EXHIBIT 1.1
UNDERWRITING AGREEMENT
for offering of
Convertible Preferred Securities
COMMONWEALTH BANKSHARES CAPITAL TRUST I
(a Delaware Trust)
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_________ __, 2000
▇▇▇▇▇▇▇▇ & Company, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Building, 16th Floor
Norfolk, Virginia 23510
Dear Sirs:
Commonwealth Bankshares Capital Trust I (the "Trust"), a statutory business
trust organized under the Business Trust Act (the "Delaware Act") of the State
of Delaware (Chapter 38, Title 12, of the Delaware Code, 12 Del. C. (S)(S) 3801
et seq.), and Commonwealth Bankshares, Inc., a Virginia corporation (the
"Company" and, together with the Trust, the "Offerors"), confirm their agreement
(the "Agreement") with ▇▇▇▇▇▇▇▇ & Company, Inc. (the "Underwriter") with respect
to the sale by the Trust of Convertible Preferred Securities (liquidation amount
of $25.00 per preferred security) of the Trust (the "Capital Securities") set
forth in Schedule A. The Capital Securities will be guaranteed on a
subordinated basis by the Company, to the extent set forth in the Prospectus (as
defined herein), with respect to distributions and payments upon liquidation,
redemption and otherwise (the "Capital Securities Guarantee") pursuant to the
Guarantee Agreement, to be dated as of __________ __, 2001, and as may be
amended, (the "Guarantee Agreement"), between the Company and Wilmington Trust
Company, as trustee (the "Guarantee Trustee"), and will be entitled to the
benefits of certain backup undertakings described in the Prospectus (as defined
herein) with respect to the Company's agreement pursuant to the Indenture (as
defined herein) to pay all expenses relating to administration of the Trust
(other than payment obligations with respect to the Capital Securities). The
Capital Securities and the related Capital Securities Guarantee are referred to
herein as the "Securities."
The Offerors have filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (Nos. 333-______ and 333-
_______) and a related preliminary prospectus for the registration under the
Securities Act of 1933, as amended (the "1933 Act") of (i) the Capital
Securities, (ii) the Capital Securities Guarantee, and (iii) the Junior
Subordinated Debt Securities (as defined below) to be issued and sold to the
Trust by the Company, have filed such amendments thereto, if any, and such
amended preliminary prospectuses as may have been required to the date hereof,
and will file such additional amendments thereto and such amended prospectuses
as may hereafter be required. Such registration statement (as amended) and the
prospectus constituting a part thereof, as from time to time amended or
supplemented pursuant to the 1933 Act, the Securities Exchange Act of 1934, as
amended (the "1934 Act"), or otherwise, are hereinafter referred to as the
"Registration Statement" and the "Prospectus," respectively, except that, if any
revised prospectus shall be provided to the Underwriter by the Offerors for use
in connection with the offering of the Capital Securities which differs from the
Prospectus on file at the Commission at the time the Registration Statement
became effective (whether or not such revised prospectus is required to be filed
by the Offerors pursuant to Rule 424(b) of the rules and regulations of the
Commission under the 1933 Act (the "1933 Act Regulations"), the term
"Prospectus" shall refer to such revised prospectus from and after the time it
is first provided to the Underwriter for such use.
The Offerors understand that the Underwriter proposes to make a public
offering of the Capital Securities as soon as the Underwriter deems advisable
after this Agreement has been executed and delivered and the Declaration (as
defined herein), the Indenture (as defined herein) and the Capital Securities
Guarantee have been qualified under the Trust Indenture Act of 1939, as amended
(the "1939 Act"). The entire proceeds to the Trust from the sale of the Capital
Securities will be combined with the entire proceeds from the sale by the Trust
to the Company of its common securities (the "Common Securities"), as guaranteed
on a subordinated basis by the Company, to the extent set forth in the
Prospectus, with respect to distributions and payments upon liquidation and
redemption thereof (the "Common Securities Guarantee" and together with the
Capital Securities Guarantee, the "Guarantees") pursuant to the Guarantee
Agreement between the Company and Guarantee Trustee, as Trustee, and will be
used by the Trust to purchase the $_______ aggregate principal amount of ____%
Junior Subordinated Debt Securities due January 15, 2031 (the "Junior
Subordinated Debt Securities") issued by the Company under the Indenture (as
defined herein). The Capital Securities and the Common Securities will be
issued pursuant to the Amended and Restated Declaration of Trust of the Trust,
to be dated as of ________ __, 2001 (the "Declaration"), among the Company, as
Sponsor, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. and ▇▇▇▇ ▇. ▇▇▇▇▇, as trustees (the
"Administrative Trustees"), and Wilmington Trust Company, as property trustee
(the "Property Trustee" and, together with the Administrative Trustees, the
"Trustees"), and the holders from time to time of undivided beneficial interests
in the assets of the Trust. The Junior Subordinated Debt Securities will be
issued pursuant to an indenture, to be dated as of __________ __, 2001, between
the Company and Wilmington Trust Company, as trustee (the "Indenture Trustee"),
together with any amendments or supplements thereto, the "Indenture"), between
the Company and the Indenture Trustee.
SECTION 1. REPRESENTATIONS AND WARRANTIES.
(a) The Offerors jointly and severally represent and warrant to the
Underwriter as of the date hereof and as of the Closing Time (as hereinafter
defined) as follows:
(i) At the time the Registration Statement became effective and as of
the date hereof, the Registration Statement complied in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations and the 1939
Act and the rules and regulations of the Commission under the 1939 Act (the
"1939 Act Regulations"), and did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
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to make the statements therein not misleading. The Prospectus, dated the date
hereof (unless the term "Prospectus" refers to a prospectus that has been
provided to the Underwriter by the Trust for use in connection with the offering
of the Securities and that differs from the Prospectus on file at the Commission
at the time the Registration Statement became effective, in which case, at the
time it is first provided to the Underwriter for such use) and at Closing Time
referred to in Section 2 hereof, does not include an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, the Offerors make no representations or
warranties as to (A) that part of the Registration Statement which constitutes
the Statements of Eligibility and Qualification (Forms T-1) under the 1939 Act
of the Indenture Trustee, the Property Trustee or the Guarantee Trustee or (B)
the information contained in or omitted from the Registration Statement or the
Prospectus or any amendment thereof or supplement thereto in reliance upon and
in conformity with information furnished in writing to the Offerors by or on
behalf of the Underwriter specifically for use in the Registration Statement and
the Prospectus.
(ii) Intentionally Omitted.
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(iii) To the best knowledge of the Offerors, Poti, ▇▇▇▇▇▇ &
Associates, PC, the accountants who certified the financial statements and
supporting schedules included in the Registration Statement, are independent
public accountants as required by the 1933 Act and the 1933 Act Regulations.
