1,700,000 Shares (plus 255,000 Shares to cover over-allotments, if any) COMMUNITY BANK SYSTEM, INC. Common Stock, $1.00 Par Value PROPOSED FORM OF UNDERWRITING AGREEMENT
Exhibit
1.1
1,700,000
Shares
(plus
255,000 Shares to cover over-allotments, if any)
COMMUNITY
BANK SYSTEM, INC.
Common
Stock, $1.00 Par Value
PROPOSED
FORM OF UNDERWRITING
AGREEMENT
__________,
2008
XXXXXX
XXXXXXXXXX XXXXX LLC
XXXXXXX
XXXXX & ASSOCIATES, INC.
FTN
MIDWEST SECURITIES CORP.
as
Representatives (the “Representatives”)
of
the Several Underwriters
Named in
Schedule I
hereto
c/o
Janney Xxxxxxxxxx Xxxxx LLC
0000
Xxxxxx Xxxxxx
Xxxxxxxxxxxx,
Xxxxxxxxxxxx 00000
Ladies
and Gentlemen:
Community
Bank System, Inc., a Delaware corporation (the “Company”), proposes, subject to
the terms and conditions stated herein, to sell to the several Underwriters
named in Schedule
I hereto (the “Underwriters”), for whom Xxxxxx Xxxxxxxxxx Xxxxx LLC,
Xxxxxxx Xxxxx & Associates, Inc., and FTN Midwest Securities Corp. are
serving as Representatives (the "Representatives"), an aggregate of _________
shares (the “Firm Shares”) of the Company’s common stock, $1.00 par value (the
“Common Stock”). If the Representatives are the only firms named in
Schedule I
hereto, then the terms “Underwriters” and “Representatives,” as used herein,
shall each be deemed to refer to such firms.
In
addition, in order to cover over-allotments in the sale of the Firm Shares, the
Underwriters may, at the Underwriters’ election and subject to the terms and
conditions stated herein, purchase ratably in proportion to the amounts set
forth opposite their respective names in Schedule I hereto, up
to _______ additional shares of Common Stock from the Company (such additional
shares of Common Stock, the “Optional Shares”). The Firm Shares and
the Optional Shares are referred to collectively as the “Shares.”
The Company and the Underwriters,
intending to be legally bound, hereby confirm their agreement as
follows:
1. Representations and
Warranties of the Company. The Company represents and warrants
to, and agrees with, each of the Underwriters that:
1
(a) The
Company meets the requirements for the use of Form S-3 under the Securities Act
of 1933, as amended (the “Act”) in connection with the offering contemplated by
this Agreement. A registration statement on Form S-3 (File No.
333-_____) with respect to the Shares, including a prospectus subject to
completion, has been prepared and filed by the Company with the Securities and
Exchange Commission (the “Commission”) under the Act, and one or more amendments
to such registration statement may have been so filed. After the
execution of this Agreement, the Company will file with the Commission either
(i) if such registration statement, as it may have been amended, has become
effective under the Act and information has been omitted therefrom in accordance
with Rule 430A under the Act, a prospectus in the form most recently included in
an amendment to such registration statement (or, if no such amendment shall have
been filed, in such registration statement) with such changes or insertions as
are required by Rule 430A or permitted by Rule 424(b) under the Act and as have
been provided to and approved by the Representatives, or (ii) if such
registration statement, as it may have been amended, has not become effective
under the Act, an amendment to such registration statement, including a form of
prospectus, a copy of which amendment has been provided to and approved by the
Representatives prior to the execution of this Agreement. As used in
this Agreement, the term “Registration Statement” means (i) such registration
statement, as amended at the time when it was or is declared effective,
including (A) all financial statements, schedules and exhibits thereto,
(B) all documents (or portions thereof) incorporated by reference therein,
and (C) any information omitted therefrom pursuant to Rule 430A under the Act
and included in the Prospectus (as hereinafter defined) and (ii) any
registration statement, if any, filed pursuant to Rule 462(b) of the Act and any
documents incorporated therein by reference; the term “Preliminary Prospectus”
means each prospectus subject to completion included in such registration
statement or any amendment or post-effective amendment thereto (including the
prospectus subject to completion, if any, included in the Registration Statement
at the time it was or is declared effective), including all documents (or
portions thereof) incorporated by reference therein; and the term “Prospectus”
means the prospectus first filed with the Commission pursuant to Rule 424(b)
under the Act or, if no prospectus is required to be so filed, such term means
the prospectus included in the Registration Statement, in either case, including
all documents (or portions thereof) incorporated by reference
therein. As used herein, any reference to any statement or
information as being “made,” “included,” “contained,” “disclosed” or “set forth”
in any Preliminary Prospectus, the Prospectus or any amendment or supplement
thereto, or the Registration Statement or any amendment thereto (or other
similar references) shall refer both to information and statements actually
appearing in such document as well as information and statements incorporated by
reference therein.
(b) No order preventing or suspending the
use of any Preliminary Prospectus has been issued and no proceeding for that
purpose has been instituted or, to the knowledge of the Company, threatened, by
the Commission or the securities authority of any state or other
jurisdiction. If the Registration Statement has become effective
under the Act, no stop order suspending the effectiveness of the Registration
Statement or any part thereof including any registration statement, if any,
filed pursuant to Rule 462(b) of the Act, whether effective or to hereafter
become effective, has been issued and no proceeding for that purpose has been
instituted or, to the knowledge of the Company, threatened or contemplated by
the Commission or the securities authority of any state or other
jurisdiction.
(c) When any Preliminary Prospectus was
filed with the Commission it contained all material statements required to be
stated therein in accordance with, and complied in all material respects with
the requirements of, the Act and the rules and regulations of the Commission
thereunder. When the Registration Statement or any amendment thereto
was or is declared effective, and at each Time of Delivery (as hereinafter
defined), it (i) contained and will contain all material statements required to
be stated therein in accordance with, and complied or will comply in all
material respects with the requirements of, the Act and the rules and
regulations of the Commission thereunder and (ii) did not and will not include
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading. When the
Prospectus or any amendment or supplement thereto is filed with the Commission
pursuant to Rule 424(b) (or, if the Prospectus or such amendment or supplement
is not required to be so filed, when the Registration Statement or the amendment
thereto containing such amendment or supplement to the Prospectus was or is
declared effective) and at each Time of Delivery, the Prospectus, as amended or
supplemented at any such time, (i) contained and will contain all material
statements required to be stated therein in accordance with, and complied or
will comply in all material respects with the requirements of, the Act and the
rules and regulations of the Commission thereunder and (ii) did not and will not
include any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The
foregoing provisions of this paragraph (c) do not apply to statements or
omissions made in the Registration Statement or any amendment thereto or the
Prospectus or any amendment or supplement thereto in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
through you specifically for use therein. It is understood that the
statements set forth in the Registration Statement or any amendment thereto or
the Prospectus or any amendment or supplement thereto in the third, fifth,
sixth, seventh, eighth and ninth paragraphs and the list of Underwriters under
the section entitled “Underwriting,” constitute the only written information
furnished to the Company by or on behalf of any Underwriter through you
specifically for use in the Registration Statement or any amendment thereto or
the Prospectus and any amendment or supplement thereto, as the case may
be. Each Preliminary Prospectus and Prospectus delivered to the
Underwriters for use in connection with the offering of the Shares was identical
to the electronically transmitted copy thereof filed with the Commission
pursuant to XXXXX, except to the extent permitted by Regulation
S-T.
2
(d) As
of the Applicable Time, neither (i) any Issuer Represented General Use Free
Writing Prospectuses issued at or prior to the Applicable Time and the Statutory
Prospectus, all considered together (collectively, the “General Disclosure
Package”), nor (ii) any individual Issuer Represented Limited Use Free
Writing Prospectus issued at or prior to the Applicable Time, when considered
together with the General Disclosure Package, included any untrue statement of a
material fact or omitted 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; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter through the Representatives expressly for use therein. As used in
this paragraph and elsewhere in this Agreement:
“Applicable
Time” means ___:00 [a/p]m (Eastern time) on the date of this
Agreement.
“Statutory
Prospectus” as of any time means the most recent Preliminary Prospectus that is
included in the Registration Statement immediately prior to the Applicable
Time.
“Issuer-Represented
Free Writing Prospectus” means any “issuer free writing prospectus,” as defined
in Rule 433 under the Act, relating to the Shares in the form filed or required
to be filed with the Commission or, if not required to be filed, in the form
retained in the Company’s records pursuant to Rule 433(g) under the
Act.
“Issuer-Represented
General Use Free Writing Prospectus” means any Issuer Represented Free Writing
Prospectus, if any, that is intended for general distribution to prospective
investors, as evidenced by its being specified in Schedule II to this
Agreement.
“Issuer-Represented
Limited Use Free Writing Prospectus” means any Issuer-Represented Free Writing
Prospectus that is not an Issuer Represented General Use Free Writing
Prospectus.
3
(e) The Company (including its agents and
representatives other than the Underwriters in their capacity as such) has not
used, authorized, approved or referred to and will not use, authorize, approve
or refer to any Issuer-Represented Free Writing Prospectus, other than the
documents listed on Schedule II
hereto. Each such Issuer-Represented Free Writing Prospectus, as of
its issue date and at all subsequent times through the completion of the public
offer and sale of the Shares or until any earlier date that the Company notified
or notifies the Representatives as described in Section 5(d), did not, does
not and will not include any information that conflicted, conflicts or will
conflict with the information contained in the Registration Statement; provided,
however, that this representation and warranty shall not apply to any statements
or omissions made in reliance upon and in conformity with information furnished
in writing to the Company by an Underwriter through the Representatives
expressly for use therein. At the time of filing of the registration statement,
the Company was not and is not an “ineligible issuer” as defined in Rule 405
under the Act.
(f) The documents which are incorporated by
reference in the Registration Statement, the General Disclosure Package or the
Prospectus or from which information is so incorporated by reference, when they
became effective or were filed with the Commission, as the case may be (or, if
any amendment with respect to any such documents was filed or became effective,
when such amendment was filed or became effective), complied in all material
respects to the requirements of the Securities Exchange Act of 1934, as amended
(the AExchange
Act@)
and the rules and regulations of the Commission thereunder, and none of such
documents contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make to the
statements therein not misleading.
(g) There are no legal or governmental
proceedings pending or, to the knowledge of the Company, threatened to which the
Company or any of its direct or indirect subsidiaries is a party or to which any
of the properties of the Company or any direct or indirect subsidiary are
subject that are required to be described in the Registration Statement, the
General Disclosure Package or the Prospectus and are not so described or any
statutes, regulations, contracts or other documents that are required to be
described in the Registration Statement, the General Disclosure Package or the
Prospectus or to be filed as exhibits to the Registration Statement that are not
described or filed as required.
