EXHIBIT NO. 1
[______] Shares
(plus [______] Shares to cover over-allotments, if any)
SUN BANCORP, INC.
COMMON STOCK, PAR VALUE $1.00 PER SHARE
UNDERWRITING AGREEMENT
----------------------
July __, 1999
ADVEST, INC.
WHEAT FIRST SECURITIES
As Representatives (the "Representatives")
of the Several Underwriters
Named in Schedule I hereto
c/o Advest, Inc.
Xxx Xxxxxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Sun Bancorp, Inc., a New Jersey corporation (the "Company"), proposes,
subject to the terms and conditions stated herein, to sell to the several
Underwriters named in Schedule I hereto (the "Underwriters"), an aggregate of
[______] shares (the "Firm Shares") of the Company's common stock, par value
$1.00 per share (the "Common Stock"). If the Representatives are the only firms
named in Schedule I hereto, then the terms "Underwriters" and "Representatives,"
as used herein, shall each be deemed to refer to such firms.
In addition, in order to cover over-allotments in the sale of the Firm
Shares, the Underwriters may, at the Underwriters' election and subject to the
terms and conditions stated herein, purchase ratably in proportion to the
amounts set forth opposite their respective names in Schedule I hereto, up to
[______] additional shares of Common Stock from the Company (such additional
shares of Common Stock, the "Optional Shares"). The Firm Shares and the Optional
Shares are referred to collectively as the "Shares."
As part of the offering of [______] Firm Shares contemplated by this
Agreement, the Underwriters have agreed to reserve out of the Firm Shares up to
an aggregate amount of [______] Shares, for sale to the Company's employees,
officers and directors (collectively, the "Participants"), as set forth in the
Prospectus in the section entitled "Underwriting" (the "Directed Share
Program"). The Shares to be sold by the Underwriters pursuant to the Directed
Share Program (the "Directed Shares") will be sold by the Underwriters pursuant
to this Agreement at the public offering price specified in
the Prospectus. Any Directed Shares not orally confirmed for purchase by any
Participants by the end of the first business day after the date on which this
Agreement is executed will be offered to the public by the Underwriters as set
forth in the Prospectus.
The Company and the Underwriters, intending to be legally bound, hereby
confirm their agreement as follows:
1. Representations and Warranties of the Company. The Company represents
and warrants to, and agrees with, each of the Underwriters that:
(a) The Company meets the requirements for the use of Form S-3 under the
Securities Act of 1933, as amended (the "Act"). A registration statement on Form
S-3 (File No. 333-_____) with respect to the Shares, including a prospectus
subject to completion, has been filed by the Company with the Securities and
Exchange Commission (the "Commission") under the Act, and one or more amendments
to such registration statement may have been so filed. After the execution of
this Agreement, the Company will file with the Commission either (i) if such
registration statement, as it may have been amended, has become effective under
the Act and information has been omitted therefrom in accordance with Rule 430A
under the Act, a prospectus in the form most recently included in an amendment
to such registration statement (or, if no such amendment shall have been filed,
in such registration statement) with such changes or insertions as are required
by Rule 430A or permitted by Rule 424(b) under the Act and as have been provided
to and approved by the Representatives, or (ii) if such registration statement,
as it may have been amended, has not become effective under the Act, an
amendment to such registration statement, including a form of prospectus, a copy
of which amendment has been provided to and approved by the Representatives
prior to the execution of this Agreement. As used in this Agreement, the term
"Registration Statement" means such registration statement, as amended at the
time when it was or is declared effective, including (A) all financial
statements, schedules and exhibits thereto, (B) all documents (or portions
thereof) incorporated by reference therein, and (C) any information omitted
therefrom pursuant to Rule 430A under the Act and included in the Prospectus (as
hereinafter defined); the term "Preliminary Prospectus" means each prospectus
subject to completion included in such registration statement or any amendment
or post-effective amendment thereto (including the prospectus subject to
completion, if any, included in the Registration Statement at the time it was or
is declared effective), including all documents (or portions thereof)
incorporated by reference therein; and the term "Prospectus" means the
prospectus first filed with the Commission pursuant to Rule 424(b) under the Act
or, if no prospectus is required to be so filed, such term means the prospectus
included in the Registration Statement, in either case, including all documents
(or portions thereof) incorporated by reference therein. As used herein, any
reference to any statement or information as being "made," "included,"
"contained," "disclosed" or "set forth" in any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto, or the Registration Statement
or any amendment thereto (or other similar references) shall refer both to
information and statements actually appearing in such document as well as
information and statements incorporated by reference therein.
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(b) No order preventing or suspending the use of any Preliminary Prospectus
has been issued and no proceeding for that purpose has been instituted or, to
the knowledge of the Company, threatened, by the Commission or the securities
authority of any state or other jurisdiction. If the Registration Statement has
become effective under the Act, no stop order suspending the effectiveness of
the Registration Statement or any part thereof has been issued and no proceeding
for that purpose has been instituted or, to the knowledge of the Company,
threatened or contemplated by the Commission or the securities authority of any
state or other jurisdiction.
(c) When any Preliminary Prospectus was filed with the Commission it
contained all material statements required to be stated therein in accordance
with, and complied in all material respects with the requirements of, the Act
and the rules and regulations of the Commission thereunder. When the
Registration Statement or any amendment thereto was or is declared effective,
and at each Time of Delivery (as hereinafter defined), it (i) contained and will
contain all material statements required to be stated therein in accordance
with, and complied or will comply in all material respects with the requirements
of, the Act and the rules and regulations of the Commission thereunder and (ii)
did not and will not include any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein not misleading.
When the Prospectus or any amendment or supplement thereto is filed with the
Commission pursuant to Rule 424(b) (or, if the Prospectus or such amendment or
supplement is not required to be so filed, when the Registration Statement or
the amendment thereto containing such amendment or supplement to the Prospectus
was or is declared effective) and at each Time of Delivery, the Prospectus, as
amended or supplemented at any such time, (i) contained and will contain all
material statements required to be stated therein in accordance with, and
complied or will comply in all material respects with the requirements of, the
Act and the rules and regulations of the Commission thereunder and (ii) did not
and will not include any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. The
foregoing provisions of this paragraph (c) do not apply to statements or
omissions made in the Registration Statement or any amendment thereto or the
Prospectus or any amendment or supplement thereto in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
through you specifically for use therein. It is understood that the statements
set forth in the Registration Statement or any amendment thereto or the
Prospectus or any amendment or supplement thereto (W) in the last paragraph of
the cover page of the Prospectus, (X) on the inside cover page with respect to
stabilization and passive market making, and (Y) in the third, sixth, and
seventh paragraphs and the list of Underwriters under the section entitled
"Underwriting," constitute the only written information furnished to the Company
by or on behalf of any Underwriter through you specifically for use in the
Registration Statement or any amendment thereto or the Prospectus and any
amendment or supplement thereto, as the case may be.
(d) There are no legal or governmental proceedings pending or, to the
knowledge of the Company, threatened to which the Company or any of its
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subsidiaries is a party or to which any of the properties of the Company or any
subsidiary are subject that are required to be described in the Registration
Statement or the Prospectus and are not so described or any statutes,
regulations, contracts or other documents that are required to be described in
the Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required.
(e) Each of the Company and its subsidiaries has been duly incorporated, is
validly existing as a corporation or banking association in good standing under
the laws of its jurisdiction of incorporation and has full power and authority
(corporate and other) to own or lease its properties and conduct its business as
described in the Prospectus. The Company is duly registered under the Bank
Holding Company Act of 1956, as amended. The Company has full power and
authority (corporate and other) to enter into this Agreement and to perform its
obligations hereunder. Each of the Company and its subsidiaries is duly
qualified to transact business as a foreign corporation and is in good standing
under the laws of each other jurisdiction in which it owns or leases properties,
or conducts any business, so as to require such qualification, except where the
failure to so qualify would not have a material adverse effect on the financial
position, results of operations or business of the Company and its subsidiaries
taken as a whole.
(f) The Company's authorized, issued and outstanding capital stock is as
disclosed in the Prospectus. All of the issued shares of capital stock of the
Company, have been duly authorized and validly issued, are fully paid and
nonassessable and conform to the descriptions of the Common Stock contained in
the Prospectus. None of the issued shares of capital stock of the Company or any
of its subsidiaries has been issued or is owned or held in violation of any
statutory (or to the knowledge of the Company, any other) preemptive rights of
shareholders, and no person or entity (including any holder of outstanding
shares of capital stock of the Company or its subsidiares) has any statutory (or
to the knowledge of the Company, any other) preemptive or other rights to
subscribe for any of the Shares. None of the capital stock of the Company has
been issued in violation of applicable federal or state securities laws.