(iv) The Trust has been duly created and is validly existing and in
good standing as a business trust under the Delaware Act with the power and
authority to own property and to conduct its business as described in the
Registration Statement and Prospectus and to enter into and perform its
obligations under this Agreement, the Capital Securities, the Common Securities
and the Declaration; the Trust is not a party to or otherwise bound by any
agreement other than those described in the Prospectus; the Trust is and will be
classified for United States federal income tax purposes as a grantor trust and
not as an association taxable as a corporation; and the Trust is and will be
treated as a consolidated subsidiary of the Company pursuant to generally
accepted accounting principles.
(v) The Common Securities have been duly authorized by the Trust
pursuant to the Declaration and, when issued and delivered by the Trust to the
Company against payment therefor as described in the Registration Statement and
Prospectus, will be validly issued and, subject to the terms of the Declaration,
fully paid and non-assessable undivided beneficial interests in the assets of
the Trust and will conform to all statements relating thereto contained in the
Prospectus; the issuance of the Common Securities is not subject to preemptive
or other similar rights.
(vi) This Agreement has been duly authorized, executed and delivered
by each of the Offerors.
(vii) The Declaration has been duly authorized by the Company, as
Sponsor, and will have been duly executed and delivered by the Company and the
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Trustees, and assuming due authorization, execution and delivery of the
Declaration by the Property Trustee, the Declaration is and will be a valid and
binding obligation of the Company, the Trust and the Administrative Trustees,
enforceable against the Company and the Administrative Trustees in accordance
with its terms, subject, as to enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency, moratorium, fraudulent conveyance or
other similar laws affecting the rights of creditors now or hereafter in effect,
and to equitable principles that may limit the right to specific enforcement of'
remedies, and further subject to 12 U.S.C. 1818(b)(6)(D) (or any successor
statute) and any bank regulatory powers now or hereafter in effect and to the
application of principles of public policy (collectively, the "Permitted
Exceptions") and will conform to all statements relating thereto in the
Prospectus; and the Declaration has been duly qualified under the 1939 Act.
(viii) The Guarantee Agreement has been duly authorized by the
Company and, when validly executed and delivered by the Company, assuming due
authorization, execution and delivery of the Guarantee Agreement by the
Guarantee Trustee, will constitute a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms except to
the extent that enforcement thereof may be limited by the Permitted Exceptions,
and each of the Guarantees and the Guarantee Agreement will conform to all
statements relating thereto contained in the Prospectus; and the trust pursuant
to the Guarantee Agreement will have been duly qualified under the 1939 Act.
(ix) The Capital Securities have been duly authorized by the Trust
pursuant to the Declaration and, when issued and delivered pursuant to this
Agreement and payment of the consideration therefor set forth in Schedule B
hereto, will be validly issued and, subject to the terms of the Declaration,
fully paid and non-assessable undivided beneficial interests in the Trust, will
be entitled to the benefits of the Declaration and will conform to all
statements relating thereto contained in the Prospectus; the issuance of the
Capital Securities is not subject to preemptive or other similar rights; and,
subject to the terms of the Declaration, holders of Capital Securities will be
entitled to the same limitation of personal liability under Delaware law as
extended to stockholders of private corporations for profit.
(x) Each of the Administrative Trustees of the Trust is an employee of
the Company and has been duly authorized by the Company to execute and deliver
the Declaration; the Declaration has been duly executed and delivered by the
Administrative Trustees and is a valid and binding obligation of each
Administrative Trustee, enforceable against such Administrative Trustee in
accordance with its terms except to the extent that enforcement thereof may be
limited by the Permitted Exceptions.
(xi) None of the Offerors is, and upon the issuance and sale of the
Capital Securities as herein contemplated and the application of the net
proceeds therefrom as described in the Prospectus none will be, an "investment
company" or a company "controlled" by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended (the "1940 Act").
(xii) No authorization, approval, consent or order of any court or
governmental authority or agency is necessary in connection with the issuance
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and sale of the Common Securities or the offering of the Capital Securities, the
Junior Subordinated Debt Securities or the Guarantees hereunder, except such as
may be required under the 1933 Act or the 1933 Act Regulations or state
securities laws and the qualification of the Declaration, the Capital Securities
Guarantee Agreement and the Indenture under the 1939 Act.
(b) The Company represents and warrants to the Underwriter as of the date
hereof and as of the Closing Time (as hereinafter defined) as follows:
(i) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as otherwise stated therein,
(A) there has been no material adverse change in the condition, financial or
otherwise, or in the earnings or business affairs of the Trust or the Company
and its subsidiaries, considered as one enterprise, whether or not arising in
the ordinary course of business.
(ii) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Virginia with
corporate power to own, lease and operate its properties and to conduct its
business as described in the Prospectus, to enter into and perform its
obligations under this Agreement, the Declaration, as Sponsor, the Indenture and
each of the Guarantees and to purchase, own, and hold the Common Securities
issued by the Trust; the Company is duly registered as a bank holding company
under the Bank Holding Company Act of 1956, as amended; and the Company is duly
qualified as a foreign corporation to transact business and is in good standing
in each jurisdiction in which the character or location of its properties or the
nature or the conduct of its business requires such qualification, except for
any failures to be so qualified or in good standing which, taken as a whole, are
not material to the Company and its subsidiaries, considered as one enterprise.
(iii) Bank of the Commonwealth (the "Principal Subsidiary Bank") is a
banking association formed under the laws of Virginia and authorized thereunder
to transact business; all of the issued and outstanding capital stock of the
Principal Subsidiary Bank has been duly authorized and validly issued, is fully
paid and non-assessable; and the capital stock of the Principal Subsidiary Bank
owned by the Company, directly or through subsidiaries, is owned free and clear
of any security interest, mortgage, pledge, lien, encumbrance, claim or equity.
(iv) The Indenture has been duly authorized by the Company and, when
validly executed and delivered by the Company, will constitute a valid and
binding agreement of the Company, enforceable against the Company in accordance
with its terms except to the extent that enforcement thereof may be limited by
the Permitted Exceptions; the Indenture will conform to all statements relating
thereto contained in the Prospectus; and the Indenture has been duly qualified
under the 1939 Act.
(v) The Junior Subordinated Debt Securities have been duly authorized
by the Company and have been duly executed by the Company and, when
authenticated in the manner provided for in the Indenture and delivered against
payment therefor as described in the Prospectus, will constitute valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms except to the extent that enforcement thereof may be
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limited by the Permitted Exceptions, will be in the form contemplated by, and
subject to the Permitted Exceptions entitled to the benefits of, the Indenture
and will conform to all statements relating thereto in the Prospectus.
(vi) The Company's obligations under the Guarantees are subordinate
and junior in right of payment to all liabilities of the Company.
(vii) The Junior Subordinated Debt Securities are subordinated and
junior in right of payment to all "Senior Debt" (as defined in the Indenture) of
the Company.
