1
EXHIBIT 1
[FORM OF UNDERWRITING AGREEMENT]
725,000 SHARES
CENTURY BANCSHARES, INC.
COMMON STOCK
---------------------------
UNDERWRITING AGREEMENT
---------------------------
XXXXX & XXXXXXXXXXXX, INC.
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000 September __, 1997
Dear Sirs:
Century Bancshares, Inc., a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to Xxxxx & Xxxxxxxxxxxx, Inc. (the "Underwriter") an aggregate of 725,000
shares (the "Firm Securities") of Common Stock, $1.00 par value, of the Company
(the "Common Stock") and, at the election of the Underwriter, up to 108,750
additional shares (the "Optional Securities") of Common Stock. The Firm
Securities and the Optional Securities that the Underwriter elects to purchase
pursuant to Section 2 hereof are collectively called the "Securities."
1. REPRESENTATIONS AND WARRANTIES.
The Company represents and warrants to, and agrees with the
Underwriter that:
2
(a) In connection with the transactions contemplated by this
Underwriting Agreement (the "Agreement"), a registration statement on Form S-1
(File No. ___________) and as a part thereof a preliminary prospectus, in
respect of the Securities has been prepared by the Company in conformity with
the requirements of the Securities Act of 1933, as amended (the "Act"), and has
been filed with the Securities and Exchange Commission (the "Commission") in
the form heretofore delivered to you; such registration statement, as amended,
has been declared effective by the Commission; no other document with respect
to such registration statement has heretofore been filed with the Commission;
and no stop order suspending the effectiveness of such registration statement
has been issued and no proceeding for that purpose has been instituted or
threatened by the Commission (any preliminary prospectus included in such
registration statement or filed with the Commission pursuant to Rule 424(a)
under the Act being hereinafter called a "Preliminary Prospectus"; the various
parts of such registration statement, including all exhibits thereto and
including the information contained in the form of final prospectus filed with
the Commission pursuant to Rule 424(b) under the Act in accordance with Section
5(a) of this Agreement and deemed by virtue of Rule 430A under the Act to be a
part of the registration statement at the time it was declared effective, each
as amended at the time such part became effective, being herein called
collectively the "Registration Statement" and the final prospectus, in the form
first filed pursuant to Rule 424(b), being hereinafter called the
"Prospectus");
(b) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary Prospectus,
at the time of filing thereof, conformed in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder, and did not contain any untrue statement of a material fact or omit
to state a material fact required to be stated or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; provided, however, 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
you expressly for use therein;
(c) The Registration Statement conforms, and the Prospectus and
any amendments or supplements thereto will conform, in all material respects to
the requirements of the Act and the rules and regulations of the Commission
thereunder and do not and will not as of the applicable effective date as to
the Registration Statement and any amendment thereto and as of the applicable
filing date as to the Prospectus and any amendment or supplement thereto
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; provided, however, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by the Underwriter
expressly for use therein;
-2-
3
(d) Neither the Company nor its wholly-owned subsidiary bank,
Century National Bank, a national banking association (the "Bank"), has
sustained since the date of the latest audited financial statements included in
the Prospectus any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or
from any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or expressly contemplated in the Prospectus;
(e) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as otherwise set forth or
expressly contemplated therein, (i) there has not been any change in the
capital stock or long term debt of the Company or the Bank or any material
adverse change, or any development involving a prospective material adverse
change, in or affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and the Bank taken
as a whole and (ii) there have been no transactions entered into by the Company
or the Bank, other than transactions entered into in the ordinary course of
business, that are material with respect to the Company and the Bank taken as a
whole;
(f) The Company and the Bank have good and marketable title to all
real property and good and marketable title to all personal property owned by
them, in each case free and clear of all liens, encumbrances and defects except
such as are described in the Prospectus or such as do not materially affect the
value of such property and do not interfere with the use made and proposed to
be made of such property by the Company and the Bank; and any real property and
buildings held under lease by the Company and the Bank are held by them under
valid, subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be made of such
property and buildings by the Company and the Bank;
(g) The Company and the Bank have been duly incorporated and are
validly existing as corporations in good standing under the laws of their
respective jurisdictions of incorporation, with power and authority (corporate
and other) to own or lease their respective properties and conduct their
respective businesses as described in the Prospectus; and each has been duly
qualified as a foreign corporation for the transaction of business and is in
good standing under the laws of each other jurisdiction in which it owns or
leases properties, or conducts any business, so as to require such
qualification, except where the failure to so qualify would not result in a
material adverse effect on the Company and the Bank taken as a whole;
-3-
4
and each of the Company and the Bank holds all material licenses, certificates,
authorizations and permits from governmental authorities necessary for the
conduct of its business as described in the Prospectus;