(g) All of the issued shares of capital stock of each subsidiary have been
duly authorized and validly issued, are fully paid and nonassessable, except to
the extent such shares may be deemed assessable under 12 U.S.C. Section 55, and
are owned beneficially by the Company or one of its subsidiaries, free and clear
of all liens, security interests, pledges, charges, encumbrances, defects,
shareholders' agreements, voting agreements, proxies, voting trusts, equities or
claims of any nature whatsoever. Other than the outstanding capital stock of Sun
National Bank and Sun National Bank, Delaware, the outstanding common securities
of Sun Capital Trust and Sun Capital Trust II, the outstanding common stock of
Med-Vine, Inc., the outstanding common stock of Sun Mortgage Company, and the
equity securities held in the investment portfolios of the Company and such
subsidiaries (the composition of which is not materially different from the
disclosures in the Prospectus as of specific dates), the Company does not own,
directly or indirectly, any capital stock or other equity securities of any
other corporation or any ownership interest in any partnership, joint venture or
other association.
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(h) Except as disclosed in the Prospectus, there are no outstanding (i)
securities or obligations of the Company or any of its subsidiaries convertible
into or exchangeable for any capital stock of the Company or any of its
subsidiaries, (ii) warrants, rights or options to subscribe for or purchase from
the Company or any of its subsidiaries any such capital stock or any such
convertible or exchangeable securities or obligations or (iii) obligations of
the Company or any of its subsidiaries to issue any shares of capital stock, any
such convertible or exchangeable securities or obligations, or any such
warrants, rights or options.
(i) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, and prior to the Closing Date and
Option Closing Date (as such terms are hereinafter defined), (i) neither the
Company nor any of its subsidiaries has incurred any liabilities or obligations,
direct or contingent, or entered into any transactions, not in the ordinary
course of business, that are material to the Company and its subsidiaries, (ii)
the Company has not purchased any of its outstanding capital stock or declared,
paid or otherwise made any dividend or distribution of any kind on its capital
stock, (iii) there has not been any change in the capital stock, long-term debt
or short-term debt of the Company or any of its subsidiaries, and (iv) there has
not been any material adverse change, or any development involving a prospective
material adverse change, in or affecting the financial position, results of
operations or business of the Company and its subsidiaries, in each case other
than as disclosed in or contemplated by the Prospectus.
(j) There are no contracts, agreements or understandings between the
Company and any person granting such person the right to require the Company to
file a registration statement under the Act with respect to any securities of
the Company owned or to be owned by such person or, requiring the Company to
include such securities in the securities registered pursuant to the
Registration Statement (or any such right has been effectively waived) or
requiring the registration of any securities pursuant to any other registration
statement filed by the Company under the Act. Neither the filing of the
Registration Statement nor the offering or sale of Shares as contemplated by
this Agreement gives any security holder of the Company any rights for or
relating to the registration of any shares of Common Stock or any other capital
stock of the Company, except such that have been satisfied or waived.
(k) Neither the Company nor any of its subsidiaries is, or with the giving
of notice or passage of time or both would be, in violation of its Amended and
Restated Certificate of Incorporation or Bylaws or in default under any
indenture, mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which the Company or any of its subsidiaries is a party or to
which any of their respective properties or assets are subject.
(l) The Company and its subsidiaries have good and marketable title in fee
simple to all real property, if any, and good title to all personal property
owned by them, in each case free and clear of all liens, security interests,
pledges, charges, encumbrances, mortgages and defects, except such as are
disclosed in the Prospectus or such as would not have a material adverse effect
on the financial
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position, results of operations or business of the Company and its subsidiaries
taken as a whole and do not interfere with the use made or proposed to be made
of such property by the Company and its subsidiaries; and any real property and
buildings held under lease by the Company or any of its subsidiaries are held
under valid, subsisting and enforceable leases, with such exceptions as are
disclosed in the Prospectus or are not material and do not interfere with the
use made or proposed to be made of such property and buildings by the Company or
any subsidiary.
(m) The Company does not require any consent, approval, authorization,
order or declaration of or from, or registration, qualification or filing with,
any court or governmental agency or body in connection with the sale of the
Shares or the consummation of the transactions contemplated by this Agreement,
except the registration of the Shares under the Act (which, if the Registration
Statement is not effective as of the time of execution hereof, shall be obtained
as provided in this Agreement) and such as may be required by the National
Association of Securities Dealers, Inc. (the "NASD") or under state securities
or blue sky laws in connection with the offer, sale and distribution of the
Shares by the Underwriters.
(n) Other than as disclosed in the Prospectus, there is no litigation,
arbitration, claim, proceeding (formal or informal) or investigation (including
without limitation, any bank regulatory proceeding) pending or, to the Company's
knowledge, threatened in which the Company or any of its subsidiaries is a party
or of which any of their respective properties or assets are the subject which,
if determined adversely to the Company or any subsidiary, would individually or
in the aggregate have a material adverse effect on the financial position,
results of operations or business of the Company and its subsidiaries taken as a
whole. Neither the Company nor any subsidiary is in violation of, or in default
with respect to, any law, statute, rule, regulation, order, judgment or decree,
except as described in the Prospectus or such as do not and will not
individually or in the aggregate have a material adverse effect on the financial
position, results of operations or business of the Company and its subsidiaries
taken as a whole, and neither the Company nor any subsidiary is required to take
any action in order to avoid any such violation or default. (o) Deloitte &
Touche LLP, which has certified certain financial statements of the Company and
its consolidated subsidiaries included in the Registration Statement and the
Prospectus, are independent public accountants as required by the Act, the
Exchange Act and the respective rules and regulations of the Commission
thereunder.
(p) The consolidated financial statements and schedules (including the
related notes) of the Company and its consolidated subsidiaries included or
incorporated by reference in the Registration Statement, the Prospectus and/or
any Preliminary Prospectus were prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved and
fairly present the financial position and results of operations of the Company
and its subsidiaries, on a consolidated basis, at the dates and for the periods
presented. The selected financial data and operating and statistical information
set forth under the captions "Summary,"
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"Selected Consolidated Financial Data," "Recent Operating Results," "Use of
Proceeds" and "Capitalization," in the Prospectus fairly present, on the basis
stated in the Prospectus, the information included therein, and have been
compiled on a basis consistent with that of the audited financial statements
included in the Registration Statement. The supporting notes and schedules
included in the Registration Statement, the Prospectus and/or any Preliminary
Prospectus fairly state in all material respects the information required to be
stated therein in relation to the financial statements taken as a whole. The
unaudited interim consolidated financial statements included or incorporated by
reference in the Registration Statement comply as to form in all material
respects with the applicable accounting requirements of Rule 10-01 of the
Regulation S-X under the Act.
(q) This Agreement has been duly authorized, executed and delivered by the
Company and, assuming due execution by the Representatives of the Underwriters,
constitutes the valid and binding agreement of the Company, enforceable against
the Company in accordance with its terms, subject, as to enforcement, to
applicable bankruptcy, insolvency, reorganization and moratorium laws and other
laws relating to or affecting the enforcement of creditors' rights generally and
to general equitable principles and except as the enforceability of rights to
indemnity and contribution under this Agreement may be limited under applicable
securities laws or the public policy underlying such laws.
(r) The sale of the Shares and the performance of this Agreement and the
consummation of the transactions herein contemplated will not (with or without
the giving of notice or the passage of time or both) (i) conflict with or
violate any term or provision of the Amended and Restated Certificate of
Incorporation or Bylaws or other organizational documents of the Company or any
subsidiary, (ii) result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument to which the
Company or any subsidiary is a party or to which any of their respective
properties or assets is subject, (iii) conflict with or violate any law,
statute, rule or regulation or any order, judgment or decree of any court or
governmental agency or body having jurisdiction over the Company or any
subsidiary or any of their respective properties or assets or (iv) result in a
breach, termination or lapse of the corporate power and authority of the Company
or any subsidiary to own or lease and operate their respective assets and
properties and conduct their respective business as described in the Prospectus.
(s) When the Shares to be sold by the Company hereunder have been duly
delivered against payment therefor as contemplated by this Agreement, the Shares
will be validly issued, fully paid and nonassessable, and the holders thereof
will not be subject to personal liability solely by reason of being such
holders. The certificates representing the Shares are in proper legal form
under, and conform in all respects to the requirements of, the New Jersey
Business Corporation Act and the requirements of the NASD.