(viii) The execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated herein and compliance by the
Company with its obligations hereunder will not conflict with or constitute a
breach of, or 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
Principal Subsidiary Bank pursuant to, any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Company or the Principal
Subsidiary Bank is a party or by which it or any of them may be bound, or to
which any of the property or assets of the Company or the Principal Subsidiary
Bank is subject (except for conflicts, breaches and defaults which would not,
individually or in the aggregate, be materially adverse to the Company and its
subsidiaries taken as a whole or materially adverse to the transactions
contemplated by this Agreement), nor will such action result in any material
violation of the provisions of the articles of incorporation or by-laws of the
Company, or any applicable law, administrative regulation or administrative or
court decree.
(ix) The shares of Common Stock issuable upon conversion of the
Capital Securities have been duly authorized and reserved for issuance upon such
conversion and when issued upon such conversion in accordance with the
provisions of the Capital Securities, will have been validly issued and will be
fully paid and non-assessable and free of preemptive rights.
(x) There are not now outstanding and at the Closing Time there will
be no preemptive conversion or other rights, options, warrants or agreements
granted or issued by or binding upon the Company for the purchase or acquisition
of any shares of its capital stock other than as set forth in the Prospectus.
(c) Each certificate signed by any officer of the Company and delivered to
the Underwriter shall be deemed to be a representation and warranty by the
Company to the Underwriter as to the matters covered thereby.
(d) The Trust represents and warrants to the Underwriter as of the date
hereof and as of the Closing Time (as hereinafter defined) as follows:
(i) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as otherwise stated therein,
(A) there has been no material adverse change in the a condition, financial or
otherwise, or in the earnings or business affairs of the Trust, whether or not
arising in the ordinary course of business, and (B) there have been no
transactions entered into by the Trust, other than in the ordinary course of
business, which are material with respect to the Trust.
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(ii) Except as disclosed in the Prospectus, there is no action, suit
or proceeding before or by any government, governmental instrumentality or
court, domestic or foreign, now pending or, to the best knowledge of the Trust,
threatened, against or affecting the Trust that is required to be disclosed in
the Prospectus, other than actions, suits or proceedings which are not
reasonably expected, individually or in the aggregate, to have a material
adverse effect on the condition, financial or otherwise, or in the earnings or
business affairs of the Trust, whether or not arising in the ordinary course of
business; and there are no transactions, contracts or documents of the Trust
that are required to be filed as exhibits to the Registration Statement by the
1933 Act or by the 1933 Act Regulations that have not been so filed.
(iii) The Trust possesses adequate certificates, authorities or
permits issued by the appropriate state, federal or foreign regulatory agencies
or bodies to conduct the business now operated by it, and the Trust has not
received any notice of proceedings relating to the revocation or modification of
any such certificate, authority or permit which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding would materially and
adversely affect the condition, financial or otherwise, or in the earnings or
business affairs of the Trust.
(iv) The execution, delivery and performance of this Agreement, the
Declaration, the Guarantee Agreement and the Guarantees, the issuance and sale
of the Capital Securities and the Common Securities, and the consummation of the
transactions contemplated herein and therein and compliance by the Trust with
its obligations hereunder and thereunder have been duly authorized by all
necessary action (corporate or otherwise) on the part of the trust and do not
and will not result in any violation of the Declaration or Certificate of Trust
and do not and will not conflict with, or result in a breach 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
Trust under (A) any contract, indenture, mortgage, loan agreement, note, lease
or other agreement or instrument to which the Trust is a party or by which it
may be bound or to which any of its properties may be subject or (B) any
existing applicable law, rule, regulation, judgment, order or decree of any
government, governmental instrumentality or court, domestic or foreign, or any
regulatory body or administrative agency or other governmental body having
jurisdiction over the Trust, or any of its properties (except for conflicts,
breaches, violations or defaults which would not, individually or in the
aggregate, be materially adverse to the trust, or materially adverse to the
transactions contemplated by this Agreement).
(e) Each certificate signed by any Trustee of the Trust and delivered to
the Underwriter or counsel for the Underwriter shall be deemed to be a
representation and warranty by the Trust to the Underwriter as to the matters
covered thereby.
SECTION 2. SALE AND DELIVERY; CLOSING.
(a) On the basis of the representations, warranties and covenants herein
contained, and subject to the conditions herein set forth, the Trust agrees to
issue and sell the Capital Securities through the Underwriter, as agent for the
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Trust, to the public and the Underwriter agrees to use its best efforts to sell
the Capital Securities as agent for the Trust, at the price per Capital Security
set forth on Schedule B (the "Public Offering Price"). The Company agrees to
pay the Underwriter a commission for Capital Securities sold through the
Underwriter in the public offering as set forth on Schedule B (the "Selling
Commission"). The Underwriter may reject any offer to purchase the Capital
Securities made through the Underwriter in whole or in part, and any such
rejection shall not be deemed a breach of the Underwriter's agreement contained
herein.
(b) It is understood that, after the Registration Statement becomes
effective, the Underwriter proposes to sell the Capital Securities to the public
as agent for the Trust upon the terms and conditions set forth in the
Prospectus. The escrow procedures established by the Underwriter shall comply
with Commission Rule 15c2-4 promulgated under the ▇▇▇▇ ▇▇▇. All subscribers to
whom the Underwriter directly sells Capital Securities shall be instructed to
make their check for payment of the Capital Securities payable to "Commonwealth
Bankshares Capital Trust I Escrow Account." In addition, the Underwriter shall
comply with Rule 15c2-4. The Underwriter shall transmit all funds that it
receives from subscribers to Wilmington Trust Company, the escrow agent (the
"Escrow Agent") by noon of the next business day following receipt thereof.
Only broker/dealers who are either (i) members in good standing of the National
Association of Securities Dealers, Inc. (the "NASD") that are registered with
the NASD and maintain net capital pursuant to Rule 15c3-1 promulgated under the
1934 Act of not less than $25,000 or (ii) dealers with their principal places of
business located outside the United States, its territories and its possessions
and not registered as brokers or dealers under the 1934 Act, who have agreed not
to make any sales within the United States, its territories or its possessions
or to persons who are nationals thereof or residents therein shall be designated
selected dealers by the Underwriter. The Underwriter shall require all selected
dealers to comply with Rule 15c2-4.
