Exhibit 1.1
1,333,333 Shares
FINANCIAL INSTITUTIONS, INC.
Common Stock
UNDERWRITING AGREEMENT
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June __, 1999
CIBC World Markets
Xxxxx, Xxxxxxxx & Xxxxx, Inc.
c/o CIBC World Markets
CIBC Xxxxxxxxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
On behalf of the Several
Underwriters named on
Schedule I attached hereto.
Ladies and Gentlemen:
Financial Institutions, Inc., a New York corporation (the "Company"), and
the Young Men's Christian Association of Batavia (the "Selling Shareholder")
propose, subject to the terms and conditions contained herein, to sell to you
and the other underwriters named on Schedule I to this Agreement (the
"Underwriters"), for whom you are acting as representatives (the
"Representatives"), an aggregate of 1,333,333 shares (the "Firm Shares") of the
Company's Common Stock, $0.01 par value per share (the "Common Stock"). Of the
1,333,333 Firm Shares, 903,133 are to be issued and sold by the Company and
430,200 are to be sold by the Selling Shareholder. The respective amounts of
the Firm Shares to be purchased by each of the several Underwriters are set
forth opposite their names on Schedule I hereto. In addition, the Company
proposes to grant to the Underwriters an option to purchase up to an additional
200,000 shares (the "Option Shares") of Common Stock for the purpose of covering
over-allotments in connection with the sale of the Firm Shares. The Firm Shares
and the Option Shares are together called the "Shares."
As part of the offering contemplated by this Agreement, CIBC World Markets
has agreed to reserve out of the Shares set forth opposite its name on Schedule
I to this Agreement, up to 133,333 shares, for sale to the Company's employees,
officers, directors and associates (collectively, "Participants"), as set forth
in the Prospectus under the heading "Underwriting" (the "Directed Share
Program"). The Shares to be sold by CIBC World Markets Corp. pursuant to the
Directed Share Program (the "Directed Shares") will be sold by CIBC World
Markets pursuant to
this Agreement at the public offering price. Any Directed Shares not orally
confirmed for purchase by any Participants by the end of the first business day
after the date on which this Agreement is executed will be offered to the public
by CIBC World Markets as set forth in the Prospectus, but CIBC World Markets
will use reasonable efforts to offer to other Participants any Directed Shares
that are not promptly orally confirmed by any Participants.
1. Sale and Purchase of the Shares. On the basis of the representations,
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warranties and agreements contained in, and subject to the terms and conditions
of, this Agreement:
(a) The Company agrees to sell to each of the Underwriters, and each
of the Underwriters agrees, severally and not jointly, to purchase from the
Company, at a price of $____ per share (the "Initial Price"), the number of
Firm Shares set forth opposite the name of such Underwriter under the
column Number of Firm Shares to be Purchased From the Company on Schedule I
to this Agreement, subject to adjustment in accordance with Section 11
hereof. The Selling Shareholder agrees to sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from the Selling Shareholder, at the Initial Price,
the number of Firm Shares set forth opposite the name of such Underwriter
under the column Number of Firm Shares to be Purchased From the Selling
Shareholder on Schedule I to this Agreement, subject to adjustment in
accordance with Section 11 hereof.
(b) The Company grants to the several Underwriters an option to
purchase, severally and not jointly, all or any part of the Option Shares
at the Initial Price. The number of Option Shares to be purchased by each
Underwriter shall be the same percentage (adjusted by the Representatives
to eliminate fractions) of the total number of Option Shares to be
purchased by the Underwriters as such Underwriter is purchasing of the Firm
Shares. Such option may be exercised only to cover over-allotments in the
sales of the Firm Shares by the Underwriters and may be exercised in whole
or in part at any time on or before 12:00 noon, New York City time, on the
business day before the Firm Shares Closing Date (as defined below), and
thereafter on one occasion within 30 days after the date of this Agreement,
in each case upon written or telegraphic notice, or oral or telephonic
notice confirmed by written or telegraphic notice, by the Representatives
to the Company no later than 12:00 noon, New York City time, on two
business days before the Firm Shares Closing Date or at least two business
days before the Option Shares Closing Date (as defined below), as the case
may be, setting forth the number of Option Shares to be purchased and the
time and date (if other than the Firm Shares Closing Date) of such
purchase.
2. Delivery and Payment. The Shares shall be represented by definitive
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certificates and shall be registered in such names and shall be in such
denominations as the Representatives shall request at least two full business
days before the Firm Shares Closing Date or, in the case of Option Shares, on
the day of notice of exercise of the option as described in Section 1(b). The
Firm Shares shall be delivered by or on behalf of the Company and the Selling
Shareholder, with any transfer taxes thereon duly paid by the Company or the
Selling Shareholder, as the case may be, to the Representatives through the
facilities of The Depository Trust Company ("DTC"), for
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the respective accounts of the several Underwriters, against payment of the
purchase price to the Company and the Selling Shareholder by wire transfer of
Federal or other funds immediately available in New York City. The certificates
representing the Firm Shares shall be made available for inspection not later
than 9:30 a.m., New York City time, on the business day prior to the Firm Shares
Closing Date at the office of DTC or its designated custodian. The time and date
of delivery and payment for the Firm Shares shall be 9:00 a.m., New York City
time, on the third business day following the date of this Agreement, or at such
time on such other date, not later than ten business days after the date of this
Agreement, as shall be agreed upon by the Company, the Selling Shareholder and
the Representatives (such time and date of delivery and payment are called the
"Firm Shares Closing Date"). The documents to be delivered on the Firm Shares
Closing Date on behalf of the parties hereto shall be delivered at the offices
of Nixon, Hargrave, Devans & Xxxxx LLP, Rochester, NY, and the Firm Shares shall
be delivered at the office of DTC or its designated custodian on the Firm Shares
Closing Date.
In the event the option with respect to the Option Shares is exercised,
delivery by the Company of the Option Shares to the Representatives for the
respective accounts of the Underwriters and payment of the purchase price to the
Company shall take place as specified above with respect to the Firm Shares at
the time and on the date (which may be the same date as, but in no event shall
be earlier than, the Firm Shares Closing Date) specified in the notice referred
to in Section 1(b) (such time and date of delivery and payment are called the
"Option Shares Closing Date"). The Firm Shares Closing Date and the Option
Shares Closing Date are called, individually, a "Closing Date" and, together,
the "Closing Dates."
3. Registration Statement and Prospectus; Public Offering. The Company
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has prepared and filed in conformity with the requirements of the Securities Act
of 1933, as amended (the "Securities Act"), and the published rules and
regulations thereunder (the "Rules") adopted by the Securities and Exchange
Commission (the "Commission") a Registration Statement (as hereinafter defined)
on Form S-1 (No. 333-76865), including a preliminary prospectus relating to the
Shares, and such amendments thereto as may have been required to the date of
this Agreement. Copies of such Registration Statement (including all amendments
thereof) and of the related Preliminary Prospectus (as hereinafter defined) have
heretofore been delivered by the Company to you. The term "Preliminary
Prospectus" means any preliminary prospectus (as described in Rule 430 of the
Rules) included at any time as a part of the Registration Statement or filed
with the Commission by the Company with the consent of the Representatives
pursuant to Rule 424(a) of the Rules. The term "Registration Statement" as used
in this Agreement means the initial registration statement (including all
exhibits and financial schedules), as amended at the time and on the date it
becomes effective (the "Effective Date"), including the information (if any)
deemed to be part thereof at the time of effectiveness pursuant to Rule 430A of
the Rules. If the Company has filed an abbreviated registration statement to
register additional Shares pursuant to Rule 462(b) under the Rules (the "462(b)
Registration Statement") then any reference herein to the Registration
Statement shall also be deemed to include such 462(b) Registration Statement.
The term "Prospectus" as used in this Agreement means the prospectus included in
the Registration Statement in the form first used to confirm sales of the
Shares.
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The Company and the Selling Shareholder understand that the Underwriters
propose to make a public offering of the Shares, as set forth in and pursuant to
the Prospectus, as soon after the Effective Date and the date of this Agreement
as the Representatives deem advisable. The Company and the Selling Shareholder
hereby confirm that the Underwriters and dealers have been authorized to
distribute or cause to be distributed each Preliminary Prospectus and are
authorized to distribute the Prospectus (as from time to time amended or
supplemented if the Company furnishes amendments or supplements thereto to the
Underwriters).
4. Representations and Warranties of the Company. The Company represents
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and warrants to each Underwriter as follows:
(a) On the Effective Date, the Registration Statement complied, and on
the date of the Prospectus, the date any post-effective amendment to the
Registration Statement becomes effective, the date any supplement or
amendment to the Prospectus is filed with the Commission and each Closing
Date, the Registration Statement and the Prospectus (and any amendment
thereof or supplement thereto) will comply, in all material respects, with
the applicable provisions of the Securities Act and the Rules. The
Registration Statement did not, as of the Effective Date, contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein not misleading. On the Effective Date and on the other dates
referred to above, the Prospectus did not and will not contain any untrue
statement of a material fact or omit 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. When any Preliminary
Prospectus was first filed with the Commission (whether filed as part of
the Registration Statement or any amendment thereto or pursuant to Rule
424(a) of the Rules) and when any amendment thereof or supplement thereto
was first filed with the Commission, such Preliminary Prospectus as amended
or supplemented complied in all material respects with the applicable
provisions of the Securities Act and the Rules and did not contain any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. Notwithstanding
the foregoing, none of the representations and warranties in this paragraph
4(a) shall apply to statements in, or omissions from, the Registration
Statement or the Prospectus made in reliance upon, and in conformity with,
information herein or otherwise furnished in writing by the Representatives
on behalf of the several Underwriters for use in the Registration Statement
or the Prospectus. With respect to the preceding sentence, the Company
acknowledges that the only information furnished in writing by the
Representatives on behalf of the several Underwriters for use in the
Registration Statement or the Prospectus are the statements appearing under
the caption "Underwriting" in the Prospectus.