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(t) The Company has not distributed and will not distribute any offering
material in connection with the offering and sale of the Shares other than the
Registration Statement, a Preliminary Prospectus, the Prospectus and other
material, if any, permitted by the Act.
(u) Neither the Company nor any of its officers, directors or affiliates
has (i) taken, directly or indirectly, any action designed to cause or result
in, or that has constituted or might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares or (ii) since the filing of the
Registration Statement (A) sold, bid for, purchased or paid anyone any
compensation for soliciting purchases of, the Shares or (B) paid or agreed to
pay to any person any compensation for soliciting another to purchase any other
securities of the Company.
(v) The operations of the Company and its subsidiaries with respect to any
real property currently leased or owned or by any means controlled by the
Company or any subsidiary (the "Real Property") are in compliance in all
material respects with all federal, state, and local laws, ordinances, rules,
and regulations relating to occupational health and safety and the environment
(collectively, "Laws"), and the Company and its subsidiaries have not violated
any Laws in a way which would have a material adverse effect on the financial
position, results of operations or business of the Company and its subsidiaries
taken as a whole. Except as disclosed in the Prospectus, there is no pending or,
to the Company's knowledge, threatened material claim, litigation or any
administrative agency proceeding, nor has the Company or any subsidiary received
any written or oral notice from any governmental entity or third party, that:
(i) alleges a violation of any Laws by the Company or any subsidiary or (ii)
alleges the Company or any subsidiary is a liable party under the Comprehensive
Environmental Response, Compensation, and Liability Act, 42 U.S.C. ss. 9601 et
seq. or any state superfund law.
(w) Neither the Company nor any subsidiary owns or has the right to use
patents, patent applications, trademarks, trademark applications, trade names,
service marks, copyrights, franchises, trade secrets, proprietary or other
confidential information and intangible properties and assets (collectively,
"Intangibles"), the loss of any of which would have a material adverse effect on
the financial position, results of operations or business of the Company and its
subsidiaries taken as a whole; and, to the best knowledge of the Company,
neither the Company nor any subsidiary has infringed or is infringing, and
neither the Company nor any subsidiary has received notice of infringement with
respect to, asserted Intangibles of others.
(x) Each of the Company and its subsidiaries makes and keeps accurate books
and records reflecting its assets and maintains internal accounting controls
which provide reasonable assurance that (i) transactions are executed in
accordance with management's authorization, (ii) transactions are recorded as
necessary to permit preparation of the Company's consolidated financial
statements in accordance with generally accepted accounting principles and to
maintain accountability for the assets of the Company, (iii) access to the
assets of the Company and each of its subsidiaries is
8
permitted only in accordance with management's authorization, and (iv) the
recorded accountability for assets of the Company and each of its subsidiaries
is compared with existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(y) The Company and its subsidiaries have filed all foreign, federal, state
and local tax returns that are required to be filed by them and have paid all
taxes shown as due on such returns as well as all other taxes, assessments and
governmental charges that are due and payable; and no material deficiency with
respect to any such return has been assessed or proposed.
(z) Except for such plans that are expressly disclosed in the Prospectus,
the Company and its subsidiaries do not maintain, contribute to or have any
material liability with respect to any employee benefit plan, profit sharing
plan, employee pension benefit plan, employee welfare benefit plan, equity-based
plan or deferred compensation plan or arrangement ("Plans") that are subject to
the provisions of the Employee Retirement Income Security Act of 1974, as
amended, or the rules and regulations thereunder ("ERISA"). All Plans are in
compliance in all material respects with all applicable laws, including but not
limited to ERISA and the Internal Revenue Code of 1986, as amended (the "Code"),
and have been operated and administered in all material respects in accordance
with their terms. No Plan is a defined benefit plan or multi-employer plan. The
Company does not provide retiree life and/or retiree health benefits or coverage
for any employee or any beneficiary of any employee after such employee's
termination of employment, except as required by Section 4980B of the Code or
under a Plan which is intended to be "qualified" under Section 401(a) of the
Code. No material liability has been, or could reasonably be expected to be,
incurred under Title IV of ERISA or Section 412 of the Code by any entity
required to be aggregated with the Company or any of the subsidiaries pursuant
to Section 4001(b) of ERISA and/or Section 414(b) or (c) of the Code (and the
regulations promulgated thereunder) with respect to any "employee pension
benefit plan" which is not a Plan. As used in this subsection, the terms
"defined benefit plan," "employee benefit plan," "employee pension benefit
plan," "employee welfare benefit plan" and "multi-employer plan" shall have the
respective meanings assigned to such terms in Section 3 of ERISA.
(aa) No material labor dispute exists with the Company's or any
subsidiary's employees, and no such labor dispute is threatened. The Company has
no knowledge of any existing or threatened labor disturbance by the employees of
any of its principal agents, suppliers, contractors or customers that would have
a material adverse effect on the financial position, results of operations or
business of the Company and its subsidiaries taken as a whole.
(bb) The Company and its subsidiaries have received all permits, licenses,
franchises, authorizations, registrations, qualifications and approvals
(collectively, "Permits") of governmental or regulatory authorities (including,
without limitation, state or federal bank regulatory authorities) as may be
required of them to own their properties and conduct their businesses in the
manner described in the Prospectus, subject to such qualifications as may be set
forth in the Prospectus; and the Company and
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its subsidiaries have fulfilled and performed all of their material obligations
with respect to such Permits, and no event has occurred which allows or, after
notice or lapse of time or both, would allow revocation or termination thereof
or result in any other mateiral impairment of the rights of the holder of any
such Permit, subject in each case to such qualification as may be set forth in
the Prospectus; and, except as described in the Prospectus, such Permits contain
no restrictions that materially affect the ability of the Company and its
subsidiaries to conduct their businesses and no state or federal bank regulatory
agency or body has issued any order or decree impairing, restricting or
prohibiting the payment of dividends by any of its subsidiaries to the Company.
(cc) The Company and each of its subsidiaries has filed, or has had filed
on its behalf, on a timely basis, all materials, reports, documents and
information, including but not limited to annual reports, call reports and
reports of examination with each applicable bank regulatory authority, board or
agency, which are required to be filed by it, except where the failure to have
timely filed such materials, reports, documents and information would not have a
material adverse effect on the financial position, results of operations or
business of the Company and its subsidiaries taken as a whole.
(dd) Neither the Company, nor any subsidiary is an "investment company" or
a company "controlled" by an investment company as such terms are defined in
Sections 3(a) and 2(a)(9), respectively, of the Investment Company Act of 1940,
as amended (the "Investment Company Act"), and, if the Company or any subsidiary
conducts its business as set forth in the Registration Statement and the
Prospectus, will not become an "investment company" and will not be required to
register under the Investment Company Act.
(ee) The Company has not offered, or caused the Underwriters to offer,
Shares to any person pursuant to the Directed Share Program with the specific
intent to unlawfully influence (i) a customer or supplier of the Company to
alter the customer's or supplier's level or type of business with the Company,
or (ii) a trade journalist or publication to write or publish favorable
information about the Company or its products.
(ff) Sun National Bank and Sun National Bank, Delaware are members in good
standing of the Federal Reserve System and their deposits are insured by the
Federal Deposit Insurance Corporation up to the legal limits.
(gg) The Company and each subsidiary have in place and effective such
policies of insurance, with limits of liability in such amounts, as are normal
and prudent in the ordinary scope of business similar to that of the Company and
such subsidiary in the respective jurisdiction in which they conduct business.
2. Purchase and Sale of Shares.
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(a) Subject to the terms and conditions herein set forth, the Company
agrees to sell to each of the Underwriters, and each of the Underwriters agrees,
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severally and not jointly, to purchase from the Company, at a purchase price of
[_____] ($_____) per share (the "Per Share Price"), the number of Firm Shares
(to be adjusted by the Representatives so as to eliminate fractional shares)
determined by multiplying the aggregate number of Firm Shares to be sold by the
Company as set forth in the first paragraph of this Agreement by a fraction, the
numerator of which is the aggregate number of Firm Shares to be purchased by
such Underwriter as set forth opposite the name of such Underwriter in Schedule
I hereto, and the denominator of which is the aggregate number of Firm Shares to
be purchased by the several Underwriters hereunder.