(h) Each of the Company and its direct or
indirect subsidiaries has been duly incorporated or organized, is validly
existing as a corporation, business or statutory trust, limited liability
company or banking association, as the case may be, in good standing under the
laws of its jurisdiction of incorporation or organization and has full power and
authority (corporate and other) to own or lease its properties and conduct its
business as described in the General Disclosure Package and the
Prospectus. The Company is duly registered under the Bank Holding
Company Act of 1956, as amended. The Company has full power and
authority (corporate and other) to enter into this Agreement and to perform its
obligations hereunder. Each of the Company and its direct or indirect
subsidiaries is duly qualified to transact business as a foreign corporation
under the laws of each other jurisdiction in which it owns or leases properties,
or conducts any business, so as to require such qualification, except where the
failure to so qualify would not have a material adverse effect on the financial
position, results of operations or business of the Company and its direct or
indirect subsidiaries taken as a whole.
(i) The Company’s authorized, issued and
outstanding capital stock is as disclosed in the Prospectus. All of
the issued shares of capital stock of the Company, have been duly authorized and
validly issued, are fully paid and nonassessable and conform to the descriptions
of the Common Stock contained in the Prospectus. None of the issued
shares of capital stock of the Company or any of its direct or indirect
subsidiaries has been issued or is owned or held in violation of any statutory
(or to the knowledge of the Company, any other) preemptive rights of
shareholders, and no person or entity (including any holder of outstanding
shares of capital stock of the Company or its direct or indirect subsidiaries)
has any statutory (or to the knowledge of the Company, any other) preemptive or
other rights to subscribe for any of the Shares. None of the capital
stock of the Company or its direct or indirect subsidiaries has been issued in
violation of applicable federal or state securities laws.
4
(j) All of the issued shares of capital
stock of each of the Company's direct or indirect subsidiaries have been duly
authorized and validly issued, are fully paid and nonassessable, except to the
extent that shares of Community Bank, N.A. (the “Bank”) may be deemed assessable
under 12 U.S.C. Section 55, and, except for the preferred securities of
Community Capital Trust II, Community Statutory Trust III and Community Capital
Trust IV and the preferred stock of CBNA Preferred Funding Corp., are owned
beneficially by the Company or one of its subsidiaries, free and clear of all
liens, security interests, pledges, charges, encumbrances, defects,
shareholders’ agreements, voting agreements, proxies, voting trusts, equities or
claims of any nature whatsoever. Other than the outstanding capital
stock of the Bank, the outstanding common securities of Community Capital Trust
II, Community Statutory Trust III and Community Capital Trust IV, the
outstanding common stock of Community Financial Services, Inc., the outstanding
common stock of Benefit Plan Administrative Services, Inc., the outstanding
common stock of CBNA Treasury Management Corporation, the outstanding common
stock of Community Investment Services, Inc., the outstanding common stock of
CBNA Preferred Funding Corp., the outstanding common stock of CFSI Close-Out
Corp., the outstanding common stock of Nottingham Advisors, Inc., the
outstanding common stock of First Liberty Service Corporation, the outstanding
common stock of First of Jermyn Realty and the outstanding common stock of
Brilie Corporation, the equity securities held in the investment portfolios of
the Company and its direct or indirect subsidiaries (the composition of which is
not materially different from the disclosures in the Prospectus as of specific
dates) and stock of the Federal Reserve Bank of New York and Federal Home Loan
Bank of New York, the Company does not own, directly or indirectly, any capital
stock or other equity securities of any other corporation or any ownership
interest in any partnership, joint venture or other association.
(k) Except as disclosed in the General
Disclosure Package, the Prospectus, the Registration Statement or the documents
incorporated therein by reference, there are no outstanding (i) securities
or obligations of the Company or any of its direct or indirect subsidiaries
convertible into or exchangeable for any capital stock of the Company or any of
its direct or indirect subsidiaries, (ii) warrants, rights or options to
subscribe for or purchase from the Company or any of its direct or indirect
subsidiaries any such capital stock or any such convertible or exchangeable
securities or obligations (other than pursuant to the Company's stock benefit
plans) or (iii) obligations of the Company or any of its direct or indirect
subsidiaries to issue any shares of capital stock, any such convertible or
exchangeable securities or obligations, or any such warrants, rights or
options.
(l) Since the respective dates as of which
information is given in the General Disclosure Package, the Registration
Statement and the Prospectus or otherwise disclosed therein, and prior to the
Closing Date and Option Closing Date (as such terms are hereinafter defined),
(i) neither the Company nor any of its direct or indirect subsidiaries has
incurred any liabilities or obligations, direct or contingent, or entered into
any transactions, not in the ordinary course of business, that are material to
the Company or its direct or indirect subsidiaries, (ii) neither the Company nor
its direct or indirect subsidiaries has purchased any of its outstanding capital
stock or declared, paid or otherwise made any dividend or distribution of any
kind on its capital stock or has been delinquent in the payment of principal or
interest on its outstanding debt obligations, (iii) there has not been any
material change in the capital stock, long-term debt or short-term debt of the
Company or any of its direct or indirect subsidiaries, and (iv) there has not
been any material adverse change, or any development involving a prospective
material adverse change, in or affecting the financial position, results of
operations or business of the Company and its direct or indirect subsidiaries,
in each case other than as disclosed in or contemplated by the
Prospectus.
5
(m) There are no contracts, agreements or
understandings between the Company and any person granting such person the right
to require the Company to file a registration statement under the Act with
respect to any securities of the Company owned or to be owned by such person or,
requiring the Company to include such securities in the securities registered
pursuant to the Registration Statement (or any such right has been effectively
waived) or requiring the registration of any securities pursuant to any other
registration statement filed by the Company under the Act. Neither
the filing of the Registration Statement nor the offering or sale of Shares as
contemplated by this Agreement gives any security holder of the Company any
rights for or relating to the registration of any shares of Common Stock or any
other capital stock of the Company, except such that have been satisfied or
waived.
(n) Neither the Company nor any of its
direct or indirect subsidiaries is, or with the giving of notice or passage of
time or both would be, in violation of its Certificate of Incorporation or
Bylaws (or comparable charter documents) or in default under any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or instrument
to which the Company or any of its direct or indirect subsidiaries is a party or
to which any of their respective properties or assets are subject.
(o) The Company and its direct or indirect
subsidiaries have good and marketable title in fee simple to all real property,
if any, and good title to all personal property owned by them, in each case free
and clear of all liens, security interests, pledges, charges, encumbrances,
mortgages and defects, except such as are disclosed in the Prospectus or such as
would not have a material adverse effect on the financial position, results of
operations or business of the Company and its direct or indirect subsidiaries
taken as a whole and do not interfere with the use made or proposed to be made
of such property by the Company and its direct or indirect subsidiaries; and any
real property and buildings held under lease by the Company or any of its direct
or indirect subsidiaries are held under valid, subsisting and enforceable
leases, with such exceptions as are disclosed in the Prospectus or are not
material and do not interfere with the use made or proposed to be made of such
property and buildings by the Company or any direct or indirect
subsidiary.
(p) The Company does not require any
consent, approval, authorization, order or declaration of or from, or
registration, qualification or filing with, any court or governmental agency or
body in connection with the sale of the Shares or the consummation of the
transactions contemplated by this Agreement, except the registration of the
Shares under the Act (which, if the Registration Statement is not effective as
of the time of execution hereof, shall be obtained as provided in this
Agreement) and such as may be required by the New York Stock Exchange or under
state securities or blue sky laws in connection with the offer, sale and
distribution of the Shares by the Underwriters.
(q) Other than as disclosed in the
Prospectus, there is no litigation, arbitration, claim, proceeding (formal or
informal) or investigation (including without limitation, any bank regulatory
proceeding) pending or, to the Company’s knowledge, threatened in which the
Company or any of its direct or indirect subsidiaries is a party or of which any
of their respective properties or assets are the subject which, if determined
adversely to the Company or any direct or indirect subsidiary, would
individually or in the aggregate have a material adverse effect on the financial
position, results of operations or business of the Company and its direct or
indirect subsidiaries taken as a whole. Neither the Company nor any
direct or indirect subsidiary is in violation of, or in default with respect to,
any law, statute, rule, regulation, order, judgment or decree, except as
described in the Prospectus or such as do not and will not individually or in
the aggregate have a material adverse effect on the financial position, results
of operations or business of the Company and its direct or indirect subsidiaries
taken as a whole, and neither the Company nor any direct or indirect subsidiary
is required to take any action in order to avoid any such violation or
default.
6
(r) PricewaterhouseCoopers LLP, which has
certified certain financial statements of the Company and its consolidated
subsidiaries included or incorporated by reference in the General Disclosure
Package, the Registration Statement and the Prospectus, and which has audited
the Company’s internal control over financial reporting, are an independent
registered public accounting firm as required by the Act, the Exchange Act and
the respective rules and regulations of the Commission thereunder.
(s) The consolidated financial statements
and schedules (including the related notes) of the Company and its consolidated
subsidiaries included or incorporated by reference in the Registration
Statement, the Prospectus and/or the General Disclosure Package were prepared in
accordance with generally accepted accounting principles consistently applied
throughout the periods involved and fairly present the financial position and
results of operations of the Company and its subsidiaries, on a consolidated
basis, at the dates and for the periods presented. The selected
consolidated financial data and operating and statistical information set forth
under the captions “Summary,” “Selected Consolidated Financial Data,” “Recent
Operating Results,” “Use of Proceeds,” “Pro Forma Consolidated Statement of
Financial Condition” and “Capitalization,” in the Prospectus fairly present, on
the basis stated in the Prospectus, the information included therein, and have
been compiled on a basis consistent with that of the audited financial
statements included in the Registration Statement. The supporting
notes and schedules included in the Registration Statement, the Prospectus
and/or the General Disclosure Package fairly state in all material respects the
information required to be stated therein in relation to the financial
statements taken as a whole. The unaudited interim consolidated
financial statements included or incorporated by reference in the Registration
Statement comply as to form in all material respects with the applicable
accounting requirements of Rule 10-01 of the Regulation S-X under the
Act.
(t) This Agreement has been duly
authorized, executed and delivered by the Company and, assuming due execution by
the Representatives, constitutes the valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, subject, as to
enforcement, to applicable bankruptcy, insolvency, reorganization and moratorium
laws and other laws relating to or affecting the enforcement of creditors’
rights generally and to general equitable principles and except as the
enforceability of rights to indemnity and contribution under this Agreement may
be limited under applicable securities laws or the public policy underlying such
laws.
