Exhibit 1
400,000 Shares 1
Pennsylvania Commerce Bancorp, Inc.
Common Stock
par value $1.00 per share
Underwriting Agreement
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______________, 2004
Sandler ▇'▇▇▇▇▇ & Partners, L.P.,
As representative of the several Underwriters
named in Schedule I hereto,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Pennsylvania Commerce Bancorp, Inc., a Pennsylvania corporation (the
"Company"), proposes, subject to the terms and conditions stated herein, to
issue and sell to the Underwriters named in Schedule I hereto (the
"Underwriters") an aggregate of 400,000 shares (the "Firm Shares") and, at the
election of the Underwriters, up to 60,000 additional shares (the "Optional
Shares") of the common stock, par value $1.00 per share ("Stock") of the Company
(the Firm Shares and the Optional Shares that the Underwriters elect to purchase
pursuant to Section 2 hereof being collectively called the "Shares").
1. (a) The Company represents and warrants to, and agrees with, each of
the Underwriters that:
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1 Plus an option to purchase from the Company up to an additional 60,000
additional shares to cover over-allotments.
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(i) A registration statement on Form S-1 (File No. 333-118236)
(the "Initial Registration Statement") in respect of the Shares has been filed
with the Securities and Exchange Commission (the "Commission"); the Initial
Registration Statement and any post-effective amendment thereto, each in the
form heretofore delivered to you, and, excluding exhibits thereto but including
all documents incorporated by reference in the prospectus contained therein,
delivered to you for each of the other Underwriters, have been declared
effective by the Commission in such form; other than a registration statement,
if any, increasing the size of the offering (a "Rule 462(b) Registration
Statement"), filed pursuant to Rule 462(b) under the Securities Act of 1933, as
amended (the "Act"), which became effective upon filing, no other document with
respect to the Initial Registration Statement or document incorporated by
reference therein has heretofore been filed with the Commission; and no stop
order suspending the effectiveness of the Initial Registration Statement, any
post-effective amendment thereto or the Rule 462(b) Registration Statement, if
any, has been issued and no proceeding for that purpose has been initiated or
threatened by the Commission (any preliminary prospectus included in the Initial
Registration Statement or filed with the Commission pursuant to Rule 424(a) of
the rules and regulations of the Commission under the Act, is hereinafter called
a "Preliminary Prospectus"); the various parts of the Initial Registration
Statement and the Rule 462(b) Registration Statement, if any, including all
exhibits thereto and including the information contained in the form of final
prospectus filed with the Commission pursuant to Rule 424(b) under the Act in
accordance with Section 5(a) hereof and deemed by virtue of Rule 430A under the
Act to be part of the Initial Registration Statement at the time it was declared
effective, each as amended at the time such part of the Initial Registration
Statement became effective or such part of the Rule 462(b) Registration
Statement, if any, became or hereafter becomes effective, are hereinafter
collectively called the "Registration Statement"; and such final prospectus, in
the form first filed pursuant to Rule 424(b) under the Act, is hereinafter
called the "Prospectus";
(ii) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material respects to
the requirements of the Act and the rules and regulations of the Commission
thereunder, and did not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter through Sandler ▇'▇▇▇▇▇ & Partners, L.P. expressly for use therein;
(iii) The Registration Statement conforms, and the Prospectus
and any further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of the Act
and the rules and regulations of the Commission thereunder and do not and will
not, as of the applicable effective date as to the Registration Statement and
any amendment thereto, and as of the applicable filing date as to the Prospectus
and any amendment or supplement thereto, contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
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necessary to make the statements therein not misleading; provided, however, that
this representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in writing to
the Company by an Underwriter through Sandler ▇'▇▇▇▇▇ & Partners, L.P. expressly
for use therein;
(iv) The documents which are incorporated by reference in the
Registration Statement or any Preliminary Prospectus or the Prospectus or from
which information is so incorporated by reference, when they became effective or
were filed with the Commission, as the case may be (or, if an amendment with
respect to any such documents was filed or became effective, when such amendment
was filed or became effective), complied in all material respects to the
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") and the rules and regulations of the Commission thereunder, and none of
such documents contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make to the
statements therein not misleading;
(v) The consolidated financial statements, audited and
unaudited (including the notes thereto), included or incorporated by reference
in the Registration Statement present fairly the consolidated financial position
of the Company and its subsidiaries as of the dates indicated and the
consolidated results of operations and cash flows of the Company and its
subsidiaries for the periods specified. Such financial statements have been
prepared in conformity with generally accepted accounting principles applied on
a consistent basis throughout the periods involved, except as otherwise stated
therein. The financial statement schedules, if any, included in the Registration
Statement present fairly the information required to be stated therein. The
selected financial, pro forma and statistical data included in the Prospectus
are accurate in all material respects and present fairly the information shown
therein and have been compiled on a basis consistent with that of the audited
and unaudited consolidated financial statements included or incorporated by
reference in the Registration Statement;
(vi) Neither the Company nor any of its subsidiaries has
sustained, since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus, any material loss or interference
with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or action, order or decree of
any Governmental Entity (as defined below), otherwise than as set forth or
contemplated in the Prospectus; and, since the respective dates as of which
information is given in the Registration Statement and the Prospectus, there has
not been any material change in the capital stock or long-term debt of the
Company or any of its subsidiaries or any material adverse change, or any
development that may cause a prospective material adverse change, in or
affecting the general affairs, management, financial position, business
prospects, stockholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the Prospectus;
(vii) The Company and its subsidiaries have good and
marketable title in fee simple to all real property and good and marketable
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title to all personal property owned by them, in each case free and clear of all
liens, encumbrances and defects except such as are described in the Prospectus
or such as do not materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by the
Company and its subsidiaries; and any real property and buildings held under
lease by the Company and its subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not material and
do not interfere with the use made and proposed to be made of such property and
buildings by the Company and its subsidiaries;
(viii) The Company is a registered bank holding company under
the Bank Holding Company Act of 1956, as amended ("BHCA") with respect to
Commerce Bank/Harrisburg, N.A. (the "Bank") and has been duly incorporated and
organized and is validly existing as a corporation in good standing under the
laws of the Commonwealth of Pennsylvania, with power and authority (corporate
and other) to own its properties and conduct its business as described in the
Prospectus, and has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts any business so
as to require such qualification, or is subject to any liability or disability
by reason of the failure to be so qualified in any jurisdiction;
(ix) Each subsidiary of the Company either has been duly
incorporated and organized and is validly existing as a corporation or a
statutory business trust or has been duly chartered and is validly existing as a
national association chartered by the Office of the Comptroller of the Currency
("OCC"), in each case in good standing under the laws of the jurisdiction of its
organization, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus, and has been