(h) The Company has an authorized capitalization as set forth in
the Prospectus; all of the issued shares of capital stock of the Company have
been duly and validly authorized and issued, are fully paid and nonassessable
and conform to the description of the capital stock of the Company contained in
the Prospectus; there are no preemptive or other rights to subscribe for or to
purchase any securities of the Company under the Certificate of Incorporation
of the Company or under Delaware law; except as described in the Prospectus,
there are no warrants, options or other rights to purchase any securities of
the Company which have been granted by the Company; and neither the filing of
the Registration Statement nor the offering or sale of the Securities as
contemplated by this Agreement gives rise to any rights for or relating to the
registration of any securities of the Company;
(i) All outstanding shares of capital stock of the Bank are owned
by the Company free and clear of any perfected security interest and any other
security interests, claims, liens or encumbrances; and, other than the Bank,
the Company does not own or control, directly or indirectly, any corporation,
association or other entity;
(j) The Securities have been duly authorized and, when issued and
delivered against payment therefor as provided herein, will be validly issued
and fully paid and nonassessable and will conform to the description of the
Securities contained in the Prospectus;
(k) The issuance and sale of the Securities being issued at each
Delivery Date (as hereinafter defined) by the Company and the performance of
this Agreement and the consummation by the Company of the other transactions
herein contemplated will not conflict with or result in a breach or violation
of any of the terms or provisions of, or constitute a default under, or result
in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or the Bank pursuant to, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company or the Bank is a party or by which the Company or the Bank is
bound or to which any of the property or assets of the Company or the Bank is
subject, nor will such action result in any violation of the provisions of the
Certificate of Incorporation or Bylaws of the Company or Articles of
Association or Bylaws of the Bank or any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
the Company or the Bank or any of their properties; and no consent, approval,
authorization, order, registration or qualification of or with any such court
or governmental agency or body is required for the issuance and sale of the
Securities or the consummation by the Company of the transactions contemplated
by this Agreement, except such consents, approvals, authorizations, orders,
registrations or
-4-
5
qualifications as may be required under the Act, under state securities or Blue
Sky laws, and under the rules of the National Association of Securities
Dealers, Inc. (the "NASD") in connection with the purchase and distribution of
the Securities by the Underwriter;
(l) There are no legal or governmental proceedings pending to
which the Company or the Bank is a party or of which any their property or
assets is subject, which, if determined adversely to the Company or the Bank,
would individually or in the aggregate, have a material adverse effect on the
financial position, stockholders' equity or results of operations of the
Company and the Bank taken as a whole and, to the best of the Company's
knowledge, no such proceedings are threatened or contemplated by governmental
authorities or by others;
(m) KPMG Peat Marwick LLP, which has certified certain financial
statements of the Company and the Bank, are independent public accountants as
required by the Act and the rules and regulations of the Commission thereunder;
(n) All employee benefit plans established, maintained or
contributed to by the Company or the Bank comply in all material respects with
all applicable requirements of the Employee Retirement Income Security Act of
1974, as amended ("ERISA") and no such plan has incurred or assumed an
"accumulated funding deficiency" within the meaning of Section 302 of ERISA or
has incurred or assumed any material liability to the Pension Benefit Guaranty
Corporation;
(o) The consolidated financial statements of the Company, together
with related notes, as set forth in the Registration Statement present fairly
the consolidated financial position and the results of operations of the
Company at the indicated dates and for the indicated periods, all in accordance
with generally accepted accounting principles, consistently applied throughout
the periods presented except as noted in such financial statements and the
notes thereon, and all adjustments necessary for a fair presentation of results
for such periods have been made; and the selected financial information
included in the Prospectus presents fairly the information shown therein and
has been compiled on a basis consistent with the financial statements presented
therein;
(p) The Company and the Bank have filed all federal, state, local
and foreign income and franchise tax returns that have been required to filed
(or have received extensions with respect thereto) other than those filings
being contested in good faith, and have paid, or made
-5-
6
adequate reserves for, all taxes indicated by said returns and all assessments
received by them to the extent that such taxes have become due and are not
being contested in good faith;
(q) No relationship, direct or indirect, exists between or among
the Company and the Bank, on the one hand, and the directors, officers,
shareholders, customers or suppliers of the Company or the Bank, on the other
hand, that is required by the Act or the Securities Exchange Act of 1934, as
amended (the "Exchange Act") or by the rules and regulations under either of
such acts to be described in the Registration Statement and the Prospectus
which is not so described;
(r) The Company and the Bank have not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities;
(s) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding agreement of the
Company in accordance with its terms; and
(t) The Securities have been approved for trading, subject to
notice of issuance, on the SmallCap Market of the Nasdaq System.
