<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 9, 1995.
REGISTRATION NO. 33-58539
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
AMENDMENT NO. 2
TO
FORM S-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
COMMUNITY BANK SYSTEM, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 16-1213679
(STATE OR OTHER JURISDICTIONOF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
5790 WIDEWATERS PARKWAY
DEWITT, NEW YORK 13214
(315) 445-2282
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
SANFORD A. BELDEN, PRESIDENT AND CEO
5790 WIDEWATERS PARKWAY
DEWITT, NEW YORK 13214
(315) 445-2282
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
It is requested that copies of notices and communications from the Securities
and Exchange Commission be sent to:
GEORGE J. GETMAN, ESQ. LAWRENCE A. LAROSE, ESQ.
BOND, SCHOENECK & KING, LLP CADWALADER, WICKERSHAM & TAFT
ONE LINCOLN CENTER 100 MAIDEN LANE
SYRACUSE, NEW YORK 13202 NEW YORK, NEW YORK 10038
(315) 422-0121 (212) 504-6000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: As soon as practicable after the effective date of this Registration
Statement.
If any of the securities being registered on this Form are being offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 check the following box. [_]
If the registrant elects to deliver its latest annual report to security
holders, or a complete and legible facsimile thereof, pursuant to Item 11(a)(1)
of this Form, check the following box. [_]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.
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<PAGE>
This Amendment No. 2 relates only to Item 17 of Part II of the Registration
Statement. Item 17 is amended and supplemented as follows:
ITEM 17. EXHIBITS
The following exhibits are filed as part of this Registration Statement:
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT
-------------- ----------------------
<C> <S>
1.1 Form of Underwriting Agreement among the Company, M.A. Schapiro
& Co., Inc., and First Albany Corporation relating to the Com-
mon Stock.
1.2 Form of Underwriting Agreement between the Company and M.A.
Schapiro & Co., Inc. relating to the Preferred Stock.
3.1 Certificate of Incorporation of the Company.+
3.2 Bylaws of the Company.+
4.1 Certificate of the Powers, Designations, Preferences and Rights
of the Cumulative Perpetual Preferred Stock, Series A.*
5 Opinion of Bond, Schoeneck & King, LLP as to the validity of
the shares of the Registrant's common stock being registered.*
7 Opinion of Bond, Schoeneck & King, LLP as to Liquidation Pref-
erences on Series A Preferred Stock (to be included in Exhibit
5).*
10.01 Purchase and Assumption Agreement dated December 6, 1994 among
the Bank, the Company and The Chase Manhattan Bank, N.A.+
10.02 First Amendment dated April 4, 1995 to Purchase and Assumption
Agreement among the Bank, the Company and The Chase Manhattan
Bank, N.A.+
10.03 Employment Agreement dated January 1, 1995 between the Company
and Mr. Belden.*
10.04 Form of Employment Agreements between the Company and Messrs.
Wears, Patton and Wallace.*
10.05 1994 Long-term Incentive Compensation Program, previously filed
with the Commission on March 18, 1994 as Exhibit A to the
Company's Definitive Proxy Statement for 1994 Annual Meeting
of Shareholders, and incorporated herein by reference.+
10.06 Stockholder Protection Rights Agreement dated February 21, 1995
between the Company and the Bank, previously filed with the
Commission on February 27, 1995 as Exhibit 1 to the Company's
Registration Statement on Form 8-A (No. 1-11431), and incorpo-
rated herein by reference.+
12 Statement regarding computation of ratios (as amended).+
23.01 Consent of Bond, Schoeneck & King, LLP (to be included in Ex-
hibit 5).*
23.02 Consent of Coopers & Lybrand L.L.P. (as amended).+
24 Power of Attorney.+
</TABLE>
- --------
* To be filed by amendment.
+ Previously filed.
II-1
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-2 and has duly caused this Amendment to the
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in Syracuse, New York on this 8th day of June, 1995.
COMMUNITY BANK SYSTEM, INC.
/s/ Sanford A. Belden
By: _________________________________
Sanford A. Belden, President and
CEO
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ Sanford A. Belden Director, President and CEO June 8, 1995
_____________________
SANFORD A. BELDEN
* Treasurer June 8, 1995
_____________________
DAVID G. WALLACE
* Chairman of the Board June 8, 1995
_____________________
EARL W. MACARTHUR
* Director June 8, 1995
_____________________
WILLIAM D. STALDER
* Director June 8, 1995
_____________________
NICHOLAS A. DICERBO
* Director June 8, 1995
_____________________
LEE T. HIRSCHEY
* Director June 8, 1995
_____________________
DAVID C. PATTERSON
* Director June 8, 1995
_____________________
RICHARD C. CUMMINGS
* Director June 8, 1995
_____________________
WILLIAM M. DEMPSEY
* Director June 8, 1995
_____________________
WILLIAM N. SLOAN
* Director June 8, 1995
_____________________
JOHN M. BURGESS
* Director June 8, 1995
_____________________
JAMES A. GABRIEL
Director
_____________________
HUGH G. ZIMMER
* Director June 8, 1995
_____________________
BENJAMIN FRANKLIN
*By: /s/ Sanford A. Belden
-----------------------
SANFORD A. BELDEN,
ATTORNEY-IN-FACT
</TABLE>
II-2
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT PAGE NO.
-------------- ---------------------- --------
<C> <S>
1.1 Form of Underwriting Agreement among the Company,
M.A. Schapiro & Co., Inc., and First Albany Corpo-
ration relating to the Common Stock.
1.2 Form of Underwriting Agreement between the Company
and M.A. Schapiro & Co., Inc. relating to the Pre-
ferred Stock.
3.1 Certificate of Incorporation of the Company.+
3.2 Bylaws of the Company.+
4.1 Certificate of the Powers, Designations, Preferences
and Rights of the Cumulative Perpetual Preferred
Stock, Series A.*
5 Opinion of Bond, Schoeneck & King, LLP as to the va-
lidity of the shares of the Registrant's common
stock being registered.*
7 Opinion of Bond, Schoeneck & King, LLP as to Liqui-
dation Preferences on Series A Preferred Stock (to
be included in Exhibit 5).*
10.01 Purchase and Assumption Agreement dated December 6,
1994 among the Bank, the Company and The Chase Man-
hattan Bank, N.A.+
10.02 First Amendment dated April 4, 1995 to Purchase and
Assumption Agreement among the Bank, the Company
and The Chase Manhattan Bank, N.A.+
10.03 Employment Agreement dated January 1, 1995 between
the Company and Mr. Belden.*
10.04 Form of Employment Agreements between the Company
and Messrs. Wears, Patton and Wallace.*
10.05 1994 Long-term Incentive Compensation Program,
previously filed with the Commission on March 18,
1994 as Exhibit A to the Company's Definitive Proxy
Statement for 1994 Annual Meeting of Shareholders,
and incorporated herein by reference.+
10.06 Stockholder Protection Rights Agreement dated Febru-
ary 21, 1995 between the Company and the Bank, pre-
viously filed with the Commission on February 27,
1995 as Exhibit 1 to the Company's Registration
Statement on Form 8-A (No. 1-11431), and incorpo-
rated herein by reference.+
12 Statement regarding computation of ratios (as amend-
ed).+
23.01 Consent of Bond, Schoeneck & King, LLP (to be in-
cluded in Exhibit 5).*
23.02 Consent of Coopers & Lybrand L.L.P. (as amended).+
24 Power of Attorney.+
</TABLE>
- --------
* To be filed by amendment.
+ Previously filed.
<PAGE>
EXHIBIT 1.1
DRAFT 6/8/95
COMMUNITY BANK SYSTEM, INC.
[750,000] SHARES
COMMON STOCK, PAR VALUE $1.25 PER SHARE
UNDERWRITING AGREEMENT
June [ ], 1995
M.A. Schapiro & Co., Inc.
First Albany Corporation
c/o M.A. Schapiro & Co., Inc.
One Chase Manhattan Plaza
New York, New York 10005
Ladies and Gentlemen:
COMMUNITY BANK SYSTEM, INC., a Delaware bank holding company (the
"Company"), located at 5790 Widewaters Parkway, DeWitt, New York, hereby
confirms its agreement with M.A. Schapiro & Co., Inc. and First Albany
Corporation (the "Underwriters"). The term "Company" shall be deemed to include
all subsidiaries and affiliates of the Company. The Company's common stock, par
value $1.25 per share, is herein referred to as the "Common Stock."
SECTION 1
SALE OF SECURITIES
The Company proposes to issue and sell to the Underwriters up to
[750,000] shares of Common Stock (the "Firm Shares"). In addition, for the sole
purpose of covering over-allotments in connection with the sale of the Firm
Shares, the Company proposes to issue and sell to the Underwriters, at the
option of the Underwriters, up to an aggregate of an additional 112,500 shares
of Common Stock (the "Additional Shares"). It is understood and agreed that the
Company has reserved up to [40,000] Firm Shares (collectively, the "Reserved
Shares") for sale by the Company to certain directors, officers and employees of
Community Bank, National Association (the "Bank") directly or indirectly through
certain employee benefit plans sponsored by the Company. The Company shall
deliver a written notice to the Underwriters no later than 9:00 a.m., New York
time, on the date of this Agreement setting forth the number of Reserved Shares
subscribed for by officers, directors and employees of the Bank. Such Reserved
Shares shall not be subject to this Agreement. The Firm Shares and any
Additional Shares purchased by the Underwriters are herein referred to as the
"Shares". The Shares are more fully described in the Registration Statement
referred to below.