(u) The sale of the Shares and the
performance of this Agreement and the consummation of the transactions herein
contemplated will not (with or without the giving of notice or the passage of
time or both) (i) conflict with or violate any term or provision of the
Certificate of Incorporation or Bylaws or comparable charter documents of the
Company or any direct or indirect subsidiary, (ii) result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement, lease or other agreement
or instrument to which the Company or any direct or indirect subsidiary is a
party or to which any of their respective properties or assets is subject,
(iii) conflict with or violate any law, statute, rule or regulation or any
order, judgment or decree of any court or governmental agency or body having
jurisdiction over the Company or any direct or indirect subsidiary or any of
their respective properties or assets or (iv) result in a breach,
termination or lapse of the corporate power and authority of the Company or any
direct or indirect subsidiary to own or lease and operate their respective
assets and properties and conduct their respective business as described in the
Prospectus.
7
(v) When the Shares to be sold by the
Company hereunder have been duly delivered against payment therefor as
contemplated by this Agreement, the Shares will be validly issued, fully paid
and nonassessable, and the holders thereof will not be subject to personal
liability solely by reason of being such holders. The Global
Securities representing the Shares are in proper legal form under, and conform
in all respects to the requirements of, the Delaware General Corporation Law,
the National Association of Securities Dealers, Financial Industry Regulatory
Authority and the New York Stock Exchange.
(w) The Company has not distributed and
will not distribute any offering material in connection with the offering and
sale of the Shares other than the Registration Statement, the General Disclosure
Package, the Prospectus and other material, if any, permitted by the
Act.
(x) The Company and the Bank had full
corporate power and authority to execute and deliver the Purchase and Assumption
Agreement, dated June 24, 2008, by and among the Company, the Bank and RBS
Citizens, National Association (the “Branch Purchase Agreement”), and each of
the Company and the Bank has full corporate power and authority to consummate
the transactions contemplated thereby (including, without limitation, in the
schedules thereto). The execution and delivery of the Branch Purchase Agreement
and the consummation of the transactions contemplated thereby have been duly and
validly approved by the Boards of Directors of the Company and the Bank and no
other corporate proceedings on the part of the Company or the Bank are necessary
to approve the Branch Purchase Agreement and to consummate the transactions
contemplated thereby. The Branch Purchase Agreement has been duly and validly
executed and delivered by the parties thereto and constitutes a valid and
binding obligation of the parties thereto, enforceable against each of them in
accordance with its terms, except as enforcement may be limited by general
principles of equity whether applied in a court of law or a court of equity and
by bankruptcy, insolvency and similar laws affecting creditors’ rights and
remedies generally. Neither the execution and delivery of the Branch
Purchase Agreement by the Company or the Bank, nor the consummation by the
Company or the Bank of the transactions contemplated thereby, nor compliance by
the Company or the Bank with any of the terms or provisions thereof, will
(i) violate any provision of the certificate of incorporation or bylaws of
the Company, or the articles or bylaws of the Bank, (ii) violate any law or
judgment applicable to the Company or the Bank or any of their respective
properties or assets, or (iii) violate, conflict with, result in a breach
of any provision of or the loss of any benefit under, constitute a default (or
an event which, with notice or lapse of time, or both, would constitute a
default) under, result in the termination of or a right of termination or
cancellation under, accelerate the performance required by, or result in the
creation of any encumbrance upon any of the respective properties or assets of
the Company or the Bank under, any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, deed of trust, license, lease, agreement or
other instrument or obligation to which the Company or the Bank is a party, or
by which they or any of their respective properties or assets may be bound or
affected, except, in the case of clause (ii) or (iii), for such violations,
conflicts, defaults, terminations, accelerations and encumbrances which could
not, singly or in the aggregate, reasonably be expected to have a material
adverse effect on the Company and its direct and indirect subsidiaries, taken as
a whole.
(y) Neither the Company nor, to the
Company’s knowledge, any of its officers, directors or affiliates has (i) taken,
directly or indirectly, any action designed to cause or result in, or that has
constituted or might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Shares or (ii) since the filing of the Registration Statement
(A) sold, bid for, purchased or paid anyone any compensation for soliciting
purchases of, the Shares or (B) paid or agreed to pay to any person any
compensation for soliciting another to purchase any other securities of the
Company.
8
(z) The operations of the Company and its
direct or indirect subsidiaries with respect to any real property currently
leased or owned or by any means controlled by the Company or any direct or
indirect subsidiary (the “Real Property”) are in compliance in all material
respects with all federal, state, and local laws, ordinances, rules, and
regulations relating to occupational health and safety and the environment
(collectively, “Laws”), and the Company and its subsidiaries have not violated
any Laws in a way which would have a material adverse effect on the financial
position, results of operations or business of the Company and its direct or
indirect subsidiaries taken as a whole. Except as disclosed in the
Prospectus, there is no pending or, to the Company’s knowledge, threatened
material claim, litigation or administrative agency proceeding, nor has the
Company or any direct or indirect subsidiary received any written or oral notice
from any governmental entity or third party, that: (i) alleges a
violation of any Laws by the Company or any direct or indirect subsidiary or
(ii) alleges the Company or any direct or indirect subsidiary is a liable party
under the Comprehensive Environmental Response, Compensation, and Liability Act,
42 U.S.C. § 9601 et seq. or any state
superfund law.
(aa) Neither the Company nor any direct or
indirect subsidiary owns or has the right to use patents, patent applications,
trademarks, trademark applications, trade names, service marks, copyrights,
franchises, trade secrets, proprietary or other confidential information and
intangible properties and assets (collectively, “Intangibles”), the loss of any
of which would have a material adverse effect on the financial position, results
of operations or business of the Company and its direct or indirect subsidiaries
taken as a whole; and, to the knowledge of the Company, neither the Company nor
any direct or indirect subsidiary has infringed or is infringing, and neither
the Company nor any direct or indirect subsidiary has received notice of
infringement with respect to, asserted Intangibles of others.
(bb) The Company is in compliance with the
applicable provisions of the Xxxxxxxx-Xxxxx Act of 2002. The Company
has established and maintains disclosure controls and procedures as required by
Rule 13a-15(e) under the Exchange Act. As of the end of each period
covered by an annual or quarterly report filed with the Commission since the
effective date of the Xxxxxxxx-Xxxxx Act of 2002, the Company has conducted an
evaluation under the supervision and with the participation of its management,
including the Company’s Chief Executive Officer and Chief Financial Officer, of
the effectiveness of the design and operation of its disclosure controls and
procedures, and the Company’s Chief Executive Officer and Chief Financial
Officer have concluded that its disclosure controls and procedures are effective
to ensure that information required to be disclosed in such reports is recorded,
processed, summarized and reported, within the periods specified in, and in
accordance with the requirements of, the SEC’s rules, regulations and
forms. Based on such evaluations, (i) there were no significant
deficiencies or material weaknesses in the design or operation of internal
control over financial reporting which are reasonably likely to adversely affect
the Company’s ability to record, process, summarize and report financial
information and (ii) there was no fraud, whether or not material, that involved
management or other employees of the Company or any of its direct or indirect
subsidiaries who have a significant role in the Company’s internal control over
financial reporting.
(cc) The Company maintains a system of
internal control over financial reporting (as such term is defined in Rule
13a-15(f) under the Exchange Act) that complies with the requirements of the
Exchange Act and has been designed by the Company’s principal executive officer
and principal financial officer, or under their supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles, and the Company’s internal control
over financial reporting is effective in all material respects to perform the
functions for which it was established and the Company is not aware of any
material weaknesses in its internal control over financial
reporting. Since the end of the last fiscal year, there has been no
change in internal control over financial reporting that has materially affected
or is reasonably likely to materially affect internal control over financial
reporting.
9
(dd) Each of the Company and its direct or
indirect subsidiaries makes and keeps accurate books and records reflecting its
assets and maintains internal accounting controls which provide reasonable
assurance that (i) transactions are executed in accordance with management’s
authorization, (ii) transactions are recorded as necessary to permit preparation
of the Company’s consolidated financial statements in accordance with generally
accepted accounting principles and to maintain accountability for the assets of
the Company, (iii) access to the assets of the Company and each of its direct or
indirect subsidiaries is permitted only in accordance with management’s
authorization, and (iv) the recorded accountability for assets of the Company
and each of its direct or indirect subsidiaries is compared with existing assets
at reasonable intervals and appropriate action is taken with respect to any
differences.
(ee) The Company and its direct or indirect
subsidiaries have filed all foreign, federal, state and local tax returns that
are required to be filed by them and have paid all taxes shown as due on such
returns as well as all other taxes, assessments and governmental charges that
are due and payable; and no material deficiency with respect to any such return
has been assessed or proposed.
(ff) Except for such plans that are
expressly disclosed in the Prospectus, the Registration Statement and the
documents incorporated by reference therein, the Company and its direct or
indirect subsidiaries do not maintain, contribute to or have any material
liability with respect to any employee benefit plan, profit sharing plan,
employee pension benefit plan, employee welfare benefit plan, equity-based plan
or deferred compensation plan or arrangement (“Plans”) that are subject to the
provisions of the Employee Retirement Income Security Act of 1974, as amended,
or the rules and regulations thereunder (“ERISA”). All Plans are in
compliance in all material respects with all applicable laws, including but not
limited to ERISA and the Internal Revenue Code of 1986, as amended (the “Code”),
and have been operated and administered in all material respects in accordance
with their terms. No Plan is a multi-employer plan. The
Company does not provide retiree life and/or retiree health benefits or coverage
for any employee or any beneficiary of any employee after such employee’s
termination of employment, except as required by Section 4980B of the Code or
under a Plan which is intended to be “qualified” under Section 401(a) of the
Code. No material liability has been, or could reasonably be expected
to be, incurred under Title IV of ERISA or Section 412 of the Code by any
entity required to be aggregated with the Company or any of the subsidiaries
pursuant to Section 4001(b) of ERISA and/or Section 414(b) or (c) of the
Code (and the regulations promulgated thereunder) with respect to any “employee
pension benefit plan” which is not a Plan. As used in this
subsection, the terms “defined benefit plan,” “employee benefit plan,” “employee
pension benefit plan,” “employee welfare benefit plan” and “multi-employer plan”
shall have the respective meanings assigned to such terms in Section 3 of
ERISA.
(gg) No material labor dispute exists with
the Company’s or any direct or indirect subsidiary’s employees, and no such
labor dispute is threatened. The Company has no knowledge of any
existing or threatened labor disturbance by the employees of any of its
principal agents, suppliers, contractors or customers that would have a material
adverse effect on the financial position, results of operations or business of
the Company and its direct or indirect subsidiaries taken as a
whole.