(b) The Company hereby grants to the Underwriters the right to purchase at
their election in whole or in part from time to time up to [_____] Optional
Shares, at the Per Share Price, for the sole purpose of covering over-allotments
in the sale of the Firm Shares. Any such election to purchase Optional Shares
may be exercised by written notice from the Representatives to the Company,
given at any time (but not more than once) within a period of 30 calendar days
after the date of this Agreement and setting forth the aggregate number of
Optional Shares to be purchased and the date on which such Optional Shares are
to be delivered, as determined by the Representatives but in no event earlier
than the First Time of Delivery (as hereinafter defined) or, unless the
Representatives otherwise agree in writing, earlier than two or later than ten
business days after the date of such notice. In the event the Underwriters elect
to purchase all or a portion of the Optional Shares, the Company agrees to
furnish or cause to be furnished to the Representatives the certificates,
letters and opinions, and to satisfy all conditions, set forth in Section 7
hereof at the Subsequent Time of Delivery (as hereinafter defined).
(c) In making this Agreement, each Underwriter is contracting severally,
and not jointly, and except as provided in Sections 2(b) and 9 hereof, the
agreement of each Underwriter is to purchase only that number of shares
specified with respect to that Underwriter in Schedule I hereto. No Underwriter
shall be under any obligation to purchase any Optional Shares prior to an
exercise of the option with respect to such Shares granted pursuant to Section
2(b) hereof.
3. Offering by the Underwriters. Upon the authorization by the
Representatives of the release of the Shares, the several Underwriters propose
to offer the Shares for sale upon the terms and conditions disclosed in the
Prospectus.
4. Delivery of Shares; Closing. Certificates in definitive form for the
Shares to be purchased by each Underwriter hereunder, and in such denominations
and registered in such names as the Representatives may request upon at least 48
hours' prior notice to the Company, shall be delivered by or on behalf of the
Company to the Representatives for the account of such Underwriter, against
payment by such Underwriter on its behalf of the purchase price therefor by wire
transfer of immediately available funds to such accounts as the Company shall
designate in writing. The closing of the sale and purchase of the Shares shall
be held at the offices of Xxxxxx & Xxxxxx, 000 00xx Xxxxxx, X.X., Xxxxxxxxxx, XX
00000. The time and date of such delivery and payment shall be, with respect to
the Firm Shares, at 9:00 a.m., Washington, DC time, on the fourth (4th) full
business day after this Agreement is executed or at such other time and date as
the Representatives and the Company may agree upon in writing, and, with
11
respect to the Optional Shares, at 9:00 a.m., Washington, DC time, on the date
specified by the Representatives in the written notice given by the
Representatives of the Underwriters' election to purchase all or part of such
Optional Shares, or at such other time and date as the Representatives and the
Company may agree upon in writing. Such time and date for delivery of the Firm
Shares is herein called the "First Time of Delivery," such time and date for
delivery of any Optional Shares, if not the First Time of Delivery, is herein
called a "Subsequent Time of Delivery," and each such time and date for delivery
is herein called a "Time of Delivery." The Company will make such certificates
available for checking and packaging at least 24 hours prior to each Time of
Delivery at the office of Xxxxxx & Xxxxxx, 000 00xx Xxxxxx, X.X., Xxxxxxxxxx, XX
00000 or at such other location specified by the Representatives in writing at
least 48 hours prior to such Time of Delivery.
5. Covenants of the Company. The Company covenants and agrees with each of
the Underwriters that:
(a) The Company will use its best efforts to cause the Registration
Statement, if not effective prior to the execution and delivery of this
Agreement, to become effective. If the Registration Statement has been declared
effective prior to the execution and delivery of this Agreement, the Company
will file the Prospectus with the Commission pursuant to and in accordance with
subparagraph (1) (or, if applicable and if consented to by the Representatives,
subparagraph (4)) of Rule 424(b) within the time period required under Rule
424(b) under the Act. The Company will advise the Representatives promptly of
any such filing pursuant to Rule 424(b).
(b) The Company will not file with the Commission the Prospectus or the
amendment referred to in Section 1(a) hereof, any amendment or supplement to the
Prospectus or any amendment to the Registration Statement unless the
Representatives have received a reasonable period of time to review any such
proposed amendment or supplement and consented to the filing thereof and will
use its best efforts to cause any such amendment to the Registration Statement
to be declared effective as promptly as possible. Upon the reasonable request of
the Representatives or counsel for the Underwriters, the Company will promptly
prepare and file with the Commission, in accordance with the rules and
regulations of the Commission, any amendments to the Registration Statement or
amendments or supplements to the Prospectus that may be necessary or advisable
in connection with the distribution of the Shares by the several Underwriters
and will use its best efforts to cause any such amendment to the Registration
Statement to be declared effective as promptly as possible. If required, the
Company will file any amendment or supplement to the Prospectus with the
Commission in the manner and within the time period required by Rule 424(b)
under the Act. The Company will advise the Representatives, promptly after
receiving notice thereof, of the time when the Registration Statement or any
amendment thereto has been filed or declared effective or the Prospectus or any
amendment or supplement thereto has been filed and will provide evidence to the
Representatives of each such filing or effectiveness.
(c) The Company will advise the Representatives promptly after receiving
notice or obtaining knowledge of (i) when any post-effective amendment
12
to the Registration Statement is filed with the Commission, (ii) the receipt of
any comments from the Commission concerning the Registration Statement, (iii)
when any post-effective amendment to the Registration Statement becomes
effective, or when any supplement to the Prospectus or any amended Prospectus
has been filed, (iv) the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or any part thereof or any order
preventing or suspending the use of any Preliminary Prospectus or the Prospectus
or any amendment or supplement thereto, (v) the suspension of the qualification
of the Shares for offer or sale in any jurisdiction or of the initiation or
threatening of any proceeding for any such purpose, or (vi) any request made by
the Commission or any securities authority of any other jurisdiction for
amending the Registration Statement, for amending or supplementing the
Prospectus or for additional information. The Company will use its best efforts
to prevent the issuance of any such stop order or suspension and, if any such
stop order or suspension is issued, to obtain the withdrawal thereof as promptly
as possible.
(d) If the delivery of a prospectus relating to the Shares is required
under the Act at any time prior to the expiration of nine months after the date
of the Prospectus and if at such time any events have occurred as a result of
which the Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, or if for any reason it is necessary during such same
period to amend or supplement the Prospectus, the Company will promptly notify
the Representatives and upon its request (but at the Company's expense) prepare
and file with the Commission an amendment or supplement to the Prospectus that
corrects such statement or omission or effects such compliance and will furnish
without charge to each Underwriter and to any dealer in securities as many
copies of such amended or supplemented Prospectus as the Representatives may
from time to time reasonably request.
(e) The Company promptly from time to time will take such action as the
Representatives may reasonably request to qualify the Shares for offering and
sale under the securities or blue sky laws of such jurisdictions as the
Representatives may request and will continue such qualifications in effect for
as long as may be necessary to complete the distribution of the Shares, provided
that in connection therewith the Company shall not be required to qualify as a
foreign corporation or as a dealer in securities or to file a general consent to
service of process in any jurisdiction. The Company will file such statements
and reports as may be required by the laws of each jurisdiction in which the
Shares have been qualified as above provided.
(f) The Company will promptly provide each of the Representatives, without
charge, (i) two manually executed copies of the Registration Statement as
originally filed with the Commission and of each amendment thereto, including
all exhibits and all documents or information incorporated by reference therein,
(ii) for each other Underwriter, a conformed copy of the Registration Statement
as originally filed and of each amendment thereto, without exhibits but
including all documents or information incorporated by reference therein and
(iii) so long as a prospectus relating to the Shares is required to be delivered
under the Act, as many copies
13
of each Preliminary Prospectus or the Prospectus or any amendment or supplement
thereto as the Representatives may reasonably request.
(g) As soon as practicable, but not later than the Availability Date (as
defined below), the Company will make generally available to its security
holders an earnings statement of the Company and its subsidiaries, if any,
covering a period of at least 12 months beginning after the effective date of
the Registration Statement (which need not be audited) complying with Section
11(a) of the Act and the rules and regulations thereunder. "Availability Date"
means the forty-fifth (45th) day after the end of the fourth fiscal quarter
following the fiscal quarter in which the Registration Statement went effective,
except that if such fourth fiscal quarter is the last quarter of the Company's
fiscal year, "Availability Date" means the ninetieth (90th) day after the end of
such fourth fiscal quarter.