<PAGE>
SECTION 2
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
In order to induce the Underwriters to enter into this Agreement, the
Company hereby represents and warrants to, and agrees with, the Underwriters
that:
2.1 Registration Statement and Prospectus.
A Registration Statement on Form S-2 (File No. 33-58539) in respect of
the Shares, including the related Prospectus, copies of which have heretofore
been delivered by the Company to the Underwriters, has been prepared by the
Company in conformity with the requirements of the Securities Act of 1933, as
amended (the "Act"), and the rules and regulations ("Rules and Regulations") of
the Securities and Exchange Commission (the "Commission") thereunder, and such
Registration Statement has been filed with the Commission under the Act; and the
Company may file one or more amendments to such Registration Statement,
including the final Prospectus, copies of which will be promptly delivered to
the Underwriters. As used in this Agreement, the term "Registration Statement"
refers to and means such Registration Statement on Form S-2 in the form
heretofore delivered to the Underwriters and all amendments thereto, including
the Prospectus, all exhibits, schedules and financial statements included
therein, and all documents incorporated by reference therein, as it became
effective and including the information contained in the form of Prospectus
filed with the Commission pursuant to Rule 424(b) under the Act and deemed by
virtue of Rule 430A under the Act to be part of the Registration Statement at
the time it was declared effective and, in the event of any amendment thereto
after the effective date, such term shall also mean (from and after the
effective date of such amendment), such Registration Statement as so amended.
The term "Prospectus" refers to and means the final Prospectus first filed
pursuant to Rule 424(b) under the Act and, in the event of any supplement or
amendment after the effective date, such term shall also mean (from and after
the effective date of such supplement or amendment) such Prospectus as so
supplemented or amended; and the term "Preliminary Prospectus" refers to and
means any prospectus filed with the Commission pursuant to Rule 424(a) under the
Act and included in such Registration Statement before it becomes effective.
The terms "effective date" and "effective" refer to the date and time the
Commission declares the Registration Statement effective pursuant to Section 8
of the Act.
2.2 Effectiveness and Accuracy of Registration Statement and
Prospectus.
The Registration Statement has been declared effective by the
Commission. No other document with respect to such Registration Statement or
document incorporated by reference therein has been filed or transmitted for
filing with the Commission other than (i) the Annual Report on Form 10-K and the
Annual Report to Stockholders, each for the year ended December 31, 1994, (ii)
the Quarterly Report on Form 10-Q for the quarter ended March 31, 1995, (iii)
the Quarterly Report on Form 10-Q for the quarter ended March 31, 1995, as
amended on Form 10-Q/A and (iv) a Report on Form 8-K filed [ ] [ ], 1995.
The Commission has not issued any order preventing or suspending the
effectiveness of the Registration Statement or the use of any Preliminary
Prospectus or
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<PAGE>
Prospectus with respect to the Shares and no proceeding for that purpose has
been initiated or threatened by the Commission. Each Preliminary Prospectus,
including the documents incorporated by reference therein, has conformed in all
material respects with the requirements of the Act and the applicable Rules and
Regulations and did not include at the time of filing any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein not misleading. When the Registration Statement became effective and on
the Closing Date and the Additional Closing Date (each as defined below), the
Registration Statement and Prospectus, including the documents incorporated by
reference therein, and any further amendments or supplements thereto, conformed
and will conform to the requirements of the Act and the Rules and Regulations,
contained and will contain all statements which are required to be stated
therein in accordance with the Act and the Rules and Regulations for the
purposes of the proposed public offering of the Shares, and neither the
Registration Statement nor the Prospectus, including the documents incorporated
by reference therein, included or will include any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading; provided, however,
-------- -------
the Company does not make any representations or warranties as to information
contained in or omitted from the Registration Statement or the Prospectus in
reliance upon and in conformity with written information relating to the
Underwriters furnished by the Underwriters to the Company, specifically for use
in the preparation of the Registration Statement as set forth in Section 12.4
hereof. The documents incorporated by reference in the Registration Statement,
each Preliminary Prospectus and the Prospectus, when they became effective, were
filed with the Commission or amended, as the case may be, conformed in all
respects with the requirements of the Act or the Securities Exchange Act of
1934, as amended (the "Exchange Act"), as applicable, and the rules and
regulations of the Commission thereunder, and none of such documents contained
an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading.
2.3 Financial Statements.
The Company's financial statements and related notes thereto as set
forth in the Registration Statement and Prospectus present fairly the financial
position of the Company and the results of its operations and the changes in its
stockholders' equity at the respective dates and for the respective periods to
which they apply; such financial statements have been prepared in accordance
with generally accepted accounting principles consistently applied throughout
the periods concerned except as otherwise stated therein and the other financial
and statistical information and data set forth in the Registration Statement and
the Prospectus is accurately presented and prepared on a basis consistent with
such financial statements and the books and records of the Company.
-3-
<PAGE>
2.4 Forward-Looking and Other Information.
All statements in the Registration Statement and the Prospectus that
(i) contain or are derived from a projection of revenues, income (loss),
earnings (loss) per share, capital expenditures, dividends, capital structure or
other financial items, (ii) relate to management's plans and objectives for
future operations or (iii) contain generally projections, forecasts or other
forward-looking information, including, without limitation, the statements,
dollar amounts, percentages and other financial information contained in the
Prospectus under the headings "Prospectus Summary -- Pending Acquisition,"
"Prospectus Summary -- Potential Disposition," "Risk Factors -- Negative Effect
of Acquisition on Regulatory Capital," "Risk Factors -- Investment of Acquired
Funds and Impact on Net Interest Margin," "Risk Factors -- Possible Inability to
Dispose of Branches and Related Deposits," "The Acquisition -- Terms and
Conditions of the Acquisition," "The Acquisition -- Reasons for the
Acquisition," "The Acquisition -- Potential Disposition," "The Acquisition --
Unaudited Pro Forma Financial Information," "The Acquisition -- Impact of the
Acquisition on Operating Performance," "The Acquisition -- Impact of the
Acquisition on Operating Performance Assuming Intended Potential Disposition"
and "Certain Regulatory Considerations -- Federal Deposit Insurance Corporation
Improvement Act of 1991" were made by the Company with a reasonable basis and
disclosed in good faith. All such statements represent the Company's best
available estimate and judgment as to the future financial performance of the
Company based on the assumptions disclosed in the Registration Statement and the
Prospectus, which assumptions reflect the Company's best available estimates of
the events, contingencies and circumstances described therein. The Company is
not aware of any presently existing facts or circumstances that could adversely
affect the reasonableness of such assumptions. The market share data under the
heading "Business -- Competition" and the information in the table under the
heading "Security Ownership of Certain Beneficial Owners and Management" are
true and accurate in all material respects.
2.5 Independent Public Accountant.
Coopers & Lybrand L.L.P., which has audited and rendered an opinion on
certain of the financial statements filed or to be filed with the Commission as
part of the Registration Statement and Prospectus, are independent certified
public accountants within the meaning of the Act and the Rules and Regulations.
2.6 No Material Adverse Change.
Subsequent to the date of the latest audited financial statements
included in the Registration Statement and Prospectus and prior to the Closing
Date, (i) there shall not be any material adverse change, or, to the Company's
knowledge, any development involving a prospective material adverse change, in
or affecting the general affairs, management, financial position, stockholders'
equity or results of operations of the Company or in the business or proposed
business of the Company; (ii) there shall not have been any material transaction
entered into by the Company other than transactions in the ordinary course of
business; (iii) the Company shall not have incurred any material obligations,
contingent or otherwise, which
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<PAGE>
are not disclosed in the Prospectus; (iv) there shall not have been nor will
there be any change in the capital stock or long-term debt (except current
payments) of the Company other than issuance under the Company's Dividend
Reinvestment Plan and exercises under outstanding stock options; and (v) the
Company shall not have sustained any material loss or interference with its
business from any labor dispute or court or governmental action, order or
decree.
2.7 No Defaults.
Except as set forth in the Prospectus, the Company is not (i) in
violation of its certificate of incorporation or bylaws, (ii) in violation of
any law, ordinance, administrative or governmental rule or regulation applicable
to the Company or of any order of any court or governmental agency or body
having jurisdiction over the Company, which might result in any material adverse
change in the condition (financial or otherwise), the business or prospects of
the Company, or (iii) in default in the performance of any obligation, agreement
or condition contained in any bond, debenture, note or other evidence of
indebtedness or in any agreement, indenture, mortgage, deed of trust, lease or
other agreement or instrument to which the Company is a party or by which the
Company or any of its properties may be bound. The execution and delivery of
this Agreement, the issue and sale of the Shares and compliance with all the
terms of this Agreement, and the consummation of the transactions contemplated
herein, will not conflict with or result in a breach or violation of any of the
terms, conditions or provisions of, or constitute a default under, the
certificate of incorporation or bylaws of the Company, any bond, debenture, note
or other evidence of indebtedness or any agreement, indenture, mortgage, deed of
trust, lease or other agreement or instrument to which the Company is a party or
by which the Company or any of its properties or assets is bound, or any
existing law, statute, order, rule, regulation, writ, injunction, or decree of
any government, governmental instrumentality, agency or body, arbitration
tribunal or court, domestic or foreign, having jurisdiction over the Company or
any of its properties or result in the imposition of any lien, charge or
encumbrance upon any property or asset of the Company. The consent, approval,
authorization, order, registration or qualification of any court or governmental
instrumentality, agency or body is not required for the consummation of the
transactions herein contemplated except such as have been obtained for the
registration of the Shares under the Act or the Exchange Act, or under the blue
sky or securities laws of any state or jurisdiction. Except as set forth in the
Prospectus, the Company owns, possesses or has obtained all governmental and
other (including those obtainable from third parties) licenses, permits,
certifications, registrations, approvals or consents and other authorizations
(collectively, "Permits") necessary to own or lease, as the case may be, and to
operate its properties, whether tangible or intangible, where the failure to own
or possess such Permits might result in any material adverse change in the
condition (financial or otherwise), the business or prospects of the Company,
and to conduct any of the business or operations of the Company as presently
conducted and all such Permits are outstanding and in good standing, and there
are no proceedings pending or threatened, or any basis therefor, seeking to
cancel, terminate or limit such Permits and, except as described in the
Prospectus, such Permits contain no restrictions that are materially burdensome
to the Company.