(b) The Registration Statement is effective under the Securities Act
and no stop order preventing or suspending the effectiveness of the
Registration Statement or suspending or preventing the use of the
Prospectus has been issued and no proceedings for that purpose have been
instituted or are threatened under the Securities Act. Any
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required filing of the Prospectus and any supplement thereto pursuant to
Rule 424(b) of the Rules has been or will be made in the manner and within
the time period required by such Rule 424(b).
(c) The financial statements of the Company (including all notes and
schedules thereto) included in the Registration Statement and Prospectus
present fairly the financial condition, the results of operations, the
statements of cash flows and the statements of shareholders' equity and the
other information purported to be shown therein of the Company at the
respective dates and for the respective periods to which they apply; and
such financial statements and related schedules and notes have been
prepared in conformity with generally accepted accounting principles,
consistently applied throughout the periods involved, and all adjustments
necessary for a fair presentation of the results for such periods have been
made. The summary and selected financial data included in the Prospectus
present fairly the information shown therein as at the respective dates and
for the respective periods specified and the summary and selected financial
data have been presented on a basis consistent with the consolidated
financial statements so set forth in the Prospectus and other financial
information.
(d) KPMG LLP, whose reports are filed with the Commission as a part of
the Registration Statement, are, and during the periods covered by their
reports were, independent public accountants as required by the Securities
Act and the Rules.
(e) The Company and each of its Non-Banking Subsidiaries (as
hereinafter defined) are corporations duly organized, validly existing and
in good standing under the laws of the State of New York; and each of its
Banking Subsidiaries (as hereinafter defined) are duly organized, validly
existing and in good standing (i) with respect to Wyoming County Bank, The
Pavilion State Bank and First Tier Bank & Trust as banking corporations
formed pursuant to Article III of the New York Banking Law and (ii) with
respect to the National Bank of Geneva, as a national banking association
formed under the laws of the United States. The Company and each such
subsidiary or other entity controlled directly or indirectly by the
Company, as set forth on Schedules II (Banking Subsidiaries) and II-A (Non-
Banking Subsidiaries) hereto (collectively, the "Subsidiaries"), are duly
qualified to do business and are in good standing as a foreign corporation
in each jurisdiction in which the nature of the business conducted by it or
location of the assets or properties owned, leased or licensed by it
requires such qualification, except for such jurisdictions where the
failure to so qualify individually or in the aggregate would not have a
material adverse effect on the assets or properties, business, results of
operations or financial condition of the Company (a "Material Adverse
Effect"). Except as disclosed in the Prospectus, the Company does not own,
lease or license any asset or property or conduct any business outside the
United States of America. The Company and each of its Subsidiaries have
all requisite corporate power and authority, and all necessary
authorizations, approvals, consents, orders, licenses, certificates and
permits of and from all governmental or regulatory bodies or any other
person or entity (collectively, the "Permits"), to own, lease and license
its assets and properties and conduct its business, all of which are valid
and in full force and effect, as
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described in the Registration Statement and the Prospectus, except where
the lack of such Permits individually or in the aggregate would not have a
Material Adverse Effect. The Company and each of its Subsidiaries have
fulfilled and performed in all material respects all of their material
obligations with respect to such Permits and no event has occurred that
allows, or after notice or lapse of time would allow, revocation or
termination thereof or results in any other material impairment of the
rights of the Company thereunder. Except as may be required under the
Securities Act and state and foreign Blue Sky laws, no other Permits are
required to enter into, deliver and perform this Agreement and to issue and
sell the Shares.
(f) Each of the Company and its Subsidiaries owns or possesses
adequate and enforceable rights to use all trademarks, trademark
applications, trade names, service marks, copyrights, copyright
applications, licenses, know-how and other similar rights and proprietary
knowledge (collectively, "Intangibles") described in the Prospectus as
being owned by it necessary for the conduct of its business. Neither the
Company nor any of its Subsidiaries has received any notice of, or is aware
of, any infringement of or conflict with asserted rights of others with
respect to any Intangibles, except that First Tier Bank & Trust was
notified in 1997 by First Tier Bank Systems (a midwest bank holding company
which was subsequently acquired by Norwest Bancorp) of a possible
infringement of that entity's trade name.
(g) The Company and each of its Subsidiaries have good and marketable
title in fee simple to all items of real property and good and marketable
title to all personal property described in the Prospectus as being owned
by it. Any real property and buildings described in the Prospectus as
being held under lease by the Company and each of its Subsidiaries is held
by it under valid, existing and enforceable leases, free and clear of all
liens, encumbrances, claims, security interests and defects, except such as
are described in the Registration Statement and the Prospectus or would not
individually or in the aggregate have a Material Adverse Effect.
(h) There is no litigation or governmental proceeding to which the
Company or its Subsidiaries is subject or which is pending or, to the
knowledge of the Company, threatened, against the Company or any of its
Subsidiaries, which individually or in the aggregate might have a Material
Adverse Effect or affect the consummation of this Agreement or which is
required to be disclosed in the Registration Statement and the Prospectus
that is not so disclosed.
(i) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as described
therein: (A) there has not been any material adverse change with regard to
the assets or properties, business, results of operations or financial
condition of the Company; (B) neither the Company nor its Subsidiaries has
sustained any loss or interference with its assets, businesses or
properties (whether owned or leased) from fire, explosion, earthquake,
flood or other calamity, whether or not covered by insurance, or from any
labor dispute or any court or legislative or other governmental action,
order or decree which would have a Material Adverse
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Effect; and (C) since the date of the latest balance sheet included in the
Registration Statement and the Prospectus, except as reflected therein,
neither the Company nor its Subsidiaries has (i) issued any securities or
incurred any liability or obligation, direct or contingent, for borrowed
money, except such liabilities or obligations incurred in the ordinary
course of business, (ii) entered into any transaction not in the ordinary
course of business or (iii) declared or paid any dividend or made any
distribution on any shares of its stock or redeemed, purchased or otherwise
acquired or agreed to redeem, purchase or otherwise acquire any shares of
its stock.
(j) There is no document, contract or other agreement of a character
required to be described in the Registration Statement or Prospectus or to
be filed as an exhibit to the Registration Statement which is not described
or filed as required by the Securities Act or the Rules. Each description
of a contract, document or other agreement in the Registration Statement
and the Prospectus accurately reflects in all material respects the terms
of the underlying document, contract or agreement. Each agreement
described in the Registration Statement and Prospectus or listed in the
Exhibits to the Registration Statement is in full force and effect and is
valid and enforceable by and against the Company or any of its
Subsidiaries, as the case may be, in accordance with its terms. Neither
the Company nor any of its Subsidiaries, if any Subsidiary is a party, nor
to the Company's knowledge, any other party, is in default in the
observance or performance of any term or obligation to be performed by it
under any such agreement, and no event has occurred which with notice or
lapse of time or both would constitute such a default, in any such case
which default or event individually or in the aggregate would have a
Material Adverse Effect. No default exists, and no event has occurred
which with notice or lapse of time or both would constitute a default, in
the due performance and observance of any term, covenant or condition, by
the Company or any of its Subsidiaries, if any Subsidiary is a party
thereto, of any other agreement or instrument to which the Company or any
of its Subsidiaries is a party or by which it or its properties or business
may be bound or affected which default or event individually or in the
aggregate would have a Material Adverse Effect.
(k) Neither the Company nor any of its Subsidiaries is in violation of
any term or provision of its charter or by-laws or of any franchise,
license, permit, judgment, decree, order, statute, rule or regulation,
where the consequences of such violation individually or in the aggregate
would have a Material Adverse Effect.
(l) Neither the execution, delivery and performance of this Agreement
by the Company nor the consummation of any of the transactions contemplated
hereby (including the issuance and sale by the Company of the Shares) will
give rise to a right to terminate or accelerate the due date of any payment
due under, or conflict with or result in the breach of any term or
provision of, or constitute a default (or an event which with notice or
lapse of time or both would constitute a default) under, or require any
consent or waiver under, or result in the execution or imposition of any
lien, charge or encumbrance upon any properties or assets of the Company or
any of its Subsidiaries pursuant to the terms of, any indenture, mortgage,
deed of trust or other agreement or instrument to
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which the Company or any of its Subsidiaries is a party or by which either
the Company or any of its Subsidiaries or any of their properties or
businesses is bound, or any franchise, license, permit, judgment, decree,
order, statute, rule or regulation applicable to the Company or any of its
Subsidiaries or violate any provision of the charter or by-laws of the
Company or any of its Subsidiaries, except for such consents or waivers
which have already been obtained and are in full force and effect.