(hh) The Company and its direct or indirect
subsidiaries have received all permits, licenses, franchises, authorizations,
registrations, qualifications and approvals (collectively, “Permits”) of
governmental or regulatory authorities (including, without limitation, state or
federal bank regulatory authorities) as may be required of them to own their
respective properties and conduct their businesses in the manner described in
the Prospectus, subject to such qualifications as may be set forth in the
Prospectus; and the Company and its direct or indirect subsidiaries have
fulfilled and performed all of their respective material obligations with
respect to such Permits, and no event has occurred which allows or, after notice
or lapse of time or both, would allow revocation or termination thereof or
result in any other material impairment of the rights of the holder of any such
Permit, subject in each case to such qualifications as may be set forth in the
Prospectus; and, except as described in the Prospectus, such Permits contain no
restrictions that materially affect the ability of the Company and its direct or
indirect subsidiaries to conduct their businesses and no state or federal bank
regulatory agency or body has issued any order or decree impairing, restricting
or prohibiting the payment of dividends by any of its direct or indirect
subsidiaries to the Company.
10
(ii) The Company and each of its direct or
indirect subsidiaries has filed, or has had filed on its behalf, on a timely
basis, all materials, reports, documents and information, including but not
limited to annual reports, call reports and reports of examination with each
applicable bank regulatory authority, board or agency, which are required to be
filed by it, except where the failure to have timely filed such materials,
reports, documents and information would not have a material adverse effect on
the financial position, results of operations or business of the Company and its
direct or indirect subsidiaries taken as a whole.
(jj) The operations of the Company and its
subsidiaries are and have been conducted at all times in compliance with
applicable financial recordkeeping and reporting requirements of the Currency
and Foreign Transactions Reporting Act of 1970, as amended, the money laundering
statutes of all jurisdictions, rules and regulations thereunder and any related
or similar rules, regulations or guidelines, issued, administered or enforced by
any governmental agency, including Section 352(a) of the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act of 2001 (collectively, the “Money Laundering Laws”); and
no action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company, or any of
its subsidiaries with respect to the Money Laundering Laws is pending or, to the
best of the Company’s knowledge, threatened or contemplated.
(kk) Neither the Company nor any direct or
indirect subsidiary is an “investment company” or a company “controlled” by an
investment company as such terms are defined in Sections 3(a) and 2(a)(9),
respectively, of the Investment Company Act of 1940, as amended (the “Investment
Company Act”), and, if the Company or any direct or indirect subsidiary conducts
its business as set forth in the Registration Statement and the Prospectus, will
not become an “investment company” and will not be required to register under
the Investment Company Act.
(ll) The Bank. is a member in good standing
of the Federal Reserve and Federal Home Loan Bank Systems and its deposits are
insured by the Federal Deposit Insurance Corporation up to the legal
limits.
(mm) The Company and each direct or indirect
subsidiary have in place and effective such policies of insurance, with limits
of liability in such amounts, as are normal and prudent in the ordinary scope of
business similar to that of the Company and direct or indirect subsidiary in the
respective jurisdiction in which they conduct business.
(nn) The Company and each direct and
indirect subsidiary have in place and effective such policies of insurance, with
limits of liability in such amounts, as are normal and prudent in the ordinary
scope of business similar to that of the Company and direct or indirect
subsidiary in the respective jurisdiction in which they conduct
business.
(oo) All documents delivered or to be
delivered by the Company or any of its representatives in connection with the
issuance and sale of the Shares were on the dates on which they were delivered,
or will be on the dates on which they are to be delivered, true, complete and
correct in all material respects; further, neither this Agreement nor any
certificate, statement or other document delivered or to be delivered by the
Company or any of its direct or indirect subsidiaries contains or will contain
any untrue statement of a material fact or omits or will omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
11
Any
certificate signed by any director or officer of the Company or any of its
direct or indirect subsidiaries, as the case may be, and delivered to the
Representative or to counsel for the Underwriters shall be deemed a
representation and warranty of the Company to the Underwriters as to the matters
covered thereby.
Any
certificate delivered by the Company or any of its subsidiaries, as the case may
be, to counsel for the Company for purposes of enabling such counsel to render
an opinion pursuant to Section 7 will also be furnished to the Underwriters and
counsel for the Underwriters and shall be deemed to be additional
representations and warranties to the Underwriters by the Company as to the
matters covered thereby.
2. Purchase and Sale of
Shares.
(a) Subject
to the terms and conditions herein set forth, the Company agrees to sell to each
of the Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from the Company, at a purchase price of ______________
Dollars and ______________ Cents ($_____) per share (the “Per Share
Price”), the number of Firm Shares to be purchased by such Underwriter as set
forth opposite the name of such Underwriter in Schedule I
hereto.
(b) The
Company hereby grants to the Underwriters the right to purchase at their
election in whole or in part from time to time up to _______ Optional Shares, at
the Per Share Price, for the sole purpose of covering over-allotments in the
sale of the Firm Shares. The option granted hereunder may be
exercised by written notice from the Representatives to the Company, given at
any time (but not more than once) within a period of thirty (30) calendar days
after the date of this Agreement and setting forth the aggregate number of
Optional Shares to be purchased and the date on which such Optional Shares are
to be delivered, as determined by the Representatives but in no event earlier
than the First Time of Delivery (as hereinafter defined) or, unless the
Representatives otherwise agree in writing, earlier than two (2) or later than
ten (10) business days after the date of such notice. In the event
the Underwriters elect to purchase all or a portion of the Optional Shares, the
Company agrees to furnish or cause to be furnished to the Representatives the
certificates, letters and opinions, and to satisfy all conditions, set forth in
Section 7 hereof at the Subsequent Time of Delivery (as hereinafter
defined).
(c) In
making this Agreement, each Underwriter is contracting severally, and not
jointly, and except as provided in Sections 2(b) and 9 hereof, the agreement of
each Underwriter is to purchase only that number of shares specified with
respect to that Underwriter in Schedule I
hereto. No Underwriter shall be under any obligation to purchase any
Optional Shares prior to an exercise of the option with respect to such Shares
granted pursuant to Section 2(b) hereof.
3. Offering by the
Underwriters. Upon the authorization by the Representatives of
the release of the Shares, the several Underwriters propose to offer the Shares
for sale upon the terms and conditions disclosed in the Prospectus.
12
4. Delivery of Shares;
Closing. The Firm Shares shall be issued in the form of one or
more fully registered global securities (the “Global Securities”) in book-entry
form in such denomination and registered in the name of the nominee of The
Depository Trust Company (“DTC”) or in such names as the Representatives may
request upon at least 48 hours’ prior notice to the Company, and shall be
delivered by or on behalf of the Company to the Representatives for the account
of such Underwriter, against payment by such Underwriter on its behalf of the
purchase price therefor by wire transfer of immediately available funds to such
accounts as the Company shall designate in writing. The closing of
the sale and purchase of the Firm Shares shall be held at the offices of Xxxxxxx
Spidi & Xxxxx, PC, 000 Xxx Xxxx Xxxxxx, X.X., Xxxxx 000 Xxxx, Xxxxxxxxxx,
X.X. 00000. The time and date of such delivery and payment shall be,
with respect to the Firm Shares, at 9:00 a.m., Washington, D.C. time, on the
third (3rd) full
business day after this Agreement is executed or at such other time and date as
the Representatives and the Company may agree upon in writing, and, with respect
to the Optional Shares, at 9:00 a.m., Eastern time, on the date specified by the
Representatives in the written notice given by the Representatives of the
Underwriters’ election to purchase all or part of such Optional Shares, or at
such other time and date as the Representatives and the Company may agree upon
in writing. Such time and date for delivery of the Firm Shares is
herein called the “First Time of Delivery,” such time and date for delivery of
any Optional Shares, if not the First Time of Delivery, is herein called a
“Subsequent Time of Delivery,” and each such time and date for delivery is
herein called a “Time of Delivery.” The Company shall make the Global
Securities representing the Firm Shares available for examination by the
Representatives and counsel for the Underwriters not later than 9:30 a.m.
Eastern time on the business day prior to each Time of Delivery at the office of
Xxxxxxx Spidi & Xxxxx, PC, 000 Xxx Xxxx Xxxxxx, X.X., Xxxxx 000 Xxxx,
Xxxxxxxxxx, X.X. 00000 or at such other location specified by the
Representatives or counsel for the Underwriters in writing at least 48 hours
prior to such Time of Delivery.
5. Covenants of the
Company. The Company covenants and agrees with each of the
Underwriters that:
(a) The
Company will use its best efforts to cause the Registration Statement, if not
effective prior to the execution and delivery of this Agreement, to become
effective. If the Registration Statement has been declared effective
prior to the execution and delivery of this Agreement, the Company will file the
Prospectus with the Commission pursuant to and in accordance with subparagraph
(1) (or, if applicable and if consented to by the Representatives, subparagraph
(4)) of Rule 424(b) within the time period required under Rule 424(b) under the
Act. The Company will advise the Representatives promptly of any such
filing pursuant to Rule 424(b).
(b) The
Company will not file with the Commission the Prospectus or the amendment
referred to in Section 1(a) hereof, any amendment or supplement to the
Prospectus or any amendment to the Registration Statement unless the
Representatives have received a reasonable period of time to review any such
proposed amendment or supplement and consented to the filing thereof and will
use its best efforts to cause any such amendment to the Registration Statement
to be declared effective as promptly as possible. Upon the reasonable
request of the Representatives or counsel for the Underwriters, the Company will
promptly prepare and file with the Commission, in accordance with the rules and
regulations of the Commission, any amendments to the Registration Statement or
amendments or supplements to the Prospectus that may be necessary or advisable
in connection with the distribution of the Shares by the several Underwriters
and will use its best efforts to cause any such amendment to the Registration
Statement to be declared effective as promptly as possible. If
required, the Company will file any amendment or supplement to the Prospectus,
with the Commission in the manner and within the time period required by Rule
424(b) under the Act. The Company will advise the Representatives,
promptly after receiving notice thereof, of the time when the Registration
Statement or any amendment thereto has been filed or declared effective or the
Prospectus or any amendment or supplement thereto has been filed and will
provide evidence to the Representatives of each such filing or
effectiveness.
13
(c) The
Company will advise the Representatives promptly after receiving notice or
obtaining knowledge of (i) when any post-effective amendment to the Registration
Statement is filed with the Commission, (ii) the receipt of any comments from
the Commission concerning the Registration Statement, (iii) when any
post-effective amendment to the Registration Statement becomes effective, or
when any supplement to the Prospectus or any amended Prospectus has been filed,
(iv) the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or any part thereof or any order
preventing or suspending the use of any Preliminary Prospectus,
Issuer-Represented Free Writing Prospectus or the Prospectus or any amendment or
supplement thereto, (v) the suspension of the qualification of the Shares
for offer or sale in any jurisdiction or of the initiation or threatening of any
proceeding for any such purpose, or (vi) any request made by the Commission or
any securities authority of any other jurisdiction for amending the Registration
Statement, for amending or supplementing the Preliminary Prospectus, any
Issuer-Represented Free Writing Prospectus or the Prospectus or for additional
information. The Company will use its best efforts to prevent the
issuance of any such stop order or suspension and, if any such stop order or
suspension is issued, to obtain the withdrawal thereof as promptly as
possible.