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<PAGE>
2.8 Incorporation and Standing.
(a) The Company is and at the Closing Date (as defined below) will be
duly incorporated and validly existing in good standing under the laws of the
State of Delaware, with authorized and outstanding capital stock as set forth in
the Registration Statement and the Prospectus, and with full power and authority
(corporate and other) to own or lease its properties and conduct its business,
present and proposed, as described in the Registration Statement and Prospectus
and is duly qualified and in good standing as a foreign corporation in each
jurisdiction in which it owns or leases real property or transacts business
requiring such qualification, if any.
(b) The Company has no subsidiaries other than Community Bank,
National Association (the "Bank") and a currently inactive nonbanking
subsidiary. All of the authorized and outstanding capital stock of the Bank is
owned by the Company. The Bank is and at the Closing Date (as defined below)
will be duly incorporated and validly existing in good standing under the laws
of the United States, with full power and authority (corporate and other) to own
or lease its properties and conduct its business, present and proposed, as
described in the Registration Statement and Prospectus and is duly qualified and
in good standing as a foreign corporation in each jurisdiction in which it owns
or leases real property or transacts business requiring such qualification, if
any.
2.9 Power and Authority.
The Company has all requisite power and authority to execute, deliver
and perform its obligations under this Agreement; the execution, delivery and
performance by the Company of its obligations under this Agreement had been duly
and validly authorized by all requisite corporate acts of the Company, and this
Agreement constitutes the legal, valid and binding agreement of the Company
enforceable against the Company in accordance with its terms. The Company has
full power and authority to authorize, issue and sell the Shares as contemplated
by this Agreement, free of any preemptive rights.
2.10 Legality of Outstanding Securities.
The outstanding securities of the Company have been duly and validly
authorized and issued and are fully paid and non-assessable, are free of any
preemptive or similar rights, and conform to all statements with regard thereto
contained in the Registration Statement and Prospectus. No sales of securities
have been made by the Company in violation of the provisions of the Act, the
Exchange Act or state securities laws. The authorized capital stock of the
Company conforms to the description thereof in the Registration Statement and
the Prospectus; the authorized and outstanding capital stock of the Company is
as set forth under the caption "Capitalization" in the Prospectus; no holder of
any securities of the Company has any right to require registration of any
securities of the Company without the consent of the Underwriters because of the
filing of the Registration Statement or the consummation of the transactions
contemplated thereby and there are no outstanding options, warrants or other
rights calling for the issuance of, and there are no commitments or arrangements
to issue, any
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<PAGE>
shares of capital stock of the Company or any security convertible into or
exchangeable or exercisable for capital stock of the Company, except for share
purchase rights for each outstanding share of Common Stock pursuant to the
Stockholder Protection Rights Plan of the Company as described in "Description
Of Capital Stock -- Rights Plan" in the Prospectus. The offers and sales of all
outstanding securities were at all relevant times either registered under the
Act and the applicable state securities or blue sky laws or exempt from such
registration requirements. All of the outstanding shares of the Bank have been
duly authorized and validly issued, are fully paid and non-assessable and are
owned beneficially by the Company free from any security interest, lien, adverse
claim or other encumbrance.
2.11 Legality of Shares.
The Shares have been duly and validly authorized and, when issued and
delivered against payment therefor as provided in this Agreement, will be duly
and validly issued, fully paid and non-assessable. The Shares, upon issuance,
will not be subject to the preemptive rights of any shareholders of the Company.
The Shares will conform to all statements and descriptions with regard thereto
in the Registration Statement and Prospectus.
2.12 Litigation.
Except as set forth in the Registration Statement and Prospectus,
there is and at the Closing Date there will be no action, suit or proceeding
before any court or governmental agency, authority or body pending or threatened
which might result in judgments against the Company or the Bank not adequately
covered by insurance or which collectively might result in any material adverse
change in the condition (financial or otherwise), the business or the prospects
of the Company or the Bank, or could materially adversely affect the properties
or assets of the Company or the Bank.
2.13 Finder.
There are no claims for services in the nature of a finder's fee with
respect to the sale of the Shares hereunder resulting directly or indirectly
from the acts of the Company or its agents or affiliates for which the
Underwriters may be responsible.
2.14 Exhibits.
There are no contracts or other documents which are required by the
Act or by the Rules and Regulations to be filed as exhibits to the Registration
Statement which have not been so filed and each written contract to which the
Company is a party and to which reference is made in the Prospectus has been
duly and validly executed, is in full force and effect in accordance with its
respective terms, and, except as set forth in the Prospectus, none of such
contracts has been assigned by the Company; and, except as set forth in the
Prospectus, the Company knows of no present fact, condition or act which could
prevent compliance with the terms of such contracts, as amended to date. Except
for amendments or modifications of such contracts in the ordinary course of
business, the Company has no
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<PAGE>
intention of exercising any right which it may have to cancel any of its
obligations under any of such contracts, and has no knowledge that any other
party to any of such contracts has any intention not to render full performance
under such contracts. None of the provisions of such contracts or documents
violates any existing applicable law, rule, regulation, judgment, order or
decree of any governmental agency or court having jurisdiction over the Company
or any of its assets or businesses.
2.15 Tax Returns.
The Company has filed all foreign, federal, state and local tax
returns which are required to be filed by it and has paid all taxes shown on
such returns and on all assessments received by it to the extent such taxes have
become due. All taxes with respect to which the Company is obligated have been
paid or adequate accruals have been made to cover any such unpaid taxes.
2.16 Property.
Except as otherwise set forth in or contemplated by the Registration
Statement and Prospectus, the Company has good and marketable title, free and
clear of all liens, encumbrances and defects, except liens for current taxes not
due and payable, to all property and assets which are described in the
Registration Statement and the Prospectus as being owned by the Company and all
the properties described in the Prospectus as being held under lease by the
Company are held thereby under valid, existing and enforceable leases, except to
the extent that any such liens, encumbrances or defects would not have a
material adverse effect on the condition (financial or otherwise), business or
prospects of the Company, and do not interfere with the use made and proposed to
be made of such property by the Company.
2.17 Not An Investment Company.
The Company is not an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
2.18 Accounting Controls.
The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
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2.19 Certain Payments.
To the best knowledge of the Company, after reasonable investigation,
neither the Company nor any employee or agent of the Company has made any
payment of funds of the Company or received or retained any funds in violation
of any law, rule or regulation which payment, receipt or retention of funds is
of a character required to be disclosed in the Prospectus.
2.20 Form S-2.
The conditions for use of Form S-2, set forth in the General
Instructions thereto, have been satisfied by the Company.
2.21 Purchase and Assumption Agreement.
The Company and the Bank have all requisite power and authority to
execute, deliver and perform their respective obligations under the Purchase and
Assumption Agreement dated December 6, 1994 among the Company, the Bank and The
Chase Manhattan Bank, N.A., as amended (the "P&A Agreement"); the execution,
delivery and performance by the Company and the Bank of their respective
obligations under the P&A Agreement have been duly and validly authorized by all
requisite corporate acts of the Company and the Bank, and the P&A Agreement
constitutes the legal, valid and binding agreement of the Company and the Bank,
enforceable against them in accordance with its terms. The execution and
delivery of the P&A Agreement and the consummation of the transactions
contemplated thereby, will not conflict with or result in a breach or violation
of any of the terms, conditions or provisions of, or constitute a default under,
the certificate of incorporation or bylaws of the Company or the Bank, any bond,
debenture, note or other evidence of indebtedness or any agreement, indenture,
mortgage, deed of trust, lease or other agreement or instrument to which the
Company or the Bank is a party or by which the Company or the Bank or any of
their respective properties or assets is bound, or any existing law, statute,
order, rule, regulation, writ, injunction, or decree of any government,
governmental instrumentality, agency or body, arbitration tribunal or court,
domestic or foreign, having jurisdiction over the Company or the Bank or any of
their respective properties or result in the imposition of any lien, charge or
encumbrance upon any property or asset of the Company or the Bank. All
consents, approvals, authorizations, orders, registrations, filings and
qualifications of or with any court or governmental body or agency required for
the execution and delivery of the P&A Agreement by the Company and the Bank, the
performance of their respective obligations under, and the consummation of the
transactions contemplated by the P&A Agreement have been obtained or made and
are in full force and effect.
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SECTION 3
PURCHASE OF FIRM SHARES
3.1 Purchase, Sale and Delivery of the Firm Shares.
On the basis of the representations, warranties, covenants and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Company agrees to sell to each Underwriter and each Underwriter
agrees, severally and not jointly, to purchase from the Company, the respective
number of Firm Shares set forth in Schedule I hereto opposite the name of such
Underwriter at a purchase price of $[ ] per Share.
Delivery of certificates and payment of the purchase price for the
Firm Shares shall be made at the offices of Cadwalader, Wickersham & Taft, 100
Maiden Lane, New York, New York 10038, or such other location as shall be
agreed upon by the Underwriters and the Company. Such delivery and payment
shall be made at 10:00 A.M., New York time, on the fourth business day following
(i) the date the Registration Statement becomes effective or (ii) if the
Prospectus omits certain information by virtue of Rule 430A on the date the
Registration Statement becomes effective, the date of the filing of the form of
Prospectus under Rule 424(b) containing such omitted information, unless in
either case such time and date are postponed in accordance with the provisions
hereof, or at such other time as shall be agreed upon by the Underwriters and
the Company. The time and date of such delivery and payment are herein called
the "Closing Date." Delivery of the certificates for the Firm Shares shall be
made to the Underwriters for their account against payment of the purchase price
as herein above described, by certified or official bank check or checks payable
to the order of the Company in New York Clearing House funds.
Certificates for the Firm Shares shall be registered in such name or
names and in such denominations as the Underwriters may request in writing at
least two full business days prior to the Closing Date. The Company will permit
the Underwriters to examine and package such certificates for delivery at the
office of M.A. Schapiro & Co., Inc. at least one full business day prior to the
Closing Date.