(m) The Company has authorized and outstanding capital stock as set
forth under the caption "Capitalization" in the Prospectus. The
certificates evidencing the Shares are in due and proper legal form and
have been duly authorized for issuance by the Company. All of the issued
and outstanding shares of Common Stock have been duly and validly issued
and are fully paid and nonassessable except as provided in Section 630 of
the New York Business Corporation Law. There are no statutory preemptive
or other similar rights to subscribe for or to purchase or acquire any
shares of Common Stock of the Company or its Subsidiaries or any such
rights pursuant to its Certificate of Incorporation or by-laws or any
agreement or instrument to or by which the Company or any of its
Subsidiaries is a party or bound. The Shares, when issued and sold
pursuant to this Agreement, will be duly and validly issued, fully paid and
nonassessable and none of them will be issued in violation of any
preemptive or other similar right. Except as disclosed in the Registration
Statement and the Prospectus, there is no outstanding option, warrant or
other right calling for the issuance of, and there is no commitment, plan
or arrangement to issue, any share of stock of the Company or its
Subsidiaries or any security convertible into, or exercisable or
exchangeable for, such stock. The Common Stock and the Shares conform in
all material respects to all statements in relation thereto contained in
the Registration Statement and the Prospectus. All outstanding shares of
capital stock of each Subsidiary have been duly authorized and validly
issued, and are fully paid and nonassessable and, except for (i) 90 shares
of the common stock of The National Bank of Geneva ("NBG") (representing a
0.90% fully diluted equity interest in NBG) and (ii) 306.25 shares of the
common stock of Wyoming County Bank ("WCB") (representing a 0.35% fully
diluted equity interest in WCB), are owned directly by the Company, free
and clear of any security interests, liens, encumbrances, equities or
claims.
(n) No holder of any security of the Company has the right to have any
security owned by such holder included in the Registration Statement or to
demand registration of any security owned by such holder during the period
ending 180 days after the date of this Agreement. Each director and
executive officer of the Company, and certain holders of 1% or more of the
issued and outstanding Common Stock of the Company, each as set forth on
Schedule III hereto, has delivered to the Representatives such person's
enforceable written lock-up agreement in the form attached to this
Agreement on Schedule IV (the "Lock-Up Agreement").
(o) All necessary corporate action has been duly and validly taken by
the Company to authorize the execution, delivery and performance of this
Agreement and the issuance and sale of the Shares by the Company. This
Agreement has been duly and
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validly authorized, executed and delivered by the Company and constitutes
the legal, valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors'
rights generally and by general equitable principles.
(p) Neither the Company nor any of its Subsidiaries is involved in any
labor dispute nor, to the knowledge of the Company, is any such dispute
threatened, which dispute individually or in the aggregate would have a
Material Adverse Effect. The Company is not aware of any existing or
imminent labor disturbance by the employees of any of its principal
suppliers or contractors which individually or in the aggregate would have
a Material Adverse Effect. The Company is not aware of any threatened or
pending litigation between the Company or its Subsidiaries and any of its
executive officers which individually or in the aggregate, if adversely
determined, could have a Material Adverse Effect and has no reason to
believe that such officers will not remain in the employment of the
Company.
(q) No transaction has occurred between or among the Company and any
of its officers, directors or 5% or greater shareholders or any affiliate
or affiliates of any such officer, director or 5% or greater shareholder
that is required to be described in and is not described in the
Registration Statement and the Prospectus.
(r) The Company has not taken, nor will it take, directly or
indirectly, any action designed to or which might reasonably be expected to
cause or result in, or which has constituted or which might reasonably be
expected to constitute, the stabilization or manipulation of the price of
the Common Stock to facilitate the sale or resale of any of the Shares.
(s) The Company and its Subsidiaries have filed all Federal, state,
local and foreign tax returns which are required to be filed through the
date hereof, or have received extensions thereof, and have paid all taxes
shown on such returns and all assessments received by them to the extent
that the same are material and have become due. There are no tax audits or
investigations pending which if adversely determined would have a Material
Adverse Effect; nor are there any material proposed additional tax
assessments against the Company and any of its Subsidiaries.
(t) The Shares have been duly authorized for quotation on the Nasdaq
National Market ("Nasdaq") of The Nasdaq Stock Market, Inc., subject to
official Notice of Issuance. A registration statement has been filed on
Form 8-A pursuant to Section 12 of the Exchange Act, which registration
statement complies in all material respects with the Exchange Act.
(u) Neither the Company nor any of its Subsidiaries is required to
comply with the requirements or file the forms specified in Florida
Statutes Section 517.075.
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(v) The books, records and accounts of the Company and its
Subsidiaries accurately and fairly reflect, in reasonable detail, the
transactions in, and dispositions of, the assets of, and the results of
operations of, the Company and its Subsidiaries. The Company and each of
its Subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted
accounting principles and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management's general or
specific authorization and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(w) The Company and its Subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in
such amounts as are customary in the businesses in which they are engaged
or propose to engage after giving effect to the transactions described in
the Prospectus. Neither the Company nor any Subsidiary has any reason to
believe that it will not be able to renew its existing insurance coverage
as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost
that would not have a Material Adverse Effect. Neither the Company nor any
Subsidiary has been denied any insurance coverage which it has sought or
for which it has applied.
(x) Each approval, consent, order, authorization, designation,
declaration or filing of, by or with any regulatory, administrative or
other governmental body necessary in connection with the execution and
delivery by the Company of this Agreement and the consummation of the
transactions herein contemplated required to be obtained or performed by
the Company (except such additional steps as may be necessary to qualify
the Shares for public offering by the Underwriters under the state
securities or Blue Sky laws) has been obtained or made and is in full force
and effect.
(y) There are no affiliations with the NASD among the Company's
officers, directors or, to the best knowledge of the Company, any 5% or
greater shareholders of the Company, except as set forth in the
Registration Statement.
(z) (i) Each of the Company and its Subsidiaries is in compliance in
all material respects with all rules, laws and regulations relating to the
use, treatment, storage and disposal of toxic substances and protection of
health or the environment ("Environmental Laws") which are applicable to
its business; (ii) none of the Company or its Subsidiaries has received any
notice from any governmental authority or third party of an asserted claim
under Environmental Laws; (iii) each of the Company and its Subsidiaries
has received all material permits, licenses or other approvals required of
it under applicable Environmental Laws to conduct its business and is in
compliance in all material respects with all terms and conditions of any
such permit, license or approval; (iv) to the Company's knowledge, no facts
currently exist that will require the Company
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or its Subsidiaries to make future material capital expenditures to comply
with Environmental Laws; and (v) no property which is or has been owned,
leased or occupied by the Company or its Subsidiaries has been designated
as a Superfund site pursuant to the Comprehensive Environmental Response,
Compensation of Liability Act of 1980, as amended (42 U.S.C. Section 9601,
et. seq.) or otherwise designated as a contaminated site under applicable
state or local law.
(aa) The Company is not and, after giving effect to the offering and
sale of the Shares and the application of proceeds thereof as described in
the Prospectus, will not be an "investment company" or an entity controlled
by an "investment company" within the meaning of the Investment Company Act
of 1940, as amended (the "Investment Company Act").
(bb) Neither the Company, its Subsidiaries nor any other person
associated with or acting on behalf of the Company or its Subsidiaries,
including any director, officer, agent or employee of the Company or its
Subsidiaries, has, directly or indirectly, while acting on behalf of the
Company or its Subsidiaries (i) used any corporate funds for unlawful
contributions, gifts, entertainment or other unlawful expenses relating to
political activity; (ii) made any unlawful payment to foreign or domestic
government officials or employees or to foreign or domestic political
parties or campaigns from corporate funds; (iii) violated any provision of
the Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any
other unlawful payment.
(cc) All material disclosure regarding year 2000 compliance that is
required to be described under the Securities Act and the regulations and
pronouncements of the Commission has been included in the Prospectus.
Neither the Company nor any Subsidiary will incur material operating
expenses or costs to ensure that its information systems will be year 2000
compliant, other than as disclosed in the Prospectus.
(dd) The deposit accounts and investment certificates of the
Subsidiaries are duly insured by the Federal Deposit Insurance Corporation
(the "FDIC") to the maximum dollar limits permitted by law. No charge,
investigation or proceeding for the termination or revocation of either the
Company or any of its Subsidiaries' charter, good standing or FDIC
insurance is pending, or to the knowledge of the Company, threatened.
(ee) Neither the Company nor any of its Subsidiaries are subject to
any order of the Federal Reserve Board (the "FRB"), the FDIC, the New York
State Banking Department (in the case of WCB, The Pavilion State Bank
("PSB") and First Tier Bank & Trust ("FTB")) or the Office of the
Comptroller of the Currency (in the case of NBG), nor are the Company or
any of its Subsidiaries subject to any agreement or consent related to
compliance with banking laws and regulations with, or board resolution
adopted at the instigation of, any such regulatory authorities. The
Company and its Subsidiaries have conducted and are conducting their
businesses so as to comply in all material respects with all applicable
federal and state laws, rules, regulations, decisions, directives and
orders (including without limitation the rules, regulations, decisions,
directives and orders
11
of the FRB, the FDIC, the New York State Banking Department (in the case of
WCB, PSB and FTB) and the Office of the Comptroller of the Currency (in the
case of the NBG)). No charge, investigation or proceeding with respect to
the Company or its Subsidiaries is pending or, to the best of the Company's
knowledge, threatened, by or before any regulatory, administrative or
governmental agency, body or authority.
(ff) The Company and each of its Subsidiaries are in compliance with
all applicable capital requirements. The Company and each of its
Subsidiaries are "well capitalized" as defined in FDIC regulations and will
be "well capitalized" after the payment of any special assessment levied by
the FDIC, and neither the Company nor any Subsidiary is, to the Company's
knowledge, threatened with or being considered for receivership or any
special supervision by the FRB, the FDIC, the New York State Banking
Department (in the case of WCB, PSB and FTB) or the Office of the
Comptroller of the Currency (in the case of the NBG).
(gg) The Company is a "bank holding company" within the meaning of the
Bank Holding Company Act of 1956, as amended.
