SUSSEX BANCORP
(a New Jersey corporation)
1,131,150 SHARES
COMMON STOCK
(No Par Value Per Share)
UNDERWRITING AGREEMENT
November __, 2004
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.
as Representative of the several Underwriters
The Equitable Building
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Sussex Bancorp, a New Jersey corporation (the "COMPANY"), proposes,
subject to the terms and conditions stated herein, to issue and sell to the
several underwriters named in SCHEDULE I hereto (the "UNDERWRITERS") an
aggregate of 983,609 shares (the "FIRM SHARES") and, at the election of the
Underwriters pursuant to Section 2 hereof, up to 147,541 additional shares (the
"OPTIONAL Shares", and together with the Firm Shares, the "SHARES") of the
common stock, no par value, of the Company (the "COMMON STOCK").
1. (a) The Company represents and warrants to and agrees with each
Underwriter that:
(i) REGISTRATION STATEMENT. A registration statement on Form
SB-2 (File No. 333-119565) (the "INITIAL REGISTRATION
STATEMENT") with respect to the Shares, including a
prospectus, and such amendments to the Initial
Registration Statement as may have been required to the
date of this Agreement, has been prepared by the Company
pursuant to and in accordance with the requirements of
the Securities Act of 1933, as amended (the "SECURITIES
ACT") and the applicable rules and regulations
promulgated thereunder, and filed with the Securities
and Exchange Commission (the "COMMISSION"). The
Registration Statement and any pre- or post-effective
amendments thereto, each in the form heretofore
delivered to you, and, excluding exhibits thereto but
including all documents incorporated by reference in the
prospectus contained therein,
delivered to you for each of the other Underwriters,
have been declared effective by the Commission in such
form. Other than a registration statement, if any,
increasing the size of the offering (a "RULE 462(B)
REGISTRATION STATEMENT"), filed pursuant to Rule 462(b)
promulgated under the Securities Act, which became
effective upon filing, no other document with respect to
the Initial Registration Statement or document
incorporated by reference therein has heretofore been
filed with the Commission. No stop order suspending the
effectiveness of the Initial Registration Statement, any
post-effective amendment thereto or the Rule 462(b)
Registration Statement, if any, has been issued and no
proceeding for that purpose has been initiated or
threatened by the Commission (any preliminary prospectus
included in the Initial Registration Statement or filed
with the Commission pursuant to Rule 424(a) of the rules
and regulations of the Commission under the Securities
Act, is hereinafter called a "PRELIMINARY PROSPECTUS").
The various parts of the Initial Registration Statement
and the Rule 462(b) Registration Statement, if any,
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 Securities Act in accordance with Section 5(a)
hereof and deemed by virtue of Rule 430A under the
Securities Act to be part of the Initial Registration
Statement at the time it was declared effective, each as
amended at the time such part of the Initial
Registration Statement became effective or such part of
the Rule 462(b) Registration Statement, if any, became
or hereafter becomes effective, are hereinafter
collectively called the "REGISTRATION STATEMENT"; and
such final prospectus, in the form first filed pursuant
to Rule 424(b) under the Securities Act, is hereinafter
called the "PROSPECTUS". All references in this
Agreement to (1) the Registration Statement, the Rule
462(b) Registration Statement, the Preliminary
Prospectus, the Prospectus, or any amendments or
supplements to any of the foregoing, shall include any
copy thereof filed with the Commission pursuant to its
Electronic Data Gathering, Analysis and Retrieval System
("▇▇▇▇▇") and (2) the Prospectus shall be deemed to
include the "electronic Prospectus" provided for use in
connection with the offering of the Shares as
contemplated by this Agreement.
(ii) NO STOP ORDER. Neither the Commission nor any state or
other jurisdiction or other regulatory body has issued,
initiated or threatened an order preventing or
suspending the use or effectiveness of the Preliminary
Prospectus. Each Preliminary Prospectus, at the time of
filing thereof, conformed in all material respects to
the requirements of the Securities Act and the
applicable rules and regulations promulgated thereunder.
Neither the Preliminary Prospectus or Prospectus, nor
any amendments or supplements thereto, at the time they
were filed, issued and as of the Closing Date (and, if
any Optional Shares are purchased, at the Date of
Delivery), did not and will not 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, in the light of the
circumstances under which they were made, not
misleading.
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(iii) CONTENTS OF REGISTRATION STATEMENT. The Registration
Statement and Prospectus conform and any further
amendments or supplements to the Registration Statement
or the Prospectus will conform, in all material respects
to the requirements of the Securities Act and the rules
and regulations promulgated 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 and 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 an Underwriter through ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇, Inc. (the "REPRESENTATIVE") expressly for use
therein. The Company acknowledges that the only
information furnished in writing by the Underwriters for
use in the Registration Statement or Prospectus are the
statements contained under the caption "Underwriting" in
the Prospectus.
(iv) INCORPORATION BY REFERENCE. The documents incorporated
by reference in the Registration Statement, Preliminary
Prospectus or the Prospectus or from which information
is so incorporated by reference, when they became
effective or were filed with the Commission, as the case
may be (or, if an amendment with respect to any such
documents was filed or became effective, when such
amendment was filed or became effective), complied in
all material respects to the requirements of the
Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT") and the rules and regulations
promulgated thereunder, and did not contain an untrue
statement of a material fact or omitted to state a
material fact necessary to make to the statements
therein not misleading.
(v) FINANCIAL STATEMENTS. The financial statements, audited
and unaudited (including all notes and schedules
thereto), included or incorporated by reference in the
Registration Statement and Prospectus present fairly the
financial position of the Company and its consolidated
subsidiaries as of the dates indicated and the results
of operations, stockholders' equity and cash flows of
the Company and its consolidated subsidiaries for the
periods specified. Such financial statements (including
all notes and schedules thereto) have been prepared in
conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods
involved, except as otherwise stated therein. The
summary and selected financial, pro forma and
statistical data included in the Prospectus is accurate
in all material respects and presents fairly the
information shown therein and has been compiled on a
basis consistent with that of the audited and unaudited
financial statements included or incorporated by
reference in the Registration Statement and Prospectus.
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(vi) NO MATERIAL ADVERSE CHANGE IN BUSINESS. Neither the
Company nor any of its subsidiaries has sustained, since
the date of the latest audited financial statements
included or incorporated by reference 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 contemplated in the Prospectus; and,
since the respective dates as of which information is
given in the Registration Statement and the Prospectus,
there has not been any material change in the capital
stock or long-term debt of the Company or any of its
subsidiaries (other than Federal Home Loan Bank
borrowings incurred in the ordinary course of business),
any material adverse change, or any development that is
reasonably likely to cause a material adverse change, in
or affecting the general affairs, management, financial
position, business prospects, stockholders' equity or
results of operations of the Company and its
subsidiaries, otherwise than as set forth or
contemplated in the Prospectus.
(vii) GOOD TITLE TO PROPERTIES. The Company and its
subsidiaries have good and marketable title in fee
simple 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
its subsidiaries; and any real property and buildings
held under lease by the Company and its subsidiaries 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 its
subsidiaries.