3.2 Underwriters' Option to Purchase Additional Shares.
The Company hereby grants to the Underwriters the option to purchase,
severally and not jointly, up to an aggregate of 112,500 Additional Shares at
the same purchase price per Share to be paid by the Underwriters to the Company
for the Firm Shares as set forth in Section 3.1, for the sole purpose of
covering over-allotments in the sale of Firm Shares by the Underwriters (the
"Over-allotment Option"). If any Additional Shares are to be purchased, each
Underwriter agrees, severally and not jointly, to purchase the number of
Additional Shares (subject to such adjustments to eliminate fractional shares as
the Underwriters may determine) that bears the same proportion to the total
number of Firm Shares set forth in Schedule I hereto opposite the name of such
Underwriter bears to the total number of Firm Shares. The Over-allotment Option
may be exercised at any time, and from
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time to time, in whole or in part, on or before the thirtieth business day
following the Closing Date, by written notice by the Underwriters to the
Company. Such notice shall set forth the aggregate number of Additional Shares
as to which the Over-allotment Option is being exercised, the number of
Additional Shares to be issued, sold and delivered by the Company, and the date
and time, as reasonably determined by the Underwriters, when the Additional
Shares are to be delivered (such date and time being herein sometimes referred
to as the "Additional Closing Date"); provided, however, that the Additional
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Closing Date shall not be earlier than the Closing Date or earlier than the
second full business day after the date on which the Over-allotment Option shall
have been exercised nor later than the eighth full business day after the date
on which the Over-allotment Option shall have been exercised (unless such time
and date are postponed in accordance with the provisions hereof). Certificates
for the Additional Shares shall be registered in such name or names and in such
denominations as the Underwriters may request in writing at least two full
business days prior to the Additional Closing Date. The Company will permit the
Underwriters to examine and package such certificates for delivery at the office
of M.A. Schapiro & Co., Inc. at least one full business day prior to the
Additional Closing Date.
Payment and delivery for the Additional Shares shall be made in the
same manner as payment and delivery for the Firm Shares or such other manner as
may be mutually acceptable. The obligation of the Underwriters to purchase and
pay for any of the Additional Shares is subject to the accuracy and completeness
(as of the date hereof and as of the Additional Closing Date) of and compliance
with the representations and warranties of the Company herein, to the accuracy
and completeness of the statements of the Company or its officers made in any
certificate or other document to be delivered by the Company pursuant to this
Agreement, to the performance by the Company of its obligations hereunder, to
the satisfaction by the Company of the conditions set forth in Section 8 hereof
as of the date hereof and as of the Additional Closing Date, and to the delivery
to the Underwriters of opinions, certificates, letters and other instruments
dated the Additional Closing Date substantially similar in scope to those
specified in Section 8 hereof, but with such changes as are necessary in order
for such documents to relate to the Additional Shares and the Additional Closing
Date. The obligation of the Company to sell to the Underwriters the Additional
Shares shall be subject to the Underwriters's compliance with their obligations
hereunder, including those set forth in Section 9, as of the Closing Date and
the Additional Closing Date.
3.3 Offering.
It is understood that the Underwriters propose to offer the Shares for
sale to the public and initially to offer the Shares upon the terms set forth in
the Prospectus.
3.4 Post-Closing Information.
The Underwriters covenant that, reasonably promptly after the Closing
Date, they will supply the Company with such additional information as the
Company may reasonably request to be supplied to the securities commissions of
such states in which the Shares have been qualified for sale.
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SECTION 4
REGISTRATION STATEMENT, PROSPECTUS AND
OFFERING OF THE SHARES OF THE COMPANY
4.1 Delivery of Registration Statements.
The Company shall deliver to the Underwriters without charge two
signed copies of the Registration Statement, including all financial statements
and exhibits and schedules filed therewith and any amendments or supplements
thereto, and shall deliver without charge to the Underwriters as many conformed
copies as the Underwriters shall reasonably request of the Registration
Statement and any amendment or supplement thereto, including such financial
statements and exhibits and schedules. The signed copies of the Registration
Statement so furnished to the Underwriters will include signed copies of any and
all consents and certificates of the independent public accountants certifying
to the financial statements included in the Registration Statement and
Prospectus and signed copies of any and all consents, certificates and opinions
of any other persons whose profession give authority to statements made by them
and who are named in the Registration Statement or Prospectus as having
prepared, certified, reviewed or opined on any part thereof.
4.2 Delivery of Preliminary Prospectus.
The Company will deliver to the Underwriters, without charge, prior to
the effective date of the Registration Statement, as many copies as the
Underwriters may reasonably request of each Preliminary Prospectus filed with
the Commission bearing in red ink the statement required by Item 501(c)(8) of
the Commission's Regulation S-K. The Company consents to the use of such
documents by the Underwriters and by Selected Dealers (as defined below), prior
to the effective date of the Registration Statement.
4.3 Delivery of Prospectus.
The Company will deliver, at its expense, as many printed copies of
the Prospectus as the Underwriters may reasonably request for the purposes
contemplated by this Agreement and shall deliver such printed copies of the
Prospectus to the Underwriters and the Selected Dealers (as defined below), as
directed by the Underwriters, within one business days after the effective date.
The Company consents to the use of the Prospectus in accordance with the
provisions of the Act and with the securities or blue sky laws of the
jurisdictions in which the Shares are offered by the Underwriters and by all
dealers to whom Shares may be sold, both in connection with the offering and
sale of the Shares and for such period of time thereafter as the Prospectus is
required by the Act to be delivered in connection with sales by the
Underwriters or a dealer.
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4.4 Further Amendments and Supplements.
If during such period of time that a Prospectus is required to be
delivered under the Act or the Rules and Regulations, any event occurs or any
event known to the Company relating to or affecting the Company shall occur as a
result of which, in the judgment of the Company or in the opinion of counsel for
the Underwriters, the Prospectus as then amended or supplemented could include
an untrue statement of a material fact, or omit to state any material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, or if, in the judgment of the Company or
in the opinion of counsel for the Underwriters, it might be necessary prior to
the Closing Date to amend or supplement the Prospectus to comply with the Act or
the Rules and Regulations or any other law, the Company will forthwith notify
the Underwriters thereof and prepare and, subject to the provisions of Section
5.1 hereof, file with the Commission such further amendment to the Registration
Statement or supplemental or amended Prospectus as may be required and promptly
furnish and deliver to the Underwriters and to others whose names and addresses
are designated by the Underwriters, all at the cost of the Company, such number
of copies of the amended or supplemented Prospectus as requested by the
Underwriters which as so amended or supplemented will not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the Prospectus not misleading in the light of the circumstances
when it is delivered to a purchaser or prospective purchaser, and which will
comply in all respects with the Act and the Rules and Regulations; and in the
event the Underwriters are required to deliver a Prospectus or Prospectuses,
such additional changes shall be included therein as may be necessary to permit
compliance with the requirements of the Act and the Rules and Regulations. In
the event that the Prospectus is to be amended or supplemented as provided in
this Section 4.4, the Company, if requested by the Underwriters, will promptly
make a press release announcing or disclosing the matters to be covered by the
proposed amendment or supplement.
4.5 Selling Group.
M.A. Schapiro & Co., Inc., on behalf of the Underwriters, may offer to
certain dealers (the "Selected Dealers") the opportunity to purchase the Shares
from the Underwriters, pursuant to a form of Selected Dealers' Agreement, by
which the Underwriters may allow such concession (out of the underwriting
discount) as M.A. Schapiro & Co., Inc., on behalf of the Underwriters, may
determine, within the limits set forth in the Registration Statement and
Prospectus. All such sales of Shares to Selected Dealers shall be determined in
the sole discretion of M.A. Schapiro & Co., Inc., on behalf of the Underwriters.
SECTION 5
COVENANTS OF THE COMPANY
The Company covenants and agrees with the Underwriters that:
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5.1 Objection of Underwriters to Amendments or Supplements.
After the date hereof, the Company will not at any time file any
amendment or supplement to the Registration Statement or Prospectus unless and
until a copy of such amendment or supplement has been previously furnished to
the Underwriters and counsel for the Underwriters within a reasonable time
period prior to the proposed filing thereof, or of which the Underwriters or
counsel for the Underwriters has objected to, in writing, on the ground that
such amendment or supplement is not in compliance with the Act or the Rules and
Regulations.
5.2 Company's Best-Efforts to Cause Registration Statement to Remain
Effective.
The Company will use its best efforts to cause the Registration
Statement and any post-effective amendment subsequently filed, to remain
effective during such period of time that a Prospectus is required to be
delivered under the Act or the Rules and Regulations, and will promptly advise
the Underwriters and counsel for the Underwriters, and will confirm such advice
in writing (i) when the Registration Statement became effective and when any
amendment thereto shall have become effective and when any amendment or
supplement to the Prospectus shall be filed with the Commission, (ii) when the
Commission shall make a request or suggestion for any amendment to the
Registration Statement or the Prospectus or for additional information and the
nature and substance thereof, and (iii) of the issuance by the Commission of any
order suspending the effectiveness of the Registration Statement pursuant to
Section 8 of the Act or of the initiation of any proceedings for that purpose,
(iv) of the happening of any event which makes any material statement in the
Registration Statement or Prospectus untrue or which requires the making of any
changes in the Registration Statement or Prospectus in order to make the
statements therein not misleading, and (v) of the refusal to qualify or the
suspension of the qualification of the Shares for offering or sale in any
jurisdiction or the suspension of the quotation of the Common Stock on The
Nasdaq National Market, or of the institution of any proceedings for any of such
proposes. The Company will promptly use its best efforts to prevent any such
refusal to qualify or any such suspension, and to obtain promptly a lifting of
any such order, the reversal of any such refusal and the termination of any such
suspension.