(d) If
at any time following issuance of an Issuer-Represented Free Writing Prospectus
there occurred or occurs an event or development as a result of which such
Issuer-Represented Free Writing Prospectus conflicted or would conflict with the
information contained in the Registration Statement or included or would include
an untrue statement of a material fact or omitted or would omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances prevailing at that subsequent time, not misleading, the
Company has notified or will notify promptly the Representatives so that any use
of such Issuer-Represented Free Writing Prospectus may cease until it is amended
or supplemented and the Company has promptly amended or will promptly amend or
supplement such Issuer-Represented Free Writing Prospectus to eliminate or
correct such conflict, untrue statement or omission; provided, however, that
this covenant shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing to the Company by
an Underwriter through the Representatives expressly for use
therein.
(e) The
Company represents and agrees that, unless it obtains the prior written consent
of the Representatives, and each Underwriter represents and agrees that, unless
it obtains the prior written consent of each of the Company and the
Representative, it has not made and will not make any offer relating to the
Shares that would constitute an “issuer free writing prospectus,” as defined in
Rule 433 under the Act, or that would otherwise constitute a “free writing
prospectus,” as defined in Rule 405 under the Act, required to be filed with the
Commission. Any such free writing prospectus consented to by the Company and the
Representatives is hereinafter referred to as a “Permitted Free Writing
Prospectus.” The Company represents that it has treated or agrees that it will
treat each Permitted Free Writing Prospectus as an “issuer free writing
prospectus,” as defined in Rule 433, and has complied and will comply with the
requirements of Rule 433 applicable to any Permitted Free Writing Prospectus,
including timely filing with the Commission where required, legending and record
keeping. The Company represents that it has satisfied the conditions in Rule 433
to avoid a requirement to file with the Commission any electronic road
show.
(f) If
the delivery of a prospectus relating to the Shares is required under the Act at
any time prior to the expiration of nine months after the date of the Prospectus
and if at such time any events have occurred as a result of which the Prospectus
as then amended or supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or if for any reason it is necessary during such same period to
amend or supplement the Prospectus, the Company will promptly notify the
Representatives and upon their request (but at the Company’s expense) prepare
and file with the Commission an amendment or supplement to the Prospectus that
corrects such statement or omission or effects such compliance and will furnish
without charge to each Underwriter and to any dealer in securities as many
copies of such amended or supplemented Prospectus as the Representatives may
from time to time reasonably request.
14
(g) The
Company promptly from time to time will take such action as the Representatives
may reasonably request to qualify the Shares for offering and sale under the
securities or blue sky laws of such jurisdictions as the Representatives may
request and will continue such qualifications in effect for as long as may be
necessary to complete the distribution of the Shares, provided that in
connection therewith the Company shall not be required to qualify as a foreign
corporation or as a dealer in securities or to file a general consent to service
of process in any jurisdiction. The Company will file such statements
and reports as may be required by the laws of each jurisdiction in which the
Shares have been qualified as above provided.
(h) Upon
request, the Company will promptly provide each of the Representatives, without
charge, (i) two manually executed copies of the Registration Statement as
originally filed with the Commission and of each amendment thereto, including
all exhibits and all documents or information incorporated by reference therein,
(ii) for each other Underwriter, a conformed copy of the Registration Statement
as originally filed and of each amendment thereto, without exhibits but
including all documents or information incorporated by reference therein and
(iii) so long as a prospectus relating to the Shares is required to be delivered
under the Act, as many copies of each Preliminary Prospectus or the Prospectus
or any amendment or supplement thereto as the Representatives may reasonably
request.
(i) As
soon as practicable, but not later than the Availability Date (as defined
below), the Company will make generally available to its security holders an
earnings statement of the Company and its subsidiaries, if any, covering a
period of at least 12 months beginning after the effective date of the
Registration Statement (which need not be audited) complying with Section 11(a)
of the Act and the rules and regulations thereunder. “Availability
Date” means the forty-fifth (45th) day
after the end of the fourth fiscal quarter following the fiscal quarter in which
the Registration Statement went effective, except that if such fourth fiscal
quarter is the last quarter of the Company’s fiscal year, “Availability Date”
means the ninetieth (90th) day
after the end of such fourth fiscal quarter.
(j) During
the period beginning from the date hereof and continuing to and including the
date 120 days after the date of the Prospectus, the Company will not, and will
use its best efforts to cause each executive officer and director of the Company
to deliver to the Representatives an agreement in the form attached hereto,
agreeing not, without the prior written consent of the
Representatives, directly or indirectly to (i) offer, sell, contract to sell or
otherwise dispose of, any shares of Common Stock or securities convertible into
or exercisable or exchangeable for shares of Common Stock or (ii) enter into any
swap or other agreement or any transaction that transfers, in whole or in part,
the economic consequences of ownership of shares of Common Stock whether any
such swap or other agreement is to be settled by delivery of shares of Common
Stock, other securities, cash or otherwise; except for the sale of the Shares
hereunder, except for the issuance of Common Stock upon the exercise of stock
options or warrants or the conversion of convertible securities outstanding on
the date of this Agreement or to the extent that such stock options, warrants
and convertible securities are disclosed in the Prospectus and except for the
grant to employees of stock options to purchase Common Stock which are not
exercisable within such 120 days.
15
(k) During
the period of three years after the effective date of the Registration
Statement, the Company will furnish to the Representatives and, upon request, to
each of the other Underwriters, without charge, (i) copies of all reports or
other communications (financial or other) furnished to shareholders and (ii) as
soon as they are available, copies of any reports and financial statements
furnished to or filed with the Commission or any national securities
exchange.
(l) Prior
to the termination of the underwriting syndicate contemplated by this
Agreement, the Company and its affiliates will not, and the Company
shall cause its officers and directors not to, (i) take, directly or
indirectly, any action designed to cause or to result in, or that might
reasonably be expected to cause or result in, the stabilization or manipulation
of the price of any security of the Company or (ii) sell, bid for, purchase or
pay anyone any compensation for soliciting purchases of, the
Shares.
(m) In
case of any event, at any time within the period during which a prospectus is
required to be delivered under the Act, as a result of which any Preliminary
Prospectus, Issuer-Represented Free Writing Prospectus or the Prospectus, as
then amended or supplemented, would contain an untrue statement of a material
fact, or omit to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, or, if it is necessary at any time to amend any Preliminary
Prospectus or the Prospectus to comply with the Act or any applicable securities
or blue sky laws, the Company promptly will prepare and file with the
Commission, and any applicable state securities commission, an amendment,
supplement or document that will correct such statement or omission or effect
such compliance and will furnish to the several Underwriters such number of
copies of such amendment(s), supplement(s) or document(s) as the Representatives
may reasonably request. For purposes of this subsection (k), the
Company will provide such information to the Representatives, the Underwriters’
counsel and counsel to the Company as shall be necessary to enable such persons
to consult with the Company with respect to the need to amend or supplement the
Registration Statement, any Preliminary Prospectus, Issuer-Represented Free
Writing Prospectus or the Prospectus or file any document, and shall furnish to
the Representatives and the Underwriters’ counsel such further information as
each may from time to time reasonably request.
(n) The
Company will use its best efforts to obtain, and thereafter maintain, the
qualification or listing of the shares of Common Stock (including, without
limitation, the Shares) on the New York Stock Exchange.
(o) At
the request of the Representatives, but not without the Representatives'
agreement and the Company’s consent, the Company shall file a Rule 462(b)
registration statement with the Commission in compliance with Rule 462(b) of the
Act and the Company shall sell any and all such shares registered thereunder to
the Underwriters at the Per Share Price and otherwise in
accordance with the terms of this Agreement.
(p) The
Company will use its best efforts to satisfy or cause to be satisfied the
conditions to the obligations of the Underwriters in Section 7
hereof.
6. Expenses and
Fees.
(a) The
Company will pay all costs and expenses incident to the performance of the
obligations of the Company under this Agreement, whether or not the transactions
contemplated hereby are consummated or this Agreement is terminated pursuant to
Section 10 hereof, including, without limitation, all costs and expenses
incident to (i) the printing of and mailing expenses associated with the
Registration Statement, any Preliminary Prospectus, any Permitted Free-Writing
Prospectus and the Prospectus and any amendments or supplements thereto, this
Agreement, the Agreement among Underwriters, the Underwriters’ Questionnaire
submitted to each of the Underwriters by the Representatives in connection
herewith, the power of attorney executed by each of the Underwriters in favor of
Xxxxxx Xxxxxxxxxx Xxxxx LLC in connection herewith, the Selected Dealer
Agreement and related documents (collectively, the “Underwriting Documents”) and
the preliminary Blue Sky memorandum relating to the offering prepared by Xxxxxxx
Spidi & Xxxxx, PC, counsel to the Underwriters (collectively with any
supplement thereto, the “Preliminary Blue Sky Memorandum”); (ii) the fees,
disbursements and expenses of the Company’s counsel and accountants in
connection with the registration of the Shares under the Act and all other
expenses in connection with the preparation and, if applicable, filing of the
Registration Statement (including all amendments thereto), any Preliminary
Prospectus, the Prospectus and any amendments and supplements thereto, the
Underwriting Documents and the Preliminary Blue Sky Memorandum; (iii) the
delivery of copies of the foregoing documents to the Underwriters; (iv) the
filing fees of the Commission, Financial Industry Regulatory Authority, and the
New York Stock Exchange relating to the Shares; (v) the preparation, issuance
and delivery to the Underwriters of any certificates evidencing the Shares,
including transfer agent’s and registrar’s fees; (vi) the qualification of
the Shares for offering and sale under state securities and blue sky laws,
including filing fees and fees and disbursements of counsel for the Underwriters
(and local counsel therefor) relating thereto; (vii) any listing of the Shares
on the New York Stock Exchange; (viii) any expenses for travel, lodging and
meals incurred by the Company and any of its officers, directors and employees
in connection with any meetings with prospective investors in the Shares; and
(ix) all other costs and expenses reasonably incident to the performance of the
Company’s obligations hereunder that are not otherwise specifically provided for
in this Section 6.
16
(b) Except
as provided herein, the Representatives and the Underwriters will pay their own
expenses, including the fees of their counsel (except as provided in Section
6(a)(vi) hereof), public advertisement of the offering and their own marketing
and due diligence expenses. If the Representatives determine not to proceed with
the offering due to a material adverse change affecting the condition of the
Company or the securities markets in the United States, or the market for bank
stocks in particular, or in the event that the Company elects not to proceed
with the offering, for any reason, the Company will reimburse Xxxxxx Xxxxxxxxxx
Xxxxx LLC for its out-of-pocket expenses relating to the offering (including,
but not limited to, the fees and disbursements to its counsel) not to exceed
$100,000.