(viii) BANK HOLDING COMPANY. The Company is a registered bank
holding company under the Bank Holding Company Act of
1956, as amended ("BHCA") with respect to Sussex Bank
(the "BANK") and has been duly incorporated and is
validly existing as a corporation in good standing under
the laws of the State of New Jersey, with the power and
authority (corporate and otherwise) to own its
properties and conduct its business as described in the
Prospectus. The Company 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 be so
qualified would not have a material adverse effect. For
purposes of this Agreement, a Material Adverse Effect (a
"MATERIAL ADVERSE EFFECT") is defined as any material
adverse change, whether or not occurring in the ordinary
course of business, in the business,
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properties, assets, current or future consolidated
financial position, business prospects, stockholders'
equity or results of operations of the Company and its
subsidiaries, individually or in the aggregate, or on
the ability of the Company to consummate the
transactions contemplated herein.
(ix) SUBSIDIARIES. Each subsidiary of the Company has been
duly incorporated and is validly existing as a
corporation, limited liability company or a statutory
business trust, or has been duly chartered and is
validly existing as a national bank, and each subsidiary
is in good standing under the laws of the jurisdiction
of its incorporation, and has the power and authority
(corporate and otherwise) to own its properties and
conduct its business as described in the Prospectus.
Each subsidiary is duly qualified as a foreign
corporation (or exempt from such qualification) to
transact business and is in good standing in each
jurisdiction in which it owns or leases properties or
conducts any business so as to require such
qualification, except that where the failure to be so
qualified or in good standing would not have a Material
Adverse Effect. The activities of the subsidiaries of
the Bank are permitted to subsidiaries of a New
Jersey-chartered commercial bank, and the deposit
accounts of the Bank are insured up to the applicable
limits by the Federal Deposit Insurance Corporation (the
"FDIC").
(x) CAPITALIZATION. The Company has an authorized
capitalization as set forth in the Prospectus under the
heading "Capitalization", and all of the issued shares
of capital stock of the Company have been duly and
validly authorized and issued, are fully paid and
non-assessable and conform to the description of the
Company's securities contained in the Prospectus. All of
the issued and outstanding capital stock of each
subsidiary of the Company has been duly authorized and
validly issued and is fully paid and non-assessable, and
is owned, directly or through other subsidiaries of the
Company, by the Company free and clear of any pledge,
lien, encumbrance, claim or equity.
(xi) OUTSTANDING SECURITIES. The unissued Shares to be issued
and sold by the Company to the Underwriters pursuant to
this Agreement have been duly and validly authorized
and, when issued and delivered against payment therefor
as provided herein, will be duly and validly issued and
fully paid and non-assessable and will conform to the
description of the Company's securities contained in the
Prospectus and the issuance of such shares will not be
subject to any preemptive or similar rights.
(xii) DESCRIPTION OF SECURITIES. Except as described in the
Prospectus, (A) there are no outstanding rights
(contractual or otherwise), warrants or options to
acquire, or instruments convertible into or exchangeable
for, or agreements or understandings with respect to the
sale or issuance of, any shares of capital stock of or
other equity interest in the Company, and (B) there are
no contracts, agreements or understandings between the
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Company and any person granting such person the right to
require the Company to file a Registration Statement
under the Securities Act or otherwise register any
securities the Company owned or to be owned by such
person.
(xiii) NO PRICE STABILIZATION OR MANIPULATION. Neither the
Company nor its subsidiaries has taken, directly or
indirectly, any action designed to or that could
reasonably be expected to cause or result in any
stabilization or manipulation of the price of the
Shares.
(xiv) DUE AUTHORIZATION. This Agreement has been duly
authorized, executed and delivered by the Company and,
when duly executed by the Underwriters, will constitute
the valid and binding agreement of the Company
enforceable against the Company in accordance with its
terms, except as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting creditors'
rights generally or by general equitable principles and
except as any indemnification or contribution provisions
thereof may be limited under applicable securities laws.
The issue and sale of the Shares by the Company and the
compliance by the Company with all of the provisions of
this Agreement and the consummation of the 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, any indenture,
mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of
its subsidiaries is a party or by which the Company or
any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its
subsidiaries is subject, nor will such action result in
any violation of the provisions of the Certificate of
Incorporation or Bylaws of the Company or any statute or
any order, rule or regulation of any federal, state,
local or foreign court or governmental agency (each a
"GOVERNMENTAL ENTITY") or body having jurisdiction over
the Company or any of its subsidiaries or any of their
properties. No consent, approval, authorization, order,
registration or qualification of or with any such court
or governmental agency or body is required for the issue
and sale of the Shares or the consummation by the
Company of the transactions contemplated by this
Agreement, except the registration under the Securities
Act of the Shares and except as may be required under
the rules and regulations of the American Stock Exchange
("AMEX") and such consents, approvals, authorizations,
registrations or qualifications as may be required under
state securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the
Underwriters.
(xv) ABSENCE OF DEFAULTS AND CONFLICTS. Neither the Company
nor any of its subsidiaries is in violation of its
certificate of incorporation or charter (as applicable)
or bylaws or in default in the performance or observance
of any material obligation, agreement, covenant or
condition contained in
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any indenture, mortgage, deed of trust, loan agreement,
note, lease or other agreement or instrument to which it
is a party or by which it or any of its properties may
be bound except for those violations or defaults which
individually or in the aggregate would not have a
Material Adverse Effect.
(xvi) COMPLIANCE WITH STATUTES AND REGULATIONS. Except as
disclosed in the Prospectus, the Company and its
subsidiaries conduct their respective businesses in
compliance in all material respects with all federal,
state, local and foreign statutes, laws, rules,
regulations, decisions, directives and orders applicable
to them (including, without limitation, all regulations
and orders of, or agreements with, the New Jersey
Department of Banking and Insurance (the "NJDBI") and
the FDIC, the Equal Credit Opportunity Act, the Fair
Housing Act, the Community Reinvestment Act, the Home
Mortgage Disclosure Act, all other applicable fair
lending laws or other laws relating to discrimination,
the Bank Secrecy Act and Title III of the USA Patriot
Act), and neither the Company nor any of its
subsidiaries has received any communication from any
Governmental Entity asserting that the Company or any of
its subsidiaries is not in compliance with any statute,
law, rule, regulation, decision, directive or order,
except for the communications disclosed in Schedule II
to this Agreement, none of which the Company believes to
be material.
(xvii) MONEY LAUNDERING. The operations of the Company and its
subsidiaries are and have been conducted at all times in
compliance with applicable financial recordkeeping and
reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, the
money laundering statutes of all jurisdictions, the
rules and regulations thereunder and any related or
similar rules, regulations or guidelines, issued,
administered or enforced by any governmental agency
(collectively, the "MONEY LAUNDERING LAWS"), and no
action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator
involving the Company or any of its subsidiaries with
respect to the Money Laundering Laws is pending or, to
the knowledge of the Company, threatened.