5.3 Preparation and Filing of Amendments and Supplements.
The Company shall prepare the Prospectus in a form approved by the
Underwriters and file such Prospectus pursuant to Rule 424(b) under the Act not
later than the Commission's close of business on the second business day
following the execution of this Agreement or, if applicable, such earlier time
as may be required by Rule 424(b) or Rule 430A to avoid the requirement of
filing a post-effective amendment. If any event shall occur, or if in the
opinion of counsel for the Underwriters any event shall occur, as a result of
which it is necessary to amend or supplement the Prospectus in order to make the
Prospectus not misleading in light of the circumstances existing at the time it
is delivered to a purchaser, the Company will forthwith amend or supplement the
Prospectus (in form and substance
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satisfactory to counsel for the Underwriters) so that, as so amended or
supplemented, the Prospectus will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances existing
at the time the Prospectus is delivered to a purchaser, not misleading.
5.4 Blue Sky Qualification.
The Company at its own expense will promptly take such actions, when
and as requested by the Underwriters, to qualify the Shares for offering and
sale under the securities laws of such states or jurisdictions as the
Underwriters may request, and to comply with such laws so as to permit the
continuance of sales and dealings therein in such jurisdictions for so long as
may be necessary to complete the distribution of the Shares; provided, however,
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the Company shall not be required to consent to jurisdiction in general or
qualify as a foreign corporation in any jurisdiction in connection therewith.
The Company shall promptly pay all blue sky counsel fees and disbursements as
and when billed by counsel for the Underwriters. The Company will also promptly
pay all blue sky filing fees, costs and expenses to be undertaken by counsel for
the Underwriters as and when billed.
5.5 Financial Statements and Reports.
The Company at its own expense will prepare and file promptly all
financial statements, reports and definitive proxy statements or information
statements required to be filed with the Commission pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act or under any applicable state securities
laws, for so long as the delivery of a prospectus is required in connection with
the offering and sale of the Shares.
5.6 Reports and Financial Statements to the Underwriters.
During the period of five years from the Closing Date, the Company
will deliver to the Underwriters copies of each annual report of the Company,
and will deliver to the Underwriters: (i) as soon as available after the close
of each fiscal year of the Company, a financial report of the Company and its
subsidiaries, if any, on a consolidated basis, and a similar financial report of
all unconsolidated subsidiaries, if any, all such reports to include a balance
sheet as of the end of the preceding fiscal year, a statement of income, a
statement of cash flows and a statement of stockholders' equity covering such
fiscal year, and all to be in reasonable detail and audited by the then
independent public accountants for the Company; (ii) as soon as available after
the end of each quarter, copies of the consolidated income statement and
statement of cash flows for that period, and the balance sheet as of the end of
that period of the Company and its subsidiaries, if any, and the income
statement, statement of cash flows and the balance sheet of each unconsolidated
subsidiary, if any, of the Company for that period, all subject to year-end
adjustment, certified by the principal financial or accounting officer of the
Company; (iii) copies of all other statements, documents, or other information
which the Company shall mail or otherwise make available generally to any class
of its security holders, or shall file with the Commission; and (iv) upon
request in writing from the
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Underwriters, furnish to the Underwriters such other information as may
reasonably be requested and which may be properly disclosed to the Underwriters
with reference to the property, business and affairs of the Company and its
subsidiaries, if any.
If the Company shall fail to furnish the Underwriters with financial
statements as herein provided, within the times specified herein, the
Underwriters shall have the right to have such financial statements prepared by
independent public accountants of its own choosing and the Company agrees to
furnish such independent public accountants such data and assistance and access
to such records as they may reasonably require to enable them to prepare such
statements and to pay their reasonable fees and expenses in preparing the same.
The Underwriters shall provide the Company with 10 days written notice of the
exercise of their right to cause independent public accountants to prepare
financial statements.
5.7 Expenses Paid by the Company.
The Company will pay, whether or not the transaction contemplated
hereunder is consummated or this Agreement becomes effective or is terminated,
all costs and expenses incident to the performance of its obligations under this
Agreement, including all expenses incident to the authorization of the Shares
and their issue and delivery to the Underwriters; any original issue taxes in
connection therewith; all transfer taxes, if any, incident to the initial sale
of the Shares to the public; the fees and expenses of the Company's counsel and
accountants; the costs and expenses incident to the preparation, printing,
distribution and filing under the Act and with the National Association of
Securities Dealers, Inc. (the "NASD") of the Registration Statement, any
Preliminary Prospectus and the Prospectus and any amendments or supplements
thereto; the cost of printing, reproducing and filing all exhibits to the
Registration Statement, this Agreement and the Selected Dealers' Agreement; the
cost of printing and furnishing to the Underwriters copies of the Registration
Statement and copies of the Preliminary Prospectus and the Prospectus as herein
provided; the cost of preparation and printing of the certificates for the
Shares and such other instruments required in connection with the offering; the
cost and charges of any transfer agent or registrar or dividend agent for the
Shares; the cost of "tombstone advertisements" and six (6) bound volumes; the
cost of qualifying the Shares under the state securities or blue sky laws, and
related expenses, as more fully provided in Section 5.4 herein; and all other
costs and expenses incident to the performance of the Company's obligations
hereunder and under any Over-allotment Option. It is understood, however, that,
except as specifically provided in this Section, Section 3.4, Section 5.4, and
Section 6 hereof, the Underwriters will pay all of their own costs and expenses,
including the fees of their counsel, transfer taxes on any resale of Shares by
them, and any expenses connected with any offers made by them.
In addition, if the purchase and sale of the Shares provided for
herein is not consummated because any condition to the obligations of the
Underwriters set forth in Section 8 hereof is not satisfied, because of any
termination pursuant to Section 10 hereof, or because of any refusal, inability
or failure on the part of the Company to perform any agreement herein or comply
with any provision hereof other than by reason of a default by any of the
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Underwriters, the Company will reimburse the Underwriters severally upon demand
for all out-of-pocket expenses (including fees and disbursements of counsel)
that shall have been incurred by them in connection with the proposed purchase
and sale of the Shares.
5.8 Reports to Stockholders.
During the period of five years from and after the Closing Date, the
Company will, as promptly as possible, not to exceed 120 calendar days after
each fiscal year, render and distribute reports to its stockholders which will
include audited statements of its operations and cash flows during such period
and its balance sheet as of the end of such period, which statements shall be
audited in accordance with generally accepted auditing standards by the
Company's independent certified public accountants.
5.9 Section 11(a) Financials.
The Company will make generally available to its security holders and
will deliver to the Underwriters, as soon as practicable, but in any event not
later than eighteen months after the effective date of the Registration
Statement (as defined in Rule 158(c) under the Act), an earning statement of the
Company and its subsidiaries (which need not be audited) complying with Section
11(a) of the Act and the Rules and Regulations relating thereto (including, at
the option of the Company, Rule 158).
5.10 Post-Effective Availability of Prospectus.
During the period in which the Prospectus is required to be delivered
under the Act or the Rules and Regulations, the Company will comply, at its own
expense, with all requirements imposed upon it by the Act, as now or hereafter
amended, by the Rules and Regulations, as from time to time may be in force, and
by any order of the Commission, so far as necessary to permit the continuance of
sales or dealing in the Shares.
5.11 Quotation on The Nasdaq National Market.
The Company will use its best efforts to promptly cause the Shares to
be quoted, subject to notice of issuance, on The Nasdaq National Market and
maintained thereon. The Company will file with The Nasdaq National Market all
documents and notices required by The Nasdaq National Market of companies that
have issued securities quoted on The Nasdaq National Market.
5.12 Application of Proceeds.
The Company will apply the net proceeds from the sale of the Shares in
the manner set forth in the Registration Statement and Prospectus, as amended or
supplemented in the manner set forth herein.
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5.13 Undertaking of the Company.
The Company hereby agrees that, without the prior written consent of
M.A. Schapiro & Co., Inc. on behalf of the Underwriters, it will not, during the
period ending 180 days after the date of the Prospectus, (i) offer, pledge,
sell, contract to sell (including, without limitation, by means of any short
sale or any purchase of an option to sell), sell any contract to purchase, grant
an option (other than pursuant to the Company's 1994 Long-term Executive
Compensation Program), right or warrant to purchase or otherwise transfer or
dispose of, directly or indirectly, any shares of Common Stock, any securities
the value of which is determined by reference to the value of the Common Stock
or any securities convertible into or exercisable or exchangeable for Common
Stock, whether any such transaction is to be settled by delivery of Common Stock
or other such securities, in cash or otherwise (other than (A) the Shares to be
sold hereunder and (B) any shares of Common Stock issued by the Company upon the
exercise of an option or warrant or the conversion of a security outstanding on
the date hereof of which the Underwriters have been advised in writing), or (ii)
enter into any derivative instrument the value of which is determined by
reference to the value of the Common Stock.
5.14 Undertakings of Certain Shareholders.
The Company will deliver to the Underwriters, prior to or
simultaneously with the execution of this Agreement, the written undertaking of
each executive officer and director of the Company, and each person who owns
beneficially 5% or more of the Common Stock of the Company (based on the number
of shares of Common Stock outstanding prior to the issuance of the Shares) that
such person shall not directly or indirectly offer or sell to the public any
portion of the shares of Common Stock owned prior to the date of this Agreement
for a period of 180 days from the effective date of the Registration Statement
without the prior written consent of M.A. Schapiro & Co., Inc., on behalf of the
Underwriters.
5.15 Cooperation With Underwriters' Due Diligence.
At all times prior to the Closing Date, the Company will cooperate
with the Underwriters and their counsel in such investigation as the
Underwriters and their counsel may make or cause to be made of all the
properties, business and operations of the Company in connection with the
purchase and public offering of the Shares, and the Company will make available
to the Underwriters and their counsel in connection therewith such information
in its possession as the Underwriters or their counsel may reasonably request.
5.16 Appointment of Transfer Agent.
The Company has appointed Chemical Bank, as Transfer Agent for the
Shares, subject to the consummation of the offering.
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5.17 Compliance With Conditions Precedent.
The Company will use its best efforts to comply or cause compliance
with the conditions precedent to the obligations of the Underwriters set forth
in Section 8 hereof.