duly qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each other jurisdiction in which it owns or
leases properties or conducts any business so as to require such qualification,
or is subject to any liability or disability by reason of the failure to be so
qualified in any jurisdiction, except where the failure to be so qualified would
not have a Material Adverse Effect; the activities of the subsidiaries of the
Bank are permitted to be conducted by subsidiaries of a national association
chartered by the OCC and the deposit accounts of the Bank are insured up to the
applicable limits by the Federal Deposit Insurance Corporation (the "FDIC");
(x) The Company has an authorized capitalization as set forth
in the Prospectus under the heading "Capitalization", and all of the issued
shares of capital stock of the Company have been duly and validly authorized and
issued, are fully paid and nonassessable; all of the issued and outstanding
capital stock of each subsidiary of the Company has been duly authorized and
validly issued and is fully paid and nonassessable and is owned, directly or
through other subsidiaries of the Company, by the Company free and clear of any
pledge, lien, encumbrance, claim or equity;
(xi) This Agreement has been duly authorized, executed and
delivered by the Company and, when duly executed by the Underwriters, will
constitute the valid and binding agreement of the Company enforceable against
the Company in accordance with its terms;
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(xii) The unissued Shares to be issued and sold by the Company
to the Underwriters hereunder have been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein, will be duly
and validly issued and fully paid and non-assessable and will conform to the
description of the Stock contained in the Prospectus;
(xiii) Except as described in the Prospectus, (A) there are no
outstanding rights (contractual or otherwise), warrants or options to acquire,
or instruments convertible into or exchangeable for, or agreements or
understandings with respect to the sale or issuance of, any shares of capital
stock of or other equity interest in the Company; and (B) there are no
contracts, agreements or understandings between the Company and any person
granting such person the right to require the Company to file a Registration
Statement under the Act or otherwise register any securities the Company owned
or to be owned by such person;
(xiv) The issue and sale of the Shares by the Company and the
compliance by the Company with all of the provisions of this Agreement and the
consummation of the transactions herein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries is
bound or to which any of the property or assets of the Company or any of its
subsidiaries is subject, nor will such action result in any violation of the
provisions of the Articles of Incorporation or Bylaws of the Company or any
statute or any order, rule or regulation of any federal, state, local or foreign
court or governmental agency or body (each such court, agency and body, a
"Governmental Entity") having jurisdiction over the Company or any of its
subsidiaries or any of their properties; and no consent, approval,
authorization, order, registration or qualification of or with any such
Governmental Entity is required for the issue and sale of the Shares or the
consummation by the Company of the transactions contemplated by this Agreement,
except the registration under the Act of the Shares and except as may be
required under the rules and regulations of the National Association of
Securities Dealers, Inc. ("NASD") and such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities or
Blue Sky laws in connection with the purchase and distribution of the Shares by
the Underwriters;
(xv) Neither the Company nor any of its subsidiaries is in
violation of its articles of incorporation or charter (as applicable) or bylaws
or in default in the performance or observance of any material obligation,
agreement, covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement, note, lease or other agreement or instrument to which it
is a party or by which it or any of its properties may be bound;
(xvi) The statements set forth in the Prospectus under the
caption "Description of our Capital Stock", insofar as they purport to
constitute a summary of the terms of the capital stock of the Company and under
the caption "Underwriting", insofar as they purport to describe the provisions
of the laws and documents referred to therein, are accurate and complete;
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(xvii) Except as disclosed in the Prospectus, the Company and
its subsidiaries are conducting their respective businesses in compliance in all
material respects with all federal, state, local and foreign statutes, laws,
rules, regulations, decisions, directives and orders applicable to them
(including, without limitation, all regulations and orders of, or agreements
with, the OCC, the Federal Reserve Board and the FDIC, the Equal Credit
Opportunity Act, the Fair Housing Act, the Community Reinvestment Act, the Home
Mortgage Disclosure Act, all other applicable fair lending laws or other laws
relating to discrimination and the Bank Secrecy Act and Title III of the USA
Patriot Act), and neither the Company nor any of its subsidiaries has received
any communication from any Governmental Entity asserting that the Company or any
of its subsidiaries is not in compliance with any statute, law, rule,
regulation, decision, directive or order;
(xviii) Except as disclosed in the Prospectus, there are no
legal or governmental actions or suits, investigations proceedings before or by
any Governmental Entity, now pending or, to the knowledge of the Company,
threatened or contemplated by Governmental Entities or threatened or
contemplated by others, to which the Company or any of its subsidiaries is a
party or of which any property of the Company or any of its subsidiaries is the
subject (A) that is required to be disclosed in the Registration Statement by
the Act or by the rules and regulations of the Commission thereunder and not
disclosed therein or (B) which, if determined adversely to the Company or any of
its subsidiaries, would, individually or in the aggregate, have a material
adverse effect on the business, properties, assets, current or future
consolidated financial position, business prospects, stockholders' equity or
results of operations of the Company and its subsidiaries taken as a whole or on
the ability of the Company to consummate the transactions contemplated herein (a
"Material Adverse Effect"); all pending legal or governmental proceedings to
which the Company or any of its subsidiaries is a party or of which any of their
property is the subject, either individually or in the aggregate, which are not
described in the Registration Statement, including ordinary routine litigation
incidental to their respective businesses, would not have a Material Adverse
Effect; and there are no contracts or documents of the Company or any of its
subsidiaries which would be required to be described in the Registration
Statement or to be filed as exhibits thereto by the Act or by the rules and
regulations of the Commission thereunder which have not been so described and
filed;
(xix) Each of the Company and its subsidiaries possess all
permits, licenses, approvals, consents and other authorizations of
(collectively, "Governmental Licenses"), and has made all filings, applications
and registrations with all Governmental Entities to permit the Company or such
subsidiary to conduct the business now operated by the Company or its
subsidiaries; the Company and its subsidiaries are in compliance with the terms
and conditions of all such Governmental Licenses, except where the failure so to
comply would not, individually or in the aggregate, have a Material Adverse
Effect; all of the Governmental Licenses are valid and in full force and effect,
except where the invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not, individually or
in the aggregate, have a Material Adverse Effect; and neither the Company nor
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any of its subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which, singly or in
the aggregate, if the subject of an unfavorable decision, ruling or finding,
would result in a Material Adverse Effect;
(xx) Neither the Company nor any of its subsidiaries is a
party to or subject to any order, decree, agreement, memorandum of understanding
or similar agreement with, or a commitment letter, supervisory letter or similar
submission to, any Governmental Entity charged with the supervision or
regulation of depository institutions or engaged in the insurance of deposits
(including the FDIC) or the supervision or regulation of it or any of its
subsidiaries and neither the Company nor any of its subsidiaries has been
advised by any such Governmental Entity that such Governmental Entity is
contemplating issuing or requesting (or is considering the appropriateness of
issuing or requesting) any such order, decree, agreement, memorandum of
understanding, commitment letter, supervisory letter or similar submission;
(xxi) Each of the Company and its subsidiaries is in
compliance in all material respects with all applicable federal, state and local
environmental laws and regulations, including, without limitation, those
applicable to emissions to the environment, waste management, and waste disposal
(collectively, the "Environmental Laws"), except where such noncompliance would
not be reasonably likely to have a Material Adverse Effect, or except as
disclosed in the Prospectus, and to the knowledge of the Company, there are no
circumstances that would prevent, interfere with or materially increase the cost
of such compliance in the future;
(xxii) Except as disclosed in the Prospectus, there is no
claim under any Environmental Law, including common law, pending or, to the
knowledge of the Company, threatened against the Company or its subsidiaries (an
"Environmental Claim"), which would be reasonably likely to have a Material
Adverse Effect, and, to the knowledge of the Company, under applicable law,
there are no past or present actions, activities, circumstances, events or
incidents, including, without limitation, releases of any material into the
environment, that are reasonably likely to form the basis of any Environmental
Claim against the Company or its subsidiaries which would be reasonably likely
to have a Material Adverse Effect;
(xxiii) The Company and each of its subsidiaries own or
possess adequate rights to use all material patents, patent applications,
trademarks, service marks, trade names, trademark registrations, service ▇▇▇▇
registrations, copyrights and licenses necessary for the conduct of their
respective businesses and have no reason to believe that the conduct of their
respective businesses will conflict with, and have not received any notice of
any claim of conflict with, any such rights of others;
(xxiv) No relationship, direct or indirect, exists between or
among the Company on the one hand, and the directors, officers, customers or
suppliers of the Company on the other hand, which is required to be described in
the Registration Statement by the Act or by the rules and regulations of the
Commission thereunder which has not been so described;
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(xxv) The statistical and market related data contained in the
Prospectus and Registration Statement are based on or derived from sources which
the Company believes are reliable and accurate;
(xxvi) Other than as set forth in the Prospectus, there are no
legal or governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any of its
subsidiaries is the subject which, if determined adversely to the Company or any
of its subsidiaries, would individually or in the aggregate have a Material
Adverse Effect; and, to the knowledge of the Company, no such proceedings are
threatened or contemplated by Governmental Entities or threatened or
contemplated by others;
(xxvii) The Company is not and, after giving effect to the
offering and sale of the Shares, will not be an "investment company" or an
entity "controlled" by an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act");
(xxviii) The Company and its subsidiaries, taken as a whole,
are insured by insurers of recognized financial responsibility against such
losses and risks and in such amounts as are prudent and customary in the
business in which they are engaged; and neither the Company nor any of its
subsidiaries has any reason to believe that it will not be able to renew its
existing insurance coverage from similar insurers as may be necessary to
continue its business at a cost that would not have a Material Adverse Effect;
(xxix) ▇▇▇▇▇ ▇▇▇▇▇▇ Company LLP, who have certified certain
financial statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder and such accountants are not in violation of the auditor
independence requirements of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 (the "▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act"); and
(xxx) The Company is in compliance with the applicable
provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act and will comply with those provisions of
the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act that will become effective in the future upon their
effectiveness.
(b) The Bank represents and warrants to, and agrees with, each
of the Underwriters that:
(i) The Bank has been duly chartered by the OCC and is validly
existing as a national association in good standing under the laws of the United
States, with power and authority (corporate and other) to own its properties and
conduct its business as described in the Prospectus, and has been duly qualified
as a foreign corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases properties
or conducts any business so as to require such qualification, or is subject to
no material liability or disability by reason of the failure to be so qualified
in any such jurisdiction;
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(ii) Neither the Bank nor any of its subsidiaries is in
violation of its stock charter, bylaws or other charter documents or in default
in the performance or observance of any material obligation, agreement, covenant
or condition contained in any contract, indenture, mortgage, deed of trust, loan
agreement, note, lease or other agreement or instrument to which the Bank or any
of its subsidiaries is a party or by which it or any of them may be bound, or to
which any of the property of the Bank or any of its subsidiaries is subject; and
(iii) The execution, delivery and performance of this
Agreement by the Bank and the compliance by the Bank with all of the provisions
of this Agreement and the consummation of the transactions herein contemplated
will not conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Bank or any
of its subsidiaries is a party or by which the Bank or any of its subsidiaries
is bound or to which any of the property or assets of the Bank or any of its
subsidiaries is subject, nor will such action result in any violation of the
provisions of the charter or bylaws of the Bank or any statute or any order,
rule or regulation of any Governmental Entity having jurisdiction over the Bank
or any of its subsidiaries or any of their properties.
2. Subject to the terms and conditions herein set forth, (a) the
Company agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company, at
a purchase price per share of $_____, the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I hereto and (b) in the event
and to the extent that the Underwriters shall exercise the election to purchase
Optional Shares as provided below, the Company agrees to issue and sell to each
of the Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from the Company, at the purchase price per share set forth
in clause (a) of this Section 2, that portion of the number of Optional Shares
as to which such election shall have been exercised (to be adjusted by you so as
to eliminate fractional shares) determined by multiplying such number of
Optional Shares by a fraction, the numerator of which is the maximum number of
Optional Shares which such Underwriter is entitled to purchase as set forth
opposite the name of such Underwriter in Schedule I hereto and the denominator
of which is the maximum number of Optional Shares that all of the Underwriters
are entitled to purchase hereunder.
The Company hereby grants to the Underwriters the right to purchase at
their election up to 60,000 Optional Shares, at the purchase price per share
set forth in clause (a) of the paragraph above, for the sole purpose of covering
sales of shares in excess of the number of Firm Shares. Any such election to
purchase Optional Shares may be exercised only by written notice from you to the
Company, given within a period of 30 calendar days after the date of this
Agreement, setting forth the aggregate number of Optional Shares to be purchased
and the date on which such Optional Shares are to be delivered, as determined by
you but in no event earlier than the First Time of Delivery (as defined in
Section 4 hereof) or, unless you and the Company otherwise agree in writing, no
earlier than two or later than ten business days after the date of such notice.
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It is understood that each Underwriter has authorized Sandler ▇'▇▇▇▇▇ &
Partners, L.P., for such Underwriter's account, to accept delivery of, receipt
for, and make payment of the purchase price for, the Firm Shares and the
Optional Shares, if any, which such Underwriter has agreed to purchase. Sandler
▇'▇▇▇▇▇ & Partners, L.P., individually and not as representative of the
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the Firm Shares or the Optional Shares, if any, to be purchased by any
Underwriter whose funds have not been received by the relevant Time of Delivery
but such payment shall not relieve such Underwriter from its obligations
hereunder.
3. Upon the authorization by you of the release of the Firm Shares, the
several Underwriters propose to offer the Firm Shares for sale upon the terms
and conditions set forth in the Prospectus.
4. (a) The Shares to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such
names as Sandler ▇'▇▇▇▇▇ & Partners, L.P. may request upon at least forty-eight
hours' prior notice to the Company shall be delivered by or on behalf of the
Company to Sandler ▇'▇▇▇▇▇ & Partners, L.P., through the facilities of the
Depository Trust Company ("DTC"), for the account of such Underwriter, against
payment by or on behalf of such Underwriter of the purchase price therefor by
wire transfer of Federal (same day) funds to the account specified by the
Company to Sandler ▇'▇▇▇▇▇ & Partners, L.P. at least 48 hours in advance. The
Company will cause the certificates representing the Shares to be made available
for checking and packaging at least twenty-four hours prior to the Time of
Delivery (as defined below) with respect thereto at the office of DTC or its
designated custodian (the "Designated Office"). The time and date of such
delivery and payment shall be, with respect to the Firm Shares, ____ a.m.,
Eastern time, on ________, 2004 or such other time and date as Sandler ▇'▇▇▇▇▇ &
Partners, L.P. and the Company may agree upon in writing, and, with respect to
the Optional Shares, ____ a.m., New York time, on the date specified by Sandler
▇'▇▇▇▇▇ & Partners, L.P. in the written notice given by Sandler ▇'▇▇▇▇▇ &
Partners, L.P. of the Underwriters' election to purchase such Optional Shares,
or such other time and date as Sandler ▇'▇▇▇▇▇ & Partners, L.P. and the Company
may agree upon in writing. Such time and date for delivery of the Firm Shares is
herein called the "First Time of Delivery", such time and date for delivery of
the Optional Shares, if not the First Time of Delivery, is herein called the
"Second Time of Delivery", and each such time and date for delivery is herein
called a "Time of Delivery".
(b) The documents to be delivered at each Time of Delivery by
or on behalf of the parties hereto pursuant to Section 7 hereof, including the
cross receipt for the Shares and any additional documents requested by the
Underwriters pursuant to Section 7(k) hereof, will be delivered at the offices
of ▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ (the
"Closing Location"), and the Shares will be delivered at the Designated Office,
all at such Time of Delivery. A meeting will be held at the Closing Location at
_____ a.m., Eastern time, on the New York Business Day next preceding such Time
of Delivery, at which meeting the final drafts of the documents to be delivered
pursuant to the preceding sentence will be available for review by the parties
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hereto. For the purposes of this Section 4, "New York Business Day" shall mean
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in New York are generally authorized or obligated by law or
executive order to close.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to
file such Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second business day following the
execution and delivery of this Agreement, or, if applicable, such earlier time
as may be required by Rule 430A(a)(3) under the Act; to make no further
amendment or any supplement to the Registration Statement or Prospectus which
shall be disapproved by you promptly after reasonable notice thereof; to advise
you, promptly after it receives notice thereof, of the time when any amendment
to the Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed and to
furnish you with copies thereof; to advise you, promptly after it receives
notice thereof, of the issuance by the Commission of any stop order or of any
order preventing or suspending the use of any Preliminary Prospectus or
Prospectus, of the suspension of the qualification of the Shares for offering or
sale in any jurisdiction, of the initiation or threatening of any proceeding for
any such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or Prospectus or for additional
information; and, in the event of the issuance of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or prospectus or
suspending any such qualification, promptly to use its best efforts to obtain
the withdrawal of such order;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Shares for offering and sale under the
securities laws of such jurisdictions as you may request and to comply with such
laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution of
the Shares, provided that in connection therewith the Company shall not be
required to qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction;
(c) Prior to 10:00 a.m., Eastern time, on the New York
Business Day next succeeding the date of this Agreement and from time to time,
to furnish the Underwriters with copies of the Prospectus in New York City in
such quantities as you may from time to time reasonably request, and, if the
delivery of a prospectus is required at any time prior to the expiration of nine
months after the time of issue of the Prospectus in connection with the offering
or sale of the Shares and if at such time any event shall have occurred as a
result of which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not misleading, or, if
for any other reason it shall be necessary during such period to amend or
supplement the Prospectus in order to comply with the Act, to notify you and
12
upon your request to prepare and furnish without charge to each Underwriter and
to any dealer in securities as many copies as you may from time to time
reasonably request of an amended Prospectus or a supplement to the Prospectus
which will correct such statement or omission or effect such compliance, and in
case any Underwriter is required to deliver a prospectus in connection with
sales of any of the Shares at any time nine months or more after the time of
issue of the Prospectus, upon your request but at the expense of such
Underwriter, to prepare and deliver to such Underwriter as many copies as you
may request of an amended or supplemented Prospectus complying with Section
10(a)(3) of the Act;
(d) To make generally available to its securityholders as soon
as practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c) under
the Act), an earnings statement of the Company and its subsidiaries (which need
not be audited) complying with Section 11(a) of the Act and the rules and
regulations thereunder (including, at the option of the Company, Rule 158);
(e) During the period beginning from the date hereof and
continuing to and including the date 180 days after the date of the Prospectus,
not to, and not to allow its directors and executive officers to, offer, sell,
contract to sell or otherwise dispose of, except as provided hereunder, any
shares of Stock or any securities of the Company that are substantially similar
to the Shares, including but not limited to any securities that are convertible
into or exchangeable for, or that represent the right to receive, Stock or any
such substantially similar securities (other than pursuant to employee stock
option plans existing on, or upon the conversion or exchange of convertible or
exchangeable securities outstanding as of, the date of this Agreement), without
your prior written consent;
(f) To furnish to its stockholders as soon as practicable
after the end of each fiscal year an annual report (including a balance sheet
and statements of income, stockholders' equity and cash flows of the Company and
its consolidated subsidiaries certified by independent public accountants) and,
as soon as practicable after the end of each of the first three quarters of each
fiscal year (beginning with the fiscal quarter ending after the effective date
of the Registration Statement), to make available to its stockholders
consolidated summary financial information of the Company and its subsidiaries
for such quarter in reasonable detail;
(g) During a period of five years from the effective date of
the Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to stockholders, and to deliver to
you (i) as soon as they are available, copies of any reports and financial
statements furnished to or filed with the Commission or any national securities
exchange on which any class of securities of the Company is listed; and (ii)
such additional information concerning the business and financial condition of
the Company as you may from time to time reasonably request (such financial
statements to be on a consolidated basis to the extent the accounts of the
Company and its subsidiaries are consolidated in reports furnished to its
stockholders generally or to the Commission);
13
(h) To use the net proceeds received by it from the sale of
the Shares pursuant to this Agreement in the manner specified in the Prospectus
under the caption "Use of Proceeds";
(i) If the Company elects to rely on Rule 462(b), the Company
shall file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) by 10:00 p.m., Eastern time on the date of this
Agreement, and the Company shall at the time of filing either pay to the
Commission the filing fee for the Rule 462(b) Registration Statement or give
irrevocable instructions for the payment of such fee pursuant to Rule 111(b)
under the Act;
(j) To use its best efforts to list for quotation the Shares
on the Nasdaq National Market System ("Nasdaq");
(k) To file with the Commission such information on Form 10-Q
or Form 10-K as may be required by Rule 463 of the Act; and
(l) During the period beginning on the date hereof and ending
on the later of the fifth anniversary of the First Time of Delivery or the date
on which the Underwriters receive full payment in satisfaction of any claim for
indemnification or contribution to which they may be entitled pursuant to
Section 9 of this Agreement, neither the Company nor the Bank shall, without the
prior written consent of Sandler ▇'▇▇▇▇▇ & Partners, L.P., take or permit to be
taken any action that could result in the Bank's common stock becoming subject
to any security interest, mortgage, pledge, lien or encumbrance; provided,
however, that this covenant shall be null and void if the FRB, the OCC, the
FDIC, or any other federal agency having jurisdiction over the Bank, by
regulation, policy statement or interpretive release or by written order or
written advice addressed to the Bank and specifically addressing the provisions
of Section 8 hereof, permits indemnification of the Underwriters by the Bank as
contemplated by such provisions.
6. The Company covenants and agrees with the several Underwriters that
the Company will pay or cause to be paid the following, whether or not the
transactions contemplated herein are completed: (i) the reasonable out-of-pocket
expenses incurred by the Underwriters in connection with the transactions
contemplated hereby, including, without limitation, disbursements, fees and
expenses of Underwriters' counsel and marketing, syndication and travel
expenses; (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, printing and filing of
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (iii) the cost of printing or producing
any agreement among Underwriters, this Agreement, the Blue Sky Memorandum,
closing documents (including any compilations thereof) and any other documents
in connection with the offering, purchase, sale and delivery of the Shares; (iv)
all expenses in connection with the qualification of the Shares for offering and
sale under state securities laws as provided in Section 5(b) hereof, including
the fees and disbursements of counsel in connection with such qualification and
in connection with the Blue Sky survey; (v) all fees and expenses in connection
with listing the Shares on the Nasdaq ; (vi) the filing fees incident to, and
the fees and disbursements of counsel for the Underwriters in connection with,
14
securing any required review by the National Association of Securities Dealers,
Inc. of the terms of the sale of the Shares; (vii) the cost of preparing stock
certificates; (viii) the cost and charges of any transfer agent or registrar;
and (ix) all other costs and expenses incident to the performance of its
obligations hereunder which are not otherwise specifically provided for in this
Section.
7. The obligations of the Underwriters hereunder, as to the Shares to
be delivered at each Time of Delivery, shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Company herein are, at and as of such Time of Delivery, true and correct,
the condition that the Company shall have performed all of its obligations
hereunder theretofore to be performed, and the following additional conditions:
(a) The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed for such
filing by the rules and regulations under the Act and in accordance with Section
5(a) hereof; if the Company has elected to rely upon Rule 462(b), the Rule
462(b) Registration Statement shall have become effective by 10:00 P.M., Eastern
time, on the date of this Agreement; no stop order suspending the effectiveness
of the Registration Statement or any part thereof shall have been issued and no
proceeding for that purpose shall have been initiated or threatened by the
Commission; and all requests for additional information on the part of the
Commission shall have been complied with to your reasonable satisfaction;
(b) ▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P., counsel for the Underwriters,
shall have furnished to you such written opinion or opinions, dated such Time of
Delivery, with respect to such matters as you may reasonably request, and such
counsel shall have received such papers and information as they may reasonably
request to enable them to pass upon such matters;
(c) Blank Rome LLP, counsel for the Company, shall have
furnished to you their written opinion, dated such Time of Delivery, in form and
substance satisfactory to you, to the effect that:
(i) The Company is a registered bank holding company under the
BHCA; has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the Commonwealth of Pennsylvania, with power and
authority (corporate and otherwise) to own its properties and conduct its
business as described in the Prospectus;
(ii) The Company has an authorized capitalization as set forth
in the Prospectus under the heading "Capitalization", and all of the issued
shares of capital stock of the Company (including the Shares being delivered at
such Time of Delivery) have been duly and validly authorized and issued and are
fully paid and nonassessable; and the Shares conform to the description of the
Stock contained in the Prospectus;
(iii) Except as described in the Prospectus, (A) there are no
15
outstanding rights (contractual or otherwise), warrants or options to acquire,
or instruments convertible into or exchangeable for, or agreements or
understandings with respect to the sale or issuance of, any shares of capital
stock of or other equity interest in the Company; and (B) there are no
contracts, agreements or understandings between the Company and any person
granting such person the right to require the Company to file a registration
statement under the Act or otherwise register any securities of the Company
owned or to be owned by such person;
(iv) The Company has been duly qualified as a foreign
corporation for the transaction of business and is in good standing under the
laws of each other jurisdiction in which it owns or leases properties or
conducts any business so as to require such qualification, or is subject to any
liability or disability by reason of failure to be so qualified in any
jurisdiction, except where such failure to be so qualified would not have a
Material Adverse Effect;
(v) Each subsidiary of the Company either has been duly
incorporated and is validly existing as a corporation or a statutory business
trust or has been duly chartered and is validly existing as a national
association, in each case in good standing under the laws of the jurisdiction of
its organization, with power and authority (corporate and otherwise) to own its
properties and conduct its business as described in the Prospectus, and has been
duly qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each other jurisdiction in which it owns or
leases properties or conducts any business so as to require such qualification,
or is subject to no material liability or disability by reason of the failure to
be so qualified in any such jurisdiction; the activities of the subsidiaries of
the Bank are activities permitted to subsidiaries of a national association
chartered by the OCC, under applicable law and the rules and regulations of the
OCC, and the deposit accounts of the Bank are insured up to the applicable
limits by the FDIC; all of the issued and outstanding capital stock of each
subsidiary of the Company has been duly authorized and validly issued and is
fully paid and nonassessable and is owned, directly or through other
subsidiaries of the Company, by the Company free and clear of any pledge, lien,
encumbrance, claim or equity;
(vi) To such counsel's knowledge, the Company and its
subsidiaries have good and marketable title to all real property owned by them,
in each case free and clear of all liens, encumbrances and defects except such
as are described in the Prospectus or such as do not materially affect the value
of such property and do not interfere with the use made and proposed to be made
of such property by the Company and its subsidiaries; and any real property and
buildings held under lease by the Company and its subsidiaries are held by them
under valid, subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be made of such
property and buildings by the Company and its subsidiaries;
(vii) Except as disclosed in the Prospectus, the Company and
its subsidiaries are conducting their respective businesses in compliance in all
material respects with all laws, rules, regulations, decisions, directives and
orders (including, without limitation, all regulations and orders of, or
agreements with, the FDIC, the FRB, the OCC, the Equal Credit Opportunity Act,
the Fair Housing Act, the Community Reinvestment Act, the Home Mortgage
Disclosure Act and all other applicable fair lending laws or other laws relating
16
to discrimination and the Bank Secrecy Act and Title III of the USA Patriot Act)
and neither the Company nor any of its subsidiaries has received any
communication from any Governmental Entity asserting that the Company or any of
its subsidiaries is not in compliance with any statute, law, rule, regulation,
decision, directive or order; there is no action, suit, investigation or
proceeding before or by anyGovernmental Entity, now pending or, to the knowledge
of such counsel, threatened or contemplated against or affecting the Company or
any of its subsidiaries (A) that is required to be disclosed in the Registration
Statement and not disclosed therein, (B) that could result, individually or in
the aggregate, in any Material Adverse Effect, (C) that could materially and
adversely affect the properties, assets or leasehold interests of the Company
and its subsidiaries, considered as one enterprise, or (D) that could adversely
affect the consummation of the transactions contemplated in this Agreement; all
pending legal or governmental proceedings to which the Company or any of its
subsidiaries is a party or of which any of their property is the subject, which
are not described in the Registration Statement, including ordinary routine
litigation incidental to their respective businesses, either individually or in
the aggregate, would not have a Material Adverse Effect;
(viii) This Agreement has been duly authorized, executed and
delivered by the Company and the Bank;
(ix) The issue and sale of the Shares being delivered at such
Time of Delivery by the Company and the compliance by the Company with all of
the provisions of this Agreement and the consummation of the transactions herein
contemplated will not conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument known
to such counsel to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is subject, nor
will such action result in any violation of the provisions of the Articles of
Incorporation or Bylaws of the Company or any statute or any order, rule or
regulation known to such counsel of any Governmental Entity;
(x) No consent, approval, authorization, order, registration
or qualification of or with any Governmental Entity is required for the issue
and sale of the Shares or the consummation by the Company of the transactions
contemplated by this Agreement, except the registration under the Act of the
Shares, and except as may be required under the rules and regulations of the
NASD and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Shares by the Underwriters;
(xi) Neither the Company nor any of its subsidiaries is in
violation of its certificate of incorporation or charter (as applicable) or
bylaws or, to such counsel's knowledge, in default in the performance or
observance of any material obligation, agreement, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement, lease or
other agreement or instrument to which it is a party or by which it or any of
its properties may be bound;
17
(xii) The statements set forth in the Prospectus under the
caption "Description of Capital Stock", insofar as they purport to constitute a
summary of the terms of the Stock and under the captions "Risk Factors - We are
dependent on Commerce of New Jersey," "Risk Factors - We operate in a highly
regulated environment; changes in laws and regulations and accounting principles
may adversely affect us," "Risk Factors - "Anti-takeover" provisions may make it
more difficult for a third party to acquire control of us, even if the change in
control would be beneficial to shareholders," Business - Relationship with
Commerce of New Jersey", "Supervision and Regulation" and "Underwriting",
insofar as they purport to describe the provisions of the laws and documents
referred to therein, are accurate and complete;
(xiii) To such counsel's knowledge, each of the Company and
its subsidiaries possess all Governmental Licenses and have made all filings,
applications and registrations with all Governmental Entities that are required
in order to permit the Company or such subsidiary to conduct its business as
presently conducted, except where the failure to possess such Governmental
License or to have made such filing, application or registration would not,
individually or in the aggregate, have a Material Adverse Effect; all of the
Governmental Licenses are valid and in full force and effect, except where the
invalidity of such Governmental Licenses to be in full force and effect,
individually or in the aggregate, would not have a Material Adverse Effect; and
neither the Company nor any of its subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such Governmental
Licenses which, individually or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a Material Adverse
Effect;
(xiv) To such counsel's knowledge, neither the Company nor any
of its subsidiaries is a party to or subject to any order, decree, agreement,
memorandum of understanding or similar arrangement with, or a commitment letter,
supervisory letter or similar submission to, any Governmental Entity charged
with the supervision or regulation of depository institutions or engaged in the
insurance of deposits (including the FDIC) or the supervision or regulation of
it or any of its subsidiaries and neither the Company nor any of its
subsidiaries has been advised by any such Governmental Entity that such
Governmental Entity is contemplating issuing or requesting (or is considering
the appropriateness of issuing or requesting) any such order, decree, agreement,
memorandum of understanding, commitment letter, supervisory letter or similar
submission;
(xv) The Company is not, and after giving effect to the
offering and sale of the Shares, will not be, an "investment company" or an
entity "controlled" by an "investment company", as such terms are defined in the
Investment Company Act;
(xvi) The documents incorporated by reference in the
Prospectus (other than the financial statements and related schedules therein,
as to which such counsel need express no opinion), when they were filed with the
Commission, complied as to form in all material respects with the requirements
of the Exchange Act and the rules and regulations of the Commission thereunder;
18
and they have no reason to believe that any such documents, when such documents
were so filed, contained an untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made when such documents were
so filed, not misleading;
(xvii) The Registration Statement and the Prospectus and any
further amendments and supplements thereto made by the Company prior to such
Time of Delivery (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion) comply as to form in
all material respects with the requirements of the Act and the rules and
regulations thereunder; and such counsel does not know of any contracts or other
agreements of a character required to be incorporated by reference into the
Prospectus or required to be filed as an exhibit to the Registration Statement
or required to be described in the Registration Statement or Prospectus which
are not filed or incorporated by reference or described as required;
(xviii) The Company is in compliance with the applicable
provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act;
In addition, although they do not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus, except for those referred to in the
opinion in subsection (xii) of this section 7(c), they have no reason to believe
that, as of its effective date, the Registration Statement or any further
amendment thereto made by the Company prior to such Time of Delivery (other than
the financial statements and related schedules therein, as to which such counsel
need express no opinion) contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading or that, as of its date, the Prospectus or any further
amendment or supplement thereto made by the Company prior to such Time of
Delivery (other than the financial statements and related schedules therein, as
to which such counsel need express no opinion) contained an untrue statement of
a material fact or omitted to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading or that, as of such Time of Delivery, either the
Registration Statement or the Prospectus or any further amendment or supplement
thereto made by the Company prior to such Time of Delivery (other than the
financial statements and related schedules therein, as to which such counsel
need express no opinion) contains an untrue statement of a material fact or
omits to state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading; and they
do not know of any amendment to the Registration Statement required to be filed;
(d) (i) At the time of the execution of this Agreement,
Sandler ▇'▇▇▇▇▇ & Partners, L.P. shall have received from ▇▇▇▇▇ ▇▇▇▇▇▇ Company
LLP, a letter dated such date, in form and substance satisfactory to Sandler
▇'▇▇▇▇▇ & Partners, L.P., to the effect that (i) they are independent public
accountants with respect to the Company and its subsidiaries within the meaning
of the Code of Ethics of the AICPA, the Securities Act and the Securities Act
19
Regulations and they are not in violation of the auditor independence
requirements of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act; (ii) it is their opinion that the
consolidated financial statements and supporting schedules included in the
Registration Statement and covered by their opinions therein comply as to form
in all material respects with the applicable accounting requirements of the
Securities Act and the Securities Act Regulations; (iii) based upon limited
procedures as agreed upon by Sandler ▇'▇▇▇▇▇ & Partners, L.P. and ▇▇▇▇▇ ▇▇▇▇▇▇
Company LLP set forth in detail in such letter, including a reading of the
latest available interim financial statements of the Company and its
subsidiaries, a reading of the minute books of the Company and its subsidiaries,
inquiries of officials of the Company and its subsidiaries responsible for
financial and accounting matters and such other inquiries and procedures as may
be specified in such letter, nothing has come to their attention which causes
them to believe that (A) the unaudited financial statements and supporting
schedules of the Company and its subsidiaries included in the Registration
Statement do not comply as to form in all material respects with the applicable
accounting requirements of the Securities Act and the Securities Act Regulations
or are not presented in conformity with generally accepted accounting principles
used in the United States applied on a basis substantially consistent with that
of the audited financial statements included in the Registration Statement and
the Prospectus, (B) the unaudited amounts of net interest income and net income,
and the other balance sheet data and operating data, set forth under "Selected
Consolidated Financial Data" in the Registration Statement and the Prospectus do
not agree with the amounts set forth in unaudited consolidated financial
statements as of and for the dates and periods presented under such captions or
such amounts were not determined on a basis substantially consistent with that
used in determining the corresponding amounts in the audited financial
statements included in the Registration Statement, (C) at a specified date not
more than five days prior to the date of this Agreement, there has been any
change in the capital stock of the Company or any increase in the consolidated
long term or short term debt of the Company and its subsidiaries or any decrease
in consolidated total assets, the provision for loan losses, total deposits,
retained earnings or stockholders' equity of the Company and its subsidiaries,
in each case as compared with the amounts shown in the most recent consolidated
balance sheet of the Company and its subsidiaries included in the Registration
Statement, or (D) during the period from the date of the most recent
consolidated statement of income included in the Registration Statement to a
specified date not more than five days prior to the date of this Agreement,
there were any decreases, as compared with the corresponding period in the
preceding year, in total interest income, net interest income, net interest
income after provision for loan losses, income before income taxes or net income
of the Company and its subsidiaries, except in all instances for changes,
increases or decreases which the Registration Statement and the Prospectus
disclose have occurred or may occur, and (iv) in addition to the audits referred
to in their opinions and the limited procedures referred to in clause (iii)
above, they have carried out certain specified procedures, not constituting an
audit, with respect to certain amounts, percentages and financial information
which are included in the Registration Statement and the Prospectus and which
are specified by Sandler ▇'▇▇▇▇▇ & Partners, L.P., and have found such amounts,
percentages and financial information to be in agreement with the relevant
accounting, financial and other records of the Company and its subsidiaries
identified in such letter.
20
(ii) At 9:30 a.m., Eastern time, on the effective date of any
post-effective amendment to the Registration Statement filed after the date of
this Agreement and also at each Time of Delivery, Sandler ▇'▇▇▇▇▇ & Partners,
L.P. shall have received from ▇▇▇▇▇ ▇▇▇▇▇▇ Company LLP a letter, dated as of
each such date, to the effect that they reaffirm the statements made in the
letter furnished pursuant to subsection (d) of this Section, except that the
specified date referred to shall be a date not more than five days prior to the
date of such letter.
(e) (i) Neither the Company nor any of its subsidiaries shall
have sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any loss or interference
with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or action, order or decree of
any Governmental Entity, otherwise than as set forth or contemplated in the
Prospectus, and (ii) since the respective dates as of which information is given
in the Prospectus there shall not have been any change in the capital stock or
long-term debt of the Company or any of its subsidiaries or any change, or any
development involving a prospective change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of operations of
the Company and its subsidiaries, otherwise than as set forth or contemplated in
the Prospectus, the effect of which, in any such case described in clause (i) or
(ii), is in the judgment of the Representative so material and adverse as to
make it impracticable or inadvisable to proceed with the public offering or the
delivery of the Shares being delivered at such Time of Delivery on the terms and
in the manner contemplated in the Prospectus;
(f) On or after the date hereof (i) no downgrading shall have
occurred in the rating accorded the Company's debt securities by any "nationally
recognized statistical rating organization", as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Act, and (ii) no such
organization shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of any of the Company's
debt securities;
(g) On or after the date hereof there shall not have occurred
any of the following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange or on the Nasdaq; (ii) a
suspension or material limitation in trading in the Company's securities on the
Nasdaq; (iii) a general moratorium on commercial banking activities declared by
either Federal or New York or Pennsylvania authorities or a material disruption
in commercial banking or securities settlement or clearance services in the
United States; (iv) the outbreak or escalation of hostilities involving the
United States or the declaration by the United States of a national emergency or
war; or (v) the occurrence of any other calamity or crisis or any change in
financial, political or economic conditions in the United States or elsewhere,
including without limitation, as a result of terrorist activities occurring
after the date hereof, if the effect of any such event specified in clause (iv)
or (v), in the judgment of Sandler ▇'▇▇▇▇▇ & Partners, L.P. makes it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Shares being delivered at such Time of Delivery on the terms and in the
manner contemplated in the Prospectus;
21
(h) The Shares to be sold at such Time of Delivery shall have
been duly listed for quotation on the Nasdaq;
(i) The Company has obtained and delivered to the Underwriters
executed copies of an agreement from each officer and director of the Company,
substantially to the effect set forth in Subsection 5(e) hereof, in form and
substance satisfactory to you;
(j) The Company shall have complied with the provisions of
Section 5(c) hereof with respect to the furnishing of prospectuses on the New
York Business Day next succeeding the date of this Agreement; and
(k) The Company shall have furnished or caused to be furnished
to you at such Time of Delivery certificates of officers of the Company
satisfactory to you as to the accuracy of the representations and warranties of
the Company herein at and as of such Time of Delivery, as to the performance by
the Company of all of its obligations hereunder to be performed at or prior to
such Time of Delivery, as to the matters set forth in subsections (a) and (e) of
this Section and as to such other matters as you may reasonably request.
8. (a) The Company and the Bank, jointly and severally, will indemnify
and hold harmless each Underwriter against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse each Underwriter for any legal or other expenses reasonably incurred
by such Underwriter in connection with investigating or defending any such
action or claim as such expenses are incurred; provided, however, that the
Company and the Bank shall not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
any Preliminary Prospectus, the Registration Statement or the Prospectus or any
such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through Sandler ▇'▇▇▇▇▇
& Partners, L.P. expressly for use therein. Notwithstanding the foregoing, the
indemnification provided for in this paragraph (a) shall not apply to the Bank
to the extent that such indemnification by the Bank is found in a final judgment
by a court of competent jurisdiction to constitute a covered transaction under
Section 23A of the Federal Reserve Act.
(b) Each Underwriter will severally and not jointly 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 an untrue statement or alleged untrue statement
22
of a material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in any Preliminary Prospectus, the Registration Statement or
the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by such Underwriter
through Sandler ▇'▇▇▇▇▇ & Partners, L.P. expressly for use therein; and will
reimburse the Company for any legal or other expenses reasonably incurred by the
Company in connection with investigating or defending any such action or claim
as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party which consent shall not be
unreasonably withheld, be counsel to the indemnifying party), and, after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party shall not be liable to such
indemnified party under such subsection for any legal expenses of other counsel
or any other expenses, in each case subsequently incurred by such indemnified
party, in connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the written consent of the
indemnified party, effect the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or threatened action or claim
in respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential party to such
action or claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability arising out of
such action or claim and (ii) does not include a statement as to or an admission
of fault, culpability or a failure to act, by or on behalf of any indemnified
party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other from the offering of the Shares. If, however, the allocation
23
provided by the immediately preceding sentence is not permitted by applicable
law or if the indemnified party failed to give the notice required under
subsection (c) above, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus. The relative fault shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand
or the Underwriters on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriters agree that, except to the extent
provided in the first and third sentences of this subsection (d), it would not
be just and equitable if contributions pursuant to this subsection (d) were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this
subsection (d). The amount paid or payable by an indemnified party as a result
of the losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Shares underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages which such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company under this Section 8 shall
be in addition to any liability which the Company or the Bank may otherwise have
and shall extend, upon the same terms and conditions, to each person, if any,
who controls any Underwriter within the meaning of the Act or who is an
affiliate or partner of any Underwriter; and the obligations of the Underwriters
under this Section 8 shall be in addition to any liability which the respective
Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company or the Bank, as the case
may be, and to each other person, if any, who controls the Company or the Bank
within the meaning of the Act or who is an affiliate of the Company or the Bank,
as the case may be.
24
9. (a) If any Underwriter shall default in its obligation to purchase
the Shares which it has agreed to purchase hereunder at a Time of Delivery, you
may, in your discretion and without obligation, arrange for you or another party
or other parties to purchase such Shares on the terms contained herein. If
within thirty-six hours after such default by any Underwriter you do not arrange
for the purchase of such Shares, then the Company shall be entitled to a further
period of thirty-six hours within which to procure another party or other
parties satisfactory to you to purchase such Shares on such terms. In the event
that, within the respective prescribed periods, you notify the Company that you
have so arranged for the purchase of such Shares, or the Company notifies you
that it has so arranged for the purchase of such Shares, you or the Company
shall have the right to postpone such Time of Delivery for a period of not more
than seven days, in order to effect whatever changes may thereby be made
necessary in the Registration Statement or the Prospectus, or in any other
documents or arrangements, and the Company agrees to file promptly any
amendments to the Registration Statement or the Prospectus which in your opinion
may thereby be made necessary. The term "Underwriter" as used in this Agreement
shall include any person substituted under this Section with like effect as if
such person had originally been a party to this Agreement with respect to such
Shares.
(b) If, after giving effect to any arrangements for the
purchase of the Shares of a defaulting Underwriter or Underwriters by you and
the Company as provided in subsection (a) above, the aggregate number of such
Shares which remains unpurchased does not exceed one-tenth of the aggregate
number of all the Shares to be purchased at such Time of Delivery, then the
Company shall have the right to require each non-defaulting Underwriter to
purchase the number of shares which such Underwriter agreed to purchase
hereunder at such Time of Delivery and, in addition, to require each
non-defaulting Underwriter to purchase its pro rata share (based on the number
of Shares which such Underwriter agreed to purchase hereunder) of the Shares of
such defaulting Underwriter or Underwriters for which such arrangements have not
been made; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
(c) If, after giving effect to any arrangements for the
purchase of the Shares of a defaulting Underwriter or Underwriters by you and
the Company as provided in subsection (a) above, the aggregate number of such
Shares which remains unpurchased exceeds one-tenth of the aggregate number of
all the Shares to be purchased at such Time of Delivery, or if the Company shall
not exercise the right described in subsection (b) above to require
non-defaulting Underwriters to purchase Shares of a defaulting Underwriter or
Underwriters, then this Agreement (or, with respect to the Second Time of
Delivery, the obligations of the Underwriters to purchase and of the Company to
sell the Optional Shares) shall thereupon terminate, without liability on the
part of any non-defaulting Underwriter or the Company, except for the expenses
to be borne by the Company as provided in Section 6 hereof and the indemnity and
contribution agreements in Section 8 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties
25
and other statements of the Company and the several Underwriters, as set forth
in this Agreement or made by or on behalf of them, respectively, pursuant to
this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Company,
or any officer or director or controlling person of the Company, and shall
survive delivery of and payment for the Shares.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
the Company shall not then be under any liability to any Underwriter except as
provided in Sections 6 and 8 hereof; but, if for any other reason, any Shares
are not delivered by or on behalf of the Company as provided herein, the Company
will reimburse the Underwriters through you for all out-of-pocket expenses
approved by you, including fees and disbursements of counsel, reasonably
incurred by the Underwriters in making preparations for the purchase, sale and
delivery of the Shares not so delivered, but the Company shall then be under no
further liability to any Underwriter except as provided in Sections 6 and 8
hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the representative at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: General Counsel; and if to the Company
shall be delivered or sent by mail or facsimile to Pennsylvania Commerce
Bancorp, Inc., ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, President and Chief Executive Officer; provided,
however, that any notice to an Underwriter pursuant to Section 8(c) hereof shall
be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its Underwriters' Questionnaire, or
telex constituting such Questionnaire, which address will be supplied to the
Company by you upon request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company and, to the extent provided in
Sections 8 and 10 hereof, the officers and directors of the Company and each
person who controls the Company or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement. No purchaser of
any of the Shares from any Underwriter shall be deemed a successor or assign by
reason merely of such purchase.
14. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. This Agreement shall be governed by and construed in accordance
26
with the laws of the State of New York, without regard to the choice of law
principles applied in such jurisdiction.
The Company hereby submits to the non-exclusive jurisdiction
of the Federal and state courts in the Borough of Manhattan in the City of New
York in any suit or proceeding arising out of or relating to this Agreement or
the transactions contemplated hereby.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
27
If the foregoing is in accordance with your understanding, please sign
and return to us four counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Underwriters, this letter and such acceptance
hereof shall constitute a binding agreement among each of the Underwriters, the
Company and the Bank. It is understood that your acceptance of this letter on
behalf of each of the Underwriters is pursuant to the authority set forth in a
form of Agreement among Underwriters, but without warranty on your part as to
the authority of the signer thereof.
Very truly yours,
PENNSYLVANIA COMMERCE BANCORP
By: __________________________________.
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: President and Chief Executive Officer
COMMERCE BANK/HARRISBURG, N.A.
By: __________________________________.
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: President and Chief Executive Officer
Accepted as of the date hereof:
SANDLER ▇'▇▇▇▇▇ & PARTNERS, L.P.
As representative of the several Underwriters
By: Sandler ▇'▇▇▇▇▇ & Partners Corp.
the sole general partner
By: __________________________________.
Name:
Title:
SCHEDULE I
Number of Optional
Shares to be
Total Number of Purchased if
Firm Shares Maximum Option
Underwriter to be Purchased Exercised
----------- --------------- ---------
Sandler ▇'▇▇▇▇▇ & Partners, ▇.▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ LLC _____________ _________________
Total 400,000 60,000