2. PURCHASE AND SALE OF THE SECURITIES.
Subject to the terms and conditions herein set forth, (a) the Company
agrees to sell to the Underwriter, and the Underwriter agrees to purchase from
the Company, at a purchase price per share of $_____, the Firm Securities and
(b) in the event and to the extent that the Underwriter shall exercise its
election to purchase the Optional Securities as provided below, the Company
agrees to sell to the Underwriter, and the Underwriter agrees to purchase from
the Company, at the purchase price set forth in clause (a) of this Section 2,
that portion of the Optional Securities as to which such election shall have
been exercised.
The Company grants the Underwriter the right to purchase at its
election up to 108,750 Optional Securities, at the purchase price per share set
forth in the preceding paragraph, for the sole purpose of covering
overallotments in the sale of the Firm Securities. Any such election to
purchase the Optional Securities may be exercised no more than once by written
notice from you to the Company, given within a period of 30 days after the date
of this Agreement, setting forth the aggregate amount of the Optional
Securities to be purchased and the date on which such Optional Securities are
to be delivered, as determined by you but in no event earlier than the First
Delivery Date (as defined in Section 4 hereof) or, unless you otherwise agree
in writing, earlier than two or later than seven business days after the date
of such notice.
-6-
7
3. OFFERING BY THE UNDERWRITER
Upon authorization by you of the release of the Firm Securities, the
Underwriter proposes to offer the Firm Securities for sale upon the terms and
conditions set forth in the Prospectus.
4. DELIVERY AND PAYMENT.
Certificates in definitive form for the Securities to be purchased by
the Underwriter hereunder, and in such denominations and registered in such
names as you may request upon at least two business days' prior notice to the
Company, shall be delivered by or on behalf of the Company to you for the
account of each Underwriter, against payment of the purchase price therefor by
certified or official bank check in next day funds (unless the Company desires
settlement in same day funds, in which case the Company shall pay the
Underwriter for any costs associated with settlement in same day funds), all at
the offices of Xxxxx & Xxxxxxxxxxxx, Inc., 000 Xxxx Xxxx Xxxxxx, Xxxxxxxx,
Xxxxxxxx. The time and date of such delivery and payment shall be, with
respect to the Firm Securities, 10:00 a.m., Richmond, Virginia time, on
__________________, 1997, or at such other time and date as you and the Company
may agree upon writing and, with respect to the Optional Securities, 10:00
a.m., Richmond, Virginia time, on the date specified by you in the written
notice of the Underwriter's election to purchase such Optional Securities, or
at such other time and date as you and the Company may agree upon in writing.
Such time and date for delivery of the Firm Securities is herein called the
"First Delivery Date," such time and date for delivery of the Optional
Securities, if not the First Delivery Date, is herein called the "Second
Delivery Date," and each such time and date for delivery is herein called a
"Delivery Date." Such certificates will be made available to the Underwriter
for checking and packaging at least twenty-four hours prior to each Delivery
Date at the offices of Xxxxx & Xxxxxxxxxxxx, Inc. in Richmond, Virginia or such
other location as you may designate.
5. AGREEMENTS OF THE COMPANY.
The Company agrees with the Underwriter:
(a) To prepare the Prospectus in a form reasonably approved by you
and to file such Prospectus pursuant to Rule 424(b) under the Act within the
time period prescribed or, if
-7-
8
applicable, such earlier time as may be required by Rule 430A under the Act; to
make no amendment or supplement to the Registration Statement or Prospectus
which shall be reasonably disapproved by you promptly after reasonable notice
thereof; to advise you, promptly after it receives notice thereof, of the time
when any amendment to the Registration Statement has been filed or becomes
effective or any supplement to the Prospectus or any amended Prospectus has
been filed and to furnish you with copies thereof; to file promptly all reports
and any definitive proxy or information statements required to be filed by the
Company with the Commission subsequent to the date of the Prospectus and for so
long as the delivery of a prospectus is required in connection with the
offering or sale of the Securities; to advise you, promptly after it receives
notice thereof, of the issuance by the Commission of any stop order or of any
order preventing or suspending the use of any Preliminary Prospectus or the
Prospectus, of the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, of the initiation or threatening of any
proceeding for any such purpose, or of any request by the Commission for the
amending or supplementing of the Registration Statement or Prospectus or for
additional information; and, in the event of the issuance of any stop order or
of any order preventing or suspending the use of any Preliminary Prospectus or
the Prospectus or suspending any such qualification, to use promptly its best
efforts to obtain its withdrawal;
(b) Promptly from time to time to take such actions as you may