7. Conditions of the
Underwriters’ Obligations. The obligations of the Underwriters
hereunder to purchase and pay for the Shares to be delivered at each Time of
Delivery shall be subject, in their discretion, to the accuracy of the
representations and warranties of the Company contained herein as of the date
hereof and as of such Time of Delivery, to the accuracy of the statements of the
Company’s officers made pursuant to the provisions hereof, to the performance by
the Company of its covenants and agreements hereunder, and to the following
additional conditions precedent:
(a) If
the registration statement as amended to date has not become effective prior to
the execution of this Agreement, such registration statement shall have been
declared effective not later than 11:00 a.m., Eastern time, on the date of this
Agreement or such later date and/or time as shall have been consented to by the
Representatives in writing. If required, the Prospectus and any
amendment or supplement thereto shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed for such
filing and in accordance with Section 5(a) of this Agreement; no stop order
suspending the effectiveness of the Registration Statement or any part thereof
shall have been issued and no proceedings for that purpose shall have been
instituted, threatened or, to the knowledge of the Company and the
Representatives, contemplated by the Commission; and all requests for additional
information on the part of the Commission shall have been complied with to the
Representatives’ reasonable satisfaction.
(b) The
Representatives shall each have received a copy of an executed lock-up agreement
from the Company and each of the Company’s executive officers and directors and
certain shareholders of Common Stock, in the form attached hereto as Exhibit A.
17
(c) The
Representatives shall each have received an opinion, dated such Time of
Delivery, of Bond, Xxxxxxxxx & King, PLLC, special counsel for the Company,
in form and substance satisfactory to the Representatives and their respective
counsel, to the effect that:
(i) The
Company is validly existing as a corporation in good standing under the laws of
the State of Delaware and has the corporate power and authority to own or lease
its properties and conduct its business as described in the Registration
Statement, the General Disclosure Package and the Prospectus and to enter into
this Agreement and perform its obligations hereunder. The Company is
duly qualified to transact business as a foreign corporation in each
jurisdiction in which it owns or leases property, or conducts any business, so
as to require such qualification, except where the failure to so qualify would
not have a material adverse effect on the financial position, results of
operations or business of the Company and its subsidiaries taken as a
whole. The Company is a registered bank holding company under the
Bank Holding Company Act of 1956, as amended.
(ii) Each
of the Company’s direct or indirect subsidiaries is validly existing as a
corporation in good standing under the laws of its jurisdiction of incorporation
and has the corporate power and authority to own or lease its properties and
conduct its business as described in the Registration Statement, the General
Disclosure Package and the Prospectus. Each subsidiary is duly
qualified to transact business as a foreign corporation in each jurisdiction in
which it owns or leases property, or conducts any business, so as to require
such qualification, except where the failure to so qualify would not have a
material adverse effect on the financial position, results of operations or
business of the Company and its direct or indirect subsidiaries taken as a
whole.
(iii) All
of the issued shares of capital stock of the Company, including the Shares to be
sold by the Company pursuant hereto when delivered against payment therefor as
contemplated hereby, have been duly authorized and validly issued, are fully
paid and nonassessable and conform to the description of the Common Stock
contained in the Prospectus. None of the issued shares of Common
Stock of the Company or, to such counsel’s knowledge, capital stock of the
Company’s direct or indirect subsidiaries has been issued or is owned or held in
violation of any statutory (or any other) preemptive rights of shareholders,
and, to such counsel’s knowledge, no person or entity (including any holder of
outstanding shares of Common Stock of the Company or capital stock of its direct
or indirect subsidiaries) has any statutory (or any other) preemptive or other
rights to subscribe for any of the Shares.
(iv) All
of the issued shares of capital stock of the Bank, has been duly authorized and
validly issued, are fully paid and nonassessable, except to the extent such
shares may be deemed assessable under 12 U.S.C. Section 55, and, to such
counsel’s knowledge, all issued and outstanding shares of the Company’s direct
and indirect subsidiaries are owned beneficially by the Company or its direct or
indirect subsidiaries (except for the preferred securities of Community Capital
Trust II, Community Statutory Trust III, Community Capital Trust IV and CBNA
Preferred Funding Corp.), free and clear of all liens, security interests,
pledges, charges, encumbrances, shareholders’ agreements, voting agreements,
proxies, voting trusts, defects, equities or claims of any nature whatsoever
(collectively, “Encumbrances”), including, without limitation, any Encumbrance
arising or resulting from any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement of or entered into by the Company or its
direct or indirect subsidiaries.
(v) Except
as disclosed in the Prospectus, the General Disclosure Package, the Registration
Statement and the documents incorporated by reference therein, to such
counsel’s knowledge, there are no outstanding (A) securities or
obligations of the Company or any of its subsidiaries convertible into or
exchangeable for any capital stock of the Company or any direct or indirect
subsidiary, (B) warrants, rights or options to subscribe for or purchase from
the Company or any of its subsidiaries any such capital stock or any such
convertible or exchangeable securities or obligations, other than pursuant to
the Company's stock benefit plans, or (C) obligations of the Company or any of
its subsidiaries to issue any shares of capital stock, any such convertible or
exchangeable securities or obligations, or any such warrants, rights or
options.
18
(vi) To
such counsel’s knowledge, there are no contracts, agreements or understandings
between the Company and any person granting such person the right to require the
Company to file a registration statement under the Act with respect to any
securities of the Company owned or to be owned by such person or, requiring the
Company to include such securities in the securities registered pursuant to the
Registration Statement (or any such right has been effectively waived) or
requiring the registration of any securities pursuant to any other registration
statement filed by the Company under the Act.
(vii) The
sale of the Shares being sold at such Time of Delivery and the performance of
this Agreement and the consummation of the transactions herein contemplated will
not conflict with or violate any provision of the certificate of incorporation
or bylaws or comparable charter documents of the Company or any of its direct or
indirect subsidiaries, in each case as amended to date or any existing law,
statute, rule or regulation, or, in any material respect, to such counsel’s
knowledge, conflict with, or (with or without the giving of notice or the
passage of time or both) result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument to which the
Company or any of its direct or indirect subsidiaries is a party or to which any
of their respective properties or assets is subject, or, conflict with or
violate any order, judgment or decree known to such counsel, of any court or
governmental agency or body having jurisdiction over the Company or any of its
direct or indirect subsidiaries or any of their respective properties or
assets.
(viii) No
consent, approval, authorization, order or declaration of or from, or
registration, qualification or filing with, any court or governmental agency or
body is required for the sale of the Shares or the consummation of the
transactions contemplated by this Agreement, except such as have been or will
have been obtained and are or will be in effect, and except the registration of
the Shares under the Act, and such as may be required by the New York Stock
Exchange or under state securities or blue sky laws in connection with the
offer, sale and distribution of the Shares by the Underwriters.
(ix) To
such counsel’s knowledge, other than as disclosed in or contemplated by the
Prospectus, the General Disclosure Package, the Registration Statement or the
documents incorporated therein by reference therein, there is no litigation,
arbitration, claim, proceeding (formal or informal) or investigation pending or
threatened, in which the Company or any of its direct or indirect subsidiaries
is a party or of which any of their respective properties or assets is the
subject which, if determined adversely to the Company or any of its direct or
indirect subsidiaries, would individually or in the aggregate have a material
adverse effect on the financial position, results of operations or business of
the Company and its direct or indirect subsidiaries taken as a
whole. To such counsel’s knowledge, neither the Company nor any
direct or indirect subsidiary is in violation of, or in default with respect to,
any law, statute, rule, regulation, order, judgment or decree, except as
described in the Prospectus or such as do not and will not individually or, in
the aggregate have a material adverse effect on the financial position, results
of operations or business of the Company and its subsidiaries taken as a whole,
and neither the Company nor any direct or indirect subsidiary is required to
take any action in order to avoid any such violation or details.
19
(x) This
Agreement has been duly authorized, executed and delivered by the Company and,
assuming due execution by the Representatives of the Underwriters, constitutes
the valid and binding agreement of the Company, enforceable against the Company,
in accordance with its terms, subject, as to enforcement, to applicable
bankruptcy, insolvency, reorganization and moratorium laws and other laws
relating to or affecting the enforcement of creditors’ rights generally and to
general equitable principles and except as the enforceability of rights to
indemnity and contribution under this Agreement may be limited under applicable
securities laws or the public policy underlying such laws.
(xi) Neither
the Company nor any of its direct or indirect subsidiaries is an “investment
company” or a company “controlled” by an investment company as such terms are
defined in Sections 3(a) and 2(a)(9), respectively, of the Investment Company
Act.
(xii) The
Registration Statement, the General Disclosure Package and the Prospectus and
each amendment or supplement thereto (other than the financial statements, the
notes and schedules thereto and other financial data included therein, to which
such counsel need express no opinion), as of their respective effective or issue
dates, complied as to form in all material respects with the requirements of the
Act and the respective rules and regulations thereunder.
(xiii) The
Registration Statement was declared effective under the Act as of the date and
time specified in such opinion, based solely on verbal communications with the
staff of the Commission, and no stop order suspending the effectiveness of the
Registration Statement has been issued under the Act and, to such counsel’s
knowledge, no proceedings therefor have been initiated or threatened by the
Commission.
Such
counsel shall also state that they have participated in the preparation of the
Registration Statement, the General Disclosure Package and the Prospectus and in
conferences with officers and other representatives of the Company,
representatives of the independent public accountants for the Company, and
representatives of and counsel to the Underwriters at which the contents of the
Registration Statement, the General Disclosure Package, the Prospectus and
related matters were discussed and, although such counsel has not passed upon or
assumed any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement, the General Disclosure
Package or the Prospectus, and although such counsel has not undertaken to
verify independently the accuracy or completeness of the statements in the
Registration Statement, the General Disclosure Package or the Prospectus, no
facts have come to such counsel’s attention to lead them to believe that the
Registration Statement, or any further amendment thereto made prior to such Time
of Delivery, on its effective date and as of such Time of Delivery, contained or
contains any untrue statement of a material fact or omitted or omits to state
any material fact required to be stated therein or necessary to make the
statements therein, not misleading, or that the Prospectus, or any amendment or
supplement thereto made prior to such Time of Delivery, as of its issue date and
as of such Time of Delivery, contained or contains any untrue statement of a
material fact or omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading (provided that such counsel need express no belief
regarding the financial statements, the notes and schedules thereto and other
financial data contained in the Registration Statement, any amendment thereto,
or the Prospectus, or any amendment or supplement thereto).
In
rendering any such opinion, such counsel may rely, as to matters of fact, to the
extent such counsel deems proper, on certificates of officers of the Company,
public officials and letters from officials of the New York Stock
Exchange. Copies of such certificates of officers of the Company and
other opinions shall be addressed and furnished to the Underwriters and
furnished to counsel for the Underwriters.