(xviii) INSURANCE LICENSES. Each subsidiary of the Company that
is engaged in the business of insurance or reinsurance
(collectively, the "INSURANCE SUBSIDIARIES"), holds such
insurance licenses, certificates and permits from the
governmental authorities (including, without limitation,
from the insurance regulatory agencies of the various
jurisdictions where it conducts business (the "INSURANCE
LICENSES")) as are necessary to the conduct of its
business as described in the Prospectus, and the Company
and each Insurance Subsidiary have fulfilled and
performed all obligations necessary to maintain the
Insurance Licenses. Except as disclosed in the
Prospectus, (1) there is no pending or, to the knowledge
of the Company, threatened action, suit, proceeding or
investigation that would reasonably be expected to
result in the revocation, termination or suspension of
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any Insurance License that would reasonably be expected
to have, individually or in the aggregate, a Material
Adverse Effect, and (2) no insurance regulatory agency
or body has issued, or commenced any proceeding for the
issuance of, any order or decree impairing, restricting
or prohibiting the payment of dividends by any Insurance
Subsidiary to its parent.
(xix) INSURANCE. The Company and its subsidiaries, taken as a
whole, are insured by insurers of recognized financial
responsibility against such losses and risks and in such
amounts as are prudent and customary in the business in
which they are engaged. Neither the Company nor any of
its subsidiaries has any reason to believe that it will
not be able to renew its existing insurance coverage
from similar insurers as may be necessary to continue
its business at a cost that would not have a Material
Adverse Effect.
(xx) INSURANCE RESERVING PRACTICES. Except as disclosed in
the Prospectus, the Company and its Insurance
Subsidiaries have made no material change in their
insurance reserving practices since December 31, 2003.
(xxi) Except as disclosed in the Prospectus, there are no
legal or governmental actions or suits, investigations
or proceedings before or by any Government Entity or
court, domestic or foreign, now pending or, to the
knowledge of the Company, threatened against the Company
or any of its subsidiaries or contemplated by Government
Entities, to which the Company or any of its
subsidiaries is a party or of which any property of the
Company or any of its subsidiaries is the subject (A)
that is required to be disclosed in the Registration
Statement by the Securities Act or by the rules and
regulations of the Commission thereunder and not
disclosed therein or (B) which, if determined adversely
to the Company or any of its subsidiaries, would,
individually or in the aggregate, have a Material
Adverse Effect. All pending legal or governmental
proceedings to which the Company or any of its
subsidiaries is a party or of which any of their
property is the subject, either individually or in the
aggregate, which are not described in the Registration
Statement, including ordinary routine litigation
incidental to their respective businesses, would not
have a Material Adverse Effect, and there are no
contracts or documents of the Company or any of its
subsidiaries which would be required to be described in
the Registration Statement or to be filed as exhibits
thereto by the Securities Act or by the rules and
regulations of the Commission thereunder which have not
been so described and filed;
(xxii) GOVERNMENTAL LICENSES. Each of the Company and its
subsidiaries possess all permits, licenses, approvals,
consents and other authorizations of (collectively,
"GOVERNMENTAL LICENSES"), and has made all filings,
applications and registrations with all Governmental
Entities to permit the Company or such subsidiary to
conduct the business now operated by the Company or its
subsidiaries; the Company and its subsidiaries are in
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compliance with the terms and conditions of all such
Governmental Licenses, except where the failure so to
comply would not, individually or in the aggregate, have
a Material Adverse Effect; all of the Governmental
Licenses are valid and in full force and effect, except
where the invalidity of such Governmental Licenses or
the failure of such Governmental Licenses to be in full
force and effect would not, individually or in the
aggregate, have a Material Adverse Effect; and neither
the Company nor any of its subsidiaries has received any
notice of proceedings relating to the revocation or
modification of any such Governmental Licenses which,
singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in
a Material Adverse Effect;
(xxiii) NO REGULATORY PROCEEDINGS. Neither the Company nor any
of its subsidiaries is a party to or subject to any
order, decree, agreement, memorandum or understanding or
similar agreement with, or a commitment letter,
supervisory letter or similar submission to, any
Governmental Entity charged with the supervision or
regulation of depository institutions or engaged in the
insurance of deposits (including the FDIC) or the
supervision or regulation of it or any of its
subsidiaries and neither the Company nor any of its
subsidiaries has been advised by any such Governmental
Entity that such Governmental Entity is contemplating
issuing or requesting (or is considering the
appropriateness of issuing or requesting) any such
order, decree, agreement, memorandum or understanding,
commitment letter, supervisory letter or similar
submission.
(xxiv) ENVIRONMENTAL. The Company and its subsidiaries (1) are
in compliance with any and all applicable foreign,
federal, state and local laws, rules, regulations,
policies, ordinances, codes or rule of common law in
relation to the protection of human health and safety,
the environment or hazardous or toxic substances or
wastes, pollutants or contaminants (collectively,
"ENVIRONMENTAL LAWS") except where such noncompliance
would not be reasonably likely to have a Material
Adverse Effect, (2) have received all permits, licenses,
authorizations or other approvals required of them under
applicable Environmental Laws, and (3) are in compliance
with all terms and conditions of any such permit,
license, authorization or approval. Except as disclosed
in the Prospectus, there is no claim under any
Environmental Laws pending or, to the knowledge of the
Company, threatened against the Company or its
subsidiaries (an "ENVIRONMENTAL CLAIM") that would be
reasonably likely to have a Material Adverse Effect and,
to the knowledge of the Company, under applicable law,
there are no past or present actions, activities,
circumstances, events or incidents, including, without
limitation, releases of any material into the
environment, that are reasonably likely to form the
basis of any Environmental Claim against the Company or
its subsidiaries that would be reasonably likely to have
a Material Adverse Effect.
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(xxv) INTELLECTUAL PROPERTY. The Company and each of its
subsidiaries own, is licensed or otherwise possesses all
rights to use all patents, patent rights, inventions,
know-how (including trade secrets and other unpatented
or unpatentable proprietary or confidential
information), trademarks, service marks, trade names,
copyrights and other intellectual property rights
(collectively, the "RIGHTS") necessary for the conduct
of their respective businesses as described in the
Registration Statement and Prospectus. To the Company's
knowledge, no claims have been asserted or threatened
against the Company by any person with respect to the
use of such Rights or challenging the validity or
effectiveness of such Rights. The continued use of the
Rights in connection with the conduct of Company's and
its subsidiaries' businesses does not, to the knowledge
of the Company, infringe on the rights of any person,
which, if the subject of an unfavorable decision, ruling
or filing, would have Material Adverse Effect.
(xxvi) RELATED PARTY TRANSACTIONS. No relationship, direct or
indirect, exists between or among the Company on the one
hand, and the directors, officers, stockholders,
customers or suppliers of the Company on the other hand,
that is required to be described in the Registration
Statement and which has not been so described.
(xxvii) STATISTICAL DATA. The statistical and market-related
data contained in the Registration Statement and
Prospectus are based on or derived from sources that the
Company believes are reliable and accurate.