reasonably request to qualify the Securities for offering and sale under the
securities laws of such jurisdictions as you have requested and to comply with
such laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution of
the Securities, provided that in connection therewith the Company shall not be
required to qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction;
(c) To furnish the Underwriter with copies of the Registration
Statement and the Prospectus in such quantities as you may from time to time
reasonably request during such period following the date hereof as a prospectus
is required to be delivered in connection with offers or sales of Securities,
and, if the delivery of a prospectus is required and if at such time any event
shall have occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it shall be necessary
during such period to amend or supplement the Prospectus in order to comply
with the Act, to notify you and upon your request prepare and furnish without
charge to the Underwriter and to any dealer in securities as many copies as you
may from time to time reasonably request of an amended Prospectus or a
supplement to the Prospectus which will correct such statement or omission or
effect such compliance;
-8-
9
(d) As soon as practicable, but not later than the Availability
Date (as defined below), to make generally available to its security holders
and deliver to you an earnings statement covering a period of at least 12
months beginning after the effective date of the Registration Statement which
will satisfy the provisions of Section 11(a) of the Act (for the purpose of
this subsection 5(d) only, "Availability Date" means the 45th day after the end
of the fourth fiscal quarter following the fiscal quarter that includes the
effective date of the Registration Statement, except that, if such fourth
fiscal quarter is the last quarter of the Company's fiscal year, "Availability
Date" means the 90th day after the end of such fourth fiscal quarter);
(e) To furnish to the holders of the Securities as soon as
practicable after the end of the each fiscal year an annual report (including a
balance sheet and statements of operations, changes in stockholders' equity and
cash flows of the Company and its consolidated subsidiaries certified by
independent public accountants) and, as soon as practicable after the end of
each of the first three quarters of each fiscal year (beginning with the fiscal
quarter ending after the effective date of the Registration Statement),
consolidated summary financial information of the Company and its consolidated
subsidiaries for such quarter in reasonable detail;
(f) During a period of five years from the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to shareholders, and deliver to
you (i) 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 on which any class of securities of the Company is listed or the NASD;
and (ii) such additional information concerning the business and financial
condition of the Company as you may from time to time reasonably request;
(g) For a period of 120 days from the effective date of the
Registration Statement, not to offer, sell, contract to sell or otherwise
dispose of any securities of the Company which are substantially similar to the
Securities (other than the Securities or pursuant to (i) employee stock option
or stockholder dividend reinvestment plans, (ii) merger and acquisition
transactions, or (iii) currently outstanding warrants) without your prior
written consent;
(h) To apply the net proceeds from the sale of the Securities for
the purposes set forth in the Prospectus; and
-9-
10
(i) To use its best efforts to cause the Common Stock to be
approved for quotation on the Nasdaq SmallCap Market (the "Nasdaq System").
6. PAYMENT OF EXPENSES.
The Company agrees with the Underwriter that the Company will pay or
cause to be paid the following, whether or not the transactions contemplated
hereunder are consummated or this Agreement is terminated: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Securities under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriter and dealers; (ii) the cost of printing or
reproducing this Agreement, the Blue Sky Survey and any other documents in
connection with the offering, purchase, sale and delivery of the Securities;
(iii) all expenses in connection with the qualification of the Securities for
offering and sale under state securities laws as provided in Section 5(b)
hereof, including the reasonable fees and disbursements of counsel for the
Underwriter in connection with such qualification and in connection with the
Blue Sky Survey; (iv) the filing fees incident to securing any required review
by the NASD of the terms of the sale of the Securities; (v) the cost of
preparing stock certificates; (vi) the costs or expenses of any transfer agent
or registrar; (vii) all fees relating to the quotation of the Securities on the
Nasdaq System; and (viii) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section. It is understood, however, that except as
provided in this Section, Section 8 and Section 10 hereof, the Underwriter will
pay all of their own costs and expenses, including the fees of their counsel,
stock transfer taxes on resale of any of the Securities by them, and any
advertising expenses connected with any offers they may make.