(c) The Underwriter shall direct the Escrow Agent to make payment for the
Capital Securities sold hereunder by wire transfer or certified or bank
cashier's check drawn to the order of the Trust in next day funds. Such payment
is to be made at the offices of the Company, at 10:00 a.m. local time, on or
about ____________ __, 2000, or at such other time, date and place as the
Underwriter and the Trust shall agree upon, such time and date being herein
referred to as the "Closing Time." Unless the transaction is closed book-entry
only through The Depository Trust Company, the certificates for the Capital
Securities will be delivered in such denominations and in such registrations as
the Underwriter requests in writing not later than the third (3rd) full business
day prior to the Closing Time, and will be made available for inspection by the
Underwriter at least twenty-four (24) hours prior to the Closing Time, with such
certificates to be delivered to the Escrow Agent by 12:00 p.m. on the day prior
to the Closing Time, along with addressed labels to be used to mail the
certificates to the purchasers thereof. The Trust shall direct the Escrow Agent
to deliver (i) payment of the portion of the Selling Commission due to the
Underwriter by wire transfer or certified or bank cashier's check drawn to the
order of the Underwriter in next day funds, to the Underwriter at the Closing
Time and (ii) payment of the portion of the Selling Commission due to each
selected dealer by wire transfer or certified or bank cashier's check drawn to
the order of such selected dealer in next day funds, to each selected dealer at
the Closing Time.
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SECTION 3. COVENANTS OF THE OFFERORS. Each of the Offerors jointly and
severally covenants with the Underwriter as follows:
(a) The Offerors will notify the Underwriter promptly, and confirm the
notice in writing, (i) of the effectiveness of the Registration Statement and
any amendment thereto (including any post-effective amendment), (ii) of the
receipt of any comments from the Commission, (iii) of any request by the
Commission for any amendment to the Registration Statement or any amendment or
supplement to the Prospectus or for additional information, and (iv) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings for that purpose.
The Offerors will make every reasonable effort to prevent the issuance of any
stop order and, if any stop order is issued, to obtain the lifting thereof at
the earliest possible moment.
(b) The Offerors will give the Underwriter notice of their intention to
file or prepare (i) any amendment to the Registration Statement (including any
post-effective amendment), (ii) any amendment or supplement to the Prospectus
(including any revised prospectus which the Offerors propose for use by the
Underwriter in connection with the offering of the Capital Securities which
differs from the prospectus on file at the Commission at the tune the
Registration Statement became effective, whether or not such revised prospectus
is required to be filed pursuant to Rule 424(b) of the 1933 Act Regulations), or
(iii) any document that would as a result thereof be incorporated by reference
in the Prospectus whether pursuant to the 1933 Act, the 1934 Act or otherwise,
will furnish the Underwriter with copies of any such amendment, supplement or
other document within a reasonable amount of time prior to such proposed filing
or use, as the case may be, and will not file any such amendment, supplement or
other document or use any such prospectus to which the Underwriter or counsel
for the Underwriter shall reasonably object. Subject to the foregoing, the
Offerors will file the Prospectus pursuant to Rule 424(b) and Rule 430A under
the Act not later than the Commission's close of business on the second business
day following the execution and delivery of this Agreement.
(c) The Offerors will deliver to the Underwriter as many signed copies of
the Registration Statement as originally filed and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein and
documents incorporated or deemed to be incorporated by reference therein) as the
Underwriter may reasonably request and will also deliver to the Underwriter a
conformed copy of the Registration Statement as originally filed and of each
amendment thereto (without exhibits) for the Underwriter.
(d) The Offerors will furnish to the Underwriter, from time to time during
the period when the Prospectus is required to be delivered under the 1933 Act,
such number of copies of the prospectus (as amended or supplemented) as the
Underwriter may reasonably request for the purposes contemplated by the 1933 Act
or the respective applicable rules and regulations of the Commission thereunder.
(e) If at any time when the Prospectus is required by the 1933 Act to be
delivered in connection with sales of the Capital Securities, any event shall
occur as a result of which the prospectus as then amended or supplemented will
include any untrue statement of a material fact or omit to state any material
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fact necessary to make the statements therein in light of the circumstances
under which they were made not misleading or if it shall be necessary to amend
or supplement the Prospectus in order to comply with the requirements of the
1933 Act or the 1933 Act Regulations, the Offerors will, subject to paragraph
(b) above, promptly prepare and file with the Commission such amendment or
supplement which will correct such statement or omission or an amendment which
will effect such compliance and the Offerors will furnish to the Underwriter a
reasonable number of copies of such amendment or supplement.
(f) The Offerors will endeavor, in cooperation with the Underwriter, to
qualify the Capital Securities (and the Capital Securities Guarantee) and the
Junior Subordinated Debt Securities for offering and sale under the applicable
securities laws of such states and the other jurisdictions of the United States
as the Underwriter may designate; provided, however, that none of the Offerors
shall be obligated to qualify as a foreign corporation in any jurisdiction in
which it is not so qualified.
(g) The Company will make generally available to its security holders and
to the Underwriter as soon as practicable, but not later than 90 days after the
close of the period covered thereby, an earnings statement (which need not be
audited) of the Company and its subsidiaries, covering an applicable period
beginning not later than the first day of the Company's fiscal quarter next
following the "Effective Date" (as defined in Rule 158(c) under the ▇▇▇▇ ▇▇▇) of
the Registration Statement, which will satisfy the provisions of Section 11(a)
of the 1933 Act.
SECTION 4. PAYMENT OF EXPENSES. The Company will pay all expenses
incident to the performance of each Offerors obligations under this Agreement,
and will pay for: (i) the printing and filing of the Registration Statement as
originally filed and of each amendment thereto, (ii) the preparation, issuance
and delivery of the certificates for the Capital Securities, (iii) the fees and
disbursements of the Company's and the Trust's counsel and accountants and
counsel to the Underwriter, (iv) the qualification of the Capital Securities,
the Capital Securities Guarantee and the Junior Subordinated Debt Securities
under securities laws in accordance with the provisions of Section 3(f) hereof,
including fees and expenses incurred in connection with the preparation of any
blue sky survey, (v) the printing and delivery to the Underwriter of copies of
the Registration Statement as originally filed and of each amendment thereto, of
each preliminary prospectus, and of the Prospectus and any amendments or
supplements thereto, (vi) the printing and delivery to the Underwriter of copies
of any blue sky survey, (vii) the fee of the NASD, if applicable, (viii) the
fees and expenses of the Indenture Trustee, including the fees and disbursements
of counsel for the Indenture Trustee in connection with the Indenture and the
Junior Subordinated Debt Securities, (ix) the fees and expenses of the Property
Trustee, and the Guarantee Trustee, including the fees and disbursements of
counsel for the Property Trustee in connection with the Declaration and the
Certificate of Trust; (x) the cost and charges of any transfer agent or
registrar, and (xi) the cost of qualifying the Capital Securities with DTC.
If this Agreement is terminated by the Underwriter in accordance with the
provisions of Section 5 or Section 9 hereof, the Company shall reimburse the
Underwriter for all of its reasonable out-of-pocket expenses, including the
reasonable fees and disbursements of counsel for the Underwriter.