5.18 Filing of Form 10-C.
The Company hereby agrees to file with the Commission and NASD Form
10-C in accordance with the provisions of Rule 13a-17 promulgated under the
Exchange Act and to provide a copy of such filing to the Underwriters and their
counsel.
5.19 Document Volumes.
Within sixty (60) days after the Closing Date, the Company will
furnish to the Underwriters, at the Company's expense, six (6) commercially
bound document volumes containing all relevant documents and correspondence in
connection with the offering and sale of the Shares.
5.20 Transfer Sheets.
For a period of 18 months from the effective date, the Company, at its
own expense, shall provide, on a weekly basis, the Underwriters with copies of
the Company's Daily Transfer Sheets and Depository Trust Company reports.
5.21 No Manipulation.
The Company has not taken, nor will it take, directly or indirectly,
any action designed to or that might reasonably be expected to cause or result
in the stabilization or manipulation of the price of the Common Stock to
facilitate the sale or resale of the Shares.
SECTION 6
INDEMNIFICATION
6.1 Indemnification by the Company.
The Company agrees to indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the meaning of Section
15 of the Act or Section 20 of the Exchange Act, and the agents of each thereof,
and each and all and any of them, jointly and severally, from and against any
and all losses, claims, damages or liabilities, joint or several, to which they
or any of them may become subject under the Act or the Exchange Act, under any
other statute, at common law or otherwise, and to reimburse each Underwriter and
each such controlling person and agent of each thereof for any legal or other
expenses (including the cost of any investigation and preparation and the cost
of recovering any claim for indemnification under this provision) incurred by
them or any of them in connection with any claim or litigation as such expenses
are incurred, whether or not resulting
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in any liability, insofar as such losses, claims, damages, liabilities (or
actions in respect thereof), arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in any Preliminary
Prospectus or in the Registration Statement or the Prospectus or any amendment
or supplement thereto, or any application or other document filed in order to
qualify the Shares under the blue sky or securities laws of the states or
jurisdictions where filings were made, or any amendment or supplement thereto,
or arising out of or based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, or arising out of or based upon the Company's
breach of the representation contained in Section 2.4 hereof; provided, however,
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that the Company shall not be liable in any such case to the extent that any
such loss, claim, damage, or liability arises out of or is based upon any untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or any
amendment or supplement thereto, or arises out of or is based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, which
statement or omission was made solely in reliance upon and in conformity with
written information furnished to the Company by such Underwriter specifically
for use in the Registration Statement or Prospectus or any amendment or
supplement thereto pursuant to Section 12.4 hereof; and provided, further, that
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the foregoing indemnity agreement with respect to any preliminary prospectus
shall not inure to the benefit of any Underwriter from whom the person asserting
such losses, claims, damages or liabilities purchases Shares, or any person
controlling such Underwriter, if a copy of the Prospectus (as then amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) was not sent or given by or on behalf of such Underwriter to such
person, if required by law so to have been delivered, at or prior to the written
confirmation of the sale of the Shares to such person, and if the Prospectus (as
so amended or supplemented) would have cured the defect giving rise to such
losses, claims, damages or liabilities. The foregoing indemnification is in
addition to any other liabilities that the Company may otherwise have.
6.2 Indemnification by the Underwriters.
Each Underwriter, severally and not jointly, agrees to indemnify and
hold harmless the Company, each director of the Company and each officer of the
Company from and against any and all losses, claims, damages or liabilities,
joint or several, to which they or any of them may become subject under the Act
or the Exchange Act, under any other statute, at common law or otherwise, and to
reimburse each such person so indemnified for any legal or other expenses
(including the cost of any investigation and preparation and the cost of
recovering any claim for indemnification under this provision) incurred by it or
him in connection with any claim or litigation as such expenses are incurred,
whether or not resulting in any liability, insofar as such losses, claims,
damages, liabilities (or actions in respect thereof), arise out of or are based
solely upon any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus or in the Registration Statement or the
Prospectus or any amendment or supplement thereto, or solely arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated
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therein or necessary to make the statements therein not misleading, but only to
the extent such statement or omission was made solely in reliance upon and in
conformity with written information furnished to the Company by such Underwriter
specifically for use in the Registration Statement or the Prospectus or any
amendment or supplement thereto pursuant to Section 12.4 hereof.
6.3 Notice of Defense Against Claims.
Promptly after receipt by an indemnified party under Sections 6.1 or
6.2 above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such section, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party.
In case any such action shall be brought against any indemnified party, and it
shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate therein, and, to the extent
that it shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party). Upon receipt of notice from the
indemnifying party, to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to such indemnified
party under such section for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than
reasonable costs of investigation.
6.4 Contribution.
In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in Sections 6.1 or 6.2
is applicable but for any reason is held to be unavailable from an indemnifying
party or insufficient to hold an indemnified party harmless, such indemnifying
party shall contribute to the aggregate amount paid or payable by such
indemnified party as a result of such losses, claims, or liabilities (including
actions in respect thereof and any investigation, legal and other expenses
incurred in connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claim asserted, but after deducting any contribution
received by the Company from persons other than an Underwriter, such as persons
who control the Company within the meaning of the Act or the Exchange Act,
officers of the Company who signed the Registration Statement and directors of
the Company, who may also be liable for contribution), to which an indemnified
party is subject in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other from the offering of the Shares to which such loss, claim, damage or
liability (or action in respect thereof) relates. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law, or if the indemnified party failed to give the notice required under
Section 6.3 above, then each indemnifying party shall contribute to such amount
paid or payable by such indemnified party in such proportion as is appropriate
to reflect not only such relative benefits
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but also the relative fault of the Company on the one hand and the Underwriters
on the other in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities (or actions in respect thereof), as
well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters on the other shall
be deemed to be in the same proportion as the total net proceeds from the
offering contemplated by this Agreement bear to the total underwriting discounts
and commissions received by the Underwriters. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand
or the Underwriters (in the manner contemplated by Section 6.2 hereof) on the
other and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section 6.4 were determined by pro-
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to above in this Section 6.4. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
in this Section 6.4 shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 6.4, the Underwriters shall not be required to contribute an amount in
excess of the percentage that the underwriting discount appearing on the cover
page of the Prospectus bears to the public offering price of the Shares
underwritten by it and distributed to the public. 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. For purposes of this Section 6.4, each person, if any, who
controls any Underwriter within the meaning of the Act or the Exchange Act shall
have the same rights to contributions as the Underwriters, and each officer of
the Company who shall have signed the Registration Statement and each director
of the Company shall have the same rights to contribution as the Company,
subject in each case to the limitations of this Section 6.4.
SECTION 7
EFFECTIVENESS OF AGREEMENT
This Agreement shall become effective at the later of (i) the time of
effectiveness on the effective date of the Registration Statement or (ii) the
date hereof.
SECTION 8
CONDITIONS TO THE UNDERWRITERS' OBLIGATIONS
The Underwriters' obligations hereunder to purchase the Shares and to
make payment to the Company hereunder on the Closing Date shall be subject to
the accuracy, as of
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the Closing Date, of the representations and warranties on the part of the
Company herein contained, to the performance by the Company of all its
agreements herein contained, to the fulfillment of or compliance by the Company
with all covenants and conditions hereof, and to the following additional
conditions:
8.1 Filing of Prospectus.
The Prospectus shall have been filed with the Commission pursuant to
Rule 424(b) within the applicable time period prescribed for such filing under
the Rules and Regulations and the Act and in accordance with Section 5.3 hereof.
On or prior to the Closing Date or the Additional Closing Date, as the case may
be, no stop order suspending the effectiveness of the Registration Statement or
any part thereof shall have been issued and no proceeding for that purpose shall
have been initiated or threatened by the Commission or be pending; any request
for additional information on the part of the Commission (to be included in the
Registration Statement or Prospectus or otherwise) shall have been complied with
to the satisfaction of the Commission; and neither the Registration Statement
nor the Prospectus nor any amendment or supplement thereto shall have been filed
to which counsel to the Underwriters shall have objected in writing or had not
given its consent. In addition, the NASD shall have indicated that it has no
objection to the underwriting arrangements pertaining to the sale of the Shares
by the Underwriters and no action shall have been taken by the Commission or the
NASD the effect of which would make it improper, at any time prior to the
Closing Date or the Additional Closing Date, as the case may be, for any member
firm of the NASD to execute transactions (as principal or as agent) in the
Shares, and no proceedings for the purpose of taking such action shall have been
instituted or shall be pending, or, to the best of the Underwriters' or the
Company's knowledge, shall be contemplated by the Commission or the NASD. The
Company represents at the date hereof, and shall represent as of the Closing
Date and each Additional Closing Date, that it has no knowledge that any such
action is in fact contemplated by the Commission or the NASD.
8.2 Accuracy of Registration Statement.
No Underwriter shall have disclosed in writing to the Company that the
Registration Statement or the Prospectus or any amendment thereof or supplement
thereto contains an untrue statement of a fact which, in the opinion of counsel
to the Underwriters, is material, or omits to state a fact which, in the opinion
of such counsel, is material and is required to be stated therein, or is
necessary to make the statements therein not misleading.
8.3 Regulatory Approvals.
The Company shall have obtained all regulatory consents and approvals
and satisfied all other requirements (including the expiration of any required
waiting period) prescribed by law which are necessary to the consummation of the
transactions contemplated by the P&A Agreement; provided, however, that no such
-------- -------
approval or consent shall be deemed to have been received if it shall impose any
conditions or requirements which would reduce the benefits to the Company or the
Bank of the transactions contemplated by the P&A Agreement
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to such a degree that (i) there could be a material adverse effect on the
operations or financial condition of the Company or the Bank, considered as an
entire entity, or (ii) in the reasonable judgment of the Underwriters, it would
be impracticable or inadvisable to offer and sell the Shares. All such approvals
and consents shall be in full force and effect as of the date hereof and the
Closing Date.