20
(d) Xxxxxxx
Spidi & Xxxxx, PC, counsel for the Underwriters, shall have furnished to
each of the Representatives such opinion or opinions, dated such Time of
Delivery, with respect to such matters as the Representatives may reasonably
request, and the Company shall have furnished to such counsel such documents as
they request for the purpose of enabling them to pass upon such
matters.
(e) The
Representatives shall each have received from Pricewaterhouse Coopers LLP, in
form and substance satisfactory to the Representatives, letters dated as of the
date hereof, the date of delivery of the Firm Shares and the date(s) of delivery
of any Optional Shares, containing statements and information of the type
ordinarily included in accountants’ “comfort letters” to Underwriters with
respect to the financial statements and certain financial information contained
in the Registration Statement and Prospectus; provided that the letter dated as
of the date of delivery of the Firm Shares shall use a “cut-off date” not
earlier than the date hereof.
(f) Since
the date of the latest audited financial statements included or incorporated by
reference in the Prospectus, neither the Company nor any of its direct or
indirect subsidiaries shall have sustained any material adverse change, or any
development involving a prospective material adverse change (including, without
limitation, a change in management or control of the Company), in or affecting
the position (financial or otherwise), results of operations, net worth or
business prospects of the Company and its direct or indirect subsidiaries,
otherwise than as disclosed in or contemplated by the Prospectus, the effect of
which, in either such case, in the Representatives’ reasonable judgment makes it
impracticable or inadvisable to proceed with the purchase, sale and delivery of
the Shares being delivered at such Time of Delivery as contemplated by the
Registration Statement, as amended as of the date hereof.
(g) Subsequent
to the date hereof, there shall not have occurred any of the
following: (i) any suspension or limitation in trading in securities
generally on any national securities exchange or any setting of minimum prices
for trading on any national securities exchange, or in the Common Stock of the
Company by the Commission, any national securities exchange or the Nasdaq Stock
Market; (ii) a moratorium on commercial banking activities in New York declared
by either federal or state authorities; or (iii) any outbreak or escalation of
hostilities involving the United States, declaration by the United States of a
national emergency or war or any other national or international calamity or
emergency if the effect of any such event specified in this clause (iii) in the
Representatives’ reasonable judgment makes it impracticable or inadvisable to
proceed with the purchase, sale and delivery of the Shares being delivered at
such Time of Delivery as contemplated by the Registration Statement, as amended
as of the date hereof.
(h) The
Company shall have furnished to the Representatives at such Time of Delivery
certificates of the chief executive officer or an executive vice president and
the chief financial officer of the Company satisfactory to the Representatives,
as to the accuracy of the representations and warranties of the Company herein
at and as of such Time of Delivery with the same effect as if made at such Time
of Delivery, as to the performance by the Company of all of its respective
obligations hereunder to be performed at or prior to such Time of Delivery, and
as to such other matters as the Representatives may reasonably request, and the
Company shall have furnished or caused to be furnished certificates of such
officers as to such matters as the Representatives may reasonably
request.
(i) The
representations and warranties of the Company in this Agreement and in the
certificates delivered by the Company pursuant to this Agreement shall be true
and correct in all material respects when made and on and as of each Time of
Delivery as if made at such time, and the Company shall have performed in all
material respects all covenants and agreements and satisfied all conditions
contained in this Agreement required to be performed or satisfied by the Company
at or before such Time of Delivery.
(j) The
Shares shall have been approved for listing on the New York Stock
Exchange.
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21
8. Indemnification and
Contribution.
(a) The
Company agrees to indemnify and hold harmless each Underwriter against any
losses, claims, damages, liabilities or expenses (including costs of
settlement), joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages, liabilities
or expenses (or actions in respect thereof) arise out of or are based
upon: (i) any untrue statement or alleged untrue statement made by
the Company in Section 1 of this Agreement; (ii) any untrue statement or alleged
untrue statement of any material fact contained in (A) the
Registration Statement or any amendment thereto, the General Disclosure Package,
any Preliminary Prospectus, the Prospectus or any Issuer-Represented Limited Use
Free Writing Prospectus, when considered together with the General Disclosure
Package or any amendment or supplement thereto, or (B) any application or other
document, or amendment or supplement thereto, executed by the Company or based
upon written information furnished by or on behalf of the Company filed in any
jurisdiction in order to qualify the Shares under the securities or blue sky
laws thereof or filed with the Commission, the Financial Industry Regulatory
Authority or any securities association or securities exchange (each an
“Application”); or (iii) the omission of or alleged omission to state in the
Registration Statement or any amendment thereto, the General Disclosure Package,
any Preliminary Prospectus, the Prospectus or any Issuer-Represented Limited Use
Free Writing Prospectus, when considered together with the General Disclosure
Package, or any amendment or supplement thereto, or any Application of a
material fact required to be stated therein or necessary to make the statements
therein not misleading; and will reimburse each Underwriter for any legal or
other expenses reasonably incurred by such Underwriter in connection with
investigating, defending against or appearing as a third-party witness in
connection with any such loss, claim, damage, liability, expense or action;
provided, however, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage, liability or action arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
the Registration Statement or any amendment thereto, the General Disclosure
Package, any Preliminary Prospectus, the Prospectus or any Issuer-Represented
Limited Use Free Writing Prospectus, when considered together with the General
Disclosure Package, or any amendment or supplement thereto or any Application in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through the Representatives expressly for use therein
(which information is solely as set forth in Section 1(c)
hereof). The Company will not, without the prior written consent of
the Representatives of the Underwriters, which shall not be unreasonably
withheld, settle or compromise or consent to the entry of any judgment in any
pending or threatened claim, action, suit or proceeding (or related cause of
action or portion thereof) in respect of which indemnification may be sought
hereunder (whether or not any Underwriter is a party to such claim, action, suit
or proceeding), unless such settlement, compromise or consent includes an
unconditional release of each Underwriter from all liability arising out of such
claim, action, suit or proceeding (or related cause of action or portion
thereof).
(b) The
Company agrees to indemnify and hold harmless the Underwriters and each person,
if any, who controls the Underwriters within the meaning of either Section 15 of
the Securities Act or Section 20 of the Exchange Act (“Underwriter Entities”),
against any and all losses, claims, damages or liabilities (including, without
limitation, any legal or other expenses reasonably incurred in connection with
defending or investigating any such action or claim): caused by the failure of
any Participant to pay for and accept delivery of the Shares which, immediately
following the effectiveness of the Registration Statement, were subject to a
properly confirmed agreement to purchase; provided that the Company shall not be
responsible under this subsection 8(b) for any losses, claims, damages or
liabilities (or expenses relating thereto) that are finally judicially
determined to have resulted from the bad faith or gross negligence of the
Underwriter Entities.
22
(c) Each
Underwriter, severally but not jointly, agrees to indemnify and hold harmless
the Company against any losses, claims, damages or liabilities to which the
Company may become subject under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement or any amendment thereto, the
General Disclosure Package, any Preliminary Prospectus, the Prospectus or any
Issuer-Represented Limited Use Free Writing Prospectus, when considered together
with the General Disclosure Package, or any amendment or supplement thereto, or
any Application or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such Underwriter
through the Representatives expressly for use therein (which information is
solely as set forth in Section 1(c) hereof); and will reimburse the Company for
any legal or other expenses reasonably incurred by the Company in connection
with investigating or defending any such loss, claim, damage, liability or
action.
(d) Promptly
after receipt by an indemnified party under subsection (a), (b) or (c)
above of notice of the commencement of any action, such indemnified party shall,
if a claim in respect thereof is to be made against the indemnifying party under
such subsection, notify the indemnifying party in writing of the commencement
thereof; but the omission so to notify the indemnifying party shall not relieve
the indemnifying party from any liability which it may have to any indemnified
party otherwise than under such subsection (a), (b) or (c). In case
any such action shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it shall
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to the
indemnifying party); provided, however, that if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be one or more legal defenses available to it or other
indemnified parties which are different from or additional to those available to
the indemnifying party, the indemnifying party shall not have the right to
assume the defense of such action on behalf of such indemnified party and such
indemnified party shall have the right to select separate counsel to defend such
action on behalf of such indemnified party. After such notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof and approval by such indemnified party of counsel appointed
to defend such action, the indemnifying party will not be liable to such
indemnified party under this Section 8 for any legal or other expenses, other
than reasonable costs of investigation, subsequently incurred by such
indemnified party in connection with the defense thereof. Nothing in
this Section 8(d) shall preclude an indemnified party from participating at its
own expense in the defense of any such action so assumed by the indemnifying
party.
(e) If
the indemnification provided for in this Section 8 is unavailable to or
insufficient to hold harmless an indemnified party under subsection (a) or (c)
above in respect of any losses, claims, damages or liabilities (or actions in
respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Underwriters on the other hand from the
offering of the Shares. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under subsection (d) above,
then each indemnifying party shall contribute to such amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of the Company on the one
hand and the Underwriters on the other hand in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company on the
one hand and the Underwriters on the other hand shall be deemed to be in the
same proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company bear to the total underwriting discounts and
commissions received by the Underwriters. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand
or the Underwriters on the other hand and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Underwriters agree that it
would not be just and equitable if contributions pursuant to this
subsection (e) 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 in this subsection (e). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this
subsection (e) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions
of this subsection (e), no Underwriter shall be required to contribute any
amount in excess of the aggregate fees actually paid to the Underwriter under or
pursuant to this Agreement by reason of such untrue or alleged untrue statement
or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters’ obligations in this
subsection (e) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(f) The
obligations of the Company under this Section 8 shall be in addition to any
liability which the Company may otherwise have and shall extend, upon the same
terms and conditions, to each officer, director and employee of the Underwriters
and to each person, if any, who controls any Underwriter within the meaning of
the Act or the Exchange Act; and the obligations of the Underwriters under this
Section 8 shall be in addition to any liability which the respective
Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company and to each person, if
any, who controls the Company within the meaning of the Act or the Exchange
Act.
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9. Default of
Underwriters.
(a) If
any Underwriter defaults in its obligation to purchase Shares at a Time of
Delivery, the Representatives may in their discretion arrange for the
Underwriters or another party or other parties to purchase such Shares on the
terms contained herein within thirty-six (36) hours after such default by any
Underwriter. In the event that, within the respective prescribed
period, the Representatives notify the Company that they have so arranged for
the purchase of such Shares, the Representatives shall have the right to
postpone a Time of Delivery for a period of not more than seven (7) days in
order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus, or in any other documents or
arrangements, and the Company agrees to file promptly any amendments to the
Registration Statement or the Prospectus that in the Representatives’ opinion
may thereby be made necessary. The cost of preparing, printing and
filing any such amendments shall be paid for by the Underwriters. The
term “Underwriter” as used in this Agreement shall include any person
substituted under this Section with like effect as if such person had originally
been a party to this Agreement with respect to such Shares.