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SECTION 5. CONDITIONS OF UNDERWRITER'S OBLIGATIONS. The obligations of
the Underwriter hereunder are subject to the accuracy of the representations and
warranties of the Offerors herein contained or in certificates of officers of
the Company, to the performance by the Offerors of their obligations hereunder,
and to the following further conditions:
(a) The Registration Statement shall have become effective not later than
5:30 P.M. on the date hereof, or with the consent of the Underwriter, at a later
time and date, not later, however, than 5:30 P.M., on the first business day
following the date hereof; or at such later time and date as may be approved by
the Underwriter; and at Closing Time no stop order suspending the effectiveness
of the Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission. The Prospectus
shall have been filed with the Commission pursuant to Rule 424(b) within the
applicable time period prescribed for such filing by the 1933 Regulations and in
accordance with Section 3(b) and prior to Closing Time the Offerors shall have
provided evidence satisfactory to the Underwriter of such timely filing.
(b) At Closing Time the Underwriter shall have received:
(i) The favorable opinion of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.C., counsel for the
Company, dated as of the Closing Time, to the following effect:
A. The Company is a duly organized and validly existing
corporation in good standing under the laws of the State of Virginia, has the
corporate power and authority to own its properties, conduct its business as
described in the Prospectus and perform its obligations under this Agreement,
and is duly registered as a bank holding company under the Bank Holding Company
Act of 1956, as amended; the Principal Subsidiary Bank is a banking association
formed under the laws of Virginia and authorized thereunder to transact
business.
B. Except for those jurisdictions specifically enumerated in such
opinion, neither the Company nor the Principal Subsidiary Bank is required to be
qualified or licensed to do business as a foreign corporation in any
jurisdiction.
C. All the outstanding shares of capital stock of the Principal
Subsidiary Bank have been duly and validly authorized and issued and are fully
paid and non-assessable, and, except as otherwise set forth in the Prospectus,
all outstanding shares of capital stock of the Principal Subsidiary Bank are
owned, directly or indirectly, by the Company free and clear of any perfected
security interest and, to the best knowledge of such counsel, any other security
interests, claims, liens or encumbrances.
D. To the best knowledge of such counsel, there is no pending
threatened action, suit or proceeding before any court or governmental agency,
authority or body or any arbitrator involving the Company or any of its
subsidiaries, of a character required to be disclosed in the Registration
Statement which is not adequately disclosed in the Prospectus, and there is no
franchise, contract, or other document of a character required to be described
11
in the Registration Statement or Prospectus, or to be filed as an exhibit, which
is not described or filed as required.
E. The Registration Statement has become effective under the 1933
Act; to the best knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been instituted or threatened; the Registration Statement,
the Prospectus and each amendment thereof or supplement thereto (other than the
financial statements and other financial and statistical information contained
therein, as to which such counsel need express no opinion) comply as to form in
all material respects with the applicable requirements of the 1933 Act and the
1933 Act Regulations and the 1934 Act and the rules and regulations of the
Commission under the 1934 Act (the "1934 Act Regulations").
F. This Agreement has been duly authorized, executed and delivered
by the Company.
G. No authorization, approval, consent or order of any court or
governmental authority or agency is required in connection with the offering,
issuance or sale of the Capital Securities, the Capital Securities Guarantee and
the Junior Subordinated Debt Securities through the Underwriter, except (a) such
as may be required under the 1933 Act and the 1933 Act Regulations and such as
may be required under the blue sky or insurance laws of any jurisdiction, and
(b) the qualification of the Declaration, the Guarantee Agreement and the
Indenture under the 1939 Act.
H. The Declaration has been duly authorized, executed and
delivered by the Company and the Administrative Trustees and has been duly
qualified under the 1939 Act.
I. The Guarantee Agreement has been duly authorized, executed and
delivered by the Company, and assuming it is duly authorized, executed and
delivered by the Guarantee Trustee, constitutes a valid and binding obligation
of the Company, enforceable against the Company in accordance with its terms,
except to the extent that enforcement thereof may be limited by the Permitted
Exceptions; and the Guarantee Agreement has been duly qualified under the 1939
Act.
J. The Indenture has been duly executed and delivered by the
Company and, assuming due authorization, execution, and delivery thereof by the
Indenture Trustee, is a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except to the extent that
enforcement thereof may be limited by the Permitted Exceptions; the Indenture
has been duly qualified under the 1939 Act; and the Indenture conforms to the
description thereof in the Prospectus.
K. The Junior Subordinated Debt Securities have been duly
authorized and executed by the Company and, when authenticated by the Trustee in
the manner provided in the Indenture and delivered against payment therefor,
will constitute valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except to the extent
12
that enforcement thereof may be limited by the Permitted Exceptions; and the
Junior Subordinated Debt Securities conform to the description thereof in the
Prospectus.
L. Neither the Company nor the Trust is, and upon the issuance and
sale of the Securities as herein contemplated and the application of the net
proceeds therefrom as described in the Prospectus neither will be, an
"investment company" or a company "controlled" by an "investment company" within
the meaning of the 1940 Act.
M. The shares of Common Stock issuable upon conversion of the
Capital Securities have been duly authorized and reserved for issuance upon such
conversion and, when issued upon such conversion in accordance with the
provisions of the Capital Securities, will have been validly issued and will be
fully paid and non-assessable and free of preemptive rights.
In rendering such opinion, such counsel may rely (A) as to matters
involving certain matters of Delaware law upon the opinion of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ &
Finger, special Delaware counsel to the Offerors, which shall be delivered in
accordance with Section 5(b)(ii) hereto; and (B) as to matters of fact, to the
extent deemed proper, on the representations and warranties of the Offerors
contained herein or in the Declaration, the Indenture and the Guarantee
Agreement of even date herewith, between the Company and the Trust covering the
Common Securities and on certificates of responsible officers of the Company and
its subsidiaries and public officials.
(ii) The favorable opinion of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger, Special
Delaware counsel to the Offerors, in form and substance satisfactory to the
Underwriter, to the effect that:
A. The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Act; all filings required under
the laws of the State of Delaware with respect to the formation and valid
existence of the Trust as a business trust have been made; the Trust has all
necessary power and authority to own property and to conduct its business as
described in the Registration Statement and the Prospectus and to enter into and
perform its obligations under this Agreement, the Capital Securities and the
Common Securities; the Trust is duly qualified and in good standing as a foreign
company in any other jurisdiction in which such qualification is necessary,
except to the extent that the failure to so qualify or be in good standing would
not have a material adverse effect on the Trust; and the Trust is not a party to
or otherwise bound by any agreement other than those described in the
Prospectus.
B. Assuming due authorization, execution and delivery by the
Company and the Trustees, the Declaration is a valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms,
except as enforcement thereof may be limited by the Permitted Exceptions.
C. The Common Securities have been duly authorized by the
Declaration and are validly issued and (subject to the terms of the Declaration)
fully paid and non-assessable beneficial interests in the assets of the Trust,
and the issuance of the Common Securities is not subject to preemptive or other
similar rights.