(h) During the period beginning from the date hereof and continuing to and
including the date 180 days after the date of the Prospectus, the Company will
not, and will cause its officers and directors not to, without the prior written
consent of the Representatives, directly or indirectly (i) offer, sell, contract
to sell or otherwise dispose of, any shares of Common Stock or securities
convertible into or exercisable or exchangeable for shares of Common Stock or
(ii) enter into any swap or other agreement or any transaction that transfers,
in whole or in part, the economic consequences of ownership of shares of Common
Stock whether any such swap or other agreement is to be settled by delivery of
shares of Common Stock, other securities, cash or otherwise; except for the sale
of the Shares hereunder and except for the issuance of Common Stock upon the
exercise of stock options or warrants or the conversion of convertible
securities outstanding on the date of this Agreement or to the extent that such
stock options, warrants and convertible securities are disclosed in the
Prospectus or except for the grant to employees of stock options to purchase
Common Stock which are not exercisable within such 180 days.
(i) During the period of three years after the effective date of the
Registration Statement, the Company will furnish to the Representatives and,
upon request, to each of the other Underwriters, without charge, (i) copies of
all reports or other communications (financial or other) furnished to
shareholders and (ii) as soon as they are available, copies of any reports and
financial statements furnished to or filed with the Commission, the NASD or any
national securities exchange.
(j) Prior to the termination of the underwriting syndicate contemplated by
this Agreement, neither the Company nor any of its officers, directors or
affiliates will (i) take, directly or indirectly, any action designed to cause
or to result in, or that might reasonably be expected to cause or result in, the
stabilization or manipulation of the price of any security of the Company or
(ii) sell, bid for, purchase or pay anyone any compensation for soliciting
purchases of, the Shares.
(k) In case of any event, at any time within the period during which a
prospectus is required to be delivered under the Act, as a result of which any
Preliminary Prospectus or the Prospectus, as then amended or supplemented, would
14
contain an untrue statement of a material fact, or omit to state any material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, or, if it is necessary
at any time to amend any Preliminary Prospectus or the Prospectus to comply with
the Act or any applicable securities or blue sky laws, the Company promptly will
prepare and file with the Commission, and any applicable state securities
commission, an amendment, supplement or document that will correct such
statement or omission or effect such compliance and will furnish to the several
Underwriters such number of copies of such amendment(s), supplement(s) or
document(s) as the Representatives may reasonably request. For purposes of this
subsection (k), the Company will provide such information to the
Representatives, the Underwriters' counsel and counsel to the Company as shall
be necessary to enable such persons to consult with the Company with respect to
the need to amend or supplement the Registration Statement, any Preliminary
Prospectus or the Prospectus or file any document, and shall furnish to the
Representatives and the Underwriters' counsel such further information as each
may from time to time reasonably request.
(l) The Company will use its best efforts to obtain, and thereafter
maintain, the qualification or listing of the shares of Common Stock (including,
without limitation, the Shares) on the Nasdaq National Market System.
6. Expenses and Fees.
(a) The Company will pay all costs and expenses incident to the performance
of the obligations of the Company under this Agreement, whether or not the
transactions contemplated hereby are consummated or this Agreement is terminated
pursuant to Section 10 hereof, including, without limitation, all costs and
expenses incident to (i) the printing of and mailing expenses associated with
the Registration Statement, any Preliminary Prospectus and the Prospectus and
any amendments or supplements thereto, this Agreement, the Agreement among
Underwriters, the Underwriters' Questionnaire submitted to each of the
Underwriters by the Representatives in connection herewith, the power of
attorney executed by each of the Underwriters in favor of Advest, Inc. in
connection herewith, the Dealer Agreement and related documents (collectively,
the "Underwriting Documents") and the preliminary Blue Sky memorandum relating
to the offering prepared by Xxxxxx & Xxxxxx, counsel to the Underwriters
(collectively with any supplement thereto, the "Preliminary Blue Sky
Memorandum"); (ii) the fees, disbursements and expenses of the Company's counsel
and accountants in connection with the registration of the Shares under the Act
and all other expenses in connection with the preparation and, if applicable,
filing of the Registration Statement (including all amendments thereto), any
Preliminary Prospectus, the Prospectus and any amendments and supplements
thereto, the Underwriting Documents and the Preliminary Blue Sky Memorandum;
(iii) the delivery of copies of the foregoing documents to the Underwriters;
(iv) the filing fees of the Commission and the NASD relating to the Shares; (v)
the preparation, issuance and delivery to the Underwriters of any certificates
evidencing the Shares, including transfer agent's and registrar's fees; (vi) the
qualification of the Shares for offering and sale under state securities and
blue sky laws, including filing fees and fees and disbursements of counsel for
the Underwriters (and local counsel therefor) relating thereto; (vii) any
listing of the Shares
15
on the Nasdaq National Market System; (viii) any expenses for travel, lodging
and meals incurred by the Company and any of its officers, directors and
employees in connection with any meetings with prospective investors in the
Shares; and (ix) all other costs and expenses reasonably incident to the
performance of the Company's obligations hereunder that are not otherwise
specifically provided for in this Section 6.
(b) The Representatives and the Underwriters will pay their own expenses,
including the fees of their counsel (except as provided in Section 6(a)(vi)
hereof), public advertisement of the offering and their own marketing and due
diligence expenses.
(c) At the First Time of Delivery, the Company shall pay to Advest, Inc.
the sum of [_____] ($_____) as a financial advisory fee.
7. Conditions of the Underwriters' Obligations. The obligations of the
Underwriters hereunder to purchase and pay for the Shares to be delivered at
each Time of Delivery shall be subject, in their discretion, to the accuracy of
the representations and warranties of the Company contained herein as of the
date hereof and as of such Time of Delivery, to the accuracy of the statements
of the Company's officers made pursuant to the provisions hereof, to the
performance by the Company of its covenants and agreements hereunder, and to the
following additional conditions precedent:
(a) If the registration statement as amended to date has not become
effective prior to the execution of this Agreement, such registration statement
shall have been declared effective not later than 11:00 a.m., New York City
time, on the date of this Agreement or such later date and/or time as shall have
been consented to by the Representatives in writing. If required, the Prospectus
and any amendment or supplement thereto shall have been filed with the
Commission pursuant to Rule 424(b) within the applicable time period prescribed
for such filing and in accordance with Section 5(a) of this Agreement; no stop
order suspending the effectiveness of the Registration Statement or any part
thereof shall have been issued and no proceedings for that purpose shall have
been instituted, threatened or, to the knowledge of the Company and the
Representatives, contemplated by the Commission; and all requests for additional
information on the part of the Commission shall have been complied with to the
Representatives' reasonable satisfaction.
(b) The Representatives shall each have received a copy of an executed
lock-up agreement from the Company and each of the Company's executive officers
and directors and certain shareholders of Common Stock, in the form attached
hereto as Exhibit A.
(c) The Representatives shall each have received an opinion, dated such
Time of Delivery, of Xxxxxxx, Spidi, Sloane & Xxxxx, P.C., special counsel for
the Company, in form and substance satisfactory to the Representatives and their
respective counsel, to the effect that:
16
(i) The Company is validly existing as a corporation in good standing under
the laws of the State of New Jersey and has the corporate power and authority to
own or lease its properties and conduct its business as described in the
Registration Statement and the Prospectus and to enter into this Agreement and
perform its obligations hereunder. The Company is duly qualified to transact
business as a foreign corporation in each jurisdiction in which it owns or
leases property, or conducts any business, so as to require such qualification,
except where the failure to so qualify would not have a material adverse effect
on the financial position, results of operations or business of the Company and
its subsidiaries taken as a whole. The Company is a registered bank holding
company under the Bank Holding Company Act of 1956, as amended.
(ii) Each of the Company's subsidiaries is validly existing as a
corporation in good standing under the laws of its jurisdiction of incorporation
and has the corporate power and authority to own or lease its properties and
conduct its business as described in the Registration Statement and the
Prospectus. Each subsidiary is duly qualified to transact business as a foreign
corporation in each jurisdiction in which it owns or leases property, or
conducts any business, so as to require such qualification, except where the
failure to so qualify would not have a material adverse effect on the financial
position, results of operations or business of the Company and its subsidiaries
taken as a whole.
(iii) All of the issued shares of capital stock of the Company, including
the Shares to be sold by the Company pursuant hereto when delivered against
payment therefor as contemplated hereby, have been duly authorized and validly
issued, are fully paid and nonassessable and conform to the description of the
Common Stock contained in the Prospectus. None of the issued shares of Common
Stock of the Company or capital stock of Sun National Bank or Sun National Bank,
Delaware has been issued or is owned or held in violation of any statutory (or,
to the knowledge of such counsel, any other) preemptive rights of shareholders,
and no person or entity (including any holder of outstanding shares of Common
Stock of the Company or capital stock of its subsidiaries) has any statutory
(or, to the knowledge of such counsel, any other) preemptive or other rights to
subscribe for any of the Shares.