(xxviii) SMALL BUSINESS. The Company meets the requirements for
use of Form SB-2 under the Securities Act and rules and
regulations promulgated thereunder.
(xxix) NOT AN INVESTMENT COMPANY. The Company is not and, after
giving effect to the offering and sale of the Shares and
the proceeds thereof as described in the Prospectus,
will not be an "investment company" or an entity
"controlled" by an "investment company", as such terms
are defined in the Investment Company Act of 1940, as
amended.
(xxx) INDEPENDENT ACCOUNTANTS. ▇▇▇▇▇ ▇▇▇▇▇▇ Company LLP, who
have certified certain financial statements of the
Company and its subsidiaries, are independent public
accountants as required by the Securities Act and the
rules and regulations promulgated thereunder.
(xxxi) ▇▇▇▇▇▇▇▇-▇▇▇▇▇ ACT. The Company is, and at all relevant
times has been, in compliance with the applicable
provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the
rules and regulations promulgated thereunder (the
"▇▇▇▇▇▇▇▇-▇▇▇▇▇ ACT"), except where such failure to
comply would not be reasonably likely to have a Material
Adverse Effect.
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(xxxii) ACCOUNTING CONTROLS. The Company files periodic reports
under the Exchange Act (the "Commission Reports"). The
Company and each of its subsidiaries have established
and maintain disclosure controls and procedures as
required by Rules 13a-15 and 15d-15 under the Exchange
Act. The Company has conducted an evaluation under the
supervision and with the participation of its
management, including the Company's Chief Executive
Officer and Chief Financial Officer, of the
effectiveness of the design and operation of its
disclosure controls and procedures, and the Company's
Chief Executive Officer and Chief Financial Officer have
concluded that its disclosure controls and procedures
are effective to ensure that information required to be
disclosed in the Commission Reports is recorded,
processed, summarized and reported, within the periods
specified in, and in accordance with the requirements
of, the Commission's rules, regulations and forms. Based
on such evaluations, (i) there were no significant
deficiencies or material weaknesses in the design or
operation of internal control over financial reporting
which are reasonably likely to adversely affect the
Company's ability to record, process, summarize and
report financial information and (ii) there was no
fraud, whether or not material, that involved management
or other employees of the Company or any of its
subsidiaries who have a significant role in the
Company's internal control over financial reporting.
(xxxiii) NO LABOR DISPUTES. No labor problem with the employees
of the Company or any of its subsidiaries exists or, to
the best knowledge of the Company, is imminent that
could have a Material Adverse Effect. The Company is not
aware of any existing or imminent labor disturbance by
the employees of any of its or its subsidiaries'
principal suppliers, contractors or customers that could
reasonably be expected to cause a Material Adverse
Effect.
(xxxiv) TAXES. The Company and each of its subsidiaries have
filed all federal, state and local income, franchise or
other tax returns required to be filed and have made
timely payments of all taxes shown thereon to be due and
payable in respect of such returns, and no material
deficiency has been asserted with respect thereto by any
taxing authority.
(xxxv) REGISTRATION RIGHTS. Except as otherwise described in
the Prospectus, there are no persons with registration
rights or other similar rights to have any securities
registered pursuant to the Registration Statement or
otherwise registered by the Company under the Securities
Act.
(xxxvi) BROKERS FEES. Except as disclosed in the Registration
Statement and the Prospectus, there are no contracts,
agreements or understandings between the Company and any
person that would give rise to a valid claim against the
Company or the Underwriters for a brokerage commission,
finder's fee or other like payment in connection with
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the transactions contemplated herein, the Registration
and the Prospectus or, to the Company's knowledge, any
contact, agreements, understanding, payments,
arrangements or issuances with respect to the Company or
any of its officers, directors, stockholders, partners,
employees or affiliates that may affect the
Underwriters' compensation as determined by the NASD.
(b) The Bank represents and warrants to, and agrees with, each of
the Underwriters that:
(i) DUE INCORPORATION AND GOOD STANDING. The Bank has been
duly chartered and is validly existing as a New
Jersey-chartered commercial bank in good standing under
the laws of the State of New Jersey, with power and
authority (corporate and other) to own its properties
and conduct its business as described in the Prospectus,
and 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, or is subject to no
material liability or disability by reason of the
failure to be so qualified in any such jurisdiction.
(ii) NO CONFLICTS OR DEFAULTS. Neither the Bank nor any of
its subsidiaries is in violation of its certificate of
incorporation, bylaws or other charter documents or in
default in the performance or observance of any material
obligation, agreement, covenant or condition contained
in any contract, indenture, mortgage, deed of trust,
loan agreement, note, lease or other agreement or
instrument to which the Bank or any of its subsidiaries
is a party or by which it or any of them may be bound,
or to which any of the property of the Bank or any of
its subsidiaries is subject except for those violations
or defaults which would not have a Material Adverse
Effect.
(iii) DUE AUTHORIZATION. This Agreement has been duly
authorized, executed and delivered by the Bank and, when
duly executed by the Underwriters, will constitute the
valid and binding agreement of the Bank enforceable
against the Bank in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar
laws relating to or affecting creditors' rights
generally or by general equitable principles or Section
23A of the Federal Reserve Act. The execution, delivery
and performance of this Agreement by the Bank and the
compliance by the Bank with all of the provisions of
this Agreement and the consummation of the 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, any indenture,
mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Bank or any of its
subsidiaries is a party or by which the Bank or any of
its subsidiaries is bound or to which any of the
property or assets of the Bank or any of its
subsidiaries is subject, nor will such action
12
result in any violation of the provisions of the charter
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 Bank or any of its
subsidiaries or any of their properties.
2. Subject to the terms and conditions set forth herein, the
Company agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company on
the Closing Date, at a purchase price per share of__________, the number of Firm
Shares set forth opposite the name of such Underwriter in SCHEDULE I hereto.
The Company hereby grants to the Underwriters the right to purchase at
their election up to 147,541 Optional Shares, at the purchase price per share
set forth in the paragraph above, for the sole purpose of covering sales of
shares in excess of the number of Firm Shares. Any such election to purchase
Optional Shares may be exercised only by written notice from the Representative
to the Company, given within a period of thirty (30) calendar days after the
date of this Agreement. Such notice shall set forth the aggregate number of
Optional Shares to be purchased and the date on which such Optional Shares are
to be delivered, as determined by the Underwriters but in no event earlier than
the First Time of Delivery (as defined in Section 4 hereof) or, unless the
Underwriters and the Company otherwise agree in writing, no earlier than two (2)
or later than ten (10) business days after the date of such notice.
3. Upon the authorization by the Representative of the release of
the Firm Shares, the several Underwriters propose to offer the Firm Shares for
sale upon the terms and conditions set forth in the Prospectus.