(hh) The Company has not offered, or caused the Underwriters to offer,
Shares to any person pursuant to the Directed Share Program with the
specific intent to unlawfully influence (i) a customer or supplier of the
Company to alter the customer's or supplier's level or type of business
with the Company or (ii) a trade journalist or publication to write or
publish favorable information about the Company or its business.
5. Representations and Warranties of the Selling Shareholder. The Selling
---------------------------------------------------------
Shareholder hereby represents and warrants to each Underwriter as follows:
(a) The Selling Shareholder has caused certificates for the number of
Shares to be sold by the Selling Shareholder hereunder to be delivered to
Xxxxx X. Xxxxxxxx, endorsed in blank or with blank stock powers duly
executed, with a signature appropriately guaranteed, such certificates to
be held in custody by the Custodian for delivery, pursuant to the
provisions of this Agreement and an agreement dated June __, 1999 between
the Custodian and the Selling Shareholder (the "Custody Agreement").
(b) The Selling Shareholder has granted an irrevocable power of
attorney (the "Power of Attorney") to the person named therein, on behalf
of the Selling Shareholder, to execute and deliver this Agreement and any
other document necessary or desirable in connection with the transactions
contemplated hereby and to deliver the shares to be sold by the Selling
Shareholder pursuant hereto.
(c) This Agreement, the Custody Agreement and the Power of Attorney
have each been duly authorized, executed and delivered by or on behalf of
the Selling Shareholder and, assuming due authorization, execution and
delivery by the other parties hereto or thereto, each constitutes the valid
and legally binding agreement of the Selling Shareholder, enforceable
against the Selling Shareholder in accordance with its terms.
12
(d) The execution and delivery by the Selling Shareholder of this
Agreement and the performance by the Selling Shareholder of its obligations
under this Agreement (i) will not contravene any provision of applicable
law, statute, regulation or filing or any agreement or other instrument
binding upon the Selling Shareholder or any judgment, order or decree of
any governmental body, agency or court having jurisdiction over the Selling
Shareholder, (ii) does not require any consent, approval, authorization or
order of or registration or filing with any court or governmental agency or
body having jurisdiction over it, except such as may be required by the
Blue Sky laws of the various states in connection with the offer and sale
of the Shares which have been or will be effected in accordance with this
Agreement, (iii) does not and will not violate any statute, law, regulation
or filing or judgment, injunction, order or decree applicable to the
Selling Shareholder and (iv) will not result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of the
Selling Shareholder pursuant to the terms of any agreement or instrument to
which the Selling Shareholder is a party or by which the Selling
Shareholder may be bound or to which any of the property or assets of the
Selling Shareholder is subject.
(e) The Selling Shareholder has, and on the Firm Shares Closing Date
will have, valid and marketable title to the Shares to be sold by the
Selling Shareholder free and clear of any lien, claim, security interest or
other encumbrance, including any restriction on transfer.
(f) The Selling Shareholder has, and on the Firm Shares Closing Date
will have, full legal right, power and authorization, and any approval
required by law, to sell, assign, transfer and deliver the Shares to be
sold by the Selling Shareholder in the manner provided by this Agreement.
(g) Upon delivery of and payment for the Shares to be sold by the
Selling Shareholder pursuant to this Agreement, the several Underwriters
will receive valid and marketable title to such Shares free and clear of
any lien, claim, security interest or other encumbrance.
(h) All information relating to the Selling Shareholder furnished in
writing by the Selling Shareholder expressly for use in the Registration
Statement and Prospectus is, and on each Closing Date will be, true,
correct and complete, and does not, and on each Closing Date will not,
contain any untrue statement of a material fact or omit to state any
material fact necessary to make such information not misleading.
(i) The Selling Shareholder has no reason to believe that any
representation or warranty of the Company set forth in Section 4 above is
untrue or inaccurate in any material respect.
(j) The representations and warranties of the Selling Shareholder in
the Custody Agreement are, and on each Closing Date will be, true and
correct.
13
6. Conditions of the Underwriters' Obligations. The obligations of the
-------------------------------------------
Underwriters under this Agreement are several and not joint. The respective
obligations of the Underwriters to purchase the Shares are subject to each of
the following terms and conditions:
(a) Notification that the Registration Statement has become effective
shall have been received by the Representatives and the Prospectus shall
have been timely filed with the Commission in accordance with Section
7(a)(i) of this Agreement.
(b) No order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus shall have been or shall be in effect and no
order suspending the effectiveness of the Registration Statement shall be
in effect and no proceedings for such purpose shall be pending before or
threatened by the Commission, and any requests for additional information
on the part of the Commission (to be included in the Registration Statement
or the Prospectus or otherwise) shall have been complied with to the
satisfaction of the Commission and the Representatives.
(c) The representations and warranties of the Company and the Donors
and the Selling Shareholder contained in this Agreement and in the
certificates delivered pursuant to Sections 6(d) and 6(e) shall be true and
correct when made and on and as of each Closing Date as if made on such
date. The Company and the Selling Shareholder shall have performed all
covenants and agreements and satisfied all the conditions contained in this
Agreement required to be performed or satisfied by them at or before such
Closing Date.
(d) The Representatives shall have received on each Closing Date a
certificate, addressed to the Representatives and dated such Closing Date,
of the chief executive officer and the chief financial officer of the
Company in their capacities as such, to the effect that (i) they have
carefully examined the Registration Statement, the Prospectus and this
Agreement and that the representations and warranties of the Company in
this Agreement are true and correct on and as of such Closing Date with the
same effect as if made on such Closing Date and the Company has performed
all covenants and agreements and satisfied all conditions contained in this
Agreement required to be performed or satisfied by it at or prior to such
Closing Date, and (ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and to the best of their knowledge,
no proceedings for that purpose have been instituted or are pending under
the Securities Act.
(e) The Representatives shall have received on each Closing Date a
certificate, addressed to the Representatives and dated such Closing Date,
of the Selling Shareholder, to the effect that the representations and
warranties of the Selling Shareholder in this Agreement are true and
correct on and as of such Closing Date with the same effect as if made on
such Closing Date and the Selling Shareholder has performed all covenants
and agreements and satisfied all conditions contained in this Agreement
required to be performed or satisfied by it at or prior to such Closing
Date.
14
(f) The Representatives shall have received at the time this Agreement
is executed and on each Closing Date a signed letter from KPMG LLP
addressed to the Representatives and dated, respectively, the date of this
Agreement and each such Closing Date, in form and substance reasonably
satisfactory to the Representatives, confirming that they are independent
accountants within the meaning of the Securities Act and the Rules, that
the response to Item 10 of the Registration Statement is correct insofar as
it relates to them and stating in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules included in the Registration Statement
and the Prospectus and reported on by them comply as to form in all
material respects with the applicable accounting requirements of the
Securities Act and the Rules;
(ii) on the basis of a reading of the amounts included in the
Registration Statement and the Prospectus under the headings
"Prospectus Summary--Summary Consolidated Financial Data" and
"Selected Consolidated Financial Data," carrying out certain
procedures (but not an examination in accordance with generally
accepted auditing standards) which would not necessarily reveal
matters of significance with respect to the comments set forth in such
letter, a reading of the minutes of the meetings of the shareholders
and directors of the Company, and inquiries of certain officials of
the Company who have responsibility for financial and accounting
matters of the Company as to transactions and events subsequent to the
date of the latest audited financial statements, except as disclosed
in the Registration Statement and the Prospectus, nothing came to
their attention which caused them to believe that:
(A) the amounts in "Prospectus Summary--Summary Consolidated
Financial Data" and "Selected Consolidated Financial Data" included
in the Registration Statement and the Prospectus do not agree with
the corresponding amounts in the audited and unaudited financial
statements from which such amounts were derived; or
(B) with respect to the Company, there were, at a specified
date not more than five business days prior to the date of the
letter, any increases in the current liabilities and long-term
liabilities of the Company or any decreases in net income or in
working capital or the shareholders' equity in the Company, as
compared with the amounts shown on the Company's audited balance
sheet for the fiscal year ended December 31, 1998 and the three
months ended March 31, 1999 included in the Registration Statement;
(iii) they have performed certain other procedures as may be
permitted under Generally Acceptable Auditing Standards as a result of
which they determined that certain information of an accounting,
financial or statistical nature (which is limited to accounting,
financial or statistical information derived from the general
accounting records of the Company) set forth in the Registration
15
Statement and the Prospectus and reasonably specified by the
Representatives agrees with the accounting records of the Company; and
(iv) based upon the procedures set forth in clauses (ii) and
(iii) above and a reading of the amounts included in the Registration
Statement under the headings "Prospectus Summary--Summary Consolidated
Financial Data" and "Selected Consolidated Financial Data" included in
the Registration Statement and Prospectus and a reading of the
financial statements from which certain of such data were derived,
nothing has come to their attention that gives them reason to believe
that the "Prospectus Summary--Summary Consolidated Financial Data" and
"Selected Consolidated Financial Data" included in the Registration
Statement and Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the Securities
Act and the Rules or that the information set forth therein is not
fairly stated in relation to the financial statements included in the
Registration Statement or Prospectus from which certain of such data
were derived and are not in conformity with generally accepted
accounting principles applied on a basis substantially consistent with
that of the audited financial statements included in the Registration
Statement and Prospectus.
References to the Registration Statement and the Prospectus in this
paragraph (g) are to such documents as amended and supplemented at the date
of the letter.
(g) The Representatives shall have received on each Closing Date from
Nixon, Hargrave, Devans & Xxxxx LLP, counsel for the Company and the
Selling Shareholder, an opinion, addressed to the Representatives and dated
such Closing Date, and stating in effect that:
(i) Each of the Company and its Non-Banking Subsidiaries (as set
forth on Schedule II-A) has been duly organized and is validly
existing as a corporation in good standing under the laws of the State
of New York; and each of its Banking Subsidiaries (as set forth on
Schedule II) has been duly organized and is validly existing and in
good standing (i) with respect to Wyoming County Bank, The Pavilion
State Bank and First Tier Bank & Trust, as banking corporations formed
pursuant to Article III of the New York Banking Law and (ii) with
respect to the National Bank of Geneva, as a national banking
association formed under the laws of the United States (collectively,
the "Subsidiaries"). Each of the Company and its Subsidiaries is duly
qualified and in good standing as a foreign corporation in each
jurisdiction in which the character or location of its assets or
properties (owned, leased or licensed) or the nature of its businesses
makes such qualification necessary, except for such jurisdictions
where the failure to so qualify individually or in the aggregate would
not have a Material Adverse Effect.
16
(ii) Each of the Company and its Subsidiaries has all requisite
corporate power and authority to own, lease and license its assets and
properties and conduct its business as now being conducted and as
described in the Registration Statement and the Prospectus and, with
respect to the Company, to enter into, deliver and perform this
Agreement and to issue and sell the Shares to be issued by it.
(iii) The Company has an authorized and issued capital stock as
set forth in the Registration Statement and the Prospectus under the
caption "Capitalization"; the certificates evidencing the Shares are
in due and proper legal form and have been duly authorized for
issuance by the Company; all of the outstanding shares of Common Stock
of the Company have been duly and validly authorized and issued and
are fully paid and nonassessable and none of them was issued in
violation of any preemptive or other similar right. The Shares to be
issued by the Company, when issued and sold pursuant to this
Agreement, will be duly and validly issued, outstanding, fully paid
and nonassessable and none of them will have been issued in violation
of any preemptive or other similar right. There are no preemptive
rights or any restrictions upon the voting or transfer of any
securities of the Company pursuant to the Company's Certificate of
Incorporation or by-laws or other governing documents or any other
instrument to which the Company is a party or by which it may be
bound. To the best of such counsel's knowledge, except as set forth
in the Prospectus, there is no outstanding option, warrant or other
right calling for the issuance of any shares of Common Stock (other
than the Shares) or any security convertible into, exercisable for, or
exchangeable for Common Stock. The capital stock of the Company
conforms in all material respects to the descriptions thereof
contained in the Registration Statement and the Prospectus.
(iv) The issued and outstanding shares of capital stock of each
of the Company's Subsidiaries have been duly authorized and validly
issued, are fully paid and nonassessable and, except for (i) 90 shares
of the common stock of NBG (representing a 0.90% fully diluted equity
interest in NBG) and (ii) 306.25 shares of the common stock of WCB
(representing a 0.35% fully diluted equity interest in WCB), are owned
directly by the Company, free and clear of any perfected security
interest or, to the knowledge of such counsel, any other security
interests, liens, encumbrances, equities or claims, other than those
contained in the Registration Statement and the Prospectus.
(v) All necessary corporate action has been duly and validly
taken by the Company to authorize the execution, delivery and
performance of this Agreement and the issuance and sale of the Shares
to be issued by the Company. This Agreement has been duly and
validly authorized, executed and delivered by the Company.
17
(vi) Neither the execution, delivery and performance of this
Agreement by the Company nor the consummation of any of the
transactions contemplated hereby (including the issuance and sale by
the Company of the Shares) will give rise to a right to terminate or
accelerate the due date of any payment due under, or conflict with or
result in the breach of any term or provision of, or constitute a
default (or any event which with notice or lapse of time, or both,
would constitute a default) under, or require consent or waiver under,
or result in the execution or imposition of any lien, charge or
encumbrance upon any properties or assets of the Company or the
Subsidiaries pursuant to the terms of any indenture, mortgage, deed of
trust, note or other agreement or instrument of which such counsel is
aware and to which the Company or any of the Subsidiaries is a party
or by which the Company or any of the Subsidiaries or any of their
properties or businesses is bound, or any franchise, license, permit,
judgment, decree, order, statute, rule or regulation of which such
counsel is aware or violate any provision of the charter or by-laws of
the Company or any Subsidiary.
(vii) To the best of such counsel's knowledge, no default
exists, and no event has occurred which with notice or lapse of time,
or both, would constitute a default in the due performance and
observance of any term, covenant or condition by the Company or the
Subsidiaries of any indenture, mortgage, deed of trust, note or any
other agreement or instrument to which the Company or any of the
Subsidiaries is a party or by which any of their assets, properties or
businesses may be bound or affected, where the consequences of such
default individually or in the aggregate would have a Material Adverse
Effect.
(viii) To the best of such counsel's knowledge, the Company and
its Subsidiaries are not in violation of any (A) term or provision of
their charter or by-laws or (B) any franchise, license, permit,
judgment, decree, order, statute, rule or regulation (except where the
consequences of the violation of this subsection (B), individually or
in the aggregate, would not have a Material Adverse Effect).
(ix) No consent, approval, authorization or order of any court or
governmental agency or regulatory body is required for the execution,
delivery or performance of this Agreement by the Company or the
consummation of the transactions contemplated hereby, except such as
have been obtained under the Securities Act and such as may be
required under state securities or Blue Sky laws in connection with
the purchase and distribution of the Shares by the several
Underwriters.
(x) To the best of such counsel's knowledge, there is no
litigation or governmental or other proceeding or investigation,
before any court or before or by any public body or board pending or
threatened against, or involving the assets, properties or businesses
of, the Company or its Subsidiaries which individually or in the
aggregate could have a Material Adverse Effect.
18
(xi) The statements in the Prospectus under the captions "Risk
Factors--Our Business is Highly Regulated," "Management's Discussion
and Analysis of Financial Condition and Results of Operations--
Financial Condition--Government Guarantee Programs," "Supervision and
Regulation," "Management--Stock Option Plan," "Management--Defined
Benefit Plan," "Certain Related Transactions," "Description of Capital
Stock," "Shares Eligible for Future Sale" and Item 14 of the
Registration Statement, insofar as such statements constitute a
summary of documents referred to therein or matters of law, are fair
summaries in all material respects and accurately present the
information called for with respect to such documents and matters.
Accurate copies of all contracts and other documents of which such
counsel is aware that are required to be filed as exhibits to, or
described in, the Registration Statement have been so filed with the
Commission or are fairly described in the Registration Statement, as
the case may be.
(xii) The Registration Statement, the Preliminary Prospectus
dated June 11, 1999 and the Prospectus and each amendment or
supplement thereto (except for the financial statements and schedules
and other financial and statistical data included therein, as to which
such counsel expresses no opinion) comply as to form in all material
respects with the requirements of the Securities Act and the Rules.
(xiii) The Registration Statement is effective under the
Securities Act, and no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to such counsel's knowledge, are
threatened, pending or contemplated. Any required filing of the
Prospectus and any supplement thereto pursuant to Rule 424(b) under
the Securities Act has been made in the manner and within the time
period required by such Rule 424(b).
(xiv) The Company is not an "investment company" or an entity
controlled by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended.
(xv) The Selling Shareholder has full legal right, power and
authority to enter into this Agreement, the Custody Agreement and the
Power of Attorney, and to sell, transfer and deliver in the manner
provided in this Agreement, the Shares to be sold by the Selling
Shareholder hereunder.
(xvi) This Agreement has been duly and validly authorized,
executed and delivered by or on behalf of the Selling Shareholder.
(xvii) The Custody Agreement and the Power of Attorney have been
duly and validly authorized, executed and delivered by the Selling
Shareholder, and each constitutes a valid and binding obligation of
the Selling Shareholder.
19
(xviii) The transfer and sale by the Selling Shareholder of the
Shares as contemplated by this Agreement will not conflict with,
result in a breach of, or constitute a default under any agreement or
instrument known to such counsel to which the Selling Shareholder is a
party or by which the Selling Shareholder or any of its properties may
be bound, or any franchise, license, permit, judgment, decree, order,
statute, rule or regulation known to such counsel.
(xix) Assuming the Underwriters are "protected purchasers" (as
defined under Section 8-303 of the New York Commercial Code), upon
delivery of the certificates by the Selling Shareholder for any Shares
to be sold against payment therefor, the Underwriters will acquire
valid and marketable title to such Shares, free and clear of any
security interest or "adverse claims" within the meaning of Section 8-
102 of the New York Commercial Code.
(xx) Any consent, approval, authorization, license, certificate,
permit or order of any court, governmental or regulatory agency,
authority or body or financial institution that is required in
connection with the performance of this Agreement by the Selling
Shareholder or the consummation of the transactions contemplated
hereby, including the delivery and sale of the Shares to be delivered
and sold by the Selling Shareholder, except such as may be required
under state securities or blue sky laws in connection with the
purchase and distribution of the Shares by the several Underwriters,
has been obtained.