(b) If,
after giving effect to any arrangements for the purchase of the Shares of a
defaulting Underwriter or Underwriters by the Representatives as provided in
subsection (a) above, if any, the aggregate number of such Shares which
remains unpurchased does not exceed one-eleventh (1/11) of the aggregate number
of Shares to be purchased at such Time of Delivery, then the Company shall have
the right to require each non-defaulting Underwriter to purchase the number of
Shares which such Underwriter agreed to purchase hereunder at such Time of
Delivery and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the number of Shares which such
Underwriter agreed to purchase hereunder) of the Shares of such defaulting
Underwriter or Underwriters for which such arrangements have not been
made.
10. Termination.
(a) This
Agreement may be terminated in the sole discretion of the Representatives by
notice to the Company given prior to the First Time of Delivery or any
Subsequent Time of Delivery, respectively, in the event that (i) any
condition to the obligations of the Underwriters set forth in Section 7
hereof has not been satisfied, or (ii) the Company shall have failed,
refused or been unable to deliver the Firm Shares or the Company shall have
failed, refused or been unable to perform all obligations and satisfy all
conditions on its part to be performed or satisfied hereunder at or prior to
such Time of Delivery, in either case other than by reason of a default by any
of the Underwriters. If this Agreement is terminated pursuant to this
Section 10(a), the Company will reimburse the Underwriters severally upon
demand for all reasonable out-of-pocket expenses (including counsel fees and
disbursements) that shall have been incurred by them in connection with the
proposed purchase and sale of the Shares. Any termination pursuant to
this Section 10(a) shall be without liability on the part of any
Underwriter to the Company or on the part of the Company to any Underwriter,
except for expenses to be paid by the Company pursuant to Section 6 hereof
or reimbursed by the Company pursuant to this Section 10(a) and except as
to indemnification and contribution to the extent provided in Section 8
hereof.
(b) If,
after giving effect to any arrangements for the purchase of the Shares of a
defaulting Underwriter or Underwriters as provided in Section 9(a), the
aggregate number of such Shares which remains unpurchased exceeds one-eleventh
(1/11) of the aggregate number of Shares to be purchased at such Time of
Delivery, then this Agreement (or, with respect to a Subsequent Time of
Delivery, the obligations of the Underwriters to purchase and of the Company to
sell the Optional Shares) shall thereupon terminate, without liability on the
part of any non-defaulting Underwriter or the Company, except for the expenses
to be borne by the Company and the Underwriters as provided in Section 6
hereof and the indemnity and contribution agreements in Section 8 hereof;
but nothing herein shall relieve a defaulting Underwriter from liability for its
default.
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11. Survival. The
respective indemnities, agreements, representations, warranties and other
statements of the Company, its officers and the several Underwriters, as set
forth in this Agreement or made by or on behalf of them, respectively, pursuant
to this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person referred to in Section 8(f) or
the Company, or any officer or director or controlling person of the Company
referred to in Section 8(f), and shall survive delivery of and payment for
the Shares. The respective agreements, covenants, indemnities and
other statements set forth in Sections 6 and 8 hereof shall remain in full
force and effect, regardless of any termination or cancellation of this
Agreement.
12. Notices. All
communications hereunder shall be in writing and, if sent to any of the
Underwriters, shall be sufficient in all respects if mailed, delivered or
telegraphed and confirmed in writing to the Representatives c/o Janney
Xxxxxxxxxx Xxxxx LLC, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000,
Attention: Xxxxxx X. Xxxxx, Managing Director (with a copy to Xxxxxxx
Spidi & Xxxxx, PC, 000 Xxx Xxxx Xxxxxx, X.X., Xxxxx 000 Xxxx,
Xxxxxxxxxx, X.X. 00000, Attention: Xxxx X. Spidi, Esq.); if to
the Company, shall be sufficient in all respects if mailed, delivered or
telegraphed and confirmed in writing to Community Bank System, Inc., 0000
Xxxxxxxxxx Xxxxxxx, Xx Xxxx, Xxx Xxxx 00000, Attention: Xxxx X. Xxxxxxxx,
President and Chief Executive Officer (with a copy to Bond, Xxxxxxxxx &
King, PLLC, Xxx Xxxxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx 00000,
Attention: Xxxxxx X. Xxxxxx, Esq.).
13. Binding
Effect. This Agreement shall be binding upon, and inure solely
to the benefit of, the Underwriters, the Company and, to the extent provided in
Sections 8 and 11 hereof, the officers, directors and employees and
controlling persons referred to therein and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of
any of the Shares from any Underwriter shall be deemed a successor or assign by
reason merely of such purchase.
14. Partial
Unenforceability. If any section, subsection, clause or provision of this
Agreement is for any reason determined to be invalid or unenforceable, such
determination shall not affect the validity or enforceability of any other
section, subsection, clause or provision hereof.
15. Entire Agreement.
This Agreement embodies the entire agreement among the parties hereto with
respect to the transactions contemplated herein, and other than the Letter of
Intent between the Company and the Representative, there have not been and are
no agreements among the parties with respect to such transactions other than as
set forth or provided for herein.
16. Governing
Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania without giving
effect to any provisions regarding conflicts of laws.
17. Counterparts. This
Agreement may be executed by any one or more of the parties hereto in any number
of counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same instrument.
[SIGNATURES
APPEAR ON THE FOLLOWING PAGE]
|
25
If the foregoing is in accordance with
your understanding of our agreement, please sign and return to us one of the
counterparts hereof, and upon the acceptance hereof by the Representatives, on
behalf of each of the Underwriters, this letter will constitute a binding
agreement among the Underwriters and the Company. It is understood
that your acceptance of this letter on behalf of each of the Underwriters is
pursuant to the authority set forth in the Agreement among Underwriters, a copy
of which shall be submitted to the Company for examination, upon request, but
without warranty on your part as to the authority of the signers
thereof.
Very truly
yours,
COMMUNITY BANK
SYSTEM, INC.
By:
Name: Xxxx
X. Xxxxxxxx
Title: President
The
foregoing Agreement is hereby
confirmed
and accepted as of the
date
first written above.
XXXXXX
XXXXXXXXXX XXXXX LLC
|
XXXXXXX
XXXXX & ASSOCIATES, INC.
|
|
By:
|
By:
|
Name: Name:
Title:
Title:
|
On
behalf of each of the
|
On
behalf of each of the
|
|
Underwriters
|
Underwriters
|
FTN
MIDWEST SECURITIES CORP.
|
By:
|
Name:
Title:
|
On
behalf of each of the
|
|
Underwriters
|
|
26
SCHEDULE
I
Underwriter
|
Total
Number
of
Firm Shares
to be Purchased
|
Number
of Optional
Shares
to be Purchased
if
Maximum
Option Exercised
|
||
Xxxxxx
Xxxxxxxxxx Xxxxx LLC
|
||||
Xxxxxxx
Xxxxx & Associates, Inc.
|
||||
FTN
Midwest Securities Corp.
|
||||
Total
|
1,700,000
|
255,000
|
|
1
27
SCHEDULE
II
Issuer-Represented
Free Writing Prospectuses
|
28
EXHIBIT
A
FORM
OF LOCK-UP AGREEMENT
COMMUNITY
BANK SYSTEM, INC.
____________
__, 2001
XXXXXX
XXXXXXXXXX XXXXX LLC
XXXXXXX
XXXXX & ASSOCIATES, INC.
FTN
MIDWEST SECURITIES CORP.
as
Representatives (the “Representatives”)
of
the Several Underwriters
Named in
Schedule I
hereto
c/o
Janney Xxxxxxxxxx Xxxxx LLC
0000
Xxxxxx Xxxxxx
Xxxxxxxxxxxx,
Xxxxxxxxxxxx 00000
Ladies
and Gentlemen:
The
undersigned understands that you, as Representatives of the several underwriters
(the “Underwriters”), propose to enter into an underwriting agreement (the
“Underwriting Agreement”) with Community Bank System, Inc. (the “Company”)
providing for the public offering (the “Public Offering”) by the Underwriters,
including yourself, of common stock of the Company (the “Common Stock”) pursuant
to the Company’s Registration Statement on Form S-3 (the “Registration
Statement”).
In
consideration of the Underwriters’ agreement to purchase and make the Public
Offering of the Common Stock, and for other good and valuable consideration,
receipt of which is hereby acknowledged, the undersigned hereby agrees, for a
period of 120 days after the effective date of the Registration Statement (the
“Lock-Up Period”), not to sell, offer to sell, solicit an offer to buy, contract
to sell, encumber, distribute, pledge, grant any option for the sale of, or
otherwise transfer or dispose of, directly or indirectly, in one or a series of
transactions (collectively, a “Disposition”), any shares of Common Stock or any
securities convertible or exercisable into or exchangeable for shares of Common
Stock (collectively, “Securities”), now owned or hereafter acquired by the
undersigned or with respect to which the undersigned has acquired or hereafter
acquires the power of disposition, without the prior written consent of the
Representatives. Prior to the expiration of the Lock-Up Period, the
undersigned agrees that it will not announce or disclose any intention to do
anything after the expiration of such period which the undersigned is
prohibited, as provided in the preceding sentence, from doing during the Lock-Up
Period. In addition, for the benefit of the Company and the
Underwriters, the undersigned hereby (i) waives any right it may have to
cause the Company to register pursuant to the Securities Act of 1933, as
amended, shares of Common Stock now owned or hereafter acquired or received by
the undersigned as a result of the Public Offering and (ii) during the
Lock-Up Period, agrees not to exercise any such registration rights and further
agrees that the Company shall not be obligated to register any shares in
violation of the Underwriting Agreement.
29
The
undersigned acknowledges and agrees that the restrictions above are expressly
agreed to preclude the holder of the Securities from engaging in any hedging or
other transaction which is designed to or reasonably expected to lead to or
result in a Disposition of Securities (or the economic equivalent thereof)
during the Lock-Up Period even if such Securities would be disposed of by
someone other than the undersigned. Such prohibited hedging or other
transactions would include, without limitation, any short sale (whether or not
against the box) or any purchase, sale or grant of any right (including, without
limitation, any put or call option) with respect to any Securities or with
respect to any security (other than a broad-based market basket or index) that
includes, relates to or derives any significant part of its value from the
Securities.
The
undersigned hereby also agrees and consents to the entry of stop transfer
instructions with the Company’s transfer agent against the transfer of the
Securities held by the undersigned except in compliance with the Lock-Up
Agreement.
It is
understood that, if the Underwriting Agreement is not executed, or if the
Underwriting Agreement shall terminate or be terminated prior to payment for and
delivery of the Common Stock the subject thereof, this Lock-Up Agreement shall
automatically terminate and be of no further force or effect.
This
Lock-Up Agreement shall be governed by and construed in accordance with the laws
of the Commonwealth of Pennsylvania (without giving effect to its conflict of
laws provisions).
Very
truly yours,
Name:
30