4. (a) The Shares to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such
names as the Underwriters may request upon at least forty-eight (48) hours'
prior notice to the Company shall be delivered by or on behalf of the Company to
the Underwriters, through the facilities of the Depository Trust Company
("DTC"), for the account of such Underwriter, against payment by or on behalf of
such Underwriter of the purchase price therefor by wire transfer of Federal
(same day) funds to the account specified by the Company at least forty-eight
(48) hours in advance. The Company will cause the certificates representing the
Shares to be made available for checking and packaging at least twenty-four (24)
hours prior to the Time of Delivery (as defined below) with respect thereto at
the office of DTC or its designated custodian (the "DESIGNATED OFFICE"). The
time and date of such delivery and payment shall be, with respect to the Firm
Shares, 10:00 a.m., Eastern time, on [__________], 2004 or such other time and
date as the Underwriters and the Company may agree upon in writing, and, with
respect to the Optional Shares, 10:00 a.m., Eastern time, on the date specified
by the Underwriters in the written notice given by the Representative of the
Underwriters' election to purchase such Optional Shares, or such other time and
date as the Underwriters and the Company may agree upon in writing. Such time
and date for delivery of the Firm Shares is herein called the "FIRST TIME OF
DELIVERY", such time and date for delivery of the Optional Shares, if not the
First Time of Delivery, is herein called the "SECOND TIME OF DELIVERY", and each
such time and date for delivery is hereinafter called a "TIME OF DELIVERY".
13
(b) The documents to be delivered at each Time of Delivery
by or on behalf of the parties hereto pursuant to Section 7 hereof, including
the cross receipt for the Shares and any additional documents requested by the
Underwriters pursuant to Section 7(k) hereof, will be delivered at the offices
of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
(the "CLOSING LOCATION"), and the Shares will be delivered at the Designated
Office, all at such Time of Delivery. A meeting will be held at the Closing
Location at 4:00 p.m., Eastern Time, on the New York Business Day preceding such
Time of Delivery, at which meeting the final drafts of the documents to be
delivered pursuant to the preceding sentence will be available for review by the
parties hereto. "NEW YORK BUSINESS DAY" shall mean each Monday, Tuesday,
Wednesday, Thursday and Friday that is not a day on which banking institutions
in New York are generally authorized or obligated by law or executive order to
close.
5. The Company agrees with the Underwriters:
(a) To prepare the Prospectus in a form approved by you and
to file such Prospectus pursuant to Rule 424(b) under the Securities Act not
later than the Commission's close of business on the second business day
following the execution and delivery of this Agreement, or, if applicable, such
earlier time as may be required by Rule 430A(a)(3) under the Securities Act; to
make no further amendment or any supplement to the Registration Statement or
Prospectus, which shall be 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 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
Prospectus, of the suspension of the qualification of the Shares 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 prospectus or
suspending any such qualification, promptly to use its best efforts to obtain
the withdrawal of such order.
(b) Promptly from time to time to take such action as you
may reasonably request to qualify the Shares for offering and sale under the
securities laws of such jurisdictions as you may request 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 Shares, 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) Prior to 10:00 a.m., Eastern Time, on the New York
Business Day next succeeding the date of this Agreement and from time to time,
to furnish the Underwriters with copies of the Prospectus in New York City in
such quantities as you may from time to time reasonably request, and, if the
delivery of a prospectus is required at any time prior to the expiration of nine
months after the time of issue of the Prospectus in connection with the offering
or sale of the Shares 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
14
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 Securities Act, to notify you and upon your request to prepare and furnish
without charge to each 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, and in case any Underwriter is required to deliver a
prospectus in connection with sales of any of the Shares at any time nine (9)
months or more after the time of issue of the Prospectus, upon your request but
at the expense of such Underwriter, to prepare and deliver to such Underwriter
as many copies as you may request of an amended or supplemented Prospectus
complying with Section 10(a)(3) of the Securities Act.
(d) To make generally available to its securityholders as
soon as practicable, but in any event not later than eighteen (18) months after
the effective date of the Registration Statement (as defined in Rule 158(c)
promulgated under the Securities Act), an earnings statement of the Company and
its subsidiaries (which need not be audited) complying with Section 11(a) of the
Securities Act and the rules and regulations promulgated thereunder (including,
at the option of the Company, Rule 158).
(e) During the period beginning from the date hereof and
continuing to and including the date one hundred eighty (180) days after the
date of the Prospectus, not to, and use its best efforts not to allow its
directors, and executive officers to, offer, sell, contract to sell or otherwise
dispose of, except as provided hereunder, any securities of the Company that are
substantially similar to the Shares, including but not limited to any securities
that are convertible into or exchangeable for, or that represent the right to
receive, equity or any such substantially similar securities (other than
pursuant to employee stock option and restricted stock plans, or upon the
conversion or exchange of convertible or exchangeable securities outstanding as
of, the date of this Agreement or pursuant to a stock dividend or stock split),
without your prior written consent.
(f) So long as the Company is subject to the reporting
requirements of the Exchange Act, to furnish to its stockholders as soon as
practicable after the end of each fiscal year an annual report (including a
balance sheet and statements of income, 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), to make available to
its stockholders consolidated summary financial information of the Company and
its subsidiaries for such quarter in reasonable detail.
(g) During a period of three years from the effective date
of the Registration Statement, to furnish to the Underwriters copies of all
reports or other communications (financial or other) furnished to stockholders,
and to deliver to the Underwriters (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, and (ii) such additional information concerning the business
and financial condition of the Company as the Underwriters may from time to time
reasonably request (such financial statements to be on a consolidated basis to
the extent the accounts of the Company and its
15
subsidiaries are consolidated in reports furnished to its stockholders generally
or to the Commission).
(h) To use the net proceeds received by it from the sale of
the Shares pursuant to this Agreement in the manner specified in the Prospectus
under the caption "Use of Proceeds".
(i) If the Company elects to rely on Rule 462(b), the
Company shall file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) by 10:00 p.m., Eastern time on the date of this
Agreement, and the Company shall at the time of filing either pay to the
Commission the filing fee for the Rule 462(b) Registration Statement or give
irrevocable instructions for the payment of such fee pursuant to Rule 111(b)
under the Securities Act.
(j) To use its best efforts to list the Shares on the
American Stock Exchange.
(k) To file with the Commission such information on Form
10-QSB or Form 10-KSB as may be required by Rule 463 of the Securities Act.
6. The Company covenants and agrees with the several Underwriters
that the Company will pay or cause to be paid the following, whether or not the
transactions contemplated herein are completed: (i) the fees, disbursements and
expenses of the Company's counsel and accountants in connection with the
registration of the Shares under the Securities Act and all other expenses in
connection with the preparation, printing and filing of amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Underwriters and dealers; (ii) the cost of printing or producing any agreement
among Underwriters, this Agreement, the Blue Sky Memorandum, closing documents
(including any compilations thereof) and any other documents in connection with
the offering, purchase, sale and delivery of the Shares; (iii) all expenses in
connection with the qualification of the Shares for offering and sale under
state securities laws as provided in Section 5(b) hereof; (iv) all fees and
expenses in connection with listing the Shares on the American Stock Exchange;
(v) the cost of preparing stock certificates; (vi) the cost and charges of any
transfer agent or registrar; and (vii) all other costs and expenses incident to
the performance of its obligations hereunder which are not otherwise
specifically provided for in this Section.