Such counsel may rely as to matters of fact on certificates of
responsible officers of the Company, the Selling Shareholder and public
officials. Copies of such certificates and other opinions shall be
furnished to the Representatives and counsel for the Underwriters.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of the
Company, representatives of the Representatives and representatives of the
independent certified public accountants of the Company, at which
conferences the contents of the Registration Statement and the Prospectus
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 the Prospectus (except as specified in the foregoing
opinion), 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 at the time it became effective (except with respect
to the financial statements and schedules and other financial data, as to
which such counsel need express no opinion) contained any untrue statement
of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading,
or that the Prospectus as amended or supplemented (except with respect to
the financial statements and schedules and other financial data, as to
which such counsel need express no opinion) on the date thereof contained
any untrue statement of a material fact or
20
omitted to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(h) All proceedings taken in connection with the sale of the Firm
Shares and the Option Shares as herein contemplated shall be reasonably
satisfactory in form and substance to the Representatives and their counsel
and the Underwriters shall have received from Xxxxxx, Xxxx & Xxxxxxxx LLP a
favorable opinion, addressed to the Representatives and dated such Closing
Date, with respect to the Shares, the Registration Statement and the
Prospectus, and such other related matters, as the Representatives may
reasonably request, and the Company shall have furnished to Xxxxxx, Xxxx &
Xxxxxxxx LLP such documents as they may reasonably request for the purpose
of enabling them to pass upon such matters.
(i) The Representatives shall have received copies of the Lock-Up
Agreements executed by each entity or person set forth on Schedule III
hereto.
(j) The Company and the Selling Shareholder shall have furnished or
caused to be furnished to the Representatives such further certificates or
documents as the Representatives shall have reasonably requested.
7. Covenants of the Company.
------------------------
(a) The Company covenants and agrees with each Underwriter as follows:
(i) The Company shall prepare the Prospectus in a form approved
by the Representatives and file such Prospectus pursuant to Rule
424(b) under the Securities Act not later than the Commission's close
of business on the second business day following the execution and
delivery of this Agreement, or, if applicable, such earlier time as
may be required by Rule 430A(a)(3) under the Securities Act.
(ii) The Company shall promptly advise the Representatives in
writing (A) when any amendment to the Registration Statement shall
have become effective, (B) of any request by the Commission for any
amendment of the Registration Statement or the Prospectus or for any
additional information, (C) of the prevention or suspension of the use
of any preliminary prospectus or the Prospectus or of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or the institution or threatening of any
proceeding for that purpose and (D) of the receipt by the Company of
any notification with respect to the suspension of the qualification
of the Shares for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose. The Company shall not
file any amendment of the Registration Statement or supplement to the
Prospectus unless the Company has furnished the Representatives a copy
for its review prior to filing and shall not file any such proposed
amendment or supplement to which the Representatives reasonably
21
object. The Company shall use its best efforts to prevent the
issuance of any such stop order and, if issued, to obtain as soon as
possible the withdrawal thereof.
(iii) If, at any time when a prospectus relating to the Shares
is required to be delivered under the Securities Act and the Rules,
any event occurs as a result of which the Prospectus as then amended
or supplemented would include any untrue statement of a material fact
or omit to state any material fact necessary to make the statements
therein in the light of the circumstances under which they were made
not misleading, or if it shall be necessary to amend or supplement the
Prospectus to comply with the Securities Act or the Rules, the Company
promptly shall prepare and file with the Commission, subject to the
second sentence of paragraph (ii) of this Section 7(a), an amendment
or supplement which shall correct such statement or omission or an
amendment which shall effect such compliance.
(iv) The Company shall make generally available to its security
holders and to the Representatives as soon as practicable, but not
later than 45 days after the end of the 12-month period beginning at
the end of the fiscal quarter of the Company during which the
Effective Date occurs (or 90 days if such 12-month period coincides
with the Company's fiscal year), an earning statement (which need not
be audited) of the Company, covering such 12-month period, which shall
satisfy the provisions of Section 11(a) of the Securities Act or Rule
158 of the Rules.
(v) The Company shall furnish to the Representatives and counsel
for the Underwriters, without charge, signed copies of the
Registration Statement (including all exhibits thereto and amendments
thereof) and to each other Underwriter a copy of the Registration
Statement (without exhibits thereto) and all amendments thereof and,
so long as delivery of a prospectus by an Underwriter or dealer may be
required by the Securities Act or the Rules, as many copies of any
preliminary prospectus and the Prospectus and any amendments thereof
and supplements thereto as the Representatives may reasonably request.
(vi) The Company shall cooperate with the Representatives and
their counsel in endeavoring to qualify the Shares for offer and sale
in connection with the offering under the laws of such jurisdictions
as the Representatives may designate and shall maintain such
qualifications in effect so long as required for the distribution of
the Shares; provided, however, that the Company shall not be required
in connection therewith, as a condition thereof, to qualify as a
foreign corporation or to execute a general consent to service of
process in any jurisdiction or subject itself to taxation as doing
business in any jurisdiction.
(vii) Without the prior written consent of CIBC World Markets,
for a period of 180 days after the date of this Agreement, the Company
shall not (A) issue, register with the Commission (other than on Form
S-8 or on any
22
successor form), offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase, lend, or
otherwise transfer or dispose of, directly or indirectly, any shares
of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or (B) enter into any swap or other
arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Common Stock, whether any
such transaction described in clause (A) or (B) above is to be settled
by delivery of Common Stock or such other securities, in cash or
otherwise. The foregoing sentence shall not apply to the issuance of
the Shares pursuant to the Registration Statement and the grant of
options and the issuance of shares pursuant to the Company's stock
incentive plans as described in the Registration Statement and the
Prospectus. In the event that during this period, (1) any shares are
issued pursuant to the Company's stock incentive plans or any other
compensation plan that are exercisable during such 180 day period or
(2) any registration is effected on Form S-8 or on any successor form
relating to shares that are exercisable during such 180 day period,
the Company shall cause each such grantee or purchaser or holder of
such registered securities to enter into a Lock-Up Agreement in the
form set forth on Schedule IV hereto.
(viii) On or before completion of this offering, the Company
shall make all filings required under applicable securities laws and
by the Nasdaq National Market (including any required registration
under the Exchange Act).
(b) The Company agrees to pay, or reimburse if paid by the
Representatives, whether or not the transactions contemplated hereby are
consummated or this Agreement is terminated, the following costs and
expenses incident to the public offering of the Shares and the performance
of the obligations of the Company and the Selling Shareholder under this
Agreement including those relating to: (i) the preparation, printing,
filing and distribution of the Registration Statement including all
exhibits thereto, each preliminary prospectus, the Prospectus, all
amendments and supplements to the Registration Statement and the
Prospectus, and the printing, filing and distribution of this Agreement;
(ii) the preparation and delivery of certificates for the Shares; (iii) the
registration or qualification of the Shares for offer and sale under the
securities or Blue Sky laws of the various jurisdictions referred to in
Section 7(a)(vi), including the reasonable fees and disbursements of
counsel for the Underwriters in connection with such registration and
qualification and the preparation, printing, distribution and shipment of
preliminary and supplementary Blue Sky memoranda; (iv) the furnishing
(including costs of shipping and mailing) to the Representatives and to the
Underwriters of copies of each preliminary prospectus, the Prospectus and
all amendments or supplements to the Prospectus, and of the several
documents required by this Section to be so furnished, as may be reasonably
requested for use in connection with the offering and sale of the Shares by
the Underwriters or by dealers to whom Shares may be sold; (v) the filing
fees of the NASD in connection with its review of the terms of the public
offering and reasonable fees and disbursements of counsel for the
Underwriters in connection with
23
such review; (vi) inclusion of the Shares for quotation on the Nasdaq
National Market; (vii) the Company's share of all marketing and road show
expenses; and (viii) all transfer taxes, if any, with respect to the sale
and delivery of the Shares by the Company and the Selling Shareholder to
the Underwriters. Subject to the provisions of Section 7(d) and Section 10,
the Underwriters agree to pay, whether or not the transactions contemplated
hereby are consummated or this Agreement is terminated, all costs and
expenses incident to the performance of the obligations of the Underwriters
under this Agreement, including the fees and disbursements of counsel for
the Underwriters.
(c) In connection with the Directed Share Program, the Company will
cause the Directed Shares to be restricted to the extent required by the
NASD or its rules from sale, transfer, assignment, pledge or hypothecation
for a period of three months following the date of the effectiveness of the
Registration Statement. CIBC World Markets will notify the Company in
writing prior to the Closing Date as to which Participants will need to be
so restricted. At the written request of CIBC World Markets, the Company
will direct the transfer agent to place stop transfer restrictions upon
such securities for such period of time.
(d) The Company agrees to pay, or reimburse if paid by the
Underwriters, all stamp duties, similar taxes or duties or other taxes, if
any, incurred by the Underwriters in connection with the Directed Share
Program.
8. Indemnification.
----------------
(a) The Company and the Selling Shareholder agree, jointly and
severally, to indemnify and hold harmless each Underwriter and each person,
if any, who controls any Underwriter within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act against any and all
losses, claims, damages and liabilities, joint or several (including any
reasonable investigation, legal and other expenses incurred in connection
with, and any amount paid in settlement of, any action, suit or proceeding
or any claim asserted), to which they, or any of them, may become subject
under the Securities Act, the Exchange Act or other Federal or state law or
regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in any preliminary
prospectus, the Registration Statement or the Prospectus or any amendment
thereof or supplement thereto, or arise out of or are based upon any
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading; provided, however, that such indemnity shall not inure to the
benefit of any Underwriter (or any person controlling such Underwriter) on
account of any losses, claims, damages or liabilities arising from the sale
of the Shares to any person by such Underwriter if such untrue statement or
omission or alleged untrue statement or omission was made in such
preliminary prospectus, the Registration Statement or the Prospectus, or
such amendment or supplement, in reliance upon and in conformity with
information furnished in writing to the Company by the Representatives on
behalf of any Underwriter specifically for use therein. Notwithstanding
the foregoing,
24
the liability of the Selling Shareholder pursuant to the provisions of
Section 8(a) shall be limited to an amount equal to the aggregate net
proceeds received by the Selling Shareholder from the sale of the Shares
sold by the Selling Shareholder hereunder. This indemnity agreement will be
in addition to any liability which the Company and the Selling Shareholder
may otherwise have.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company and the Selling Shareholder and each person,
if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, each director of the
Company, and each officer of the Company who signs the Registration
Statement, to the same extent as the foregoing indemnity from the Company,
the Donors and the Selling Shareholder to each Underwriter, but only
insofar as such losses, claims, damages or liabilities arise out of or are
based upon any untrue statement or omission or alleged untrue statement or
omission with respect to such Underwriter which was made in any preliminary
prospectus, the Registration Statement or the Prospectus, or any amendment
thereof or supplement thereto, appearing under the caption "Underwriting"
in the Prospectus.