8.4 Preferred Stock Offering.
The Company and M.A. Schapiro & Co., Inc. shall have entered into the
underwriting agreement (the "Preferred Stock Underwriting Agreement") relating
to the Company's Cumulative Perpetual Preferred Stock, Series A, par value $1.00
per share (the "Preferred Stock") and such Preferred Stock Underwriting
Agreement shall be in full force and effect.
8.5 Casualty and Other Calamity.
Between the date hereof and the Closing Date, or the Additional
Closing Date, as the case may be, the Company and the Bank shall not have
sustained any loss on account of fire, explosion, flood, accident, calamity or
any other cause, of such character as materially adversely affects its business
or properties, considered as an entire entity, whether or not such loss is
covered by insurance.
8.6 Litigation and Other Proceedings.
Between the date hereof and the Closing Date, there shall be no
litigation instituted or threatened against the Company or the Bank and there
shall be no proceeding instituted or threatened against the Company or the Bank
before or by any federal or state commission, regulatory body or administrative
agency or other governmental body, domestic or foreign, wherein an unfavorable
ruling, decision or finding could materially adversely affect the business,
franchises, licenses, operations or financial condition or income of the Company
or the Bank, considered as an entire entity, or the ability of the Company or
the Bank to perform its obligations under the P&A Agreement.
8.7 Lack of Material Change.
Except as contemplated herein or as set forth in the Registration
Statement and Prospectus, during the period subsequent to the date of the last
audited balance sheet included in the Registration Statement and prior to the
Closing Date or the Additional Closing Date, as the case may be, the Company and
the Bank (A) shall have conducted their respective businesses in the usual and
ordinary manner as the same was being conducted on the date of the last audited
balance sheet included in the Registration Statement, (B) except in the ordinary
course of business, the Company and the Bank shall not have incurred any
liabilities or obligations (direct or contingent) or disposed of any of its
assets, or entered into any material transaction or (C) shall not have suffered
or experienced any material adverse change or any development involving a
prospective material adverse change in or affecting its general affairs,
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management or condition, financial or otherwise. At the Closing Date, the
capital stock and capital surplus account of the Company shall be substantially
the same as the date of the last audited balance sheet included in the
Registration Statement, without considering the proceeds from the sale of the
Shares.
8.8 Review by Underwriters' Counsel.
The authorization of the Shares, the Registration Statement, the
Prospectus and all corporate proceedings and other legal matters incident
thereto and to this Agreement shall be reasonably satisfactory in all respects
to Cadwalader, Wickersham & Taft, counsel to the Underwriters, and such counsel
shall have furnished to the Underwriters such opinion or opinions, dated the
Closing Date or the Additional Closing Date as the case may be, with respect to
the Registration Statement, the Prospectus and other related matters as the
Underwriters may reasonably request.
8.9 Opinion of Company Counsel.
The Company shall have furnished to the Underwriters the opinion,
dated as of the Closing Date or the Additional Closing Date, as the case may be,
addressed to the Underwriters from Bond, Schoeneck & King, LLP, counsel to the
Company, in form and substance satisfactory to the Underwriters and counsel to
the Underwriters and to the effect that based upon a review by it of the
Registration Statement, Prospectus, the Company's Certificate of Incorporation,
Bylaws, relevant corporate proceedings, and an examination of such statutes and
other documents it deems necessary to express such opinion:
(i) The Company has been duly incorporated and is validly
existing and in good standing under the laws of the State of Delaware,
with full corporate power and authority to own and operate its
properties and to conduct its business as set forth in the
Registration Statement and Prospectus. The Company is qualified or
registered as a foreign corporation to transact business and is in
good standing in such states in which ownership of its property or its
conduct of business requires such qualification or restriction.
(ii) The Bank has been duly incorporated and is validly
existing and in good standing under the laws of the United States,
with full corporate power and authority to own and operate its
properties and to conduct its business as set forth in the
Registration Statement and Prospectus. The Bank is qualified or
registered as a foreign corporation to transact business and is in
good standing in such states in which ownership of its property or its
conduct of business requires such qualification or registration.
(iii) The Company and the Bank had all requisite power and
authority to execute, deliver and perform their respective obligations
under the P&A Agreement; the execution, delivery and performance by
the Company and the Bank of their respective obligations under the P&A
Agreement have been duly
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and validly authorized by all requisite corporate acts of the Company
and the Bank and the P&A Agreement constitutes the legal, valid and
binding agreement of the Company and the Bank, enforceable against
them in accordance with its terms;
(iv) The execution and delivery of the P&A Agreement and the
consummation of the transactions contemplated thereby, will not
conflict with or result in a breach or violation of any of the terms,
conditions or provisions of, or constitute a default under, the
certificate of incorporation or bylaws of the Company or the Bank, any
bond, debenture, note or other evidence of indebtedness or any
agreement, indenture, mortgage, deed of trust, lease or other
agreement or instrument to which the Company or the Bank is a party or
by which the Company or the Bank or any of their respective properties
or assets is bound, or any existing law, statute, order, rule,
regulation, writ, injunction, or decree of any government,
governmental instrumentality, agency or body, arbitration tribunal or
court, domestic or foreign, having jurisdiction over the Company or
the Bank or any of their respective properties or result in the
imposition of any lien, charge or encumbrance upon any property or
asset of the Company or the Bank.
(v) All consents, approvals, authorizations, orders,
registrations, filings or qualifications of or with any court or
governmental body or agency required for the execution and delivery of
the Company and the Bank of the performance of their respective
obligations under, and the consummation of the transactions
contemplated by the P&A Agreement have been obtained or made and are
in full force and effect.
(vi) The Company has authorized and outstanding capital stock
as set forth in the Registration Statement and Prospectus; the
outstanding Common Stock of the Company, the Shares, and all the
securities and classes and series thereof described in the
Registration Statement under the heading "Description of Capital
Stock" and elsewhere in the Registration Statement conform to the
statements concerning them in the Registration Statement and
Prospectus.
(vii) All of the outstanding Common Stock of the Company has
been duly and validly issued and is fully paid and non-assessable and
contains no preemptive rights; all of the outstanding capital stock of
the Bank has been duly authorized and validly issued, is fully paid
and non-assessable and is owned by the Company free and clear of any
mortgage, pledge, lien, encumbrance, claim or equity; the Shares have
been duly and validly authorized, and upon issuance thereof and
payment therefor in accordance with this Agreement will be duly and
validly issued, fully paid and non-assessable, and will not be subject
to any preemptive or similar rights (except for share purchase rights
for each outstanding share of Common Stock pursuant to a Stockholders
Protection
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Rights Plan of the Company, as described in "Description of Capital
Stock -- Rights Plan" in the Prospectus).
(viii) No consents, approvals, authorizations, orders,
registrations or qualifications of any court or other governmental
instrumentality are necessary for the valid authorization, issue or
sale by the Company of the Shares hereunder, except such as have been
obtained under the Act or blue sky or state securities laws.
(ix) The Company has all requisite power and authority to
execute, deliver and perform its obligations under this Agreement; the
execution, delivery and performance by the Company of its obligations
under this Agreement have been duly and validly authorized by all
requisite corporate acts of the Company and this Agreement constitutes
the legal, valid and binding agreement of the Company, enforceable
against it in accordance with its terms.
(x) The execution and delivery of this agreement and issuance
and sale of the Shares will not conflict with or result in a breach or
violation of any of the terms, conditions or provisions of, or
constitute a default under, the articles of incorporation or bylaws of
the Company or the Bank, any bond, debenture, note, or other evidence
of indebtedness or any agreement, indenture, mortgage, deed or trust,
lease or other agreement or instrument to which the Company or the
Bank, is a party or by which the Company or the Bank or any of their
respective properties, or assets is bound, or any existing law,
statute, order, rule, regulation, writ, injunction, or decree of any
government, governmental instrumentality, agency or body, arbitration
court or tribunal, domestic or foreign, having jurisdiction over the
Company or the Bank or any of their respective properties or result in
the imposition of any lien, charge or encumbrance upon any property or
asset of the Company or the Bank.
(xi) The Company is not an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
(xii) the statements (1) in the Prospectus under the captions
"Prospectus Summary," "Risk Factors," "The Company," "The
Acquisition," "Use of Proceeds," "Capitalization," "Market for Common
Stock and Dividends," "Management's Discussion and Analysis of
Financial Condition and Results of Operations," "Business,"
"Management," "Security Ownership of Certain Beneficial Owners and
Management," "Certain Regulatory Considerations," "Description of
Capital Stock" and "Underwriters" and (2) in the Registration
Statement in Items 14 and 15, in each case in so far as such
statements constitute summaries of the legal matters, documents or
proceedings referred to therein, fairly represent the information
called for with respect to such legal matters, documents and
proceedings and fairly summarize the matters referred to therein.
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(xiii) The Registration Statement has become effective under
the Act and, to such counsel's actual knowledge, after reasonable
investigation, no order suspending the effectiveness of the
Registration Statement or the use of any Preliminary Prospectus or
Prospectus has been issued and no proceedings for that purpose have
been instituted or are pending or threatened by the Commission; based
on the information which such counsel developed in the course of the
performance of their services for the Company (including their review
of material documents and contracts), their examination of the
corporate minutes of the Company and other conversations with and
certificates from principal executive officers of the Company, such
counsel confirms that the Registration Statement and the Prospectus
(including the documents incorporated by reference therein), and any
amendment or supplement thereto, at the time it became effective,
appear on their face to comply as to form to the requirements of the
Act and the Rules and Regulations and that such counsel has no reason
to believe that either the Registration Statement or the Prospectus
(including the documents incorporated by reference therein) or any
amendment or supplement thereto, at the time it became effective,
contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances under
which made (except that no opinion need be expressed as to financial
statements and financial data contained in the Registration Statement
or Prospectus); and to such counsel's actual knowledge, after
reasonable investigation, any statutes, regulations, contracts,
agreements or other documents that are required to be described in the
Registration Statement or Prospectus or to be filed as an exhibit to
the Registration Statement have been described or filed as required,
and to such counsel's actual knowledge, after reasonable
investigation, there are no legal or governmental proceedings pending
or threatened to which the Company is subject of such a character
required to be disclosed in the Registration Statement or the
Prospectus which are not disclosed and properly described therein as
required.