(iv) All of the issued shares of capital stock of Sun National Bank and Sun
National Bank, Delaware have been duly authorized and validly issued, are fully
paid and nonassessable, except to the extent such shares may be deemed
assessable under 12 U.S.C. Section 55, and, to such counsel's knowledge, are
owned beneficially by the Company or its subsidiaries, free and clear of all
liens, security interests, pledges, charges, encumbrances, shareholders'
agreements, voting agreements, proxies, voting trusts, defects, equities or
claims of any nature whatsoever (collectively, "Encumbrances"), including,
without limitation, any Encumbrance arising or resulting from any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement of or entered
into by the Company, Sun National Bank, or Sun National Bank, Delaware.
(v) Except as disclosed in the Prospectus, there are, to such counsel's
knowledge, no outstanding (A) securities or obligations of the Company
17
or any of its subsidiaries convertible into or exchangeable for any capital
stock of the Company or any subsidiary, (B) warrants, rights or options to
subscribe for or purchase from the Company or any of its subsidiaries any such
capital stock or any such convertible or exchangeable securities or obligations
or (C) obligations of the Company or any of its subsidiaries to issue any shares
of capital stock, any such convertible or exchangeable securities or
obligations, or any such warrants, rights or options.
(vi) There are no contracts, agreements or understandings known to such
counsel between the Company and any person granting such person the right to
require the Company to file a registration statement under the Act with respect
to any securities of the Company owned or to be owned by such person or,
requiring the Company to include such securities in the securities registered
pursuant to the Registration Statement (or any such right has been effectively
waived) or requiring the registration of any securities pursuant to any other
registration statement filed by the Company under the Act.
(vii) The sale of the Shares being sold at such Time of Delivery and the
performance of this Agreement and the consummation of the transactions herein
contemplated will not conflict with or violate any provision of the articles of
incorporation or bylaws of the Company or any of its subsidiaries, in each case
as amended to date, or to such counsel's knowledge, any existing law, statute,
rule or regulation, or in any material respect, conflict with, or (with or
without the giving of notice or the passage of time or both) result in a breach
or violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument known to such counsel to which the Company or any of its
subsidiaries is a party or to which any of their respective properties or assets
is subject, or, conflict with or violate any order, judgment or decree known to
such counsel, of any court or governmental agency or body having jurisdiction
over the Company or any of its subsidiaries or any of their respective
properties or assets.
(viii) To such counsel's knowledge, no consent, approval, authorization,
order or declaration of or from, or registration, qualification or filing with,
any court or governmental agency or body is required for the sale of the Shares
or the consummation of the transactions contemplated by this Agreement, except
such as have been or will have been obtained and are or will be in effect, and
except the registration of the Shares under the Act, and such as may be required
by the NASD or under state securities or blue sky laws in connection with the
offer, sale and distribution of the Shares by the Underwriters.
(ix) To such counsel's knowledge and other than as disclosed in or
contemplated by the Prospectus, there is no litigation, arbitration, claim,
proceeding (formal or informal) or investigation pending or threatened, in which
the Company or any of its subsidiaries is a party or of which any of their
respective properties or assets is the subject which, if determined adversely to
the Company or any of its subsidiaries, would individually or in the aggregate
have a material adverse effect on the financial position, results of operations
or business of the Company and its subsidiaries taken as a whole.
18
(x) This Agreement has been duly authorized, executed and delivered by the
Company and, assuming due execution by the Representatives of the Underwriters,
constitutes the valid and binding agreement of the Company, enforceable against
the Company, in accordance with its terms, subject, as to enforcement, to
applicable bankruptcy, insolvency, reorganization and moratorium laws and other
laws relating to or affecting the enforcement of creditors' rights generally and
to general equitable principles and except as the enforceability of rights to
indemnity and contribution under this Agreement may be limited under applicable
securities laws or the public policy underlying such laws.
(xi) Neither the Company nor any of its subsidiaries is an "investment
company" or a company "controlled" by an investment company as such terms are
defined in Sections 3(a) and 2(a)(9), respectively, of the Investment Company
Act.
(xii) The Registration Statement and the Prospectus and each amendment or
supplement thereto (other than the financial statements, the notes and schedules
thereto and other financial data included therein, to which such counsel need
express no opinion), as of their respective effective or issue dates, complied
as to form in all material respects with the requirements of the Act and the
respective rules and regulations thereunder. Such counsel do not know of any
contracts or other documents of a character required to be filed as an exhibit
to the Registration Statement or required to be described in the Registration
Statement or the Prospectus which are not so filed or described as required.
(xiii) The Registration Statement was declared effective under the Act as
of the date and time specified in such opinion and, to such counsel's knowledge,
no stop order suspending the effectiveness of the Registration Statement has
been issued under the Act and no proceedings therefor have been initiated or
threatened by the Commission.
Such counsel shall also state that they have participated in the
preparation of the Registration Statement and the Prospectus and in conferences
with officers and other representatives of the Company, representatives of the
independent public accountants for the Company, and representatives of and
counsel to the Underwriters at which the contents of the Registration Statement,
the Prospectus and related matters were discussed and, although such counsel has
not passed upon or assumed any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement or the
Prospectus, and although such counsel has not undertaken to verify independently
the accuracy or completeness of the statements in the Registration Statement or
the Prospectus, nothing has come to such counsel's attention to lead them to
believe that the Registration Statement, or any further amendment thereto made
prior to such Time of Delivery, on its effective date and as of such Time of
Delivery, contained or contains any untrue statement of a material fact or
omitted or omits to state any material fact required to be stated therein or
necessary to make the statements therein, not misleading, or that the
Prospectus, or any amendment or supplement thereto made prior to such Time of
Delivery, as of its issue date and as of such Time of Delivery, contained
19
or contains any untrue statement of a material fact or omitted or omits to state
a material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading (provided that
such counsel need express no belief regarding the financial statements, the
notes and schedules thereto and other financial data contained in the
Registration Statement, any amendment thereto, or the Prospectus, or any
amendment or supplement thereto).
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of officers of
the Company, public officials and letters from officials of the NASD. Copies of
such certificates of officers of the Company and other opinions shall be
addressed and furnished to the Underwriters and furnished to counsel for the
Underwriters.
(d) Xxxxxx & Xxxxxx, counsel for the Underwriters, shall have furnished to
each of the Representatives such opinion or opinions, dated such Time of
Delivery, with respect to such matters as the Representatives may reasonably
request, and the Company shall have furnished to such counsel such documents as
they request for the purpose of enabling them to pass upon such matters.
(e) The Representatives shall each have received from Deloitte & Touche
LLP, independent public accountants, in form and substance satisfactory to the
Representatives, letters dated as of the date hereof, the date of delivery of
the Firm Securities and the date(s) of delivery of any Option Securities,
containing statements and information of the type ordinarily included in
accountants' "comfort letters" to Underwriters with respect to the financial
statements and certain financial information contained in the Registration
Statement and Prospectus; provided that the letter dated as of the date of
delivery of the Firm Securities shall use a "cut-off date" not earlier than the
date hereof.
(f) Since the date of the latest audited financial statements included in
the Prospectus, neither the Company nor any of the subsidiaries shall have
sustained any material adverse change, or any development involving a
prospective material adverse change (including, without limitation, a change in
management or control of the Company), in or affecting the position (financial
or otherwise), results of operations, net worth or business prospects of the
Company and its subsidiaries, otherwise than as disclosed in or contemplated by
the Prospectus, the effect of which, in either such case, in the
Representatives' reasonable judgment makes it impracticable or inadvisable to
proceed with the purchase, sale and delivery of the Shares being delivered at
such Time of Delivery as contemplated by the Registration Statement, as amended
as of the date hereof.
(g) Subsequent to the date hereof, there shall not have occurred any of the
following: (i) any suspension or limitation in trading in securities generally
on the New York Stock Exchange, and/or the American Stock Exchange or any
setting of minimum prices for trading on such exchange, or in the Common Stock
of the Company by the Commission or the NASD; (ii) a moratorium on commercial
banking activities in New York or New Jersey declared by either federal or state
authorities; or (iii) any
20
outbreak or escalation of hostilities involving the United States, declaration
by the United States of a national emergency or war or any other national or
international calamity or emergency if the effect of any such event specified in
this clause (iii) in the Representatives' reasonable judgment makes it
impracticable or inadvisable to proceed with the purchase, sale and delivery of
the Shares being delivered at such Time of Delivery as contemplated by the
Registration Statement, as amended as of the date hereof.