13
D. The Capital Securities have been duly authorized by the
Declaration and are validly issued and, subject to the terms of the Declaration,
when delivered to and paid for by the Underwriter pursuant to this Agreement,
will be validly issued, fully paid and non-assessable beneficial interests in
the assets of the Trust; the holders of the Capital Securities will, subject to
the terms of the Declaration, be entitled to the same limitation of personal
liability under Delaware law as is extended to stockholders of private
corporations for profit; and the issuance of the Capital Securities is not
subject to preemptive or other similar rights.
E. The Common Securities, the Capital Securities and the
Declaration conform in all material respects to all statements relating thereto
contained in the Prospectus.
F. All of the issued and outstanding Common Securities of the
Trust are directly owned by the Company free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equitable right.
G. This Agreement has been duly authorized, executed and delivered
by the Trust.
H. The execution, delivery and performance of this Agreement, the
Declaration, the Capital Securities and the Common Securities; the consummation
of the transactions contemplated herein and therein; and the compliance by the
Trust with its obligations hereunder and thereunder do not and will not result
in any violation of the Declaration or Certificate of Trust, and do not and will
not conflict with, or result in, a breach 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 Trust under (A)
any contract, indenture, mortgage, loan agreement, note, lease or any other
agreement or instrument known to such counsel to which the Trust is a party or
by which it may be bound or to which any of its properties may be subject
(except for such conflicts, breaches or defaults or liens, charges or
encumbrances that would not have a material adverse effect on the condition,
financial or otherwise, or in the earnings or business affairs of the Trust, (B)
any existing applicable law, rule or regulation (other than the securities or
blue sky laws of the various states, as to which such counsel need express no
opinion) or (C) any judgment, order or decree of any government, governmental
instrumentality or court, domestic or foreign, or any regulatory body or
administrative agency or other governmental body having jurisdiction over the
Trust or any of its properties.
(iii) The favorable opinion, dated as of Closing Time, of ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ & Finger, counsel to Wilmington Trust Company, as Property Trustee under
the Declaration, Guarantee Trustee under the Capital Securities Guarantee
Agreement, and Indenture Trustee under the Indenture, in form and substance
satisfactory to the Underwriter, to the effect that:
A. Wilmington Trust Company is a Delaware banking corporation with
trust powers, duly organized, validly existing and in good standing under the
laws of the State of Delaware with all necessary power and authority to execute
and deliver, and to carry out and perform its obligations under the terms of the
Declaration.
14
B. The execution, delivery and performance by the Indenture
Trustee of the Indenture and the execution, delivery and performance by the
Property Trustee of the Declaration and the execution, delivery and performance
by the Guarantee Trustee of the Guarantee Agreement have been duly authorized by
all necessary corporate action on the part of the Indenture Trustee, the
Property Trustee and the Guarantee Trustee, respectively. The Indenture, the
Declaration and the Guarantee Agreement have been duly executed and delivered by
the Indenture Trustee, the Property Trustee and the Guarantee Trustee,
respectively, and constitute the legal, valid and binding obligations of the
Indenture Trustee, the Property Trustee and the Guarantee Trustee, respectively,
enforceable against the Indenture Trustee, the Property Trustee and the
Guarantee Trustee, respectively, in accordance with their terms, except as
enforcement thereof may be limited by the Permitted Exceptions.
C. The execution, delivery and performance of the Indenture, the
Declaration and the Guarantee Agreement by the Indenture Trustee, Property
Trustee and the Guarantee Trustee, respectively, does not conflict with or
constitute a breach of the Certificate of Incorporation or Bylaws of the
Indenture Trustee, Property Trustee and the Guarantee Trustee, respectively.
D. No consent, approval or authorization of, or registration with
or notice to, any Delaware or federal banking authority is required for the
execution, delivery or performance by the Indenture Trustee, the Property
Trustee and the Guarantee Trustee of the Indenture, the Declaration and the
Guarantee Agreement, respectively
(iv) The favorable opinion of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.C., tax counsel to
the Company and the Trust, as to certain Federal tax matters set forth in the
Prospectus under "United States Income Taxation."
(v) ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.C. shall also provide a written statement that
nothing has come to their attention that has caused them to believe that the
Registration Statement (except for financial statements and schedules and other
financial or statistical data included therein, as to which counsel need make no
statement), at the time it became effective or as of the date of their
respective opinions, contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus (except for financial
statements and schedules and other financial or statistical data included
therein, as to which counsel need make no statement), as at the date hereof or
at Closing Time, included an untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(vi) At Closing Time, there shall not have been, since the date hereof
or since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings or business affairs of the
Trust or the Company and its subsidiaries, considered as one enterprise, whether
or not arising in the ordinary course of business, and the Underwriter shall
have received a certificate of the President or a Vice President of the Company
15
and of the chief financial or chief accounting officer of the Company and a
certificate of the Trustee of the Trust, and dated as of Closing Time, to the
effect that (i) there has been no such material adverse change, (ii) the
representations and warranties in Section 1 hereof are true and correct with the
same force and effect as though expressly made at and as of Closing Time, (iii)
the Trust and the Company have complied with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to Closing Time,
and (iv) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
initiated or threatened by the Commission.
(vii) At the Closing Time, Poti, ▇▇▇▇▇▇ & Associates, PC shall have
furnished to the Underwriter a letter or letters (which may refer to letters
previously delivered to the Underwriter), dated as of the Closing Time, in form
and substance satisfactory to the Underwriter, confirming that the response, if
any, to Item 10 of the Registration Statement is correct insofar as it relates
to them and stating in effect that:
A. They are independent accountants within the meaning of the 1933
Act and the 1934 Act and the l933 Act Regulations and the 1934 Act Regulations.
