EXHIBIT NO. 1
Shares
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(plus Shares to cover over-allotments, if any)
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SUN BANCORP, INC.
COMMON STOCK, PAR VALUE $1.00 PER SHARE
UNDERWRITING AGREEMENT
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, 1998
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ADVEST, INC.
XXXXXX XXXXXXXXXX XXXXX INC.
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").
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 Advest pursuant to the Directed Share
Program (the "Directed Shares") will be sold by Advest 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, a Prospectus or any amendment or supplement thereto, or the
Registration Statement or any amendment thereto (or other similar references)
shall refer both to information and statements actually appearing in such
document as well as information and statements incorporated by reference
therein.
(b) No order preventing or suspending the use of any
Preliminary Prospectus has been issued and no proceeding for that purpose has
been instituted or, to the knowledge of the Company, threatened, by the
Commission or the securities authority of any state or other jurisdiction. If
the Registration Statement has become effective under the Act,
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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 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.
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(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, 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 Allegiance Mortgage
Company ("Allegiance"), [the outstanding common stock of Sun Mortgage Corp.,]
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.
(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
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(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 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 Articles 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 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.
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(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 "Prospectus Summary,"
"Selected Consolidated Financial Data," "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
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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 Articles 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.
(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.
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(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 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
8
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 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,
9
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 is a member in good standing of
the Federal Reserve System and its 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.
(a) Subject to the terms and conditions herein set
forth, the Company agrees to sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company, at
a purchase price of ___________ dollars and _________ cents ($______) per share
(the "Per Share Price"), the number of Firm Shares (to be 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
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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, X.X. 00000, except that physical delivery of such certificates
shall be made at the office of The Depository Trust Company, 00 Xxxxx Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000. The time and date of such delivery and payment
shall be, with respect to the Firm Shares, at 9:00 a.m., New York, New York
time, on the third (3rd) full business day after this Agreement is executed or
at such other time and date as the Representatives and the Company may agree
upon in writing, and, with respect to the Optional Shares, at 9:00 a.m., New
York, New York 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 The Depository Trust Company, 00
Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or at such other location specified
by the Representatives in writing at least 48 hours prior to such Time of
Delivery.
11
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 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
12
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 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-fift (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.
13
(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 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
14
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, the 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 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
each of the Representatives the sum of ________________ Dollars ($_______) as a
financial advisory fee.
7. Conditions of the Underwriters' Obligations. The
obligations of the
15
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:
(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
16
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 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 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 or Sun National Bank.
(v) Except as disclosed in the Prospectus,
there are, to such counsel's knowledge, no outstanding (A) securities or
obligations of the Company or any of its subsidiaries convertible into or
exchangeable for any capital stock of the Company or any 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
17
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.
(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
18
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 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 deem 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
19
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 and New Jersey declared by either
federal or state authorities; or (iii) any outbreak or escalation of hostilities
involving the United States, declaration by the United States of a national
emergency or war or any other national or international calamity or emergency if
the effect of any such event specified in this clause (iii) in the
Representatives' reasonable judgment makes it impracticable or inadvisable to
proceed with the purchase, sale and delivery of the Shares being delivered at
such Time of Delivery as contemplated by the Registration Statement, as amended
as of the date hereof.
(h) The Company shall have furnished to the Representatives
at such Time of Delivery certificates of the chief executive officer or an
executive vice president and 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.
20
(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 Representative.
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 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
21
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 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
22
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 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
23
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, 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
24
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 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
25
to any of the Underwriters, shall be 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 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 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.
26
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: Xxxxxx X. Xxxx
Title: Executive Vice President
The foregoing Agreement is hereby
confirmed and accepted as of the
date first written above at New York,
New York.
ADVEST, INC. XXXXXX XXXXXXXXXX
XXXXX INC.
By: ADVEST, INC.
By: XXXXXX XXXXXXXXXX
XXXXX INC.
By: By:
------------------------------ -------------------------
Name: Xxxxxxx X. Xxxxxxxx Name:
Title: Director Title:
On behalf of each of the Underwriters On behalf of each of the
Underwriters
27
SCHEDULE I
Number of Optional
Total Number Shares to be Purchased
of Firm Shares if Maximum
Underwriter to be Purchased Option Exercised
----------- --------------- ----------------
Advest, Inc.
Xxxxxx Xxxxxxxxxx Xxxxx Inc.
EXHIBIT A
FORM OF LOCK-UP AGREEMENT
SUN BANCORP, INC.
LOCK-UP AGREEMENT
_______, 1998
Advest, Inc.
Xxxxxx Xxxxxxxxxx Xxxxx Inc.
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 Advest, Inc. 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:
2