7. CONDITIONS TO OBLIGATIONS OF THE UNDERWRITER.
The obligations of the Underwriter hereunder, as to the Securities to
be delivered at each Delivery Date, shall be subject, in its discretion, to the
condition that all representations and warranties and other statements of the
Company are, at and as of the date hereof and each Delivery Date, true and
correct and the condition that the Company shall have performed all of its
obligations hereunder theretofore to be performed, and the following additional
conditions:
(a) The Registration Statement is effective; if the filing of the
Prospectus, or any supplement thereto, is required pursuant to Rule 424(b), the
Prospectus, and any such supplement, will be filed in the manner and within the
time period required by Rule 424(b); no stop order suspending the effectiveness
of the Registration Statement shall have been issued and
-10-
11
no proceeding for that purpose shall have been initiated or, to the knowledge
of the Company, threatened by the Commission; and all requests for additional
information on the part of the Commission shall have been complied with to your
reasonable satisfaction;
(b) On each Delivery Date, XxXxxxx Xxxx, A Professional
Corporation, counsel for the Underwriter, shall have furnished to you such
opinion or opinions, dated such dates, with respect to the incorporation of the
Company, the validity of the Securities being issued on such Delivery Date, the
Registration Statement, the Prospectus, and other related matters as you may
reasonably request, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon such
matters;
(c) On each Delivery Date, Xxxxxxxxx & Xxxxxxxxx, L.L.P., counsel
for the Company, shall have furnished to you their written opinion, dated such
dates, in form and substance satisfactory to you, to the effect that:
(i) The Company and the Bank have been duly incorporated and are
validly existing as corporations in good standing under the laws of their
respective jurisdictions of incorporation, with corporate power and
authority to own or lease their respective properties and conduct their
businesses as described in the Prospectus; and the Company and the Bank are
duly qualified to do business and are in good standing in each jurisdiction
in which it owns or leases properties or conducts business so as to require
such qualification;
(ii) The Company has an authorized capitalization as set forth
under the caption "Description of Capital Stock" in the Prospectus, and all
of the issued shares of capital stock of the Company have been duly and
validly authorized and issued, are fully paid and nonassessable and conform
to the description contained in the Prospectus; there are no preemptive or
similar rights to subscribe for or to purchase any securities of the
Company under the Certificate of Incorporation of the Company or under
Delaware law; except as described in the Prospectus, there are no warrants
or options to purchase any securities of the Company which have been
granted by the Company; to the best of such counsel's knowledge, neither
the filing of the Registration Statement nor the offering or sale of the
Securities as contemplated by this Agreement gives rise to any rights for
or relating to the registration of any securities of the Company; and the
-11-
12
form of the certificates evidencing the Securities complies with all formal
requirements of Delaware law;
(iii) The Registration Statement has been declared effective under
the Act and, to the best knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has been issued
and no proceeding for that purpose has been instituted or threatened under
the Act;
(iv) The Securities have been duly authorized and, when issued and
delivered against payment therefor as provided herein, will be validly
issued and fully paid and nonassessable and conform to the description of
the Securities contained in the Prospectus, as amended or supplemented;
(v) All outstanding shares of capital stock of the Bank are owned
by the Company free and clear of any perfected security interests, claims,
liens or encumbrances;
(vi) To the best of such counsel's knowledge, there are no legal or
governmental proceedings pending to which the Company or the Bank is a
party or of which any property or assets of the Company or the Bank is
subject which, if determined adversely to the Company or Bank, would
individually or in the aggregate, have a material adverse effect on the
financial position, stockholders' equity or results of operations of the
Company and the Bank taken as a whole; and, to the best of such counsel's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(vii) This Agreement has been duly authorized, executed and
delivered by the Company;
(viii) The issue and sale of the Securities and the performance of
this Agreement by the Company and the consummation of the other
transactions contemplated by this Agreement will not result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or Bank pursuant to,
any material indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which the Company or Bank
is a party or by which the Company or Bank is bound or to which any of the
property or assets of the Company or Bank is subject, nor will such action
result in any violation of the provisions of the Certificate of
Incorporation or Bylaws of the Company or of any statute or any order, rule
or regulation known to such counsel of any
-12-
13
court or governmental agency or body having jurisdiction over the Company
or Bank or any of their properties;
(ix) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body is
required for the issuance and sale of the Securities by the Company or the
consummation by the Company of the other transactions contemplated by this
Agreement, except such as have been obtained under the Act, such as may be
required under state securities or Blue Sky laws, and under the rules of
the NASD in connection with the purchase and distribution of the Securities
by the Underwriter; and
(x) The Registration Statement and the Prospectus and any further
amendments and supplements thereto made by the Company prior to such
Delivery Date (other than the financial statements and related schedules
and other financial and statistical information included therein and
information furnished for use therein by the Underwriter, as to which such
counsel need express no opinion) comply as to form in all material respects
with the requirements of the Act and the rules and regulations thereunder;
nothing has come to their attention which leads them to believe that, as of
the effective date of the Registration Statement and as of each Delivery
Date, either the Registration Statement or the Prospectus or, as of its
date, any further amendment or supplement thereto made by the Company prior
to the Delivery Date (in each case, other than the financial statements and
the related schedules and other financial and statistical information
included therein, as to which such counsel need express no opinion)
contains an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
In rendering such opinion, such counsel may rely as to matters of fact, to the
extent deemed proper, on certificates of responsible officers of the Company
and the Bank and public officials.