(h) The Company shall have furnished to the Representatives at such Time of
Delivery certificates of the chief executive officer or an executive vice
president and the chief financial officer of the Company satisfactory to the
Representatives, as to the accuracy of the representations and warranties of the
Company herein at and as of such Time of Delivery with the same effect as if
made at such Time of Delivery, as to the performance by the Company of all of
its respective obligations hereunder to be performed at or prior to such Time of
Delivery, and as to such other matters as the Representatives may reasonably
request, and the Company shall have furnished or caused to be furnished
certificates of such officers as to such matters as the Representatives may
reasonably request.
(i) The representations and warranties of the Company in this Agreement and
in the certificates delivered by the Company pursuant to this Agreement shall be
true and correct in all material respects when made and on and as of each Time
of Delivery as if made at such time, and the Company shall have performed all
covenants and agreements and satisfied all conditions contained in this
Agreement required to be performed or satisfied by the Company at or before such
Time of Delivery.
(j) The Shares shall have been approved for quotation in the Nasdaq
National Market System.
(k) Each person purchasing Shares pursuant to the Directed Share Program
shall have executed and delivered to each of the Representatives a subscription
agreement in form and substance acceptable to the Representatives.
8. Indemnification and Contribution.
---------------------------------
(a) The Company agrees to 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 Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon: (i) any untrue statement or alleged untrue statement made
by the Company in Section 1 of this Agreement; (ii) any untrue statement or
alleged untrue statement of any material fact contained in (A) the Registration
Statement or any amendment thereto, any Preliminary Prospectus or the Prospectus
or any amendment or supplement thereto, or (B) any application or other
document, or amendment or supplement thereto, executed by the Company or based
upon written information furnished by or on behalf of the Company filed in any
jurisdiction in order to qualify the Shares under the securities or blue sky
laws thereof or filed with the Commission or any securities association or
21
securities exchange (each an "Application"); or (iii) the omission of or alleged
omission to state in the Registration Statement or any amendment thereto, any
Preliminary Prospectus, the Prospectus or any amendment or supplement thereto,
or any Application of a material fact required to be stated therein or necessary
to make the statements therein not misleading; and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating, defending against or appearing as
a third-party witness in connection with any such loss, claim, damage, liability
or action; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage, liability or action arises
out of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in the Registration Statement or any amendment
thereto, any Preliminary Prospectus, the Prospectus or any amendment or
supplement thereto or any Application in reliance upon and in conformity with
written information furnished to the Company by any Underwriter through the
Representatives expressly for use therein (which information is solely as set
forth in Section 1(c) hereof). The Company will not, without the prior written
consent of the Representatives of the Underwriters, which shall not be
unreasonably withheld, settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action, suit or proceeding (or
related cause of action or portion thereof) in respect of which indemnification
may be sought hereunder (whether or not any Underwriter is a party to such
claim, action, suit or proceeding), unless such settlement, compromise or
consent includes an unconditional release of each Underwriter from all liability
arising out of such claim, action, suit or proceeding (or related cause of
action or portion thereof).
(b) The Company agrees to indemnify and hold harmless the Underwriters and
each person, if any, who controls the Underwriters within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act ("Underwriter
Entities"), against any and all losses, claims, damages or liabilities
(including, without limitation, any legal or other expenses reasonably incurred
in connection with defending or investigating any such action or claim): (i)
caused by the failure of any Participant to pay for and accept delivery of the
Shares which, immediately following the effectiveness of the Registration
Statement, were subject to a properly confirmed agreement to purchase; or (ii)
related to, arising out of, or in connection with the Directed Share Program,
provided that the Company shall not be responsible under this subsection 8(b)
for any losses, claims, damages or liabilities (or expenses relating thereto)
that are finally judicially determined to have resulted from the bad faith or
gross negligence of the Underwriter Entities.
(c) Each Underwriter, severally but not jointly, agrees to indemnify and
hold harmless the Company against any losses, claims, damages or liabilities to
which the Company may become subject under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement or any amendment thereto,
any Preliminary Prospectus, the Prospectus or any amendment or supplement
thereto, or any Application or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not
22
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information furnished to the
Company by such Underwriter through the Representatives expressly for use
therein (which information is solely as set forth in Section 1(c) hereof); and
will reimburse the Company for any legal or other expenses reasonably incurred
by the Company in connection with investigating or defending any such loss,
claim, damage, liability or action.
(d) Promptly after receipt by an indemnified party under subsection (a),
(b) or (c) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve the indemnifying party from any liability
which it may have to any indemnified party otherwise than under such subsection
(a), (b) or (c). In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to participate therein and, to
the extent that it shall wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel satisfactory to
such indemnified party (who shall not, except with the consent of the
indemnified party, be counsel to the indemnifying party); provided, however,
that if the defendants in any such action include both the indemnified party and
the indemnifying party and the indemnified party shall have reasonably concluded
that there may be one or more legal defenses available to it or other
indemnified parties which are different from or additional to those available to
the indemnifying party, the indemnifying party shall not have the right to
assume the defense of such action on behalf of such indemnified party and such
indemnified party shall have the right to select separate counsel to defend such
action on behalf of such indemnified party. After such notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof and approval by such indemnified party of counsel appointed to
defend such action, the indemnifying party will not be liable to such
indemnified party under this Section 8 for any legal or other expenses, other
than reasonable costs of investigation, subsequently incurred by such
indemnified party in connection with the defense thereof. Nothing in this
Section 8(d) shall preclude an indemnified party from participating at its own
expense in the defense of any such action so assumed by the indemnifying party.
Notwithstanding anything contained herein to the contrary, if indemnity may be
sought pursuant to Section 8(b) hereof in respect of such action or proceeding,
then in addition to such separate firm for the indemnified parties, the
indemnifying party shall be liable for the reasonable fees and expenses of
respective counsel for the Underwriters for the defense of any losses, claims,
damages and liabilities arising out of the Directed Share Program, and all
persons, if any, who control the Underwriters within the meaning of either
Section 15 of the Act or Section 20 of the Exchange Act.
(e) If the indemnification provided for in this Section 8 is unavailable to
or insufficient to hold harmless an indemnified party under subsection (a) or
(c) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount
24
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters on the other hand from the offering of the Shares. If,
however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the indemnified party failed to give the
notice required under subsection (d) above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company on the one hand and the Underwriters on the
other hand in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities (or actions in respect thereof), as well
as any other relevant equitable considerations. The relative benefits received
by the Company on the one hand and the Underwriters on the other hand shall be
deemed to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriters. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company on the one hand or the Underwriters on the other hand and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Underwriters agree that
it would not be just and equitable if contributions pursuant to this subsection
(e) were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to above in
this subsection (e). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to above in this subsection (e) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (e), no Underwriter shall be
required to contribute any amount in excess of the 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 Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (e) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(f) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each officer, director and employee of
the Underwriters and to each person, if any, who controls any Underwriter within
the meaning of the Act or the Exchange Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer,
24
trustee and director of the Company and to each person, if any, who controls the
Company within the meaning of the Act or the Exchange Act.
9. Default of Underwriters.
------------------------
(a) If any Underwriter defaults in its obligation to purchase Shares at a
Time of Delivery, the Representatives may in their discretion arrange for the
Representatives or another party or other parties to purchase such Shares on the
terms contained herein within thirty-six (36) hours after such default by any
Underwriter. In the event that, within the respective prescribed period, the
Representatives notify the Company that they have so arranged for the purchase
of such Shares, the Representatives shall have the right to postpone a Time of
Delivery for a period of not more than seven (7) days in order to effect
whatever changes may thereby be made necessary in the Registration Statement or
the Prospectus, or in any other documents or arrangements, and the Company
agrees to file promptly any amendments to the Registration Statement or the
Prospectus that in the Representatives' opinion may thereby be made necessary.
The cost of preparing, printing and filing any such amendments shall be paid for
by the Underwriters. The term "Underwriter" as used in this Agreement shall
include any person substituted under this Section with like effect as if such
person had originally been a party to this Agreement with respect to such
Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by the Representatives as
provided in subsection (a) above, if any, the aggregate number of such Shares
which remains unpurchased does not exceed one-eleventh (1/11) of the aggregate
number of Shares to be purchased at such Time of Delivery, then the Company
shall have the right to require each non-defaulting Underwriter to purchase the
number of Shares which such Underwriter agreed to purchase hereunder at such
Time of Delivery and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the number of Shares which such
Underwriter agreed to purchase hereunder) of the Shares of such defaulting
Underwriter or Underwriters for which such arrangements have not been made.