B. In their opinion, the consolidated financial statements of the
Company and its subsidiaries audited by them and included in the Registration
Statement and Prospectus comply as to form in all material respects with the
applicable accounting requirements of the 1933 Act and the 1933 Act Regulations
with respect to registration statements on Form S-1 and the 1934 Act and the
1934 Act Regulations.
C. On the basis of procedures (but not in accordance with
generally accepted auditing standards) consisting of:
(1) Reading the minutes of the meetings of the shareholders,
the board of directors, executive committee and audit committee of the Company
and the boards of directors and executive committees of its subsidiaries as set
forth in the minute books through a specified date not more than five business
days prior to the date of delivery of such letter;
(2) Performing the procedures specified by the American
Institute of Certified Public Accountants for a review of interim financial
information as described in SAS No. 71, Interim Financial Information, on the
unaudited condensed consolidated interim financial statements of the Company and
its consolidated subsidiaries included in the Registration Statement and
Prospectus and reading the unaudited interim financial data, if any, for the
period from the date of the latest balance sheet included in the Registration
Statement and Prospectus to the date of the latest available interim financial
data; and
(3) Making inquiries of certain officials of the Company who
have responsibility for financial and accounting matters regarding the specific
items for which representations are requested below; and
16
nothing has come to their attention as a result of the foregoing
procedures that caused them to believe that:
i. the unaudited condensed consolidated interim financial statements,
included in the Registration Statement and Prospectus, do not comply as to form
in all material respects with the applicable accounting requirements of the 1934
Act and the 1934 Act Regulations thereunder;
ii. any material modifications should be made to the unaudited
condensed consolidated interim financial statements included in the Registration
Statement and Prospectus, for them to be in conformity with generally accepted
accounting principles;
iii. (i) at the date of the latest available interim financial data and
at the specified date not more than five business days prior to the date of the
delivery of such letter, there was any change in the capital stock or the long-
term debt (other than scheduled repayments of such debt) or any decreases in
shareholders' equity of the Company and the subsidiaries on a consolidated basis
as compared with the amounts shown in the latest balance sheet included in the
Registration Statement and the Prospectus or (ii) for the period from the date
of the latest available financial data to a specified date not more than five
business days prior to the delivery of such letter, there was any change in the
capital stock or the long-term debt (other than scheduled repayments of such
debt) or any decreases in shareholders' equity of the Company and the
subsidiaries on a consolidated basis, except in all instances for changes or
decreases which the Registration Statement and Prospectus discloses have
occurred or may occur, or Poti, ▇▇▇▇▇▇ & Associates, PC shall state any specific
changes or decreases.
D. The letter shall also state that Poti, ▇▇▇▇▇▇ & Associates, PC
has carried out certain other specified procedures, not constituting an audit,
with respect to certain amounts, percentages and financial information which are
included in the Registration Statement and Prospectus and which are specified by
the Underwriter and agreed to by Poti, ▇▇▇▇▇▇ & Associates, PC , and has found
such amounts, percentages and financial information to be in agreement with the
relevant accounting, financial and other records of the Company and its
subsidiaries identified in such letter.
In addition, at or prior to the time this Agreement is executed, Poti,
▇▇▇▇▇▇ & Associates, PC , shall have furnished to the Underwriter a letter dated
the date of this Agreement, in form and substance satisfactory to the
Underwriter, to the effect set forth in this subsection (7).
(viii) At Closing Time, the NASD shall have confirmed in writing that
it has not raised any objection with respect to the fairness and reasonableness
of the underwriting terms and arrangements.
If any condition specified in this Section shall not have been fulfilled in
all material respects when and as required to be fulfilled, this Agreement may
be terminated by the Underwriter by notice to the Offerors, in writing or by
telephone or telegraph confirmed in writing, at any time at or prior to Closing
Time, and such termination shall be without liability of any party to any other
17
party except as provided in Section 4 hereof, and except that Sections 1, 7, and
8 shall survive any such termination and will remain in full force and effect.
SECTION 6. [INTENTIONALLY OMITTED]
SECTION 7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Offerors jointly and severally agree to indemnify and hold harmless
the Underwriter and each of its partners, officers, directors, and employees and
each person, if any, who controls the Underwriter within the meaning of the 1933
Act or the 1934 Act against any losses, claims, damages or liabilities, and any
action in respect thereof (including, but not limited to, any loss, claim,
damage, liability or action relating to purchases and sales of the Capital
Securities), joint or several, which arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material fact contained in (A)
the Registration Statement, or any amendment or supplement thereto, including
information deemed to be part of the Registration Statement pursuant to Rule
430A(b) of the 1933 Act Regulations, if applicable, (B) the prospectus and any
amendment or supplement thereto, or (C) any application or other document, any
amendment or supplement thereto, executed by the Offerors or based upon
information furnished by or on behalf of the Offerors filed in any jurisdiction
in order to qualify the Capital Securities under the securities or blue sky laws
thereof (each, an "Application") or (ii) the omission or alleged omission to
state in the Registration Statement, or any amendment or supplement thereto, the
Prospectus or any amendment or supplement thereto, or any Application, a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and shall reimburse as incurred the Underwriter and each
such controlling person for any legal and other expenses incurred in
investigating or defending or preparing to defend against or appearing as a
third party witness in connection with any such loss, claim, damage, liability
or action; provided, however, that neither of the Offerors shall be liable to
the Underwriter in any such case to the extent that any such loss, claim, damage
or liability arises out of, or is based upon, any untrue statement or alleged
untrue statement made in the Prospectus, including any amendment or supplement
thereto, in reliance upon and in conformity with information furnished in
writing to the Offerors by or on behalf of the Underwriter specifically for
inclusion and actually included therein; and provided further that, as to any
Prospectus that has been amended or supplemented as provided herein, this
indemnity agreement shall not inure to the benefit of the Underwriter, on
account of any loss, claim, damage, liability or action arising out of the sale
of Capital Securities to any person by the Underwriter if (A) the Underwriter
failed to send or give a copy of the final Prospectus as so amended or
supplemented to that person at or prior to the confirmation of the sale of such
Capital Securities to such person in any case where such delivery is required by
the 1933 Act, and (B) the untrue statement or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact in any
preliminary Prospectus was corrected in an amendment or supplement thereto (but
only if the sale to such person occurred after the Offerors provided the
Underwriter and the Underwriter received copies of such amendment or supplement
for distribution). This indemnity agreement will be in addition to any
liability which the Offerors may otherwise have.
(b) The Underwriter will indemnify and hold harmless the Company, the
Trust, the Trustees and each of the Company's directors, each of its officers
18
and each person, if any, who controls the Company or the Trust within the
meaning of the 1933 Act or the 1934 Act, to the sane extent as the foregoing
indemnity from the Offerors to the Underwriter, but only with reference to
written information relating to such Underwriter furnished to the Offerors by
the Underwriter and specifically included in the Prospectus. This indemnity
shall be in addition to any liability which such Underwriter may otherwise have.
The Offerors acknowledge that the statements set forth under the heading
"Underwriting" in the Prospectus constitute the only information furnished in
writing by the Underwriter for inclusion in the Prospectus.
(c) Promptly after receipt by an indemnified party under this Section 7 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against one or more indemnifying parties
under this Section 7, notify such indemnifying party or parties of the
commencement thereof; but the omission so to notify the indemnifying party or
parties will not relieve it or them from any liability which it or they may have
to any indemnified party otherwise than under subsection (a) or (b) of this
Section 7 or to the extent that the indemnifying party was not adversely
affected by such omission. In case any such action is brought against an
indemnified party and it notifies an indemnifying party or parties of the
commencement thereof, the indemnifying party or parties against which a claim is
to be made will be entitled to participate therein and, to the extent that it or
they may wish, 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 reasonably concluded
that there may be one or more legal defenses available to it and/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
direct the defense of such action on behalf of such indemnified party or parties
and such indemnified party or parties shall have the right to select separate
counsel to defend such action on behalf of such indemnified party or parties.