(d) At 10:00 a.m., Richmond, Virginia time, on the date of this
Agreement and also at each Delivery Date, KPMG Peat Marwick LLP shall have
furnished to you a letter or letters, dated the respective dates of delivery
thereof, in form and substance satisfactory to you, to the effect set forth in
Annex I hereto;
-13-
14
(e) (i) Neither the Company nor the Bank shall have sustained
since the date of the latest audited financial statements included in the
Prospectus, any material loss or interference with its business taken as a
whole from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order or
decree, otherwise than as set forth or expressly contemplated in the
Prospectus, and (ii) since the respective dates as of which information is
given in the Prospectus there shall not have been any change in the capital
stock or long-term debt of the Company or the Bank or any change, or any
development involving a prospective change, in or affecting the general
affairs, management, financial position, stockholders' equity or results of
operation of the Company or the Bank taken as a whole otherwise than as set
forth or contemplated in the Prospectus, the effect of which, in any such case
described in clause (i) or (ii), is in your judgment so material and adverse as
to make it impracticable or inadvisable to proceed with the public offering or
the delivery of the Securities being issued at such Delivery Date on the terms
and in the manner contemplated by the Prospectus; and
(f) On or after the date hereof there shall not have occurred any
of the following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange or the Nasdaq System; (ii)
a general moratorium on commercial banking activities in New York declared by
federal or New York State authorities; (iii) the outbreak or escalation of
hostilities involving the United States or the declaration by the United States
of a national emergency or war, if any such event specified in this clause
(iii) would have such a materially adverse effect, in your judgment, as to make
it impracticable or inadvisable to proceed with the offering or the delivery of
the Securities on the terms and in the manner contemplated in the Prospectus;
or (iv) such a material adverse change in general economic, political,
financial or international conditions affecting financial markets in the United
States having a material adverse impact on trading prices of securities in
general, as, in your judgment, makes it impracticable or inadvisable to proceed
with the offering or delivery of the Securities on the terms and in the manner
contemplated in the Prospectus; or (v) any suspension of trading of the Common
Stock on the Nasdaq System;
(g) The Company shall have furnished or caused to be furnished to
you copies of agreements between the Company and each of the executive officers
and directors of the Company specified by you, in form and content satisfactory
to you, pursuant to which such persons agree not to offer, sell, or contract to
sell, or otherwise dispose of, any shares of Common Stock beneficially owned by
them or any securities convertible into, or exchangeable for, Common Stock on
or before the 120th day after the date of this Agreement without your prior
written consent;
(h) The Company shall have furnished or caused to be furnished to
you on the date of this Agreement and on the Delivery Date certificates of
officers of the Company satisfactory
-14-
15
to you as to the accuracy of the representations and warranties of the Company
herein at and as of the date hereof and the Delivery Date, as to the
performance by the Company of all of its obligations hereunder to be performed
at or prior to the Delivery Date, as to the matters set forth in subsections
(a) and (e) of this Section and as to such other matters as you may reasonably
request; and
(i) The Common Stock shall have been approved for trading on the
Nasdaq System.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company will indemnify and hold harmless the Underwriter
against any losses, claims damages or liabilities, joint or several, to which
the Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon (i) any breach of any representation, warranty,
agreement or covenant of the Company herein contained or (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or any
amendment or supplement, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse
the Underwriter for any legal or other expenses reasonably incurred by it in
connection with investigating, preparing to defend or defending, or appearing
as a third party witness in connection with, any such action or claims as such
expenses are incurred; provided, however, that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in any Preliminary Prospectus, the
Registration Statement or the Prospectus or any amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by you expressly for use therein. This indemnity agreement will be in
addition to any liability which the Company may otherwise have.
(b) The Underwriter will indemnify and hold harmless the Company
against any losses, claims damages or liabilities, joint or several, to which
the Company may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement
-15-
16
or the Prospectus, or any amendment or supplement, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission
was made in any Preliminary Prospectus, Registration Statement or Prospectus or
any such amendment or supplement in reliance upon and in conformity with
written information furnished to the Company by such Underwriter through you
expressly for use therein; and will reimburse the Company for any legal or
other expenses reasonably incurred by the Company in connection with
investigating, preparing to defend or defending, or appearing as a third party
witness in connection with, any such action or claim as such expenses are
incurred. This indemnity agreement will be in addition to any liability which
the Underwriter may otherwise have. The Company acknowledges that for purposes
of this Section 8 the statements set forth in footnote 3 on the cover page and
footnote 1 on page 6 of the Preliminary Prospectus and the Prospectus
concerning over-allotment by the Underwriter, and the statement on page 2 of
the Preliminary Prospectus and Prospectus concerning stabilization by the
Underwriters, constitute the only information furnished in writing by you for
inclusion in the Preliminary Prospectus or the Prospectus, and you confirm that
such statements are correct.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against
the indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection, unless and to the
extent that such indemnifying party did not otherwise learn of such action and
such failure results in the forfeiture by the indemnifying party of substantial
rights and defenses. 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 reasonably satisfactory to such indemnified party; provided, however,
that if the defendants in any such action include both the indemnified party
and the indemnifying party and the indemnified party shall have been advised by
counsel that representation of such indemnified party and the indemnifying
party would present such counsel with a conflict of interest under applicable
standards of professional conduct due to actual or potential differing
interests between them, the indemnified party or parties shall have the right
to select separate counsel to defend such action on behalf of such indemnified
party or parties. It is understood that the indemnifying party shall, in
connection with any such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
only one separate firm or attorneys together with appropriate local counsel at
any time for all indemnified parties
-16-
17
not having actual or potential differing interests with any indemnified party.
Upon receipt of notice from the indemnifying party to such indemnified party of
its election so to appoint counsel to defend such action and approval by the
indemnified party of such counsel, the indemnifying party will not be liable
for any settlement entered into without its consent and will not be liable to
such indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel
in accordance with the proviso to the next preceding sentence, (ii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of commencement of the action or (iii) the indemnifying party
has authorized in writing the employment of counsel for the indemnified party
at the expense of the indemnifying party; and except that, if clause (i) or
(iii) is applicable, such liability shall be only in respect of the counsel
referred to in such clause (i) or (iii). Notwithstanding the immediately
preceding sentence and the third preceding sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding effected
without its consent if (i) such settlement is entered into more than 30 days
after receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions 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
Underwriter on the other from the offering of the Securities. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law, then each indemnifying party shall contribute to such amount
paid or payable by such indemnified party in such proportion as is appropriate
to reflect not only such relative benefits but also the relative fault of the
Company on the one hand and the Underwriter on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and
-17-
18
the Underwriter on the other 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 Underwriter, in each case as set forth in the table and
footnote (3) thereto on the cover page of the Prospectus. The relative fault
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company on the
one hand or the Underwriter on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Underwriter agree that it would not
be just and equitable if contributions pursuant to this subsection (d) were
determined by pro rata allocation or by any other method of allocation which
does not take into account the equitable considerations referred to above in
this subsection (d). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions or proceedings
in respect thereof) referred to above in this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), the Underwriter shall
not be required to contribute any amount in excess of the amount by which the
total price at which the Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages that the
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. Notwithstanding the
provisions of this subsection (d), no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.
(e) The obligations of the Company under this Section 8 shall be
in addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each officer, director, employee
and agent of the Underwriter and each person, if any, who controls the
Underwriter within the meaning of the Act; and the obligations of the
Underwriter under this Section 8 shall be in addition to any liability which
the Underwriter may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company and to each person, if
any, who controls the Company within the meaning of the Act.
9. REPRESENTATIONS AND WARRANTIES TO SURVIVE.
The respective indemnities, agreements, representations, warranties
and other statements of the Company and the Underwriter, as set forth in this
Agreement or made by them, respectively, pursuant to this Agreement, shall
remain in full force and effect, regardless of any termination or cancellation
of this Agreement or any investigation (or any statement as to the results
thereof) made by the Underwriter or any controlling person of the Underwriter,
or the
-18-
19
Company, or any officer or director or controlling person of the Company, and
shall survive delivery of and payment for the Securities.
10. TERMINATION AND PAYMENT OF EXPENSES.
(a) This Agreement shall be subject to termination in your
absolute discretion, by notice given to the Company prior to the delivery of
any payment for the Securities, if prior to such time there shall have occurred
any of the following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange or the Nasdaq System; (ii)
a general moratorium on commercial banking activities in New York declared by
federal or New York State authorities; (iii) the outbreak or escalation of
hostilities involving the United States or the declaration by the United States
of a national emergency or war, if any such event specified in this clause
(iii) would have such a materially adverse effect, in your judgment, as to make
it impracticable or inadvisable to proceed with the offering or the delivery of
the Securities on the terms and in the manner contemplated in the Prospectus;
(iv) such a material adverse change in general economic, political, financial
or international conditions affecting financial markets in the United States
having a material adverse impact on trading prices of securities in general,
as, in your judgment, makes it impracticable or inadvisable to proceed with the
offering or delivery of the Securities on the terms and in the manner
contemplated in the Prospectus; or (v) any suspension of trading of the Common
Stock on the Nasdaq System.
(b) If for any other reason the sale of the Securities provided
for herein is not consummated because any condition to the obligations of the
Underwriter set forth in Section 7 hereof is not satisfied, because of any
termination pursuant to this Section 10 or because of any refusal, inability or
failure on the part of the Company to perform any agreements herein or comply
with the provisions hereof other than by reason of a default by the
Underwriter, the Company will be responsible for and will reimburse the
Underwriter upon demand for all out-of-pocket expenses, including fees and
disbursements of counsel, reasonably incurred by the Underwriter in connection
with the proposed purchase, sale and delivery of the Securities. Nothing in
this Section 10 shall be deemed to relieve the Underwriter of its liability, if
any, to the Company for damages occasioned by its default hereunder.
-19-
20
11. NOTICES.
All statements, requests, notices and agreements hereunder shall be in
writing or by telegram if promptly confirmed in writing, and if to the
Underwriter shall be sufficient in all respects if delivered or sent by mail,
telex or facsimile transmission to Xxxxx & Xxxxxxxxxxxx, Inc., 000 Xxxx Xxxx
Xxxxxx, Xxxxxxxx, Xxxxxxxx 00000, Attention: Corporate Finance Department; and
if to the Company shall be sufficient in all respects if delivered or sent by
mail, telex or facsimile transmission to the address of the Company set forth
in the Prospectus, Attention: _______________. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
12. SUCCESSORS.
This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriter and the Company and, to the extent provided in Sections 8
and 9 hereof, the officers and directors of the Company, the officers and
directors, employees and agents of the Underwriter and each person who controls
the Company or the Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of
the Securities from the Underwriter shall be deemed a successor or assign by
reason merely of such purchase.
13. TIME OF THE ESSENCE.
Time shall be of the essence in this Agreement.
14. BUSINESS DAY.
As used herein, the term "business day" shall mean any day when the
Commission's office in Washington, D.C. is open for business.
15. APPLICABLE LAW.
This Agreement shall be construed in accordance with the laws of the State of
New York.
16. CAPTIONS.
The captions included in this Agreement are included solely for
convenience of reference and shall not be deemed to be a part of this
Agreement.
-20-
21
17. COUNTERPARTS.
This Agreement may be executed by any one or more of the parties in
any number of counterparts, each of which shall be deemed to be an original,
but all such counterparts shall together constitute one and the same
instrument.
-21-
22
If the foregoing is in accordance with your understanding, please sign
and return to us two counterparts hereof, and upon the acceptance hereof by
you, this letter and such acceptance hereof shall constitute a binding
agreement between the Underwriter and the Company.
Very truly yours,
CENTURY BANCSHARES, INC.
By:
----------------------------------
Xxxxxx X. Xxxxxxxxx
President and Chief Executive
Officer
Accepted as of the date hereof
at Richmond, Virginia:
XXXXX & XXXXXXXXXXXX, INC.
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
-22-
23
ANNEX I
Pursuant to Section 7(d) of the Underwriting Agreement, KPMG Peat
Marwick LLP shall furnish letters to the Underwriter to the effect that:
1. They are independent public accountants with respect to the
Company and its subsidiaries within the meaning of the Act and the applicable
published rules and regulations thereunder;
2. In their opinion, the consolidated audited financial
statements audited by them and included in the Registration Statement or the
Prospectus comply as to form in all material respects with the applicable
accounting requirements of the Act or the Exchange Act, as applicable, and the
related published rules and regulations thereunder;
3. On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the latest unaudited financial statements made
available by the Company, inspection of the minute books of the Company and the
Bank since the date of the latest audited financial statements included in the
Prospectus, inquiries of officials of the Company and the Bank responsible for
financial and accounting matters and such other inquiries and procedures as may
be specified in such letter, nothing came to their attention that caused them
to believe that:
(A) the unaudited consolidated financial statements
included in the Registration Statement or the Prospectus do not comply
as to form in all material respects with the applicable accounting
requirements of the Act and published rules and regulations thereunder
or are not presented in conformity with generally accepted accounting
principles applied on a basis substantially consistent with that of the
audited consolidated financial statements included in the Registration
Statement or Prospectus;
(B) (i) as of a specified date not more than five calendar
days prior to the date of delivery of such letter, there have been any
changes in the capital stock, short-term debt or long-term debt of the
Company, or any decreases in consolidated total assets or stockholders'
equity as compared with amounts shown on the most recent consolidated
balance sheet included in the Registration Statement or Prospectus, and
(ii) for the period from the date of the most recent consolidated
financial statements included in the
-23-
24
Registration Statement or Prospectus to such specified date there were
any decreases in consolidated net interest income or the total or per
share amounts of net income as compared with the corresponding period
in the preceding year, except in each case for increases or decreases
which the Prospectus discloses have occurred or may occur or which are
described in such letter; and
4. In addition to the audit referenced in their report included
in the Registration Statement and the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures referred to above,
they have carried out certain specified procedures, not constituting an audit
in accordance with generally accepted auditing standards, with respect to
certain amounts, percentages and financial information which are derived from
the general accounting records of the Company and the Bank, which appear in any
Preliminary Prospectus, the Prospectus, or in Part II of, or in exhibits and
schedules to, the Registration Statement specified by the Representative, and
have compared certain of such amounts, percentages and financial information
with the accounting records of the Company and have found them to be in
agreement.
-24-