10. Termination.
-----------
(a) This Agreement may be terminated in the sole discretion of the
Representatives by notice to the Company given prior to the First Time of
Delivery or any Subsequent Time of Delivery, respectively, in the event that (i)
any condition to the obligations of the Underwriters set forth in Section 7
hereof has not been satisfied, or (ii) the Company shall have failed, refused or
been unable to deliver Certificates in definitive form for the Shares or the
Company shall have failed, refused or been unable to perform all obligations and
satisfy all conditions on its part to be performed or satisfied hereunder at or
prior to such Time of Delivery, in either case other than by reason of a default
by any of the Underwriters. If this Agreement is terminated pursuant to this
Section 10(a), the Company will reimburse the Underwriters severally upon demand
for all reasonable out-of-pocket expenses (including counsel fees and
disbursements) that shall have been incurred by them in connection with the
proposed purchase and sale of
25
the Shares. Any termination pursuant to this Section 10(a) shall be without
liability on the part of any Underwriter to the Company or on the part of the
Company to any Underwriter (except for expenses to be paid by the Company
pursuant to Section 6 hereof or reimbursed by the Company pursuant to this
Section 10(a) and except as to indemnification and contribution to the extent
provided in Section 8 hereof.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by the Representatives as
provided in Section 9(a), the aggregate number of such Shares which remains
unpurchased exceeds one-eleventh (1/11) of the aggregate number of Shares to be
purchased at such Time of Delivery, then this Agreement (or, with respect to a
Subsequent Time of Delivery, the obligations of the Underwriters to purchase and
of the Company to sell the Optional Shares) shall thereupon terminate, without
liability on the part of any non-defaulting Underwriter or the Company, except
for the expenses to be borne by the Company and the Underwriters as provided in
Section 6 hereof and the indemnity and contribution agreements in Section 8
hereof; but nothing herein shall relieve a defaulting Underwriter from liability
for its default.
11. Survival. The respective indemnities, agreements, representations,
warranties and other statements of the Company, its officers and the several
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of any Underwriter or any controlling person referred to in
Section 8(f) or the Company, or any officer, trustee or director or controlling
person of the Company referred to in Section 8(f), and shall survive delivery of
and payment for the Shares. The respective agreements, covenants, indemnities
and other statements set forth in Sections 6 and 8 hereof shall remain in full
force and effect, regardless of any termination or cancellation of this
Agreement.
12. Notices. All communications hereunder shall be in writing and, if sent
to any of the Underwriters, shall be sufficient in all respects if mailed,
delivered or telegraphed and confirmed in writing to the Representatives c/o
Advest, Inc., Xxx Xxxxxxxxxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxxxx X. Xxxxx (with a copy to Xxxxxx & Xxxxxx, 000 00xx Xxxxxx,
X.X., Xxxxxxxxxx, X.X. 00000, Attention: Xxxxxx Xxxxxx); if to the Company,
shall be sufficient in all respects if mailed, delivered or telegraphed and
confirmed in writing to Sun Bancorp, Inc., 000 Xxxxxx Xxxxxx, Xxxxxxxx, Xxx
Xxxxxx 00000, Attention: Xxxxxx X. Xxxxxx, III (with a copy to Xxxxxxx, Spidi,
Sloane & Xxxxx, P.C., One Franklin Square, 0000 X Xxxxxx, X.X., Xxxxx 000 Xxxx,
Xxxxxxxxxx, X.X. 00000, Attention: Xxxx X. Spidi).
13. Binding Effect. This Agreement shall be binding upon, and inure solely
to the benefit of, the Underwriters, the Company and, to the extent provided in
Sections 8 and 10 hereof, the officers, trustees, directors and employees and
controlling persons referred to therein and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by
26
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. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without giving effect to any
provisions regarding conflicts of laws.
15. Counterparts. This Agreement may be executed by any one or more of the
parties hereto in any number of counterparts, each of which shall be deemed to
be an original, but all such counterparts shall together constitute one and the
same instrument.
[SIGNATURES APPEAR ON THE FOLLOWING PAGE]
27
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us one of the counterparts hereof, and upon the
acceptance hereof by the Representatives, on behalf of each of the Underwriters,
this letter will constitute a binding agreement among the Underwriters and the
Company. It is understood that your acceptance of this letter on behalf of each
of the Underwriters is pursuant to the authority set forth in the Agreement
among Underwriters, a copy of which shall be submitted to the Company for
examination, upon request, but without warranty on your part as to the authority
of the signers thereof.
Very truly yours,
SUN BANCORP, INC.
By:
---------------------------------
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the
date first written above at New York,
New York.
ADVEST, INC. WHEAT FIRST SECURITIES
By: By:
---------------------------------- ------------------------------
Name: Name:
Title: Title:
On behalf of each of the On behalf of each of the
Underwriters Underwriters
28
SCHEDULE I
Number of Optional
Total Number Shares to be Purchased
of Firm Shares if Maximum
Underwriter to be Purchased Option Exercised
----------- --------------- ----------------
Advest, Inc. [__________] [__________]
Wheat First Securities [__________] [__________]
----------- -----------
Total [__________] [__________]
EXHIBIT A
FORM OF LOCK-UP AGREEMENT
SUN BANCORP, INC.
LOCK-UP AGREEMENT
_______, 1999
Advest, Inc.
Wheat First Securities
As Representatives of the Several Underwriters
c/o Advest, Inc.
Xxx Xxxxxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
The undersigned understands that you, as Representatives of the several
underwriters (the "Underwriters"), propose to enter into an underwriting
agreement (the "Underwriting Agreement") with Sun Bancorp, Inc. (the "Company")
providing for the public offering (the "Public Offering") by the Underwriters,
including yourself, of common stock of the Company (the "Common Stock") pursuant
to the Company's Registration Statement on Form S-3 (the "Registration
Statement").
In consideration of the Underwriters' agreement to purchase and make
the Public Offering of the Common Stock, and for other good and valuable
consideration, receipt of which is hereby acknowledged, the undersigned hereby
agrees, for a period of 180 days after the effective date of the Registration
Statement (the "Lock-Up Period"), not to sell, offer to sell, solicit an offer
to buy, contract to sell, encumber, distribute, pledge, grant any option for the
sale of, or otherwise transfer or dispose of, directly or indirectly, in one or
a series of transactions (collectively, a "Disposition"), any shares of Common
Stock or any securities convertible or exercisable into or exchangeable for
shares of Common Stock (collectively, "Securities"), now owned or hereafter
acquired by the undersigned or with respect to which the undersigned has
acquired or hereafter acquires the power of disposition, without the prior
written consent of the Representatives. Prior to the expiration of the Lock-Up
Period, the undersigned agrees that it will not announce or disclose any
intention to do anything after the expiration of such period which the
undersigned is prohibited, as provided in the preceding sentence, from doing
during the Lock-Up Period. In addition, for the benefit of the Company and the
Underwriters, the undersigned hereby (i) waives any right it may have to cause
the Company to register pursuant to the Securities Act of 1933, as amended,
shares of Common Stock now owned or hereafter acquired or received by the
undersigned as a result of the Public Offering and (ii) during the Lock-Up
Period, agrees not to exercise any such registration rights and further agrees
that the Company shall not be obligated to register any shares in violation of
the Underwriting Agreement.
The undersigned acknowledges and agrees that the restrictions above are
expressly agreed to preclude the holder of the Securities from engaging in any
hedging or other transaction which is designed to or reasonably expected to lead
to or result in a Disposition of Securities (or the economic equivalent thereof)
during the Lock-Up Period even if such Securities would be disposed of by
someone other than the undersigned. Such prohibited hedging or other
transactions would include, without limitation, any short sale (whether or not
against the box) or any purchase, sale or grant of any right (including, without
limitation, any put or call option) with respect to any Securities or with
respect to any security (other than a broad-based marked basket or index) that
includes, relates to or derives any significant part of its value from the
Securities.
The undersigned hereby also agrees and consents to the entry of stop
transfer instructions with the Company's transfer agent against the transfer of
the Securities held by the undersigned except in compliance with the Lock-Up
Agreement.
It is understood that, if the Underwriting Agreement is not executed,
or if the Underwriting Agreement shall terminate or be terminated prior to
payment for and delivery of the Common Stock the subject thereof, this Lock-Up
Agreement shall automatically terminate and be of no further force or effect.
This Lock-Up Agreement shall be governed by and construed in accordance
with the laws of the State of New York (without giving effect to its conflict of
laws provisions).
Very truly yours,
---------------------------
Name:
