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FORM OF
UNDERWRITING AGREEMENT
1,875,000 Shares
SUN COMMUNITY BANCORP LIMITED
Common Stock
June , 1999
UNDERWRITING AGREEMENT
EVEREN Securities, Inc.
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1,875,000 Shares
SUN COMMUNITY BANCORP LIMITED
Common Stock
(No par value)
UNDERWRITING AGREEMENT
June , 1999
EVEREN Securities, Inc.
As Representative of
the Several Underwriters
c/o EVEREN Securities, Inc.
77 West Wacker Drive
Chicago, Illinois 60601-1994
Ladies and Gentlemen:
Sun Community Bancorp Limited, an Arizona corporation (the "Company"),
confirms its agreement with the several underwriters listed in Schedule I hereto
(the "Underwriters"), for whom EVEREN Securities, Inc. (the "Representative")
has been duly authorized to act as representative, as follows:
1. The Shares. Subject to the terms and conditions set forth in this
agreement (the "Agreement"), the Company proposes to issue and sell 1,875,000
shares of its authorized but unissued Common Stock, no par value (the "Common
Stock"), to the several Underwriters. Such 1,875,000 shares of Common Stock
proposed to be sold by the Company are hereinafter referred to as the "Firm
Shares." The Company also proposes to grant to the Underwriters an option to
purchase up to 281,250 additional shares of Common Stock (the "Additional
Shares") if requested by the Underwriters as provided in Section 3 hereof. The
Firm Shares and the Additional Shares are herein collectively called the
"Shares."
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The Company hereby confirms its agreement with the Underwriters as
follows:
2. Registration Statement and Prospectus. The Company has prepared and
filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively, the
"Act"), a registration statement on Form S-1 (File No. 333-76719) including a
prospectus, relating to the Shares, that may have been amended; each such
amendment was so prepared and filed. The registration statement, as amended at
the time when it became or becomes effective, including all financial schedules
and exhibits thereto and all of the information (if any) deemed to be part of
the registration statement at the time of its effectiveness pursuant to Rule
430A under the Act ("Rule 430A"), is hereinafter referred to as the
"Registration Statement"; the prospectus in the form first provided to the
Underwriters by the Company in connection with the offering and sale of the
Shares (whether or not required to be filed pursuant to Rule 424(b) under the
Act ("Rule 424(b)")) is hereinafter referred to as the "Prospectus," except that
if any revised prospectus shall be provided to the Underwriters by the Company
for use in connection with the offering of the Shares that differs from the
Prospectus (whether or not any such revised prospectus is required to be filed
by the Company pursuant to Rule 424(b) under the Act), the term "Prospectus"
shall refer to the revised prospectus from and after the time it is first
provided to the Underwriters for such use; and each preliminary prospectus
included in the Registration Statement prior to the time it became or becomes
effective is herein referred to as a "Preliminary Prospectus."
3. Agreements to Sell and Purchase. On the basis of the representations
and warranties contained in this Agreement, and subject to the terms and
conditions hereof, (i) the Company agrees to issue and sell to the Underwriters,
(a) at a price of $ per Share (the "Discounted Purchase Price"), 918,750 of
the Firm Shares; and (b) at a price of $ per Share (the "Nondiscounted
Purchase Price") the remaining 956,250 Firm Shares; and (ii) each Underwriter
agrees, severally and not jointly, to purchase from the Company, at the
respective Purchase Prices, the aggregate number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I hereto.
On the basis of the representations and warranties contained in this
Agreement, and subject to the terms and conditions hereof, (i) the Company
agrees to sell to the Underwriters up to 281,250 Additional Shares, 49% at the
Discounted Purchase Price and 51% at the Nondiscounted Purchase Price; and (ii)
the Underwriters shall have the right to purchase, severally and not jointly,
from time to time, up to an aggregate of 281,250 Additional Shares at the
respective Purchase Prices. Additional Shares may be purchased as provided in
Section 4 hereof solely for the purpose of covering over-allotments made in
connection with the offering of the Firm Shares. If any Additional Shares are to
be purchased, each Underwriter, severally and not jointly, agrees to purchase
that number of Additional Shares at the respective Purchase Prices (subject to
such adjustments to eliminate fractional shares as the Representatives may
determine) that bears the same proportion to the total number of Additional
Shares to be purchased as the number of Firm Shares set forth opposite the name
of such Underwriter in Schedule I bears to the total number of Firm Shares.
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For a period of 180 days from the date this Agreement becomes
effective, the Company will not, without the prior written consent of the
Representative (1) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, or otherwise transfer or dispose of, directly or
indirectly, any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock, or (2) enter into any swap or
other agreement that transfers, in whole or in part, any of the economic
consequences of ownership of the Common Stock, whether any such transaction
described in clause (1) or (2) above is to be settled by delivery of Common
Stock or such other securities, in cash or otherwise; provided, however, that
this clause shall not apply to the transactions expressly contemplated hereby
and the granting of options for shares of Common Stock and involving sales of
shares of Common Stock to the Company's employees pursuant to the exercise of
options under those employee benefit plans described in the Prospectus.
For a period of 180 days from the date this Agreement becomes
effective, the Company will not, without the prior written consent of the
Representative, file a registration statement relating to shares of capital
stock (including the Common Stock) or securities convertible into or exercisable
or exchangeable for capital stock or warrants, options or rights to purchase or
acquire capital stock, with the exception of the filing of Registration
Statements on Form S-8 with respect to the Company's employee benefit plans
described in the Prospectus.
4. Agreements of the Company as to Delivery and Payment. The Company
agrees with each Underwriter that:
(a) Delivery to the Underwriters of and payment to the Company for the
Firm Shares shall be made at 10:00 A.M., New York City time, on the third full
business day (such time and date being referred to as the "Closing Date")
following the date of the initial public offering of the Firm Shares at such
place as you shall designate.
(b) Delivery to the Underwriters of and payment to the Company for any
Additional Shares to be purchased by the Underwriters shall be made at such
place as the Representative shall designate, at 10:00 A.M., New York City time,
on such date or dates (individually, an "Option Closing Date" and collectively,
the "Option Closing Dates"), which may be the same as the Closing Date but shall
in no event be earlier than the Closing Date, as shall be specified in a written
notice(s) from the Representative to the Company of the Underwriters'
determination to purchase a number, specified in said notice, of Additional
Shares. Any such notice(s) may be given at any time or times within 30 days
after the date of this Agreement.
(c) Certificates for the Shares shall be registered in such names and
issued in such denominations as you shall request in writing not later than two
business days prior to the Closing Date or the applicable Option Closing Date,
as the case may be, and shall be made available for inspection not later than
9:30 A.M., New York City time, on the business day next preceding the Closing
Date or the applicable Option Closing Date, as the case may be, with any
transfer taxes payable upon initial issuance or the transfer thereof duly paid
by the Company for the respective
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accounts of the Underwriters against payment of the Purchase Price therefor by
certified or official bank check or checks payable in New York Clearing House or
similar next-day funds to the order of the Company.
5. Further Agreements of the Company. The Company also agrees with each
Underwriter that:
(a) it will, if the Registration Statement has not heretofore become
effective under the Act, file an amendment to the Registration Statement or, if
necessary pursuant to Rule 430A under the Act, a post-effective amendment to the
Registration Statement, as soon as practicable after the execution and delivery
of this Agreement, and will use its best efforts to cause the Registration
Statement or such post-effective amendment to become effective at the earliest
possible time; and the Company will comply fully and in a timely manner with the
applicable provisions of Rule 424(b) and Rule 430A under the Act;
(b) it will advise you promptly and, if requested by you, confirm such
advice in writing, (i) when the Registration Statement has become effective, if
and when the Prospectus is sent for filing pursuant to Rule 424 under the Act
and when any post-effective amendment to the Registration Statement becomes
effective, (ii) of the receipt of any comments from the Commission that relate
to the Registration Statement or requests by the Commission for amendments to
the Registration Statement or amendments or supplements to the Prospectus or for
additional information, (iii) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement, or of the
suspension of qualification of the Shares for offering or sale in any
jurisdiction, or the initiation or, to the best knowledge of the Company, threat
of any proceedings for such purpose by the Commission or any state securities
commission or other regulatory authority, and (iv) of the happening of any event
or information becoming known during the period referred to in paragraph (e)
below that makes any statement of a material fact made in the Registration
Statement untrue or that requires the making of any additions to or changes in
the Registration Statement (as amended or supplemented from time to time) in
order to make the statements therein not misleading or that makes any statement
of a material fact made in the Prospectus (as amended or supplemented from time
to time) untrue or that requires the making of any additions to or changes in
the Prospectus (as amended or supplemented from time to time) in order to make
the statements therein not misleading; if at any time the Commission shall issue
or institute proceedings (or threaten to institute any such proceedings) to
issue any stop order suspending the effectiveness of the Registration Statement,
or any state securities commission or other regulatory authority shall issue or
institute proceedings (or threaten to institute proceedings) to issue an order
suspending the qualification or exemption of the Shares under any state
securities or Blue Sky laws, the Company shall use its best efforts to obtain
the withdrawal or lifting of such order at the earliest possible time;
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(c) it will furnish to you without charge one signed copy of the
Registration Statement as first filed with the Commission and of each amendment
to it, including all exhibits filed therewith, and will furnish to you and each
Underwriter designated by you such number of conformed copies of the
Registration Statement as so filed and of each amendment to it, without
exhibits, as you may reasonably request;
(d) it will not file any amendment or supplement to the Registration
Statement, whether before or after the time when it becomes effective, or make
any amendment or supplement to the Prospectus of which you shall not previously
have been advised and provided a copy a reasonable period of time prior to the
filing thereof or to which you or your counsel shall reasonably object; and it
will prepare and file with the Commission, promptly upon your reasonable
request, any amendment to the Registration Statement or supplement to the
Prospectus that may be necessary or advisable in connection with the
distribution of the Shares by you in your or your counsel's opinion, and will
use its best efforts to cause the same to become effective as promptly as
possible;
(e) promptly after the Registration Statement becomes effective, and
from time to time thereafter for such period as a prospectus is required by the
Act to be delivered in connection with the sales by an underwriter or a dealer
(in the opinion of your counsel), it will furnish to each Underwriter and dealer
without charge as many copies of the Prospectus (and any amendment or supplement
of the Prospectus) as such Underwriter or dealer may reasonably request for the
purposes contemplated by the Act; the Company consents to the use of the
Prospectus and any amendment or supplement thereto by any Underwriter or any
dealer, both in connection with the offering or sale of the Shares and for such
period of time thereafter as the Prospectus is required by the Act to be
delivered in connection therewith;
(f) if during the period specified in paragraph (e) any event shall
occur or information become known as a result of which in the opinion of your
counsel it becomes necessary to amend or supplement the Prospectus in order to
make the statements therein, in light of the circumstances existing as of the
date the Prospectus is delivered to a purchaser, not misleading, or it is
necessary to amend or supplement the Prospectus to comply with any law,
forthwith to prepare and, subject to paragraph 5(d) above, it will file with the
Commission at the sole expense of the Company an appropriate amendment or
supplement to the Prospectus so that the statements of any material facts in the
Prospectus, as so amended and supplemented, will not, in light of the
circumstances when it is so delivered, be misleading, or so that the Prospectus
will comply with law and it will furnish to the Underwriters and to such dealers
as the Underwriters shall specify, at the sole expense of the Company, such
number of copies thereof as such Underwriters or dealers may reasonably request;
(g) prior to any public offering of the Shares, it will cooperate with
you and counsel for the Underwriters in connection with the registration or
qualification of the Shares for offer and sale by the several Underwriters and
by dealers under the state securities or Blue Sky laws of such jurisdictions as
you may request (provided, that the Company shall not be obligated to qualify as
a foreign corporation in any jurisdiction in which it is not so qualified or to
take any action
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which would subject it to general consent to service of process in any
jurisdiction in which it is not now so subject); the Company will continue such
qualification in effect so long as required by law for the distribution of the
Shares and will file such consents to service of process or other documents as
may be necessary in order to effect such registration or qualification
(provided, that the Company shall not be obligated to take any action that would
subject it to general consent to service of process in any jurisdiction in which
it is not now so subject);
(h) it will not, prior to the exercise in full or termination or
expiration of the option to purchase the Option Shares, incur any liability or
obligation, direct or contingent, or enter into any material transaction, other
than in the ordinary course of business, except as contemplated by the
Prospectus;
(i) it will not acquire any capital stock of the Company prior to the
exercise in full or termination or expiration of the option to purchase the
Option Shares nor will the Company declare or pay any dividend or make any other
distribution upon the Common Stock payable to shareholders of record on a date
prior to the exercise in full or termination or expiration of the option to
purchase the Option Shares, except in either case as contemplated by the
Prospectus;
(j) it will mail and make generally available to its security holders
and furnish to the Underwriters as soon as reasonably practicable a consolidated
earnings statement covering a period of at least 12 months beginning after the
"effective date" (as defined in Rule 158 under the Act) of the Registration
Statement (but in no event commencing later than 90 days after such date) that
will satisfy the provisions of Section 11(a) of the Act and Rule 158 thereunder
and to advise you in writing when such statement has been made so available;
(k) during the period of five years after the date of this Agreement,
it will furnish to you a copy (i) as soon as practicable after the filing
thereof, of each report filed by the Company with the Commission, any securities
exchange or the National Association of Securities Dealers, Inc. ("NASD"); (ii)
as soon as practicable after the release thereof, of each material press release
in respect of the Company; (iii) as soon as available, of each report of the
Company mailed to shareholders; and (iv) as soon as available, such other
publicly available information concerning the Company as you may reasonably
request;
(l) whether or not the transactions contemplated hereby are consummated
or this Agreement becomes effective as to all of its provisions or is
terminated, to pay all costs, fees, expenses and taxes incident to the
performance by the Company of its obligations hereunder, including (i) the
preparation, printing, filing and distribution under the Act of the Registration
Statement (including financial statements and exhibits), each preliminary
Prospectus and all amendments and supplements to any of them prior to or during
the period specified in paragraph (e) above of this Section 5, (ii) the word
processing, reproduction and distribution of this Agreement, the Blue Sky Survey
and any other agreements, memoranda, correspondence and other documents prepared
and delivered by the Underwriters or their counsel in connection with the
offering of the Shares (including in each case any disbursements of counsel for
the Underwriters relating to such
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preparation and delivery), (iii) the registration or qualification of the Shares
for offer and sale under the securities or Blue Sky laws of the several states,
including in each case the fees and disbursements of counsel for the
Underwriters, relating to such registration or qualification and memoranda
relating thereto, (iv) filings and clearance with the NASD in connection with
the offering and sale of the Shares, (v) the listing of the Shares on the Nasdaq
National Market ("Nasdaq") (vi) furnishing such copies of the Registration
Statement, each Preliminary Prospectus, the Prospectus and all amendments and
supplements thereto as may be requested for use in connection with the offering
or sale of the Shares by the Underwriters or by dealers to whom the Shares may
be sold, (vii) obtaining the opinions to be provided pursuant to Section 8(g) of
this Agreement and (viii) the performance by the Company of all of its other
obligations under this Agreement; if the sale of the Shares provided for herein
is not consummated because the Underwriters exercise their right to terminate
this Agreement pursuant to Section 9 hereof and any of the following have
occurred during the term of this Agreement: (a) there has been any material
adverse change in the condition (financial or otherwise), earnings, affairs,
business or prospects of the Company, or (b) the Company shall refuse or be
unable to comply with any provision hereof (except as the result of a breach of
this Agreement by the Underwriters), the Company will promptly reimburse the
Underwriters upon demand for all reasonable out-of-pocket expenses (including
the fees and disbursements of counsel for the Underwriters) that shall have been
incurred by the Underwriters in connection with the proposed purchase and sale
of Shares;
(m) it intends to use the net proceeds received by it from the sale of
the Shares being sold by it in the manner specified in the Prospectus and it
will file such reports with the Commission with respect to the application of
the proceeds therefrom as may be required in accordance with Rule 463 under the
Act and will furnish you copies of any such reports as soon as practicable after
the filing thereof;
(n) if, at the time of effectiveness of the Registration Statement, any
information shall have been omitted therefrom in reliance upon Rule 430A, then
immediately following the execution and delivery of this Agreement, it will
prepare, and file or transmit for filing with the Commission in accordance with
such Rule 430A and Rule 424(b), copies of an amended prospectus, or, if required
by such Rule 430A, a post-effective amendment to the Registration Statement
(including an amended prospectus), containing all information so omitted;
(o) it will cause the Shares to be approved for quotation, subject to
notice of issuance or sale, on Nasdaq; it will comply with all registration,
filing and reporting requirements of the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder
(collectively, the "Exchange Act"), and Nasdaq; and
(p) it will use its best efforts to do and perform all things required
to be done and performed under this Agreement by it prior to or after the
Closing Date or any Option Closing Date, as the case may be, and to satisfy all
conditions precedent to the delivery of the Shares.
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6. Representations and Warranties.
(a) the Company represents and warrants to each Underwriter as of the
date hereof, the Closing Date and each Option Closing Date that:
(i) the Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus relating to the
proposed offering of the Shares nor instituted or threatened any
proceedings for that purpose. The Registration Statement, on the date
it became or becomes effective, each Preliminary Prospectus, on the
date of the filing thereof with the Commission, and the Prospectus and
any amendment or supplement thereto, on the date of filing thereof with
the Commission (or if not filed, on the date provided by the Company to
the Underwriters in connection with the offering and sale of the
Shares) and at the Closing Date and each Option Closing Date conformed
or will conform with the requirements of the Act and the rules and
regulations promulgated thereunder ("Rules and Regulations"); the
Registration Statement, on the date it became or becomes effective, did
not or will not contain an untrue statement of material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading; each Preliminary
Prospectus, on the date of the filing thereof with the Commission, and
the Prospectus and any amendment or supplement thereto, on the date of
filing thereof with the Commission (or if not filed, on the date
provided by the Company to the Underwriters in connection with the
offering and sale of the Shares) and at the Closing Date and each
Option Closing Date did not and will not include an untrue statement of
material fact or omit 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; the foregoing
shall not apply to statements in or omissions from the Registration
Statement and the Prospectus made or omitted in reliance upon, and in
conformity with, information relating to the Underwriters furnished in
writing to the Company by or on behalf of the Underwriters with your
consent expressly for use therein; the Company hereby acknowledges for
all purposes under this Agreement that (A) the statements set forth
under the caption "Underwriting" in the Prospectus and (B) footnote 1
and the paragraph of text immediately below footnote 1 on the cover
page of the Prospectus constitute the only written information
furnished to the Company by or on behalf of the Underwriters for use in
the preparation of the Registration Statement or the Prospectus or any
amendment or supplement thereto;
(ii) the Company has been duly incorporated and is a validly
existing corporation in good standing under the laws of Arizona, with
full corporate power and authority to own or lease its properties and
assets and to conduct its business as described in the Registration
Statement, and is duly registered as a bank holding company under the
Bank Holding Company Act of 1956, as amended, (the "BHC Act"),
supervised by the Board of Governors of the Federal Reserve System (the
"FRS");
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(iii) except as described in the Prospectus, the Company does
not own, directly or indirectly, equity securities or any equity
interest in any business enterprises other than Bank of Tucson, Valley
First Community Bank, Camelback Community Bank, Southern Arizona
Community Bank, Mesa Bank, Sunrise Bank of Arizona, and East Valley
Community Bank, each an Arizona banking corporation (together, the
"Banks"), Sun Community Mortgage Company, an Arizona corporation, and
Nevada Community Bancorp Limited, a Nevada corporation and bank holding
company (together with the Banks, the "Subsidiaries"). Each Subsidiary
has been duly organized and is validly existing in good standing under
the laws of its jurisdiction of incorporation or organization, as the
case may be;
(iv) all the outstanding shares of capital stock of each
Subsidiary have been duly authorized and validly issued and are fully
paid and nonassessable. All of the outstanding shares of the
Subsidiaries owned of record and beneficially by the Company are,
except as described in the Prospectus, free and clear of all liens,
security interests, charges, claims, encumbrances or restrictions on
transfer or rights of others, except for restrictions on transfer set
forth in the Act or under applicable state securities laws. Except as
described in the Registration Statement and the Prospectus, there are
no options, warrants, agreements, contracts or other rights in
existence to purchase or acquire from any Subsidiary any shares of the
capital stock of such Subsidiary;
(v) the accounts of the Banks are insured by the Bank
Insurance Fund of the Federal Deposit Insurance Corporation (the
"FDIC") up to the maximum applicable amount in accordance with the
rules and regulations of the FDIC, and no proceedings for the
termination or revocation of such membership or insurance are pending,
or to the best knowledge of the Company, threatened;
(vi) the Company and each Subsidiary has full corporate power
and authority to own or lease their respective properties and assets
and to conduct their respective businesses as described in the
Registration Statement and the Prospectus and are duly qualified to do
business in each jurisdiction in which they own or lease real property
or in which the conduct of their respective businesses or the ownership
or leasing of their respective properties requires such qualification,
except where the failure to be so qualified, either individually or in
the aggregate, would not have a material adverse effect on the
condition (financial or otherwise), business, assets, prospects, net
worth or results of operations of the Company and its Subsidiaries
taken as a whole (a "Material Adverse Effect");
(vii) Each of the Banks is in good standing with the Arizona
State Banking Department; and the activities of the Company and the
Banks are permitted under applicable federal and state banking laws and
regulations. Sun Community Mortgage Company is validly licensed by the
Arizona State Banking Department and in all other jurisdictions in
which the conduct of its business requires license or qualification.
The Company has all
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necessary approvals, including the approvals of the Arizona State
Banking Department and the FRB, as applicable, to own the capital stock
of the Subsidiaries. Except as described in the Registration Statement
and the Prospectus, neither the Company nor any of the Subsidiaries is
a party or subject to any agreement or memorandum with, or directive or
order issued by, the FRB, the Arizona State Banking Department, the
FDIC or other regulatory authority having jurisdiction over it (the
"Banking Regulators"), which imposes any restrictions or requirements
not generally applicable to entities of the same type as the Company
and the Subsidiaries. Neither the Company nor any Subsidiary is subject
to any directive from any of the Banking Regulators to make any
material change in the method of conducting their respective
businesses, and no such directive is pending or threatened by such
Banking Regulators;
(viii) the capitalization of the Company is, and upon
consummation of the transactions contemplated hereby and by the
Prospectus will be, as set forth in the Registration Statement and the
Prospectus under the caption "Capitalization;" all of the outstanding
shares of capital stock of the Company have been duly authorized and
are validly issued, are fully paid and non-assessable and conform to
the description thereof in the Registration Statement and the
Prospectus and were not issued in violation of any preemptive rights or
other rights to subscribe for or purchase securities; all offers and
sales of its capital stock by the Company and each Subsidiary were
exempt from the registration requirements of the Act and any applicable
state securities or Blue Sky laws; and, except as set forth in the
Registration Statement and the Prospectus with respect to the Company's
Stock Option Program, no options, warrants or other rights to purchase
from the Company or its Subsidiaries, agreements or other obligations
of the Company or its Subsidiaries to issue or other rights to convert
any obligation into, or exchange any securities for, shares of capital
stock of or ownership interests in the Company are outstanding; the
description of the Company's Stock Option Program and the other options
or rights granted by the Company or its Subsidiaries as set forth in
the Registration Statement and the Prospectus accurately and fairly
presents the information required to be shown under the Act with
respect to such options and rights; the discussion in the section
"Shares Eligible for Future Sale," in the Prospectus, including the
number of shares shown as eligible for resale and those subject to
restrictions on resale, accurately and fairly presents the information
called for under the Act with respect thereto;
(ix) subsequent to the respective dates as of which
information is given in the Registration Statement and Prospectus, and
except as described therein, (A) the Company and each Subsidiary has
not incurred any material liabilities or obligations, direct or
contingent, or entered into any material transactions not in the
ordinary course of business, (B) the Company and each Subsidiary has
not purchased any of the Company's outstanding capital stock nor has
the Company declared, paid or otherwise made any dividend or
distribution of any kind on its capital stock or otherwise and (C)
there has not been any material adverse change in either the Company's
or any Subsidiary's condition (financial or
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otherwise), business, affairs, prospects or results of operations or
any material change in the Company's or any Subsidiary's capital stock,
short-term debt or long-term debt;
(x) the Shares to be sold by the Company pursuant to this
Agreement have been duly and validly authorized and, when issued,
delivered and paid for pursuant to this Agreement, will be validly
issued, fully paid and nonassessable, and will conform to the
description thereof contained in the Prospectus;
(xi) this Agreement has been duly authorized, executed and
delivered by the Company and is a legal, valid and binding agreement of
the Company enforceable in accordance with its terms;
(xii) Neither the Company nor any Subsidiary is in violation
of its respective Articles of Incorporation or by-laws; neither the
Company nor any Subsidiary is in violation of or in breach of or in
default in (nor has any event occurred that with notice or lapse of
time, or both, would be a breach of or a default in) the performance of
any obligation, agreement or condition contained in any agreement,
lease, contract, permit, license, franchise agreement, mortgage, loan
agreement, debenture, note, deed of trust, bond, indenture or other
evidence of indebtedness or any other instrument or obligation
(collectively, "Obligations and Instruments") to which the Company or
any Subsidiary is a party or by which the Company or any Subsidiary or
any of their respective properties or assets is bound or affected
(except for such contravention or default as would not have a Material
Adverse Effect); neither the Company nor any Subsidiary is in violation
of any statute, judgment, decree, order, Rule or regulation
(collectively, "Laws") applicable to the Company nor any Subsidiary or
any of their respective properties or assets that, alone, or together
with other violations of Laws would result in a Material Adverse
Effect; and, to the best knowledge of the Company, no other party under
any contract or other agreement to which the Company or any Subsidiary
is a party is in material default thereunder except for such defaults
as would not individually or in the aggregate result in a Material
Adverse Effect;
(xiii) the execution, delivery and performance of this
Agreement and delivery of the Shares by the Company and compliance by
the Company with all the provisions hereof and the consummation of the
transactions contemplated hereby will not, alone or upon notice or the
passage of time or both (A) to the best knowledge of the Company, after
due inquiry, require any consent, approval, authorization or other
order of any court, regulatory body, administrative agency or other
governmental body or third party (except such as may be required under
the Act and the securities or Blue Sky laws of the various states or by
the NASD), (B) result in the creation or imposition of any lien, charge
or encumbrance upon any of the properties or assets of the Company or
any Subsidiary pursuant to the terms and provisions of any Obligation
or Instrument, (C) conflict with or constitute a breach or default
under any Obligation or Instrument to which the Company or any
Subsidiary is a party or by which the Company or any Subsidiary or any
of their respective properties or assets is bound, (except for such
creation, conflict, breach or default as would not have a Material
Adverse
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Effect), or (D) assuming compliance with the Act and all applicable
state securities or Blue Sky laws, violate or conflict with any Laws
applicable to the Company or any Subsidiary or any of their respective
properties or assets (except for such violation or conflict as could
not have a Material Adverse Effect); no action, suit or proceeding
before any court or arbitrator or any governmental body, agency or
official (domestic or foreign) is pending against or, to the knowledge
of the Company, threatened against the Company or any Subsidiary, that,
if adversely determined, could reasonably be expected to in any manner
invalidate this Agreement;
(xiv) except as set forth in the Prospectus, there is no
action, suit, proceeding, inquiry or investigation, governmental or
otherwise before any court, arbitrator or governmental agency or body
(collectively, "Proceedings") pending to which the Company or any
Subsidiary is a party or to which any of their respective properties or
assets are subject, that, if determined adversely to the Company or any
Subsidiary, might result in a Material Adverse Effect, or that might
materially and adversely affect the properties or assets thereof, or
that seeks to restrain, enjoin, prevent the consummation of or
otherwise challenge the issuance or sale of any of the Shares to be
sold hereunder, and, to the best knowledge of the Company after due
inquiry, no such Proceedings are threatened or contemplated; and there
is no contract, document, agreement or transaction to which the Company
or any Subsidiary is a party, or that involved or involves the Company
or any Subsidiary or any of their respective properties or assets that
are required to be described in or filed as exhibits to the
Registration Statement or the Prospectus by the Act or the Rules and
Regulations that have not been so described or filed; no action has
been taken with respect to the Company or any Subsidiary, and, to the
best knowledge of the Company, no statute, rule or regulation or order
has been enacted, adopted or issued by any governmental agency that
suspends the effectiveness of the Registration Statement, prevents or
suspends the use of any Preliminary Prospectus or the Prospectus or
suspends the sale of the Shares in any jurisdiction referred to in
Section 5(g) hereof; no injunction, restraining order or order of any
nature by a federal or state court of competent jurisdiction has been
issued with respect to the Company or any Subsidiary that might prevent
the issuance of the Shares, suspend the effectiveness of the
Registration Statement, prevent or suspend the use of any Preliminary
Prospectus or the Prospectus or suspend the sale of the Shares in any
jurisdiction referred to in Section 5(g) hereof; and every request of
the Commission, or any securities authority or agency of any
jurisdiction, for additional information (to be included in the
Registration Statement or the Prospectus or otherwise) has been
complied with in all material respects;
(xv) neither the Company nor any Subsidiary has violated any
foreign, federal, state or local law or regulation relating to the
protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("Environmental
Laws"), nor any foreign, Federal, state or local law relating to
discrimination in the hiring, promotion or pay of employees nor any
applicable foreign, Federal or state wages and hours laws, nor any
provisions of the Employee Retirement Income Security Act of 1974, as
amended, or the rules and regulations promulgated
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thereunder or similar foreign laws, that, in each case or in the
aggregate, might result in a Material Adverse Effect; none of the
property leased by the Company or any Subsidiary is contaminated with
any waste or hazardous substances, nor may the Company nor any
Subsidiary be deemed an "owner or operator" of a "facility" or "vessel"
that owns, possesses, transports, generates, discharges or disposes of
a "hazardous substance" as those terms are defined in Section 9601 of
the Comprehensive Response Compensation and Liability Act of 1980,
U.S.C. Section 9601 et seq.;
(xvi) the Company and each Subsidiary has such permits,
licenses, franchises and authorizations of governmental or regulatory
authorities or third parties ("Permits") as are necessary to own, lease
and operate their respective properties and assets and to conduct their
respective businesses, except where the failure to have any such Permit
would not have a Material Adverse Effect; the Company and each
Subsidiary has fulfilled and performed all of their respective material
obligations with respect to such Permits and no event has occurred that
allows, or after notice or lapse of time, or both would allow,
revocation or termination thereof or result in any other material
impairment of the rights of the holder of any such Permit; and except
as described in the Prospectus, such Permits contain no restrictions
that are materially burdensome to the Company or any Subsidiary;
(xvii) Neither the Company nor any Subsidiary is, and none of
them intends to conduct its business in a manner in which it would
become, an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act
of 1940, as amended (the "Investment Company Act");
(xviii) except as otherwise set forth in the Prospectus, the
Company and each Subsidiary has good and marketable title, free and
clear of all liens, claims, encumbrances and restrictions (except liens
for taxes not yet due and payable) to all property and assets described
in the Registration Statement as being owned by it; all leases to which
the Company or any Subsidiary is a party are subsisting, valid and
binding and no default of the Company or any Subsidiary or, to the best
knowledge of the Company, any other person has occurred or is
continuing thereunder that might result in a Material Adverse Effect;
and the Company and each Subsidiary enjoys peaceful and undisturbed
possession under all such leases to which the Company or any Subsidiary
is a party as lessee with such exceptions as do not materially
interfere with the use made thereof by the Company or any Subsidiary;
(xix) the Company and each Subsidiary maintain reasonably
adequate insurance for the conduct of their respective businesses in
accordance with prudent business practices (and the insurances
maintained by retailers generally) with reputable third-party insurers;
provided, that the Company and the Subsidiaries do not maintain
coverage for losses associated with earthquakes;
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(xx) to the best knowledge of the Company, BDO Seidman, LLP,
the accounting firm that has certified or reviewed, or shall certify or
review, the financial statements and supporting schedules filed or to
be filed with the Commission as part of the Registration Statement and
the Prospectus, is an independent public accounting firm with respect
to the Company as required by the Act;
(xxi) the consolidated financial statements of the Company,
together with related notes and schedules of the Company included in
the Registration Statement and the Prospectus, are accurate and present
fairly the financial position, results of operations and cash flows of
the Company at the indicated dates and for the indicated periods; such
financial statements relating to audited periods have been prepared in
accordance with generally accepted accounting principles ("GAAP")
consistently applied throughout the periods involved, and all
adjustments necessary for a fair presentation of results for such
periods have been made; and any unaudited financial statements have
been prepared on a basis substantially consistent with that of the
audited consolidated financial statements included in the Registration
Statement and the Prospectus; the summary and selected financial and
operating data included in the Registration Statement and the
Prospectus presents fairly the information shown therein and have been
compiled on a basis consistent with the audited and any unaudited
financial statements, as the case may be, included therein; and any pro
forma information included in the Prospectus present fairly the
information shown therein, have been prepared in accordance with GAAP
and the Commission's rules and guidelines with respect to pro forma
financial statements and other pro forma information, have been
properly compiled on the pro forma basis described therein, and the
assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate under the circumstances;
(xxii) no holder of any security of the Company has any right
to require inclusion of any such security in the Registration
Statement. There are no preemptive rights with respect to the offering
being made by the Prospectus;
(xxiii) except as disclosed in the Registration Statement and
the Prospectus, no labor dispute with the employees of the Company or
any Subsidiary exists, or to the best knowledge of the Company after
due inquiry, is imminent, that could result in a Material Adverse
Effect; and neither the Company nor any Subsidiary has received notice
of any existing or imminent labor disturbance by the employees of any
of their respective principal suppliers, customers, manufacturers or
contractors that could result in any Material Adverse Effect;
(xxiv) the Company and the Subsidiaries have filed or caused
to be filed, or have properly filed extensions for, all foreign,
federal, state and local income, value added and franchise tax returns
and have paid all taxes and assessments shown thereon as due, except
for such taxes and assessments as are disclosed or adequately reserved
against and that are being contested in good faith by appropriate
proceedings, promptly instituted and
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diligently conducted; all material tax liabilities are adequately
provided for on the books of the Company and the Subsidiaries, and
there is no material tax deficiency that has been or might be asserted
against the Company or any Subsidiary that is not so provided for;
(xxv) the Company and the Subsidiaries own or possess, or can
acquire on reasonable terms, the patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other
unpatented and or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks and trade names
(collectively, "Patents and Proprietary Rights") currently employed by
them in connection with their respective businesses which they now
operate except where the failure to so own, possess or acquire such
Patents and Proprietary Rights would not have a Material Adverse
Effect; and the Company and the Subsidiaries have not received any
notice and are not otherwise aware of any infringement of or conflict
with asserted rights of others with respect to any Patent or
Proprietary Rights that, if the subject of any unfavorable decision,
ruling or finding, singly or in the aggregate, could result in a
Material Adverse Effect;
(xxvi) the Company and each Subsidiary are conducting and
intend to conduct their respective businesses so as to comply in all
material respects with applicable federal, state, local and foreign
government Laws, except where the failure to comply would not have a
Material Adverse Effect; and except as set forth in the Registration
Statement and the Prospectus, the Company and the Subsidiaries are not
charged with or, to the Company's knowledge after due inquiry, under
investigation with respect to, any material violation of any such Laws;
(xxvii) the Company has not taken and will not take, directly
or indirectly, any action designed to or which has constituted or that
might reasonably be expected to cause or result, under the Exchange Act
or otherwise, in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares;
(xxviii) neither the Company, any Subsidiary nor, to the best
knowledge of the Company, any employee or agent of the Company or any
Subsidiary has made any payment of funds of the Company or any
Subsidiary or received or retained any funds in violation of any law,
Rule or regulation (including, without limitation, the Foreign Corrupt
Practices Act) or of a character required to be disclosed in the
Prospectus; the Company and the Subsidiaries have not, at any time
during the past five years, (1) made any unlawful contributions to any
candidate for any political office, or failed fully to disclose any
contribution in violation of law, or (2) made any unlawful payment to
state, federal or foreign government officer or officers, or other
person charged with similar public or quasi-public duty;
(xxix) the Company and each Subsidiary maintains a system of
internal accounting controls sufficient to provide reasonable assurance
that (1) transactions are executed in accordance with management's
general or specific authorizations, (2) transactions are recorded as
necessary to permit preparation of financial statements in
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conformity with GAAP and to maintain asset accountability, (3) access
to assets is permitted only in accordance with management's general or
specific authorization, and (4) the loan portfolio is reviewed for
potential risk of collectibility at reasonable intervals and
appropriate action is taken with respect to providing for potential
loan losses;
(xxx) the information regarding Year 2000 compliance that is
required to be disclosed under the Act and the Rules and Regulations
has been disclosed in the Prospectus as required; except as disclosed
in the Prospectus, neither the Company nor any Subsidiary will incur
material costs in connection with Year 2000 preparedness efforts;
(xxxi) except as disclosed in the Prospectus, the Company
knows of no trends, events or uncertainties that will have a material
affect on the results of operations or financial condition of the
Company;
(xxxii) except as disclosed in the "Supervision and
Regulation" section of the Prospectus, there are no Laws or policies of
the Banking Regulators currently in effect, or, to the best knowledge
of the Company, proposed, and applicable to the Company or any
Subsidiary or any of their respective properties or assets that could
have a Material Adverse Effect on the Company's conduct of its business
or pursuit of its growth strategy as contemplated in the Prospectus;
(xxxiii) there is no material document of a character required
to be described in the Registration Statement or the Prospectus or to
be filed as an exhibit to the Registration Statement that is not
described or filed as required; and
(xxxiv) Valley First Community Bank has properly administered,
in all material respects, all accounts for which it acts as a
fiduciary, including but not limited to accounts for which it serves as
a trustee, agent, custodian, personal representative, guardian,
conservator or investment advisor, in accordance with the terms of the
governing documents and applicable state and federal law and regulation
and common law. Neither any Bank nor any of their respective directors,
officers or employees has committed any material breach of trust with
respect to any such fiduciary account, and the accountings for each
such fiduciary account are true and correct in all material respects
and accurately reflect the assets of such fiduciary account in all
material respects.
(b) Any certificate signed by any officer of the Company and delivered
to you or to counsel for the Underwriters shall be deemed a representation and
warranty made by the Company to each Underwriter as to the matters covered
thereby and shall be deemed incorporated herein in its entirety and shall be
effective as if such representation and warranty were made herein.
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7. Indemnification.
(a) The Company agrees to indemnify and hold harmless each of the
Underwriters and each person, if any, who controls each of the Underwriters
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act
(the "indemnified parties") from and against any and all losses, claims,
damages, liabilities and judgments caused by, arising out of, related to or
based upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), including
the information deemed to be part of the Registration Statement at the time of
effectiveness pursuant to Rule 430A, if applicable, or the Prospectus or any
Preliminary Prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that the Company shall not
be liable in any such case to the extent that such losses, claims, damages,
liabilities or judgments are caused by an untrue statement or omission made or
omitted in reliance upon, and in conformity with, information relating to the
Underwriters furnished in writing to the Company by or on behalf of the
Underwriters with your consent expressly for use therein.
(b) In case any action shall be brought against any of the indemnified
parties, based upon any Preliminary Prospectus, the Registration Statement or
the Prospectus or any amendment or supplement thereto and with respect to which
indemnity may be sought against the Company, such indemnified parties shall
promptly notify the Company in writing (but the failure so to notify shall not
relieve the Company of any liability that it may otherwise have to such
indemnified parties under this Section 7 (although the Company's liability to an
indemnified party may be reduced on a monetary basis to the extent, but only to
the extent, it has been prejudiced by such failure on the part of such
indemnified party)) and the Company shall promptly assume the defense thereof,
including the employment of counsel satisfactory to such indemnified party and
payment of all fees and expenses. The indemnified parties shall each have the
right to employ separate counsel in any such action and participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of such indemnified parties unless (i) the employment of such counsel
shall have been specifically authorized by the Company, (ii) the Company shall
have failed to assume promptly the defense or to employ counsel reasonably
satisfactory to such indemnified party, or (iii) the named parties to any such
action (including any impleaded parties) include both the indemnified parties
and the Company, and an indemnified party shall have been advised by counsel
that there may be one or more legal defenses available to one or more of the
indemnified parties that are different from or additional to those available to
the Company (in which case the Company shall not have the right to assume the
defense of such action on behalf of such indemnified party, it being understood,
however, that the Company shall not, in connection with any one such action or
separate but substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
fees and expenses of more than one separate firm of attorneys (in addition to
any local counsel) for the indemnified parties, which firm shall be designated
in writing by the Representative, and that all such fees and expenses shall be
reimbursed promptly as they are incurred). The Company shall not be liable for
any settlement of any such action effected without its written consent, which
consent shall not be unreasonably withheld, but
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if settled with the written consent of the Company, the Company agrees to
indemnify and hold harmless the indemnified parties from and against any and all
loss or liability by reason of such settlement. Notwithstanding the foregoing
sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the second sentence of this paragraph, the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 10 business days after delivery by registered or
certified mail to the proper address for notice to such indemnifying party of
the aforesaid request (whether or not such delivery is accepted) and (ii) such
indemnifying party shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such settlement. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional and complete release in writing of such indemnified party from any
and all liability on claims that are the subject matter of such proceeding,
which such settlement shall be in form and substance satisfactory to the
indemnified party. The indemnification provided in this Section 7 will be in
addition to any liability which the Company may otherwise have.
(c) The Underwriters agree, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign the Registration
Statement and any person controlling the Company within the meaning of Section
15 of the Act or Section 20 of the Exchange Act, to the same extent as the
foregoing indemnity from the Company to the Underwriters but only with reference
to information stated in or omitted from the Registration Statement, the
Prospectus or any Preliminary Prospectus in reliance upon, and in conformity
with, information relating to the Underwriters furnished in writing to the
Company by or on behalf of the Underwriters with your consent expressly for use
therein. In case any action shall be brought against the Company, any of the
Company's directors, any such officers or any person controlling the Company
based on the Registration Statement, the Prospectus or any Preliminary
Prospectus and in respect of which indemnity may be sought against the
Underwriters, the Underwriters shall have the rights and duties given to the
Company by Section 7(b) hereof (except that if the Company shall have assumed
the defense thereof, such Underwriter shall not be required to do so, but may
employ separate counsel therein and participate in the defense thereof but the
fees and expenses of such counsel shall be at the expense of such Underwriter),
and the Company, its directors, any such officers and any person controlling the
Company shall have the rights and duties given to the "indemnified parties" by
Section 7(b) hereof.
(d) If the indemnification provided for in this Section 7 is for any
reason unavailable to an indemnified party or insufficient to hold such
indemnified party harmless in respect of any losses, claims, damages,
liabilities or judgments referred to therein, then each indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages, liabilities and judgments (i) 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 Securities or (ii) if the
allocation
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provided in clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above 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 or alleged statements or omissions that resulted in such losses,
claims, damages, liabilities or judgments, 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 and sale of the Shares
(before deducting expenses) received by the Company on the one hand, and the
total underwriting discounts and commissions received by the Underwriters on the
other, bears to the total price to the public of the Shares, in each case as set
forth in the table on the cover page of the Prospectus. The relative fault of
the Company and the Underwriters shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or the alleged omission to state a material fact relates to
information supplied by the Company or the Underwriters 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 contribution pursuant to this Section 7(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 that does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, 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 Section 7, 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 paid or been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission more in the aggregate than the
Maximum Amount (net of all amounts reimbursed, for any reason, by the Company or
insurance policies paid for or held by the Company). 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' obligation in this Section 7(d)
to contribute are several in proportion to the respective amount of Shares
purchased hereunder by each Underwriter and not joint.
8. Conditions of the Obligations of the Underwriters. The obligations of
the several Underwriters to purchase and pay for the Firm Shares on the Closing
Date and the Option Shares on any Option Closing Date are subject to the
fulfillment of each of the following conditions on or prior to the Closing Date
and each Option Closing Date:
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(a) All the representations and warranties of the Company contained in
this Agreement and in any certificate delivered hereunder shall be true and
correct on the Closing Date and each Option Closing Date with the same force and
effect as if made on and as of the Closing Date or Option Closing Date, as
applicable. The Company shall not have failed at or prior to the Closing Date or
Option Closing Date, as applicable, to perform or comply in all respects with
any of the agreements herein contained and required to be performed or complied
with by the Company at or prior to the Closing Date.
(b) If the Registration Statement is not effective at the time of the
execution and delivery of this Agreement, the Registration Statement shall have
become effective (or, if a post-effective amendment is required to be filed
pursuant to Rule 430A under the Act, such post-effective amendment shall have
become effective) not later than 9:30 A.M., New York City time, on the date of
this Agreement or such later time as you may approve in writing or, if the
Registration Statement has been declared effective prior to the execution and
delivery hereof in reliance on Rule 430A, the Prospectus shall have been filed
as required hereby, if necessary; and at the Closing Date and each applicable
Option Closing Date, no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been commenced or shall be pending before or, to the best
knowledge of the Underwriters or the Company, threatened by the Commission;
every request for additional information on the part of the Commission shall
have been complied with to the Underwriters' satisfaction; no stop order
suspending the sale of the Shares in any jurisdiction referred to in Section
5(g) shall have been issued and no proceeding for that purpose shall have been
commenced or shall be pending or threatened.
(c) The Shares shall be eligible for sale under the Blue Sky laws of
such states as shall have been specified by the Representative.
(d) The legality and sufficiency of the authorization, issuance and
sale or transfer and sale of the Shares hereunder, the validity and form of the
certificates representing the Shares, the execution and delivery of this
Agreement and all corporate proceedings and other legal matters incident
thereto, and the form of the Registration Statement and the Prospectus (except
financial statements) shall have been approved by counsel for the Underwriters
exercising reasonable judgment, and no Underwriter shall have advised the
Company that the Registration Statement or the Prospectus, or any amendment or
supplement thereto, contains an untrue statement of material fact, or omits to
state a fact that in your opinion is material and is required to be stated
therein or is necessary to make the statements therein not misleading.
(e) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred any material change, or any material development
involving a prospective change, in or affecting particularly the business or
properties of the Company or any Subsidiary, whether or not arising in the
ordinary course of business, that, in the judgment of the Representative, makes
it impractical or inadvisable to proceed with the public offering or purchase of
the Shares as contemplated hereby.
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(f) You shall have received an agreement (the "Lock-Up Agreement") from
each of the officers and directors of the Company and from Capital Bancorp Ltd.,
whereby each agrees that for a period of 180 days from the date this Agreement
becomes effective, they will not, without the prior written consent of the
Representative (1) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, or otherwise transfer or dispose of, directly or
indirectly, any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock, or (2) enter into any swap or
other agreement that transfers, in whole or in part, any of the economic
consequences of ownership of the Common Stock, whether any such transaction
described in clause (1) or (2) above is to be settled by delivery of Common
Stock or such other securities, in cash or otherwise; provided, however, that
this clause shall not apply to transfers of Common Stock to partnerships,
limited liability companies, trusts or similar entities organized for the
exclusive benefit of family members of the officers and directors of the Company
for financial and estate planning purposes so long as any transferee that
receives Common Stock as a result of such transfer shall agree upon such
transfer to be bound by the terms of this paragraph and shall be capable of
being so bound.
(g) You shall have received an opinion (satisfactory to you and your
counsel) dated the Closing Date or the Option Closing Date, as the case may be,
of Snell & Wilmer L.L.P., counsel for the Company, to the effect that:
(i) the Company has been duly incorporated and is a validly
existing corporation in good standing under the laws of the State of
Arizona and is duly registered as a bank holding company under the BHC
Act, with all necessary corporate power and authority to own, lease and
operate its properties and assets and to conduct its business as
described in the Registration Statement and the Prospectus; the Company
is duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction in which its ownership or lease of
real property or the conduct of its business makes such qualification
necessary and in which the failure to so qualify could have a Material
Adverse Effect;
(ii) an opinion to the same general effect as clause (i) of
this subparagraph (g) in respect of each Subsidiary;
(iii) the Company has all necessary corporate power and
authority to enter into and perform this Agreement, and the performance
of the Company's obligations hereunder has been duly authorized by all
necessary corporate action; this Agreement has been duly executed and
delivered by and on behalf of the Company, and, assuming due
authorization, execution and delivery of this Agreement by the
Underwriters, constitutes a legal, valid and binding agreement of the
Company enforceable in accordance with its terms, except as
enforceability of the same may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors'
rights generally and by general equity principles; no approval,
consent, order, authorization, designation, declaration or filing by or
with any regulatory, administrative or other governmental body or, to
the best
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of such counsel's knowledge, after due inquiry, third party, is
necessary in connection with the execution and delivery of this
Agreement and the consummation of the transactions contemplated herein
or as contemplated by the Prospectus (other than as may be required by
the NASD or as required by state securities or Blue Sky laws, as to
which such counsel need express no opinion) except such as have been
obtained or made, with counsel specifying the same;
(iv) the authorized, issued and outstanding capital stock of
the Company is as set forth in the Prospectus under "Capitalization;"
and all of the shares of outstanding capital stock of the Company and
of each Subsidiary have been duly authorized and validly issued, are
fully paid and non-assessable and were not issued in violation of any
preemptive rights or, to the best of such counsel's knowledge, other
rights to subscribe for or purchase securities; and, except as set
forth in the Registration Statement and the Prospectus, to the best of
such counsel's knowledge, no options, warrants or other rights to
convert any obligation into, or exchange any securities for, shares of
capital stock or ownership interests in the Company or any Subsidiary
are outstanding;
(v) to the best of such counsel's knowledge, after due
inquiry, neither the filing of the Registration Statement or any
amendment thereto nor the offer and sale of the Shares to the
Underwriters as contemplated by this Agreement gives rise to any
rights, nor do any rights exist, for or relating to the registration
under the Act of any securities of the Company;
(vi) the Registration Statement has become effective under the
Act, the Prospectus has been filed as required by this Agreement, if
necessary, and to the best of such counsel's knowledge, after
telephonic inquiry of the Commission, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose are pending or have been initiated or
threatened by the Commission; and the Registration Statement (including
the information deemed to be part of the Registration Statement at the
time of effectiveness pursuant to Rule 430A, if applicable), the
Prospectus and each amendment or supplement thereto (except for the
financial statements and other statistical or financial data included
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;
(vii) the statements made in the Registration Statement under
the captions, "Capitalization," "Management-Stock Option Program,"
"Management-Employment Agreements," "Supervision and Regulation,"
"Description of Capital Stock" and "Shares Eligible for Future Sale,"
to the extent that they constitute summaries of legal documents, laws
or regulations referred to therein or matters of law or legal
conclusions, have been reviewed by such counsel and are accurate in all
material respects;
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(viii) the descriptions in the Registration Statement and
Prospectus of contracts, instruments and other documents filed as
exhibits to the Registration Statement fairly and accurately present
the material terms thereof; such counsel does not know of any
Proceedings or Laws applicable to the Company or any Subsidiary
required to be described in the Prospectus that are not described, or
of any contracts or documents of a character required to be described
in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that were not described and
filed as required;
(ix) the certificates for the Shares to be delivered hereunder
are in due and proper form, and when duly countersigned by the
Company's transfer agent and delivered to you or upon your order
against payment of the agreed consideration therefor in accordance with
the provisions of this Agreement, the Shares sold by the Company
hereunder and represented thereby will be duly authorized and validly
issued, fully paid and nonassessable;
(x) neither the filing of the Registration Statement or any
amendment nor the execution and performance of this Agreement will
contravene any of the provisions of, or result in a default under (nor,
to the best of such counsel's knowledge, has any event occurred which
with notice or lapse of time, or both, would constitute a breach or
default under), any Obligations and Instruments to which the Company or
any Subsidiary is a party or by which their respective properties are
bound (except for such contravention or default which would not have a
Material Adverse Effect); or violate any of the provisions of the
Articles of Incorporation or by-laws of the Company or any Subsidiary
or violate any Laws known to such counsel;
(xi) to the best of such counsel's knowledge, all offers and
sales of the Company's outstanding capital stock by or on behalf of the
Company and of each Subsidiary's outstanding capital stock by or on
behalf of such Subsidiary were at the time of issuance exempt from the
registration requirements of the Act and were duly registered or the
subject of an available exemption from the registration requirements of
the applicable state securities or Blue Sky laws;
(xii) neither the Company nor any Subsidiary is in violation
of their respective Articles of Incorporation; to the best of such
counsel's knowledge, neither the Company nor any Subsidiary is in
violation of any material provision of their respective by-laws that
would have a Material Adverse Effect;
(xiii) the execution and delivery of this Agreement, the
issuance and sale of the Shares by the Company as contemplated herein
and the fulfillment of the terms hereof by the Company will not violate
the Articles of Incorporation or by-laws of the Company or any
Subsidiary;
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(xiv) neither the Company nor any Subsidiary is an "investment
company" subject to registration or regulation under the Investment
Company Act or a company controlled by an "investment company" subject
to such registration or regulation;
(xv) the consummation of the transactions described in the
Prospectus will not result in the creation of any lien, charge or
encumbrance upon any of the properties or assets of the Company or any
Subsidiary pursuant to the terms and provisions of, or conflict with,
or violate or constitute a breach of or default under (or an event
which with notice or lapse or time, or both, would constitute a breach
of or a default under) or otherwise give any other party the right to
terminate, the Articles of Incorporation or by-laws of the Company or
any Subsidiary or the terms and provisions of any Obligations and
Instruments to which the Company or any Subsidiary is a party or by
which they, or any of their respective properties or assets may be,
bound or affected, or any Laws known to such counsel that are
applicable to the Company or any Subsidiary or any of their respective
properties or assets, which such conflict, violation, breach or default
could have a Material Adverse Effect;
(xvi) the Lock-Up Agreement with Capital Bancorp Ltd. has been
duly authorized, executed and delivered, and the performance of the
Lock-Up Agreement by Capital Bancorp Ltd. does not and will not result
in a breach or violation of any of the terms and provisions of, or
constitute a default under any Obligations and Instruments to which it
is a party or by which it is bound or to which any of its property is
subject, or any Laws known to such counsel and, to the best of such
counsel's knowledge, no consent, approval, authorization or order of
any court or governmental agency or body is required for the
consummation of the transactions contemplated by such Lock-Up
Agreement; and
(xvii) each Lock-Up Agreement is a legal, valid and binding
agreement of the signing shareholder enforceable in accordance with its
terms, except as enforceability of the same may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors' rights generally and by general equity
principles.
In addition, such counsel shall state that they have
participated in conferences with officers and other representatives of the
Company, representatives of the independent public accountants of the Company
and representatives of the Underwriters and their counsel, at which the contents
of the Registration Statement and the Prospectus and related matters were
discussed and, although such counsel is not passing upon, and does not assume
any responsibility for, the accuracy, completeness or fairness of the statements
contained in the Registration Statement and the Prospectus (except as set forth
above) and has not made any independent check or verification thereof, on the
basis of the foregoing (relying as to materiality upon the statements of
officers and other representatives of the Company), no facts have come to such
counsel's attention that lead such counsel to believe that either the
Registration Statement or any amendment (including any post-effective amendment)
thereto at the time such Registration Statement or amendment became effective,
and as of the Closing Date and any applicable Option Closing Date, contained or
contains an untrue statement of a material fact or omitted to state a material
fact required to be stated therein
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or necessary to make the statements therein not misleading, or that the
Prospectus or any amendment or supplement thereto as of their respective dates
and as of the Closing Date and any applicable Option Closing Date contained or
contains an untrue statement of a material fact or omitted or omits 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, except that such counsel need express no opinion with respect to the
financial statements, schedules and other financial data included in the
Registration Statement or the Prospectus.
(h) You shall have received an opinion of Vedder, Price, Kaufman &
Kammholz, counsel for the Underwriters, dated the Closing Date or the Option
Closing Date, as the case may be, in form and substance reasonably satisfactory
to you.
(i) You shall have received, on the date of execution of this Agreement
and on the Closing Date and each Option Closing Date, a "cold comfort" letter
from BDO Seidman, LLP, dated as of each such date in form and substance
satisfactory to you with respect to the financial statements and certain
financial information contained in the Registration Statement and the
Prospectus.
(j) You shall have received from the Company a certificate, signed by
Joseph I. Reid and Lee W. Hendrickson in their capacities as Chief Executive
Officer and Chief Financial Officer of the Company, respectively, addressed to
the Underwriters and dated the Closing Date or Option Closing Date, as
applicable to the effect that:
(i) such officer does not know of any Proceedings instituted,
threatened or contemplated against the Company of a character required
to be disclosed in the Prospectus that are not so disclosed; such
officer does not know of any material contract required to be filed as
an exhibit to the Registration Statement which is not so filed;
(ii) such officer has carefully examined the Registration
Statement and the Prospectus and all amendments or supplements thereto
and, in such officer's opinion, such Registration Statement or such
amendment as of its effective date and as of the Closing Date, and the
Prospectus or such supplement as of its date and as of the Closing
Date, did not contain an untrue statement of material fact or omit to
state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading and, in such
officer's opinion, since the effective date of the Registration
Statement, no event has occurred or information become known that
should have been set forth in an amendment to the Registration
Statement or a supplement to the Prospectus which has not been so set
forth in such amendment or supplement;
(iii) the representations and warranties of the Company set
forth in Section 6(a) of this Agreement are true and correct as of the
date of this Agreement and as of the Closing Date or the Option Closing
Date, as the case may be, and the Company has
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complied with all the agreements and satisfied all the conditions on
its part to be performed or satisfied at or prior to such Closing Date;
and
(iv) the Commission has not issued an order preventing or
suspending the use of the Prospectus or any preliminary prospectus
filed as a part of the Registration Statement or any amendment thereto;
no stop order suspending the effectiveness of the Registration
Statement has been issued; and, to the best knowledge of the respective
signers, no proceedings for that purpose have been instituted or are
pending or contemplated under the Act.
The delivery of the certificate provided for in this subparagraph shall
be and constitute a representation and warranty of the Company as to the facts
required in the immediately foregoing clauses (iii) and (iv) of this
subparagraph to be set forth in said certificate.
(k) You and Vedder, Price, Kaufman & Kammholz, counsel for the
Underwriters, shall have received on or before the Closing Date or the Option
Closing Date, as the case may be, such further documents, opinions, certificates
and schedules or instruments relating to the business, corporate, legal and
financial affairs of the Company as you and they shall have reasonably requested
from the Company.
9. Effective Date of Agreement, Termination and Defaults. This
Agreement shall become effective upon, and shall not be deemed delivered until,
the later of (i) execution of this Agreement and (ii) when notification of the
effectiveness of the Registration Statement has been released by the Commission.
This Agreement may be terminated at any time prior to the Closing Date
and any exercise of the option to purchase Additional Shares may be canceled at
any time prior to any Option Closing Date by the Underwriters by written notice
to the Company if any of the following has occurred: (i) since the respective
dates as of which information is given in the Registration Statement and the
Prospectus, any material adverse change or development involving a prospective
material adverse change in the condition, financial or otherwise, of the Company
or the earnings, affairs, management, or business of the Company, whether or not
arising in the ordinary course of business, that would, in the Representative's
sole judgment, make it impracticable to market the Shares on the terms and in
the manner contemplated in the Prospectus, (ii) any outbreak or escalation of
hostilities or other national or international calamity or crisis or change in
economic conditions or in the financial markets of the United States that, in
the Representatives' judgment, is material and adverse and would, in the
Representatives' judgment, make it impracticable to market the Shares on the
terms and in the manner contemplated in the Prospectus, (iii) the suspension or
material limitation of trading in securities on the NYSE, the American Stock
Exchange or the Nasdaq Stock Market or limitation on prices for securities on
either such exchange or the Nasdaq Stock Market, (iv) the enactment,
publication, decree or other promulgation of any federal or state statute,
regulation, Rule or order of any court or other governmental authority that in
the Representative's opinion materially and adversely affects, or will
materially and adversely affect, the business or operations of the
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Company, (v) the declaration of a banking moratorium by either federal, New York
or Arizona state authorities, (vi) the taking of any action by any Federal,
state or local government or agency in respect of its monetary or fiscal affairs
that in the Representative's opinion has a material adverse effect on the
financial markets in the United States or (vii) there shall be any change in
financial markets or in political, economic or financial conditions which, in
the opinion of the Representative, either renders it impracticable or
inadvisable to proceed with the offering and sale of the Shares on the terms set
forth in the Prospectus or materially adversely affects the market for the
Shares.
If on the Closing Date or on any Option Closing Date, as the case may
be, any of the Underwriters shall fail or refuse to purchase the Firm Shares or
Additional Shares, as the case may be, which it has agreed to purchase hereunder
on such date, and the aggregate number of Firm Shares or Additional Shares, as
the case may be, that such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase does not exceed, in the aggregate, 10% of the
total number of Shares that all Underwriters are obligated to purchase on such
date, each non-defaulting Underwriter shall be obligated, in the proportion
which the number of Firm Shares set forth opposite its name in Schedule I hereto
bears to the total number of Firm Shares or Additional Shares, as the case may
be, that all the non-defaulting Underwriters have agreed to purchase, or in such
other proportion as you may specify, to purchase the Firm Shares or Additional
Shares, as the case may be, that such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase on such date. If, on the Closing Date
or on the Option Closing Date, as the case may be, any of the Underwriters shall
fail or refuse to purchase the Firm Shares or Additional Shares, as the case may
be, in an amount that exceeds, in the aggregate, 10% of the total number of the
Shares, and arrangements satisfactory to you and the Company for the purchase of
such Shares are not made within 48 hours after such default, this Agreement
shall terminate without liability on the part of the non-defaulting Underwriters
and the Company, except as otherwise provided in this Section 9. In any such
case that does not result in termination of this Agreement, either you or the
Company may postpone the Closing Date or the Option Closing Date, as the case
may be, for not longer than seven (7) days, in order that the required changes,
if any, in the Registration Statement and the Prospectus or any other documents
or arrangements may be effected. Any action taken under this paragraph shall not
relieve a defaulting Underwriter from liability in respect of any default of any
such Underwriter under this Agreement.
The indemnity and contribution provisions and other agreements,
representations and warranties of the Company and the Company's officers and
directors set forth in or made pursuant to this Agreement shall remain operative
and in full force and effect, and will survive delivery of and payment for the
Shares, regardless of (i) any investigation, or statement as to the results
thereof, made by or on behalf of any of the Underwriters or by or on behalf of
the Company or the officers or directors of the Company or any controlling
person of the Company, (ii) acceptance of the Shares and payment therefor
hereunder or (iii) termination of this Agreement. Notwithstanding any
termination of this Agreement, the Company shall be liable for and shall pay all
expenses it has agreed to pay pursuant to Section 5(l).
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Except as otherwise provided, this Agreement has been and is made
solely for the benefit of, and shall be binding upon, the Company, the
Underwriters, any indemnified person referred to herein and their respective
successors and assigns, all as and to the extent provided in this Agreement, and
no other person shall acquire or have any right under or by virtue of this
Agreement. The terms "successors and assigns" shall not include a purchaser of
any of the Shares from any of the several Underwriters merely because of such
purchase.
10. Effectiveness of Registration Statement. You and the Company will
use your, its and their best efforts to cause the Registration Statement to
become effective, if it has not yet become effective, and to prevent the
issuance of any stop order suspending the effectiveness of the Registration
Statement and, if such stop order be issued, to obtain as soon as possible the
lifting thereof.
11. Miscellaneous. All communications hereunder will be in writing and,
if sent to the Underwriters will be mailed, delivered or telegraphed and
confirmed to you c/o EVEREN Securities, Inc., 77 West Wacker Drive, Chicago,
Illinois 60601-1994, Attention: Syndicate Department, with a copy to Vedder,
Price, Kaufman & Kammholz, 222 North LaSalle Street, Chicago, Illinois 60601,
Attention: Jennifer R. Evans, Esq.; and if sent to the Company will be mailed,
delivered or faxed and confirmed to the Company, Attention: Cristin Reid
English, Esq., at its corporate headquarters, with a copy to Snell & Wilmer
L.L.P., One Arizona Center, Phoenix, Arizona 85004, Attention: Terry Morris
Roman, Esq.
THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF ILLINOIS WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF
LAW THEREOF.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
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Please confirm that the foregoing correctly sets forth the agreement
among the Company and the several Underwriters, including you.
Very truly yours,
Sun Community Bancorp Limited, an Arizona corporation
By:
---------------------------------------------
Name:
---------------------------------------------
Title:
---------------------------------------------
The foregoing Underwriting Agreement is hereby confirmed and accepted as of the
date first above written.
EVEREN Securities, Inc.
Acting as Representative of the several Underwriters named in Schedule I.
By: EVEREN Securities, Inc.
By:
-----------------------------
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Schedule I
Number of Firm Number of Firm Total Number
Shares at Discounted Shares at Non Discounted Purchase of Firm Shares
Underwriter Purchase Price Price to be Purchased
- ----------- -------------- ----- ---------------
EVEREN Securities, Inc.............
-----------
TOTAL: 1,875,000
===========
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