7. The obligations of the Underwriters hereunder, as to the Shares
to be delivered at each Time of Delivery, shall be subject, in their discretion,
to the condition that all representations and warranties and other statements of
the Company herein are, at and as of such Time of Delivery, true and correct,
the condition that the Company shall have performed all of its obligations
hereunder theretofore to be performed, and the following additional conditions:
(a) 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 rules and regulations under the Securities Act and in accordance
with Section 5(a) hereof; if the Company has elected to rely upon Rule 462(b),
the Rule 462(b) Registration Statement shall have become effective by 10:00
p.m., Eastern Time, on the date of this Agreement; no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and all
16
requests for additional information on the part of the Commission shall have
been complied with to your reasonable satisfaction.
(b) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the
Underwriters, shall have furnished to the Underwriters such written opinion or
opinions, dated such Time of Delivery, with respect to such matters as the
Underwriters 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) ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇, LLP, counsel for the
Company, shall have furnished to the Underwriters their written opinion, dated
such Time of Delivery, in form and substance reasonably satisfactory to the
Underwriters, to the effect that:
(i) The Company is a registered bank holding company under
the BHCA, has been duly incorporated and is validly
existing as a corporation in good standing under the
laws of the State of New Jersey, with corporate power
and authority to own its properties and conduct its
business as described in the Prospectus.
(ii) The Company has an authorized capitalization as set
forth in the Prospectus under the heading
"Capitalization," and all of the shares of capital stock
of the Company issued (including the Shares being issued
pursuant to the Agreement when delivered against payment
therefore) have been duly and validly authorized and are
fully paid and nonassessable; and the Shares conform to
the description of the Stock contained in the Prospectus
and are not subject to any preemptive or similar rights.
(iii) Except as described in the Prospectus, (A) there are no
outstanding rights (contractual or otherwise), warrants
or options to acquire, or instruments convertible into
or exchangeable for, or agreements or understandings
with respect to the sale or issuance of, any shares of
capital stock of or other equity interest in the Company
except pursuant to the Company's stock option plans and
awards currently in effect on the date hereof; and (B)
there are no contracts, agreements or understandings
between the Company and any person granting such person
the right to require the Company to file a registration
statement under the Securities Act or otherwise register
any securities of the Company owned or to be owned by
such person.
(iv) The Company 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, or is
subject to any liability or disability by reason of
failure to be so qualified in any jurisdiction, except
where such failure to be so qualified would not have a
Material Adverse Effect.
17
(v) Each subsidiary of the Company either has been duly
incorporated and is validly existing as a corporation or
a statutory business trust or has been duly chartered
and is validly existing as a New Jersey-chartered
commercial bank, in each case in good standing under the
laws of the jurisdiction of its organization, with power
and authority (corporate and other) to own its
properties and conduct its business as described in the
Prospectus, and 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 such failure to be so qualified would not have a
Material Adverse Effect; the activities of the
subsidiaries of the Bank are activities permitted to
subsidiaries of a New Jersey-chartered commercial bank
under applicable law and the rules and regulations of
the NJBDI and the deposit accounts of the Bank are
insured up to the applicable limits by the FDIC; all of
the issued and outstanding capital stock of each
subsidiary of the Company is owned, directly or through
other subsidiaries of the Company, by the Company, free
and clear of any pledge, lien, encumbrance, claim or
equity.
(vi) The activities of each subsidiary of the Company as
described in the Prospectus are permitted to
subsidiaries of a New Jersey corporation or chartered
commercial bank by the rules, regulations, policies and
practices of the New Jersey Department of Banking and
Insurance ("NJBI"), the FDIC, and/or the Federal Reserve
Board ("FRB"), as the case may be, and any other federal
or state authority having jurisdiction over such
matters. to the best of such counsel's knowledge,
neither the Company nor any of its subsidiaries has
received any communication from any Governmental Entity
asserting that the Company or any of its subsidiaries is
not in compliance with any statute, law, rule,
regulation, decision, directive or order.
(vii) Except as disclosed in the Prospectus, to the best of
such counsel's knowledge, after inquiry of the Chairman,
President and Chief Financial Officer of the Company,
there are no legal or governmental actions or suits,
investigations or proceedings before or by any
Government Entity or court, domestic or foreign, now
pending or threatened against the Company or any of its
subsidiaries or contemplated by Government Entities, to
which the Company or any of its subsidiaries is a party
or of which any property of the Company or any of its
subsidiaries is the subject (A) that is required to be
disclosed in the Registration Statement by the
Securities Act or by the rules and regulations of the
Commission thereunder and not disclosed therein or (B)
which, if determined adversely to the Company or any of
its subsidiaries, would, individually or in the
aggregate, have a Material Adverse Effect; all pending
legal or governmental proceedings to which the Company
or any of its subsidiaries is a party or of which any of
their property is the subject, either
18
individually or in the aggregate, and which are not
described in the Registration Statement, including
ordinary routine litigation incidental to their
respective businesses, would not have a Material Adverse
Effect.
(viii) This Agreement has been duly authorized, executed and
delivered by the Company and the Bank and, when duly
executed by the Underwriters, will constitute the valid
and binding agreement of the Company and the Bank. The
issue and sale of the Shares being delivered at such
Time of Delivery by the Company and the compliance by
the Company and the Bank with all of the provisions of
this Agreement and the consummation of the 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, any indenture,
mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which
the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or
to which any of the property or assets of the Company or
any of its subsidiaries is subject, nor will such action
result in any violation of the provisions of the amended
and restated certificate of incorporation or bylaws of
the Company or any statute or any order, rule or
regulation known to such counsel of any court or
Governmental Entity.
(ix) No consent, approval, authorization, order, registration
or qualification of or with any court or Governmental
Entity is required for the issue and sale of the Shares
or the consummation by the Company of the transactions
contemplated by this Agreement, except the registration
under the Securities Act of the Shares, and except as
may be required under the rules and regulations of the
Amex and such consents, approvals, authorizations,
registrations or qualifications as may be required under
state securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the
Underwriters.
(x) To the best of such counsel's knowledge, after inquiry
of the Chairman, President and Chief Financial Officer
of the Company, neither the Company nor any of its
subsidiaries is in violation of its certificate of
incorporation or charter (as applicable) or bylaws or in
default in the performance or observance of any material
obligation, agreement, covenant or condition contained
in any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to
which it is a party or by which it or any of its
properties may be bound.
(xi) The statements set forth in the Prospectus under the
caption "Description of Capital Stock", insofar as they
purport to constitute a summary of the legal terms of
the Stock, are accurate and complete in all material
respects.
(xii) Each of the Company and its subsidiaries possess all
Governmental Licenses and have made all filings,
applications and registrations with all
19
Governmental Entities that are required in order to
permit the Company or such subsidiary to conduct its
business as disclosed in the Prospectus, except where
the failure to possess such Governmental License or to
have made such filing, application or registration would
not, individually or in the aggregate, have a Material
Adverse Effect; all of the Governmental Licenses are
valid and in full force and effect, except where the
invalidity of such Governmental Licenses to be in full
force and effect, individually or in the aggregate,
would not have a Material Adverse Effect; to such
counsel's knowledge, neither the Company nor any of its
subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such
Governmental Licenses which, individually or in the
aggregate, if the subject of an unfavorable decision,
ruling or finding, would result in a Material Adverse
Effect.
(xiii) To the best of such counsel's knowledge, after inquiry
of the Chairman, President and Chief Financial Officer
of the Company, neither the Company nor any of its
subsidiaries is a party to or subject to any order,
decree, agreement, memorandum of understanding or
similar arrangement with, or a commitment letter,
supervisory letter or similar submission to, any
Governmental Entity charged with the supervision or
regulation of depository institutions or engaged in the
insurance of deposits (including the FDIC) or the
supervision or regulation of it or any of its
subsidiaries and, to such counsel's knowledge, neither
the Company nor any of its subsidiaries has been advised
by any such Governmental Entity that such Governmental
Entity is contemplating issuing or requesting (or is
considering the appropriateness of issuing or
requesting) any such order, decree, agreement,
memorandum of understanding, commitment letter,
supervisory letter or similar submission.
(xiv) The Company is not, and after giving effect to the
offering and sale of the Shares, will not be, an
"investment company" or an entity "controlled" by an
"investment company", as such terms are defined in the
Investment Company Act of 1940, as amended.
(xv) The documents incorporated by reference in the
Prospectus (other than the financial statements and
related notes and schedules therein, as to which such
counsel need express no opinion), when they were filed
with the Commission, complied as to form in all material
respects with the requirements of the Exchange Act and
the rules and regulations promulgated thereunder.
(xvi) The Registration Statement and the Prospectus and any
further amendments and supplements thereto made by the
Company prior to such Time of Delivery (other than the
financial statements and related schedules therein, as
to which such counsel need express no opinion) comply as
to form in all material respects with the requirements
of the Securities Act and the rules and regulations
promulgated thereunder.
20
In addition, although they do not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus, except for those referred to in the
opinion in subsection (xi) of this section 7(c), such counsel shall state in a
separate letter that, in connection with the preparation of the Registration
Statement and Prospectus, such counsel has participated in conferences with
officers and representatives of the Company and with their independent public
accountants and with the Underwriters and their counsel, at which conferences
such counsel made inquiries of such officers, representatives and accountants
and the contents of the Registration Statement and Prospectus were discussed in
detail and based on such conferences, nothing has come to the attention of such
counsel to cause it to believe that, as of its effective date, the Registration
Statement or any further amendment thereto made by the Company prior to such
Time of Delivery (other than the financial statements and related notes and
schedules therein, as to which such counsel need express no opinion) contained
an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading or that,
as of its date, the Prospectus or any further amendment or supplement thereto
made by the Company prior to such Time of Delivery (other than the financial
statements and related schedules therein, as to which such counsel need express
no opinion) contained an untrue statement of a material fact or omitted to state
a material fact required to be stated or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading or that, as of such Time of Delivery, either the Registration
Statement or the Prospectus or any further amendment or supplement thereto made
by the Company prior to such Time of Delivery (other than the financial
statements and related schedules 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 or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
(d) On the date of the Prospectus at a time prior to the execution
of this Agreement, at 9:30 a.m., Eastern Time, on the effective date of any
post-effective amendment to the Registration Statement filed subsequent to the
date of this Agreement and also at each Time of Delivery, the Company's
Independent Auditor shall have furnished to you a letter or letters, dated the
respective dates of delivery thereof, in form and substance satisfactory to you,
with respect to the financial statements of the Company and certain financial
information contained in the Prospectus.
(e)(i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any 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 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 any of its subsidiaries or any change, or any
development involving a prospective change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of operations of
the Company and its subsidiaries, 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 the judgment of the Representative so
21
material and adverse as to make it impracticable or inadvisable to proceed with
the public offering or the delivery of the Shares being delivered at such Time
of Delivery on the terms and in the manner contemplated in the Prospectus.
(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 American Stock Exchange; (ii) a general moratorium on
commercial banking activities declared by either Federal or New Jersey
authorities or a material disruption in commercial banking or securities
settlement or clearance services in the United States; (iii) the outbreak of new
hostilities or escalation of existing hostilities involving the United States or
the declaration by the United States of a national emergency or war; or (iv) the
occurrence of any other calamity or crisis or any change in financial, political
or economic conditions in the United States or elsewhere, including without
limitation, as a result of terrorist activities occurring after the date hereof,
if the effect of any such event specified in clause (iii) or (iv), in the
judgment of the Underwriters makes it impracticable or inadvisable to proceed
with the public offering or the delivery of the Shares being delivered at such
Time of Delivery on the terms and in the manner contemplated in the Prospectus.
(g) The Shares to be sold at such Time of Delivery shall have been
duly listed for quotation on the American Stock Exchange.
(h) The Company has obtained and delivered to the Underwriters
executed copies of an agreement from each officer and director and the
stockholders listed on SCHEDULE II hereto of the Company, substantially to the
effect set forth in Subsection 5(e) hereof in form and attached hereto as ANNEX
I.
(i) The Company shall have complied with the provisions of Section
5(c) hereof with respect to the furnishing of prospectuses on the New York
Business Day next succeeding the date of this Agreement.
(j) The Company shall have furnished or caused to be furnished to
the Underwriters at such Time of Delivery certificates of officers of the
Company satisfactory to the Underwriters as to the accuracy of the
representations and warranties of the Company herein at and as of such Time of
Delivery, as to the performance by the Company of all of its obligations
hereunder to be performed at or prior to such Time of Delivery, 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.
8. (a) The Company and the Bank, jointly and severally, will indemnify and
hold harmless each Underwriter against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become subject,
under the Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon an
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 thereto, 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 each Underwriter for any legal or other expenses reasonably
22
incurred by such Underwriter in connection with investigating or defending any
such action or claim as such expenses are incurred; PROVIDED, HOWEVER, that the
Company and the Bank 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
such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through the
Representative expressly for use therein; and PROVIDED FURTHER, that, as to any
Preliminary Prospectus, this indemnity shall not inure to the benefit of any
Underwriter or any person controlling that Underwriter on account of any loss,
claim, damage, or liability arising from the sale of Shares to any person by
that Underwriter if that Underwriter failed to send or give a copy of the
Prospectus, as the same may be amended or supplemented, to that person within
the time required by the Securities Act, and the untrue statement, or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact in such Preliminary Prospectus was corrected in the Prospectus.
Notwithstanding the foregoing, the indemnification provided for in this
paragraph (a) shall not apply to the Bank to the extent that such
indemnification by the Bank would constitute a covered transaction under Section
23A of the Federal Reserve Act, as amended.
(b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon an 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 thereto, 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, the Registration Statement or the Prospectus or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through the
Representative expressly for use therein; and will reimburse the Company for any
legal or other expenses reasonably incurred by the Company in connection with
investigating or defending any such action or claim as such expenses are
incurred.
(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 that it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party which consent shall not be
unreasonably withheld, be counsel to the indemnifying party), and, after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party shall not be liable to such
23
indemnified party under such subsection for any legal expenses of other counsel
or any other expenses, in each case subsequently incurred by such indemnified
party, in connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the written consent of the
indemnified party, effect the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or threatened action or claim
in respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential party to such
action or claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability arising out of
such action or claim and (ii) does not include a statement as to or an admission
of fault, culpability or a failure to act, by or on behalf of any indemnified
party.
(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 Underwriters
on the other from the offering of the Shares. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law or if the indemnified party failed to give the notice required under
subsection (c) above, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus. The relative fault shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand
or the Underwriters on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this subsection (d) were determined by
PRO RATA allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this subsection (d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
in this subsection (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), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Shares underwritten
by it and distributed to the public were offered to the public exceeds the
amount of any damages which such Underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be
24
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company or the Bank may otherwise have and
shall extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Securities Act or who is an
affiliate or partner of any Underwriter; and the obligations of the Underwriters
under this Section 8 shall be in addition to any liability which the respective
Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company or the Bank, as the case
may be, and to each other person, if any, who controls the Company or the Bank
within the meaning of the Securities Act or who is an affiliate of the Company
or the Bank, as the case may be.
9. (a) If any Underwriter shall default in its obligation to purchase the
Shares which it has agreed to purchase hereunder at a Time of Delivery, you may
in your discretion arrange for you or another party or other parties to purchase
such Shares on the terms contained herein. If within thirty-six hours after such
default by any Underwriter you do not arrange for the purchase of such Shares,
then the Company shall be entitled to a further period of thirty-six hours
within which to procure another party or other parties satisfactory to you to
purchase such Shares on such terms. In the event that, within the respective
prescribed periods, you notify the Company that you have so arranged for the
purchase of such Shares, or the Company notifies you that it has so arranged for
the purchase of such Shares, you or the Company shall have the right to postpone
such Time of Delivery for a period of not more than seven days, in order to
effect whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus, or in any other documents or arrangements, and the
Company agrees to file promptly any amendments to the Registration Statement or
the Prospectus which in your opinion may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to this Agreement with respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase of
the Shares of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a) above, the aggregate number of such Shares which
remains unpurchased does not exceed one-tenth of the aggregate number of all the
Shares to be purchased at such Time of Delivery, then the Company shall have the
right to require each non-defaulting Underwriter to purchase the number of
shares which such Underwriter agreed to purchase hereunder at such Time of
Delivery and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the number of Shares which such
Underwriter agreed to purchase hereunder) of the Shares of such defaulting
Underwriter or Underwriters for which such arrangements have not been made; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
(c) If, after giving effect to any arrangements for the purchase of
the Shares of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a) above, the aggregate number of such Shares which
remains unpurchased exceeds one-tenth of the aggregate number of all the Shares
to be purchased at such Time of Delivery, or if the Company shall not exercise
the right described in subsection (b) above to require non-defaulting
25
Underwriters to purchase Shares of a defaulting Underwriter or Underwriters,
then this Agreement (or, with respect to the Second Time of Delivery, the
obligations of the Underwriters to purchase and of the Company to sell the
Optional Shares) shall thereupon terminate, without liability on the part of any
non-defaulting Underwriter or the Company, except for the expenses to be borne
by the Company as provided in Section 6 hereof and the indemnity and
contribution agreements in Section 8 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations,
warranties and other statements of the Company and the several Underwriters, as
set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless of
any investigation (or any statement as to the results thereof) made by or on
behalf of any Underwriter or any controlling person of any Underwriter, or the
Company, or any officer or director or controlling person of the Company, and
shall survive delivery of and payment for the Shares.
11. If this Agreement shall be terminated pursuant to Section 9
hereof, the Company shall not then be under any liability to any Underwriter
except as provided in Sections 6 and 8 hereof; but, if for any other reason, any
Shares are not delivered by or on behalf of the Company as provided herein, the
Company will reimburse the Underwriters through you for all out-of-pocket
expenses incurred by the Underwriters, including fees and disbursements of
counsel, reasonably incurred by the Underwriters in making preparations for the
purchase, sale and delivery of the Shares not so delivered, but the Company
shall then be under no further liability to any Underwriter except as provided
in Sections 6 and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of
the Underwriters, and the parties hereto shall be entitled to act and rely upon
any statement, request, notice or agreement on behalf of any Underwriter made or
given by you.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to the Representative at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, and if to the Company shall be
delivered or sent by mail or facsimile to ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President and Chief
Executive Officer; PROVIDED, HOWEVER, that any notice to an Underwriter pursuant
to Section 8(c) hereof shall be delivered or sent by mail, telex or facsimile
transmission to such Underwriter at its address set forth in its Underwriters'
Questionnaire, or telex constituting such Questionnaire, which address will be
supplied to the Company by you upon request. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
13. This Agreement constitutes the entire agreement between the
parties hereto and supersedes all prior agreements or understandings among the
parties hereto with respect to the subject matter hereof. This Agreement shall
be binding upon, and inure solely to the benefit of, the Underwriters, the
Company and, to the extent provided in Sections 8 and 10 hereof, the officers
and directors of the Company and each person who controls the Company or any
Underwriter, and their respective heirs, executors, administrators, successors
and assigns, and no
26
other person shall acquire or have any right under or by virtue of this
Agreement. No purchaser of any of the Shares from any Underwriter shall be
deemed a successor or assign by reason merely of such purchase.
14. Time shall be of the essence of this Agreement. 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. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)
27
If the foregoing is in accordance with your understanding, please sign
and return to us four (4) counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Underwriters, this letter and such acceptance
hereof shall constitute a binding agreement between each of the Underwriters and
the Company. It is understood that your acceptance of this letter on behalf of
each of the Underwriters is pursuant to the authority set forth in a for of
Agreement among Underwriters, but without warranty on your part as to the
authority of the signer thereof.
Very truly yours,
SUSSEX BANCORP
By: __________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Chairman and Chief Executive Officer
SUSSEX BANK
By: __________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Chairman and Chief Executive Officer
Accepted as of the date hereof:
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, INC.
AS REPRESENTATIVE FOR THE SEVERAL UNDERWRITERS
By: __________________________________
Name:
Title:
28
SCHEDULE I
NUMBER OF OPTIONAL
TOTAL SHARES TO BE
NUMBER OF PURCHASED IF
FIRM SHARES MAXIMUM OPTION
UNDERWRITER TO BE PURCHASED EXERCISED
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.
Total 983,609 147,541
============= =============
SCHEDULE II
NAME TITLE
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ President, Chief Executive Officer and Chairman of the
Board
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Executive Vice President (Principal Financial Officer)
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Director
▇▇▇▇ ▇. ▇▇▇▇▇ Director
▇▇▇▇ ▇. ▇▇▇▇▇▇ Director
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Director
▇▇▇▇▇▇▇ ▇▇▇▇▇ Director
▇▇▇▇▇▇ ▇▇▇▇▇▇ Director
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Director
ANNEX I
[Form of Lock-Up Agreement]