(c) Any party that proposes to assert the right to be indemnified
under this Section will, promptly after receipt of notice of commencement
of any action, suit or proceeding against such party in respect of which a
claim is to be made against an indemnifying party or parties under this
Section, notify each such indemnifying party of the commencement of such
action, suit or proceeding, enclosing a copy of all papers served. No
indemnification provided for in Section 8(a) or 8(b) shall be available to
any party who shall fail to give notice as provided in this Section 8(c) if
the party to whom notice was not given was unaware of the proceeding to
which such notice would have related and was prejudiced by the failure to
give such notice, but the omission so to notify such indemnifying party of
any such action, suit or proceeding shall not relieve it from any liability
that it may have to any indemnified party for contribution or otherwise
than under this Section. In case any such action, suit or proceeding shall
be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party
shall be entitled to participate in, and, to the extent that it shall wish,
jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified
party, and after notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof and the approval by
the indemnified party of such counsel, the indemnifying party shall not be
liable to such indemnified party for any legal or other expenses, except as
provided below and except for the reasonable costs of investigation
subsequently incurred by such indemnified party in connection with the
defense thereof. The indemnified party shall have the right to employ its
counsel in any such action, but the fees and expenses of such counsel shall
be at the expense of such indemnified party unless (i) the employment of
counsel by such indemnified party has been authorized in writing by the
indemnifying party, (ii) the indemnified party shall have been advised by
counsel that there may be one or more legal defenses available to it which
are different from or additional to those available to the indemnifying
party (in which case the
25
indemnifying parties shall not have the right to direct the defense of such
action on behalf of the indemnified party) or (iii) the indemnifying
parties shall not have employed counsel to assume the defense of such
action within a reasonable time after notice of the commencement thereof,
in each of which cases the fees and expenses of counsel shall be at the
expense of the indemnifying party. An indemnifying party shall not be
liable for any settlement of any action, suit, proceeding or claim effected
without its written consent.
(d) The provisions of this Section 8 shall not supersede or otherwise
affect any agreement that the Company and the Selling Shareholder may
otherwise have for the allocation of indemnification obligations among
themselves.
9. Contribution. In order to provide for just and equitable contribution
------------
in circumstances in which the indemnification provided for in Section 8(a) or
8(b) for any reason is held to be unavailable to or insufficient to hold
harmless an indemnified party under Section 8(a) or 8(b), then each indemnifying
party shall contribute to the aggregate losses, claims, damages and liabilities
(including any investigation, legal and other expenses reasonably incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claims asserted, but after deducting any contribution received
by any person entitled hereunder to contribution from any person who may be
liable for contribution) to which the indemnified party may be subject in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Selling Shareholder on the one hand and the Underwriters on the
other from the offering of the Shares or, if such allocation is not permitted by
applicable law or indemnification is not available as a result of the
indemnifying party not having received notice as provided in Section 8 hereof,
in such proportion as is appropriate to reflect not only the relative benefits
referred to above but also the relative fault of the Company and the Selling
Shareholder on the one hand and the Underwriters on the other in connection with
the statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company, the Selling Shareholder and the
Underwriters shall be deemed to be in the same proportion as (x) the total
proceeds from the offering (net of underwriting discounts but before deducting
expenses) received by the Company and the Selling Shareholder, as set forth in
the table on the cover page of the Prospectus, bear to (y) the underwriting
discounts received by the Underwriters, as set forth in the table on the cover
page of the Prospectus. The relative fault of the Company, the Selling
Shareholder or the Underwriters shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact
related to information supplied by the Company or the Selling Shareholder or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company,
the Selling Shareholder and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this Section 9, (i) in no case shall any Underwriter (except as may be provided
in the Agreement Among Underwriters) be liable or responsible for any amount in
excess of the underwriting discount applicable to the Shares purchased by such
26
Underwriter hereunder; (ii) the Company shall be liable and responsible for any
amount in excess of such underwriting discount; and (iii) in no case shall the
Selling Shareholder be liable and responsible for any amount in excess of the
aggregate net proceeds of the sale of Shares received by the Selling
Shareholder; provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 9, each person, if
any, who controls an Underwriter within the meaning of Section 15 of the
Securities Act or Section 20(a) of the Exchange Act shall have the same rights
to contribution as such Underwriter, and each person, if any, who controls the
Company or the Selling Shareholder within the meaning of the Section 15 of the
Securities Act or Section 20(a) of the Exchange Act, each officer of the Company
who shall have signed the Registration Statement and each director of the
Company shall have the same rights to contribution as the Company or the Selling
Shareholder, subject in each case to clauses (i) and (ii) in the immediately
preceding sentence of this Section 9. Any party entitled to contribution will,
promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution may
be made against another party or parties under this Section, notify such party
or parties from whom contribution may be sought, but the omission so to notify
such party or parties from whom contribution may be sought shall not relieve the
party or parties from whom contribution may be sought from any other obligation
it or they may have hereunder or otherwise than under this Section. No party
shall be liable for contribution with respect to any action, suit, proceeding or
claim settled without its written consent. The Underwriter's obligations to
contribute pursuant to this Section 9 are several in proportion to their
respective underwriting commitments and not joint.
The provisions of this Section 9 shall not supersede or otherwise affect
any agreement that the Company, the Donors and the Selling Shareholder may
otherwise have for the allocation of contribution obligations among themselves.
10. Termination. This Agreement may be terminated with respect to the
-----------
Shares to be purchased on a Closing Date by the Representatives by notifying the
Company and the Selling Shareholder at any time:
(a) in the absolute discretion of the Representatives at or before any
Closing Date: (i) if on or prior to such date, any domestic or
international event or act or occurrence has materially disrupted, or in
the opinion of the Representatives will in the future materially disrupt,
the securities markets; (ii) if there has occurred any new outbreak or
material escalation of hostilities or other calamity or crisis the effect
of which on the financial markets of the United States is such as to make
it, in the judgment of the Representatives, inadvisable to proceed with the
offering; (iii) if there shall be such a material adverse change in general
financial, political or economic conditions or the effect of international
conditions on the financial markets in the United States is such as to make
it, in the judgment of the Representatives, inadvisable or impracticable to
market the Shares; (iv) if trading in the Shares has been suspended by the
Commission or trading generally on the New York Stock Exchange, Inc., on
the American Stock Exchange, Inc. or the Nasdaq National Market has been
suspended or limited, or minimum or maximum
27
ranges for prices for securities shall have been fixed, or maximum ranges
for prices for securities have been required, by said exchanges or by order
of the Commission, the NASD or any other governmental or regulatory
authority; (v) if a banking moratorium has been declared by any state or
Federal authority; or (vi) if, in the judgment of the Representatives,
there has occurred a Material Adverse Effect; or
(b) at or before any Closing Date, that any of the conditions
specified in Section 6 shall not have been fulfilled when and as required
by this Agreement, or waived in writing by CIBC World Markets Corp. on
behalf of the Underwriters.
If this Agreement is terminated pursuant to this Section 10, neither the
Company nor the Selling Shareholder shall be under any liability to any
Underwriter, and no Underwriter shall be under any liability to the Company or
the Selling Shareholder, except that (y) if this Agreement is terminated by the
Representatives or the Underwriters because of any failure, refusal or inability
on the part of the Company, the Donors or the Selling Shareholder to comply with
the terms or to fulfill any of the conditions of this Agreement, the Company
will reimburse the Underwriters for all reasonable out-of-pocket expenses
(including the reasonable fees and disbursements of their counsel) incurred by
them in connection with the proposed purchase and sale of the Shares or in
contemplation of performing their obligations hereunder and (z) no Underwriter
who shall have failed or refused to purchase the Shares agreed to be purchased
by it under this Agreement, without some reason sufficient hereunder to justify
cancellation or termination of its obligations under this Agreement, shall be
relieved of liability to the Company, the Selling Shareholder or to the other
Underwriters for damages occasioned by its failure or refusal.
11. Substitution of Underwriters. If one or more of the Underwriters shall
----------------------------
fail (other than for a reason sufficient to justify the cancellation or
termination of this Agreement under Section 10) to purchase on any Closing Date
the Shares agreed to be purchased on such Closing Date by such Underwriter or
Underwriters, the Representatives may find one or more substitute underwriters
to purchase such Shares or make such other arrangements as the Representatives
may deem advisable or one or more of the remaining Underwriters may agree to
purchase such Shares in such proportions as may be approved by the
Representatives, in each case upon the terms set forth in this Agreement. If no
such arrangements have been made by the close of business on the business day
following such Closing Date,
(a) if the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date shall not exceed 10% of the Shares that
all the Underwriters are obligated to purchase on such Closing Date, then
each of the nondefaulting Underwriters shall be obligated to purchase such
Shares on the terms herein set forth in proportion to their respective
obligations hereunder; provided, that in no event shall the maximum number
of Shares that any Underwriter has agreed to purchase pursuant to Section 1
be increased pursuant to this Section 11 by more than one-ninth of such
number of Shares without the written consent of such Underwriter, or
28
(b) if the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date shall exceed 10% of the Shares that all
the Underwriters are obligated to purchase on such Closing Date, then the
Company shall be entitled to one additional business day within which it
may, but is not obligated to, find one or more substitute underwriters
reasonably satisfactory to the Representatives to purchase such Shares upon
the terms set forth in this Agreement.
In any such case, either the Representatives or the Company shall have the
right to postpone the applicable Closing Date for a period of not more than five
business days in order that necessary changes and arrangements (including any
necessary amendments or supplements to the Registration Statement or Prospectus)
may be effected by the Representatives and the Company. If the number of Shares
to be purchased on such Closing Date by such defaulting Underwriter or
Underwriters shall exceed 10% of the Shares that all the Underwriters are
obligated to purchase on such Closing Date, and none of the nondefaulting
Underwriters or the Company shall make arrangements pursuant to this Section
within the period stated for the purchase of the Shares that the defaulting
Underwriters agreed to purchase, this Agreement shall terminate with respect to
the Shares to be purchased on such Closing Date without liability on the part of
any nondefaulting Underwriter to the Company or the Selling Shareholder and
without liability on the part of the Company and the Selling Shareholder, except
in both cases as provided in Sections 7(b), 8, 9 and 10. The provisions of this
Section shall not in any way affect the liability of any defaulting Underwriter
to the Company, the Selling Shareholder or the nondefaulting Underwriters
arising out of such default. A substitute underwriter hereunder shall become an
Underwriter for all purposes of this Agreement.
12. Miscellaneous. The respective agreements, representations, warranties,
-------------
indemnities and other statements of the Company or its officers, the Donors, the
Selling Shareholder and of the Underwriters set forth in or made pursuant to
this Agreement shall remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter, the Company, the Donors
or the Selling Shareholder or any of the officers, directors or controlling
persons referred to in Sections 8 and 9 hereof, and shall survive delivery of
and payment for the Shares. The provisions of Sections 7(b), 8, 9 and 10 shall
survive the termination or cancellation of this Agreement.
This Agreement has been and is made only for the benefit of the
Underwriters, the Company and the Selling Shareholder and their respective
successors and assigns, and, to the extent expressed herein, for the benefit of
persons controlling any of the Underwriters or the Company, and directors and
officers of the Company, and their respective successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include any purchaser of
Shares from any Underwriter merely because of such purchase.
All notices and communications hereunder shall be in writing and mailed or
delivered or by telephone or telegraph if subsequently confirmed in writing, (a)
if to the Representatives, c/o CIBC World Markets, CIBC Xxxxxxxxxxx Xxxxx, Xxxxx
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, attention: Xxxx Xxxx Xxxxxxxx, with
a copy to Xxxxxx, Xxxx & Xxxxxxxx LLP, 200
00
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, attention: Xxxxxx X. Xxxxxx and (b) if to
the Company, to its agent for service as such agent's address appears on the
cover page of the Registration Statement with a copy to Nixon, Hargrave, Devans
& Xxxxx, LLP, Xxxxxxx Square, X.X. Xxx 0000, Xxxxxxxxx, Xxx Xxxx 00000,
attention: Xxxxx X. Xxxxx and (c) if to the Selling Shareholder, to the Young
Men's Christian Association of Batavia, 000 Xxxx Xxxx Xxxxxx, Xxxxxxx, Xxx Xxxx
00000-0000, attention: Executive Director, with a copy to Nixon, Hargrave,
Devans & Xxxxx, LLP, Xxxxxxx Square, X.X. Xxx 0000, Xxxxxxxxx, Xxx Xxxx 00000,
attention: Xxxxxxx X. Xxxxxx.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York without regard to principles of conflict of laws.
This Agreement may be signed in any number of counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument.
30
Please confirm that the foregoing correctly sets forth the agreement among
us.
Very truly yours,
FINANCIAL INSTITUTIONS, INC.
By:
--------------------------------------
Xxxxx X. Xxxxxxxx
President and Chief Executive Officer
YOUNG MEN'S CHRISTIAN ASSOCIATION
OF BATAVIA
By:
---------------------------------------
Name:
Title:
Confirmed:
CIBC WORLD MARKETS
XXXXX, XXXXXXXX & XXXXX, INC.
Acting severally on behalf of itself
and as representative of the several
Underwriters named in Schedule I annexed
hereto.
By CIBC WORLD MARKETS
By:______________________________
Xxxx Xxxx Xxxxxxxx
Managing Director
31
SCHEDULE I
Number of Firm Shares to be Purchased
---------------------------------------------
From the Selling
Underwriter From the Company Shareholder
----------- ---------------------- ---------------------
CIBC World Markets.........................
Xxxxx, Xxxxxxxx & Xxxxx, Inc...............
[Others]...................................
[Others]...................................
[Others]...................................
[Others]...................................
Total.................................... 903,133 430,200
======= =======
SCHEDULE II
BANKING SUBSIDIARIES OF THE COMPANY
-----------------------------------
First Tier Bank & Trust (100.00% owned by the Company)
The National Bank of Geneva (99.10% owned by the Company)
The Pavilion State Bank (100.00% owned by the Company)
Wyoming County Bank (99.65% owned by the Company)
SCHEDULE II-A
NON-BANKING SUBSIDIARIES OF THE COMPANY
---------------------------------------
Financial Institutions Services, Inc. (100% owned by the Company)
The FI Group, Inc. (100% owned by the Company)
SCHEDULE III
PERSONS TO EXECUTE LOCK-UP AGREEMENTS
-------------------------------------
Executive Officers and Directors
--------------------------------
X.X. Xxxxxxxx, Xx.
Xxxxx X. Xxxxxxxx
Xxx X. Xxxxxx
Xxxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Xxxxxx X. Xxxxxxxx
X.X. Xxxxxxxx, III
Xxxxxx X. Xxxx
H. Xxxx South
Xxxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx
Xxxxxxxx X. Xxxxx
Xxxxxx X. Xxxxxxxxx
Xxxxx X. Xxxxxxxxx
Xxxxx X. XxxXxxxxx
X. Xxxxxxxx XxXxxxxxxx
Xxxxxx X. Xxxxxx
Xxxxxx X. Perl
1% or Greater Shareholders (without duplication from above)
-----------------------------------------------------------
Young Men's Christian Association of Batavia
Xxxxx Xxxxx
Xxxxxxxxx Xxxx
Xxxxx Xxxxxxxx
Xxxxxxx Xxxxxxxx
Xxxxxx Xxxxxxxx
Xxxx Xxxxxxxx
Xxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx
Page Xxxxxxxx Xxxxxx
Xxxxxxxx Xxxxxxx
Estate of Xxxxx X. Xxxxxxx, Xxxxx X. Xxxxxxx, Trustee
Xxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx
Xxxxxxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx
Liva & Co.
SCHEDULE IV
FORM OF LOCK-UP AGREEMENT
-------------------------
June __, 1999
CIBC World Markets Corp.
Xxxxx, Xxxxxxxx & Xxxxx, Inc.
c/o CIBC World Markets
CIBC Xxxxxxxxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
The undersigned understands that CIBC World Markets ("CIBC") and Xxxxx,
Xxxxxxxx & Xxxxx, Inc. ("Xxxxx") propose to enter into an Underwriting Agreement
(the "Underwriting Agreements") with Financial Institutions, Inc., a New York
corporation (the "Company") and the Young Men's Christian Association of Batavia
(the "Selling Stockholder"), providing for the public offering (the "Public
Offering") by the several Underwriters, including CIBC and Xxxxx (the
"Underwriters"), of 1,333,333 shares (the "Shares") of the Common Stock, $0.01
par value, of the Company (the "Common Stock").
To induce the Underwriters that may participate in the Public Offering
to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of CIBC on
behalf of the Underwriters, it will not, during the period commencing on the
date hereof and ending 180 days after the date of the final prospectus relating
to the Public Offering, (1) offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase, lend, or otherwise transfer or dispose
of, directly or indirectly, any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock or (2) enter
into any swap or other arrangement that transfers to another, in whole or in
part, any of the economic consequences of ownership of the Common Stock, whether
any such transaction described in clause (1) or (2) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise. The
foregoing sentence shall not apply to (a) transfers of shares of Common Stock,
either during the undersigned's lifetime or on death, (i) by will or the laws of
descent and distribution or (ii) to the undersigned's ancestors, descendants or
spouse, or to any custodian or trustee for the benefit of the undersigned or the
undersigned's ancestors, descendants or spouse, whether by gift or for value;
provided that any such transferee of such shares of Common Stock in this
subsection (a) agrees to be bound by the terms of this lock-up and (b) shares of
Common Stock pledged by the undersigned prior to the date of this lock-up
agreement; provided that if such pledged shares are released or returned to the
undersigned prior
IV-1
to the date which is 180 days after the date of the final prospectus, such
previously pledged shares shall become subject to this lock-up agreement.
Whether or not the Public Offering actually occurs depends on a number
of factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation among the Company, the Selling Stockholder and the Underwriters.
Very truly yours,
-----------------------------
Name:
-----------------------------
-----------------------------
(Address)
IV-2