After 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 7 for any legal or other
expenses, other than reasonable costs of investigation, 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 (it being understood, however, that in
connection with such action the indemnifying party shall not be liable for the
expenses of more than one separate counsel (in addition to local counsel) in any
one action or separate but substantially similar actions in the same
jurisdiction arising out of the same general allegations or circumstances,
designated by the lead Underwriter in the case of paragraph (a) of this Section
7, representing the indemnified parties under such paragraph (a) who are parties
to such action or actions), or (ii) the indemnifying party has authorized in
writing the employment of counsel for the indemnified party at the expense of
the indemnifying party. After such notice from the indemnifying party to such
indemnified party, the indemnifying party will not be liable for the costs and
expenses of any settlement of such action effected by such indemnified party
without the consent of the indemnifying party, which will not be unreasonably
withheld, unless such indemnified party waived its rights under this Section 7
in writing in which case the indemnified party may effect such a settlement
without such consent.
19
(d) The Company agrees to indemnify the Trust against all losses, claims,
damages or liabilities due from the Trust under Section 7(a) hereof
(e) If the indemnification provided for in the preceding paragraphs of this
Section 7 is unavailable or insufficient to hold harmless an indemnified party
under paragraph (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then the
Offerors or the Underwriter shall contribute to the aggregate losses, claims,
damages and liabilities (including legal or other expenses reasonably incurred
in connection with investigating or defending same) to which the Offerors and
the Underwriter may be subject in such proportion so that the Underwriter is
responsible for that portion represented by the percentage that the total
discounts and/or commissions received by the Underwriter bears to the sum of
such discounts and/or commissions and the purchase price of the Capital
Securities specified in Schedule B hereto and the Offerors are responsible for
the balance; provided, however, that (y) in no case shall the Underwriter be
responsible for any amount in excess of the total discounts and/or commissions
received by it with respect to the Capital Securities sold under this Agreement
and (z) no person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. For purposes of this
Section 7, each person who controls the Underwriter within the meaning of the
1933 Act shall have the same rights to contribution as the Underwriter, and each
person who controls either of the Offerors within the meaning of either the 1933
Act or the 1934 Act, each officer or trustee of the Offerors who shall have
signed the Registration Statement and each director or trustee of the Offerors
shall have the same rights to contribution as the Offerors, subject in each case
to clause (y) of this paragraph (e). Any party entitled to contribution will,
promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution may
be made against another party or parties under this paragraph (e), notify such
party or parties from whom contribution may be sought, but the omission to so
notify such party or parties shall not relieve the party or parties from whom
contribution may be sought from any other obligation it or they may have
hereunder or otherwise than under this paragraph (d).
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY.
All representations, warranties and agreements contained in this Agreement, or
contained in certificates of officers or Trustees of the Offerors submitted
pursuant hereto, shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of the Underwriter or controlling
person, or by or on behalf of the Offerors and shall survive delivery of the
Capital Securities to the purchasers therefor.
SECTION 9. TERMINATION OF AGREEMENT.
(a) The Underwriter may terminate this Agreement, by notice to the
Offerors, at any time at or prior to Closing Time (i) if there has been, since
the date of this Agreement or since the respective dates as of which information
is given in the Registration Statement, any material adverse change in the
condition, financial or otherwise, or in the earnings or business affairs of the
Trust or the Company and its subsidiaries, considered as one enterprise, whether
or not arising in the ordinary course of business, or (ii) if there has occurred
any material adverse change in the financial markets in the United States or
elsewhere or any outbreak of hostilities or escalation thereof or other calamity
20
or crisis or any change or development involving a prospective change in
national or international political, financial or economic conditions, in each
case the effect of which is such as to make it, in the judgment of the
Underwriter, impracticable to market the Capital Securities or to enforce
contracts for the sale of the Capital Securities, or (iii) if trading in any
securities of the Company or the Trust has been suspended or materially limited
by the Commission or the applicable exchange, or if trading generally on the New
York Stock Exchange, the American Stock Exchange or on the NASDAQ National
Market, has been suspended, limited or restricted or minimum or maximum prices
for trading have been fixed, or maximum ranges for prices for securities have
been required, by said exchanges or such system or by order of the Commission,
the NASD or any governmental authority, or (iv) if a banking moratorium has been
declared by either Federal, New York, Virginia or Delaware authorities.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Section 4 hereof, and except that Sections 1, 7, and 8 shall survive
any such termination and will remain in full force and effect.
SECTION 10. [INTENTIONALLY OMITTED]
SECTION 11. NOTICES. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriter shall be directed to ▇▇▇▇▇▇▇▇ & Company, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, First
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇. Notices to the Trust and the Company shall be directed to them at
Commonwealth Bankshares, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Attention: ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, ▇▇.
SECTION 12. PARTIES. This Agreement shall inure to the benefit of and be
binding upon the Underwriter and the Trust, the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriter and the Trust and the Company and their respective successors and
the controlling persons and officers, directors and trustees referred to in
Sections 6 and 7 and their heirs and legal assigns, any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision
herein contained. This Agreement and all conditions and provisions hereof are
intended to be for the sole and exclusive benefit of the Underwriter and the
Trust and the Company and their respective successors, and said controlling
persons and officers, directors and trustees and their heirs and legal assigns,
and for the benefit of no other person, firm or corporation. No purchaser of
Capital Securities from the Underwriter shall be deemed to be a successor by
reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. This Agreement shall be governed by
and construed in accordance with the laws of the State of Virginia applicable to
agreements made and to be performed in said State. Except as otherwise set
forth herein, specified times of day refer to City of Norfolk, Virginia time.
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SECTION 14. 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 respective counterparts shall together
constitute one and the same instrument.
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Trust a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the Underwriter and the Trust and the Company in accordance with its terms.
Very truly yours,
COMMONWEALTH BANKSHARES, INC.
By: ______________________________________
Title:
COMMONWEALTH BANKSHARES CAPITAL TRUST I
By: ______________________________________
Title: Administrative Trustee
By: ______________________________________
Title: Administrative Trustee
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇▇ & COMPANY, INC.
By: __________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
President
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SCHEDULE A
Name of Underwriter Number of Capital Securities
------------------- ----------------------------
▇▇▇▇▇▇▇▇ & Company, Inc. ____________
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SCHEDULE B
Underwriting Agreement dated __________ __, 2000
Registration Statement Nos. 333-____ and 333-_____
Underwriter: ▇▇▇▇▇▇▇▇ & Company, Inc.
Address of Underwriter: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Purchase Price and Description of Securities:
Title: Convertible Preferred Capital Securities (Liquidation Amount
$25.00)
1. The initial public offering price per security for the Capital
Securities, determined as provided in said Section 2, shall be $25.00.
2. The compensation per Capital Security to be paid by the Company to
the Underwriter shall be $____, out of which commissions payable to
Selected Dealers shall be paid.
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