the securities laws of the states or other
jurisdictions where the Stock is to be offered or sold (including the costs of
preparing, printing and mailing the "Blue Sky" surveys and the fees and
disbursements of counsel to the Underwriters in connection therewith); (xi) the
costs of printing certificates for the Stock; (xii) the reasonable costs of
advertising the offering, including the placement of "tombstone" advertisements;
and (xiii) all other costs and expenses incident to the performance of the
Company's obligations under this Agreement. It is understood, however, that,
except as provided in this Section and in Section 6 hereof, the Underwriters
shall pay their own costs and expenses, including the fees and expenses of their
counsel. If the sale of the Stock provided for herein is not consummated (x) by
reason of acts of the Company, or the Underwriters with cause, pursuant to
Section 7(a) hereof which prevent this Agreement from becoming effective, (y) by
reason of any failure, refusal or inability on the part of the Company to
perform any agreement on its part to be performed pursuant to this Agreement or
(z) for any other reason, including the nonfulfillment of any condition of the
Underwriters' obligations set forth in Section 7(b) or Section 8 of this
Agreement (unless such failure to perform such agreement or fulfill such
condition is due to the default without cause of any Underwriter or its
counsel), then the Company shall reimburse the several Underwriters for all
reasonable, accountable out-of-pocket expenses (including reasonable fees and
expenses of their counsel as set forth above in this paragraph) incurred by them
in connection with this Agreement and the proposed purchase of the Stock, but in
an amount not to exceed $100,000 in the aggregate.
(m) During the period when the Prospectus is required to be delivered
under the Act or the Exchange Act, the Company will cooperate with the
Underwriters in endeavoring to qualify the Stock for sale under the securities
laws of such jurisdictions as the Underwriters may reasonably have designated in
writing and will make such applications, file such documents, and furnish such
information as may be reasonably required for that purpose, provided that 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 where it is not now so
qualified or required to file such a consent. During the period when the
Prospectus is required to be delivered under the Act or the Exchange Act, the
Company will, from time to time, prepare and file such statements, reports and
other documents, as are or may be required to continue any such qualifications
in effect for so long as the Underwriters may reasonably request for
distribution of the Stock.
6. Indemnification and Contribution. (a) The Company and the Bank, jointly and
severally, shall indemnify and hold harmless each Underwriter and each person,
if any, who controls any Underwriter within the meaning of the Act from and
against any loss, claim, damage or liability, joint or several, and any action
in respect thereof, to which that Underwriter or controlling person may become
subject, under the Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, any breach of the Company's
representations and warranties made in this Agreement or any untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement, the Prospectus or the Registration
Statement or Prospectus as amended or supplemented, or in any blue sky
application or other document filed in any state or other jurisdiction in order
to qualify any or all of the Stock under the securities laws thereof (any such
application, document or information being hereinafter referred to as a "Blue
Sky Application"), or any failure of the Company or its subsidiaries to take all
reasonable steps to protect (i) the Company's and its subsidiaries' Intellectual
Property and (ii) all confidential information of customers of the Company or
its subsidiaries, or any failure to comply with any federal, state or foreign
laws or regulations that has occurred, or arises out of, or is based upon, the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
shall reimburse each Underwriter and each such controlling person for any legal
and other expenses reasonably incurred by that Underwriter or controlling person
in investigating or defending or preparing to defend against any such loss,
-14-
claim, damage, liability or action, notwithstanding the possibility that
payments for such expenses might later be held to be improper in which case the
person receiving them shall promptly refund them; provided, that neither the
Company nor the Bank shall 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,
any untrue statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Prospectus or in the Registration Statement or the
Prospectus or any amendment or supplement thereto or in any Blue Sky Application
in reliance upon and in conformity with written information furnished to the
Company through the Underwriters by or on behalf of any Underwriter specifically
for inclusion therein; and provided further, that, as to any Preliminary
Prospectus, this indemnity agreement shall not inure to the benefit of any
Underwriter or any person controlling that Underwriter on account of any loss,
claim, damage, liability or action arising from the sale of Stock to any person
by that Underwriter if that Underwriter failed to send or give a copy of the
Prospectus, as the same may be amended or supplemented, to that person within
the time required by the Act, and the untrue statement or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact in such Preliminary Prospectus was corrected in the Prospectus, unless such
failure resulted from noncompliance by the Company with Section 5(b), 5(c) or
5(d) hereof. The foregoing indemnity agreement is in addition to any liability
which the Company or the Bank may otherwise have to any Underwriter or any
controlling person of that Underwriter.
(b) Each Underwriter, severally but not jointly, shall indemnify and
hold harmless the Company, each of its directors, each of its officers who
signed the Registration Statement, and any person who controls the Company
within the meaning of the Act, from and against any loss, claim, damage or
liability, or any action in respect thereof to which the Company or any such
director, officer or controlling person may become subject, under the Act or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, any untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement, the Prospectus or the Registration Statement or Prospectus as amended
or supplemented, or in any Blue Sky Application, or arises out of, or is 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,
but in each case only to the extent that the 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 or on behalf of
that Underwriter specifically for inclusion therein, and shall reimburse the
Company for any legal and other expenses reasonably incurred by the Company or
any such director, officer or controlling person in investigating or defending
or preparing to defend against any such loss, claim, damage, liability or
action, notwithstanding the possibility that payments for such expenses might
later be held to be improper, in which case the person receiving them shall
promptly refund them. The foregoing indemnity agreement is in addition to any
liability which any Underwriter may otherwise have to the Company, or any of its
directors, officers or controlling persons.
-15-
(c) Promptly after receipt by an indemnified party under this Section 6
of notice of any claim or the commencement of any action, the indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under this Section 6, notify the indemnifying party in writing of the
claim or the commencement of that action, provided that the failure to notify
the indemnifying party shall not relieve it from any liability which it may have
to an indemnified party otherwise than under this Section 6. If any such claim
or action shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein, and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 6 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided that the
Underwriters shall have the right to employ separate counsel to represent those
Underwriters and their respective controlling persons who may be subject to
liability arising out of any claim in respect of which indemnity may be sought
by the Underwriters against the Company and/or the Bank under this Section 6 if,
in the reasonable judgment of the Underwriters, it is advisable for those
Underwriters and controlling persons to be represented by separate counsel, and
in that event the fees and expenses of such separate counsel shall be paid by
the Company. It is understood, however, that the Company shall not, in
connection with any one such claim or action (or separate but substantially
similar or related claims or actions in the same jurisdiction) arising out of
the same general allegations or circumstances, be liable for the reasonable fees
and expenses of more than one such separate firm of attorneys for all such
Underwriters and their respective controlling persons. Such firm shall be
designated in writing by the Underwriters. An indemnifying party shall not be
obligated to reimburse an indemnified party hereunder for any amount paid to
effect settlement of any action or claim unless such settlement shall have been
consented to in writing by the indemnifying party, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 6 shall for any
reason be unavailable to an indemnified party under Section 6(a) or 6(b) in
respect of any loss, claim, damage or liability, or any action in respect
thereof, referred to therein, then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable by
such indemnified party as a result of such loss, claim, damage or liability, or
action in respect thereof, (i) in such proportion as shall be appropriate to
reflect the relative benefits received by the Company on the one hand and the
Underwriters on the other from the offering of the Stock or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and the Underwriters on the other with respect to the statements or
omissions which resulted in such loss, claim, damage or liability, or action 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 with respect to such offering shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Stock (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters with respect to such
offering, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault shall be determined by reference to whether the
untrue or alleged untrue statement of a material fact or omission or alleged
-16-
omission to state a material fact relates to information supplied by the Company
or the Underwriters, the intent of the parties and their relative 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 Section were to be determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take into account
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the loss, claim, damage or liability, or
action in respect thereof referred to above in this Section shall be deemed to
include, for purposes of this Section, any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this Section, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Stock underwritten by it and distributed
to the public was offered to the public exceeds that amount of any damages which
such Underwriter has otherwise paid or become liable to pay by reason of any
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Underwriters' obligations to contribute
as provided in this Section are several in proportion to their respective
underwriting obligations and not joint. Each party entitled to contribution
agrees that upon the service of a summons or other initial legal process upon it
in any action instituted against it in respect to which contribution may be
sought, it shall promptly give written notice of such service to the party or
parties from whom contribution may be sought, but the omission to so notify such
party or parties of any such service shall not relieve the party from whom
contribution may be sought for any obligation it may have otherwise than under
this Section.
(e) The indemnity and contribution agreements contained in this
Paragraph and the representations, warranties and agreements of the Company in
Sections 1 and 5 shall survive the delivery of the Stock and shall remain in
full force and effect, regardless of any termination or cancellation of this
Agreement or any investigation made by or on behalf of any indemnified party.
7. Effective Date and Termination. (a) This Agreement shall become effective at
10:00 A.M., New York City time, on the first full business day following the
date on which this Agreement is executed, or at such earlier time after the
Registration Statement becomes effective as the Underwriters shall release the
Firm Stock for public offering. The Underwriters shall notify the Company
immediately after they have taken any action which causes this Agreement to
become effective. Until this Agreement is effective, it may be terminated by the
Company by notice to the Underwriters or by the Underwriters by notice to the
Company. For purposes of this Agreement, the release of the public offering of
the Firm Stock shall be deemed to have been made when the Underwriters make, by
telegram or otherwise, firm offers of the Firm Stock to securities dealers or
release for publication a newspaper advertisement relating to the Firm Stock,
whichever occurs first.
-17-
(b) The obligations of the Underwriters hereunder may be terminated by
the Underwriters, in their absolute discretion, by notice given to and received
by the Company prior to delivery of and payment for the Stock, if prior to that
time (i) there has been a material adverse change in the business, franchises,
assets, properties, condition (financial or other), results of operations or
prospects of the Company or the Company and its subsidiaries taken as a whole,
(ii) trading in securities generally on the New York Stock Exchange, the
American Stock Exchange, the Nasdaq National Market, or the over-the-counter
market shall have been suspended, or trading in the Common Stock is suspended
for two consecutive hours or more, or minimum prices shall have been established
on either of such exchanges or such market, (ii) a general banking moratorium
shall have been declared by federal or New Jersey state authorities, (iii) the
United States becomes engaged in hostilities or there is a significant
escalation of existing hostilities involving the United States or there is a
declaration of a national emergency or war by the United States, (iv) there
shall have occurred any material adverse change in the general economic,
political or financial conditions in the United States or elsewhere or any other
substantial national or international calamity or emergency and, in the
reasonable judgment of the Underwriters, the effect of any such adverse change,
calamity or emergency makes it impractical or inadvisable to proceed with the
payment for and delivery of the Stock, (v) the enactment, publication, decree or
other promulgation of any federal or state statute, regulation, rule or order of
any court or other governmental authority which in the opinion of the
Underwriters materially and adversely affects or will materially and adversely
affect the business, franchises, assets, properties, condition (financial or
other), results of operations or prospects of the Company or the Company and its
subsidiaries taken as a whole; (vi) the Company shall have failed, refused or
been unable, at or prior to the First Delivery Date or the Second Delivery Date,
to perform any agreement on its part to be performed hereunder, or (vii) any
other condition of the obligation of the Underwriters hereunder is not
fulfilled.
(c) Any termination of this Agreement pursuant to this Section 7 shall
be without liability of any party to any other party, except as provided in
Sections 5(l) and 6 hereof.
8. Additional Terms and Conditions. The respective obligations of the
Underwriters hereunder are subject to the accuracy, when made and on the First
Delivery Date and the Second Delivery Date, if any, of the representations and
warranties of the Company contained herein, to performance by the Company of its
obligations hereunder, and to each of the following additional terms and
conditions:
(a) The Prospectus shall have been timely filed with the Commission in
accordance with Section 5(c) of this Agreement; at or before the First Delivery
Date and the Second Delivery Date, if any, no stop order suspending
effectiveness of the Registration Statement shall have been issued and prior to
that time no stop order proceeding shall have been initiated or threatened by
the Commission; any request of the Commission for inclusion of additional
information in the Registration Statement or the Prospectus or otherwise shall
have been complied with to the reasonable satisfaction of counsel to the
Underwriters; and the Company shall not have filed with the Commission the
Prospectus or any amendment or supplement to the Registration Statement or the
Prospectus without the consent of the Underwriters.
-18-
(b) No Underwriter shall have discovered and disclosed to the Company
on or prior to the First Delivery Date or the Second Delivery Date, if any, that
the Registration Statement or the Prospectus or any amendment or supplement
thereto contains an untrue statement of a fact which, in the reasonable opinion
of Xxxxxx, Xxxxx & Xxxxxxx LLP, counsel for the Underwriters, is material or
omits to state a fact which, in the opinion of such counsel, is material and is
required to be stated therein or is necessary to make the statements therein not
misleading.
(c) All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the Stock and the form of
the Registration Statement and the Prospectus, other than financial statements
and other financial data, and all other legal matters relating to this Agreement
and the transactions contemplated hereby shall be reasonably satisfactory in all
respects to Xxxxxx, Xxxxx & Bockius LLP, counsel for the Underwriters, and the
Company shall have furnished to such counsel all documents and information that
they may reasonably request to enable them to pass upon such matters.
(d) Xxxxxx Xxxxxxxx LLP, counsel for the Company, shall have furnished
to the Underwriters their opinion addressed to the Underwriters (and stating
that it may be relied upon by the Underwriters) and dated the First Delivery
Date and the Second Delivery Date, if any, as counsel to the Company to the
effect that:
(i) The Company is a registered financial holding company
under the Xxxxx-Xxxxx-Xxxxxx Act, and each of the Company and its subsidiaries
listed on Exhibit A to such counsel's opinion (the "Subsidiaries"), other than
the Bank and Yardville Capital Trust, Yardville Capital Trust II and Yardville
Capital Trust III (collectively, the "Trusts"), is an active business and is in
good standing under the laws of the State of New Jersey, and to such counsel's
knowledge, each of the Company and such Subsidiaries has all corporate power and
authority necessary to own its properties and conduct the business in which it
is engaged as described in the Prospectus;
(ii) The Bank is a national banking association authorized to
transact the business of banking under the laws of the United States of America,
and to such counsel's knowledge, the Bank has all requisite power and authority
necessary to own its properties and conduct the business in which it is engaged
as described in the Prospectus;
(iii) Each of the Trusts is a statutory business trust duly
formed and in good standing under the laws of the State of Delaware, and to such
counsel's knowledge, each of the Trusts has all trust power and authority
necessary to own its properties and conduct the business in which it is engaged
as described in the Prospectus.
-19-
(iv) To such counsel's knowledge, the Subsidiaries are the
only subsidiaries of the Company, and except as may be disclosed in the
Registration Statement and the Prospectus, all outstanding shares of capital
stock of the Subsidiaries are, to such counsel's knowledge, owned, directly or
indirectly, by the Company, free and clear of any lien, pledge and encumbrance
or any claim of any third party and are duly authorized, validly issued, fully
paid and non-assessable; provided, however, (x) the Trusts and YNB Realty, Inc.
are each owned in part by third parties other than the Company or any of the
Subsidiaries and (y) the capital stock of the Bank is assessable in accordance
with the National Bank Act, 12 U.S.C. ss.55;
(v) The Company and each of the Subsidiaries are duly
qualified to transact business in all jurisdictions in which the conduct of
their business, to such counsel's knowledge, requires such qualifications, or in
which the failure to qualify would have a material adverse effect on the
business of the Company or any of the Subsidiaries.
(vi) The Stock has been duly authorized; upon payment for the
Stock pursuant to the terms of this Agreement, the Stock, will be validly
issued, fully paid and non-assessable, with no personal liability attaching to
the ownership thereof;
(vii) Other than (A) shares of Common Stock and/or options
granted under the Company's stock option or other employee benefit plans, (B)
shares of Common Stock and/or warrants to purchase shares of Common Stock issued
to investors in private placements by the Company on June 23, 2000 and August
22, 2001, (C) transfer restrictions imposed by the Lock-up Letters, (D) transfer
restrictions imposed by the Act and (E) the option of the Underwriters to
purchase the Option Stock, there are no preemptive or other rights to subscribe
for or to purchase, nor is there any restriction upon the voting or transfer of,
any shares of the Common Stock, including the Stock, pursuant to the Company's
Restated Certificate of Incorporation, as amended, or By-laws or any agreement
or other instrument known to such counsel;
(viii) The Stock conforms as to legal matters to the
statements concerning the Common Stock of the Company contained in the
Prospectus under the caption "Description of Capital Stock;"
(ix) The Registration Statement and all post-effective
amendments thereto, if any, filed prior to the date of such counsel's opinion
are effective under the Act; any required filing of the Prospectus pursuant to
Rule 424(b) has been made within the time period required by Rule 424(b); to
such counsel's knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that purpose is
pending or threatened by the Commission;
(x) The Registration Statement and the Prospectus (excluding
the financial statements, notes thereto and schedules therein and other
financial and statistical information, as to which we express no opinion) comply
as to form in all material respects with the requirements of the Act and the
Rules and Regulations, and the conditions for use of Form S-3, set forth in the
General Instructions thereto, have been satisfied, with respect to the offering
of the Stock;
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(xi) Such counsel has no knowledge of any litigation or any
governmental proceeding pending or threatened against the Company or any of the
Subsidiaries or the results of any governmental audit, review or survey which
would adversely affect the transactions contemplated by this Agreement or which
is required to be disclosed in the Prospectus which is not disclosed and
correctly summarized therein;
(xii) Such counsel has no knowledge of any contracts or other
documents which are required by the Act or the Rules and Regulations to be
described in the Registration Statement or Prospectus, to be filed as exhibits
to the Registration Statement or to be incorporated by reference into the
Registration Statement or Prospectus which have not been described, filed or
incorporated by reference as required;
(xiii) Neither the Company nor any of the Subsidiaries is in
violation of its corporate charter, by-laws, articles of association,
certificate of trust or trust agreement, as applicable, or to such counsel's
knowledge, neither the Company nor any of the Subsidiaries is in default under
any agreement, indenture or instrument, or in violation of any law, rule or
regulation, other than any violation described in the Prospectus, the effect of
which violation or default would have a material adverse effect on the Company
or the Company and the Subsidiaries taken as a whole;
(xiv) The Company has full corporate power and authority to
execute, deliver and perform this Agreement; this Agreement has been duly
authorized, executed and delivered by the Company and constitutes the valid and
legally binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to
creditors' rights generally or by equitable principles (whether considered in an
action at law or in equity) and except as the rights to indemnification or
contribution hereunder may be limited by federal or state securities laws; the
execution, delivery and performance of this Agreement by the Company will not
conflict with, or result in the creation or imposition of any lien, charge or
encumbrance upon any of the assets of the Company or any of the Subsidiaries
pursuant to the terms of or constitute a default under, any material agreement,
indenture or instrument actually known to such counsel, or result in a violation
of the corporate charter, by-laws, articles of association, certificate of trust
or trust agreement, as applicable, of the Company or any of the Subsidiaries or
any order, law, rule or regulation normally applicable to transactions of this
type of any court or governmental agency having jurisdiction over the Company or
any of the Subsidiaries or their property; and no consent, authorization or
order of, or filing or registration with, any court or governmental agency is
required for the execution, delivery and performance of this Agreement by the
Company, except such as may be required by the Act, the Exchange Act, state
securities laws, the Nasdaq Stock Market, Inc. or the National Association of
Securities Dealers, Inc.;
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(xv) To such counsel's knowledge, each of the Company and its
subsidiaries has such licenses, permits, consents, approvals, authorizations and
certificates from any public or governmental authorities that are necessary for
the conduct of its business and owns, or possesses adequate rights to use, all
rights necessary for the conduct of such business and without which there would
be a material adverse effect on the business or financial condition of the
Company or the Company and the Subsidiaries taken as a whole and neither the
Company nor any of the Subsidiaries received any notice of conflict with the
asserted rights of others in respect thereof;
(xvi) Except as set forth in the Registration Statement and
Prospectus, there are no holders of securities of the Company who, by reason of
the filing of the Registration Statement under the Act or the execution by the
Company of this Agreement, have the right pursuant to the Company's Restated
Certificate of Incorporation, as amended, By-laws or any agreement, instrument
or other document of which such counsel has knowledge (other than a right which
has been waived or satisfied) to request or demand that the Company register
under the Act securities of the Company held by them; and
(xvii) The Company is not an "investment company" or an entity
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, and the rules and regulations thereunder.
In addition, such counsel shall state that such counsel has
participated in conferences with the Underwriters, officers and other
representatives of the Company and representatives of the independent
accountants of the Company at which the contents of the Registration Statement
and Prospectus and the documents incorporated by reference therein and related
matters were discussed and, although such counsel is not passing upon and does
not assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement and Prospectus (except as
provided above with respect to clause (viii) of this Section 8(d)), on the basis
of the foregoing, no facts have come to the attention of such counsel which lead
such counsel to believe that the Registration Statement or any amendment thereto
when such Registration Statement or amendment became effective contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading or that on the
First Delivery Date and Second Delivery Date, if any, the Prospectus, as amended
or supplemented (including any document filed under the Exchange Act and deemed
to be incorporated by reference into the Prospectus) contains any untrue
statement of a material fact 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 (it being understood that such counsel need
express no opinion with respect to the financial statements, the notes thereto
and schedules therein and other financial and statistical information included
in the Registration Statement or Prospectus).
(e) The Company shall have furnished to the Underwriters on each of the
First Delivery Date and the Second Delivery Date, if any, a certificate, dated
such delivery date, of its President and its Treasurer stating that:
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(i) The representations, warranties and agreements of the
Company in Section 1 are true and correct as of such delivery date; the Company
has complied with all the agreements and satisfied all the conditions herein on
its part to be performed or satisfied at or prior to such delivery date;
(ii) No stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for such purpose have
been instituted or, to the Company's knowledge, threatened; and
(iii) They have carefully examined the Registration Statement
and the Prospectus and, in their opinion, (A) as of the Effective Date, the
Registration Statement did not include any untrue statement of a material fact
and did not omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, and on such delivery date, the Prospectus
(including any documents filed under the Exchange Act and deemed to be
incorporated by reference into the Prospectus) does not include any untrue
statement of a material fact and does not omit to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, and (B) since the
Effective Date, no event has occurred which should have been set forth in the
Prospectus or a supplement thereto or amendment thereof which has not been set
forth in such a supplement or amendment and there has been no document required
to be filed under the Exchange Act and the Rules and Regulations that upon such
filing would be deemed to be incorporated by reference into the Prospectus that
has not been so filed.
(f) The Company shall have furnished to the Underwriters on each of the
First Delivery Date and the Second Delivery Date, if any, a letter of KPMG LLP,
addressed to the Underwriters and dated such delivery date, confirming that they
are independent public accountants within the meaning of the Act and are in
compliance with the applicable requirements relating to the qualification of
accountants under Rule 2-01 of Regulation S-X of the Commission, stating, as of
the date of such letter (or, with respect to matters involving changes or
developments since the respective dates as of which specified financial
information is given in the Prospectus, as of a date not more than five days
prior to the date of such letter), the conclusions and findings of such firm
with respect to the financial information and other matters covered by its
letter delivered to the Underwriters concurrently with the execution of this
Agreement and confirming in all material respects the conclusions and findings
set forth in such prior letter.
(g) The Underwriters shall have received from Xxxxxx, Xxxxx & Xxxxxxx
LLP, counsel for the Underwriters, an opinion dated the First Delivery Date and
the Second Delivery Date, if any, relating to such matters as may be agreed upon
by the Underwriters and Xxxxxx, Xxxxx & Bockius LLP.
(h) Since the Effective Date, neither the Company nor any of its
subsidiaries shall have sustained any loss by fire, flood, accident or other
calamity, or shall have become a party to or the subject of any litigation,
which would have a material adverse effect on the Company or the Company and its
subsidiaries taken as a whole, nor shall there have been a material adverse
change in the general affairs, prospects, business, key personnel,
capitalization, financial position or net worth of the Company and its
subsidiaries, whether or not arising in the ordinary course of business, which
loss, litigation or change, in the reasonable judgment of the Underwriters,
shall render it inadvisable to proceed with the delivery of the Stock.
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(i) The Lock-up Letters described in Section 5(i) are in full
force and effect.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to Xxxxxx, Xxxxx & Xxxxxxx LLP, counsel for the Underwriters.
9. Notice. The Company shall be entitled to act and rely upon any request,
consent, notice or agreement given or made by Xxxx Xxxxx Xxxx Xxxxxx,
Incorporated and Sandler X'Xxxxx & Partners, L.P. on behalf of the Underwriters.
Any notice to the Underwriters shall be sufficient if given in writing or by
telefax or telecopy addressed to (a) Xxxx Xxxxx Xxxx Xxxxxx, Incorporated, 000
Xxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000, Attention: Xxxx X. Xxxxxxx
(telecopy no. 410-454-5299), and (b) Sandler X'Xxxxx & Partners, L.P., 000 0xx
Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxxx X. Xxxxxx
(telecopy no. 212-466-7711); any notice to the Company shall be sufficient if
given in writing or by telefax or telecopy addressed to the Company at 0000
Xxxxx Xxxx, Xxxxxxxx Xxxxxxxx, Xxx Xxxxxx 00000, Attention: Xxxxxxx X. Xxxx
(telecopy no. 609-584-5984).
10. Parties. This Agreement shall inure to the benefit of and be binding upon
the Underwriters, the Company and their respective successors. This Agreement
and the terms and provisions hereof are for the sole benefit of only those
persons, except that (a) the representations, warranties, indemnities and
agreements of the Company contained in this Agreement shall also be deemed to be
for the benefit of the person or persons, if any, who control any Underwriter
within the meaning of Section 15 of the Act, and (b) the indemnity agreement of
the Underwriters contained in Section 6 of this Agreement shall be deemed to be
for the benefit of directors of the Company, officers of the Company who have
signed the Registration Statement and any person controlling the Company.
Nothing in this Agreement is intended or shall be construed to give any person,
other than the persons referred to in this section, any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision
contained herein.
11. Definition of "Business Day" and "Subsidiary". For purposes of this
Agreement, (a) "business day" means any day on which the New York Stock
Exchange, Inc. is open for trading, and (b) "subsidiary" has the meaning set
forth in Rule 405 of the Rules and Regulations.
12. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey, without giving effect to
the choice of law or conflicts of laws principles thereof. This Agreement may be
executed in one or more counterparts, and if executed in more than one
counterpart, the executed counterparts shall together constitute a single
instrument.
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13. Counterparts. This Agreement may be signed in one or more counterparts, each
of which shall constitute an original and all of which together shall constitute
one and the same Agreement.
14. Information Furnished by Underwriters. The statements set forth in [specific
paragraphs to be inserted] under the caption "Underwriting" constitute the only
written information furnished by reference or on behalf of any Underwriter
referred to in paragraph (b) of Section 1 hereof and in paragraphs (a) and (b)
of Section 6 hereof.
[SIGNATURE PAGE TO FOLLOW]
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If the foregoing correctly sets forth the agreement among the Company,
the Bank and the Underwriters, please indicate your acceptance in the space
provided for that purpose below.
Very truly yours,
Yardville National Bancorp
By: __________________________
Xxxxxxx X. Xxxx
President and Chief Executive Officer
Confirmed and accepted as of the date first above mentioned:
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated
By: _______________________________
Xxxx X. Xxxxxxx
Managing Director
Sandler X'Xxxxx & Partners, L.P.
By: Sandler X'Xxxxx & Partners Corp.,
the sole general partner
By: _______________________________
Vice President
The Yardville National Bank hereby agrees to and accepts its obligations under
Section 6 hereof as of the date first above mentioned.
The Yardville National Bank
By: _______________________________
Xxxxxxx X. Xxxx
President and Chief Executive Officer
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SCHEDULE I
Number of
Underwriters Shares
------------ ------
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated
Sandler X'Xxxxx & Partners, L.P. _________
Total 1,500,000
-27-
[FORM OF LOCK-UP AGREEMENT]
AGREEMENT REGARDING THE SALE OF
YARDVILLE NATIONAL BANCORP SECURITIES
August ___, 2002
Reference is made to the registration statement on Form S-3 of
Yardville National Bancorp (the "Company") (as the same may hereafter be
amended, the "Registration Statement") pursuant to which shares (the
"Securities") of common stock of the Company, no par value per share (the
"Common Stock"), are being registered under the Securities Act of 1933, as
amended (the "Act") for public sale through Xxxx Xxxxx Xxxx Xxxxxx, Incorporated
and Sandler X'Xxxxx & Partners, L.P. (the "Underwriters") pursuant to the terms
of a Purchase Agreement (the "Purchase Agreement") by and among the Company and
the Underwriters.
The undersigned hereby agrees that the undersigned will not, directly
or indirectly, sell or otherwise dispose of, or offer or contract to sell any
shares of Common Stock or any securities convertible into, or exercisable for,
shares of the Common Stock, owned of record or beneficially by the undersigned
on the date hereof or on the effective date of the Registration Statement (the
"Effective Date") for 180 days after the Effective Date (the "Lock-up Period")
without first obtaining the prior written consent of Xxxx Xxxxx Xxxx Xxxxxx,
Incorporated (which consent shall not be unreasonably withheld). Notwithstanding
the foregoing, nothing herein shall prevent or prohibit (1) bona fide gifts by
the undersigned, (2) transfers by the undersigned to his or her family members
or related trusts for the benefit of his or her family members, or (3) transfers
by the undersigned to its affiliates (as defined in the rules and regulations of
the Act), provided that in the case of each of (1), (2) and (3) the transferee
agrees in writing to the terms of this letter.
The undersigned acknowledges that the Company at the request of the
Underwriters may instruct the transfer agent of the Company to place stop
transfer instructions against shares of the Common Stock so owned by the
undersigned during such Lock-up Period, which will require the transfer agent to
notify the Company and obtain the Company's approval prior to any transfer of
record during the Lock-up Period.
It is understood that, if the Company notifies the Underwriters that it
does not intend to proceed with the Offering, if the Purchase Agreement does not
become effective, or if the Purchase Agreement (other than the provisions
thereof which survive termination) shall terminate or be terminated prior to
payment for and delivery of the Securities, the undersigned will be released
from his, her or its obligations under this Lock-Up Letter Agreement.
The undersigned represents and acknowledges that this Agreement is
being executed in order to induce the Underwriters to enter into the Purchase
Agreement, and that the Underwriters will not enter into the Purchase Agreement
in the absence of this Agreement.
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