(xiv) Such counsel does not know of any legal or beneficial
owner of any securities of the Company who has any rights, not
effectively satisfied or waived, to require registration of any shares
of Common Stock in connection with the filing of the Registration
Statement.
As to certain factual matters such as the issuance of stock and
receipt of payment therefor, the states in which the Company transacts business,
the adoption of resolutions reflected by the Company's minute books and the
like, such counsel may rely on the certificates of appropriate public officials
and officers of the Company.
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8.10 Auditors' Letters.
The Underwriters shall have received, on each of the date hereof and
the Closing Date, letters dated the date hereof or the Closing Date, as the case
may be, in form and substance satisfactory to the Underwriters, from Coopers &
Lybrand L.L.P. and Price Waterhouse LLP, independent Accountants, containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements and
certain financial information contained in the Registration Statement and the
Prospectus.
8.11 Consultant's Letter.
The Underwriters shall have received, on each of the date hereof and
the Closing Date, a letter dated the date hereof or the Closing Date, as the
case may be, in form and substance satisfactory to the Underwriters, from
Darling Consulting Group, Inc., consultants to the Company, stating that (i) on
the basis of certain indicated procedures and inquiries of the officers of the
Company responsible for financial and accounting matters and on the basis of
such consultant's expertise and experience in asset/liability consulting, in
their opinion, the statements, dollar amounts, percentages and other financial
information contained in the Prospectus under the headings "The Acquisition --
Reasons for the Acquisition", "The Acquisition -- Impact of the Acquisition on
Operating Performance" and "The Acquisition -- Impact of the Acquisition on
Operating Performance Assuming Intended Potential Disposition" represent a
reasonable estimate and judgment as to the future financial performance of the
Company based on the assumptions disclosed in the Prospectus under such
headings, which assumptions are a reasonable estimate of the events,
contingencies and circumstances described therein, (ii) they have compared
certain dollar amounts, percentages and other financial information contained in
the Prospectus under the headings "The Acquisition -- Reasons for the
Acquisition," "The Acquisition -- Impact of the Acquisition on Operating
Performance" and "The Acquisition -- Impact of the Acquisition on Operating
Performance Assuming Intended Potential Disposition" and found such amounts,
percentages and other financial information to be in agreement with the
financial analysis of the Company prepared by such consultant, and (iii) they
are not aware of any event or occurrence which could cause a material change in
such consultant's view of the likelihood of achievement of the statements made
under the headings referred to in clauses (i) and (ii) above or the
reasonableness of the assumptions underlying such statements.
The letter required by this Section shall also cover such other
matters as the Underwriters shall reasonably request.
8.12 Officer's Certificate.
The Company shall have furnished to the Underwriters a certificate of
the President and the Chief Financial Officer of the Company, dated as of the
Closing Date and the Additional Closing Date, as the case may be, to the effect
that:
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(i) The representations and warranties of the Company in this
Agreement are true and correct at and as of such date, and the Company
has complied with all the agreements and has satisfied all the
conditions on its part to be performed or satisfied at or prior to
such date;
(ii) The Registration Statement has become effective and no
order suspending the effectiveness of the Registration Statement has
been issued and no proceeding relating to the foregoing has been
initiated or is threatened by the Commission;
(iii) The respective signers of the certificate have each
carefully examined the Registration Statement and Prospectus and any
amendments and supplements thereto, and the Prospectus and any
amendments and supplements thereto contain all statements required to
be stated therein, and neither the Registration Statement nor
Prospectus nor any amendment or supplement thereto includes any untrue
statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading and, since the effective date of the
Registration Statement, there has occurred no event required to be set
forth in a supplemented Prospectus which has not been so set forth;
and
(iv) Except as set forth in the Registration Statement and
Prospectus, since the date of the latest audited financial statements
in the Registration Statement and Prospectus and on or prior to the
date of such certificate, there has not been any materially adverse
change, financial or otherwise, in the affairs or condition of the
Company, the Company has not incurred any material liabilities, direct
or contingent, or entered into any transaction, otherwise than in the
ordinary course of business.
Such certificate shall also cover such other matters as the
Underwriters may reasonably request.
8.13 Delivery of Documents.
The Company shall have furnished to the Underwriters true and correct
copies of the Certificate of Incorporation of the Company and all amendments
thereto, the Bylaws of the Company and of the minutes of all meetings of the
directors and shareholders of the Company held prior to the Closing Date which
in any way relate to the subject matter of this Agreement; and such other
documents or certificate as counsel to the Underwriters may reasonably request.
8.14 Tender of Delivery of Shares.
All the Shares being purchased from the Company by the Underwriters
shall be tendered for delivery in accordance with the terms and provisions of
this Agreement.
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8.15 Blue Sky Qualification.
The Shares shall be qualified in such states and jurisdictions as the
Underwriters may reasonably request pursuant to Section 5.4, and each such
qualification shall be in effect and not subject to any stop order or other
proceeding on the Closing Date or the Additional Closing Date, as the case may
be.
8.16 Approval of Underwriters' Counsel.
All opinions, letters, certificates and evidence mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if in form and substance satisfactory to counsel to the
Underwriters. A draft of such documents shall be provided to such counsel at
least two business days prior to the Closing Date and the Additional Closing
Date, as the case may be.
8.17 Officers' Certificate as a Company Representation.
Any certificate signed by an officer of the Company and delivered to
the Underwriters or to counsel for the Underwriters will be deemed a
representation and warranty by the Company to the Underwriters as to the
statements made therein.
8.18 Restriction on Sale of Securities.
Certain of the Company's current stockholders, officers and directors
shall have agreed with the Underwriters not to sell or otherwise dispose of any
of their shares of Common Stock owned directly or indirectly by them prior to
this offering for a period of 180 days after the effective date of the
Registration Statement without the prior written consent of M.A. Schapiro & Co.,
Inc. on behalf of the Underwriters, all as contemplated by Section 5.14 hereof.
SECTION 9
CONDITIONS TO THE COMPANY'S OBLIGATIONS
The Company's obligations hereunder to sell and deliver the Shares to
the Underwriters on the Closing Date shall be subject to the accuracy, as of the
Closing Date, of the representations and warranties on the part of the
Underwriters herein contained, to the performance by the Underwriters of all
their agreements herein contained and to the fulfillment of or compliance by the
Underwriters with all covenants and conditions hereof applicable to them.
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SECTION 10
TERMINATION
10.1 Termination Because of Non-Compliance.
This Agreement may be terminated by the Underwriters by notice to the
Company in the event that the Company shall have failed or been unable to comply
with any of the terms, conditions or provisions of this Agreement on the part of
the Company to be performed, complied with or fulfilled (including but not
limited to those specified in Sections 2, 3, 4, 5 and 8 hereof) within the
respective times herein provided for, unless compliance therewith or performance
or satisfaction thereof shall have been expressly waived by the Underwriters in
writing.
10.2 Termination.
This Agreement may be terminated at any time at or prior to the
Closing Date or any Additional Closing Date, as the case may be, by written
notice given by the Underwriters to the Company as herein set forth at or prior
to such Closing Date or any Additional Closing Date, as the case may be, if
after the date hereof and at or prior to such time:
(i) an outbreak or escalation of armed hostilities or other
national or international calamity or crisis between or involving the
United States or any foreign power or Act of God or any change in
financial markets shall have occurred which has a material adverse
impact on the Company's operations or financial condition or which in
the reasonable judgment of the Underwriters could render it
impracticable or inadvisable to offer and sell the Shares;
(ii) the Company or the Bank shall have sustained a loss on
account of fire, flood, accident, or other calamity of such a
character as to interfere with the continuous operation of the
Company's or the Bank's business and which materially and adversely
affects the financial position or the business of the Company or the
Bank, regardless of whether or not such loss shall have been insured;
(iii) there shall have been, since the respective dates as of
which information is given in the Registration Statement and the
Prospectus, any material adverse change in or affecting the condition
(financial or other) of the Company not described in the Prospectus,
or any material adverse change in the earnings, operations, management
or business prospects of the Company, whether or not arising in the
ordinary course of business;
(iv) an action, suit or proceeding shall be threatened or
pending, at law or in equity, against the Company or the Bank, by any
federal, state or
-32-
<PAGE>
other commission, board or agency, which is not disclosed in the
Prospectus and in which an unfavorable result or decision could
materially adversely affect the business, prospects, property,
financial condition or income or earnings of the Company or the Bank,
or the ability of the Company or the Bank to perform their respective
obligations under the P&A Agreement;
(v) trading in securities generally on the New York Stock
Exchange, the American Stock Exchange, the Nasdaq National Market, the
Chicago Board of Options Exchange, the Chicago Mercantile Exchange or
the Chicago Board of Trade shall have been suspended or materially
limited;
(vi) trading of any of the securities of the Company shall
have been suspended on any exchange or in any over-the-counter market;
(vii) a moratorium on commercial banking activities in New
York shall have been declared by any State or Federal authority or a
moratorium in foreign exchange trading shall have been declared;
(viii) the enactment, publication, decree or other
promulgation of any federal or state (domestic or foreign) statute,
regulation, rule or order of any court or other governmental authority
which in the Underwriters's sole judgment materially and adversely
affects or could materially and adversely affect the business,
operations or prospects of the Company or the Bank; or
(xi) the Company shall have breached or otherwise failed to
perform or failed to comply with its obligations under the Preferred
Stock Underwriting Agreement.
The Company agrees and acknowledges that the Underwriters shall be the
sole determining party as to the presence of any such condition, event or
occurrence and as to its materiality, which determination shall be made in the
reasonable judgment of the Underwriters.
10.3 Effect of Termination Hereunder.
Any termination of this Agreement pursuant to the occurrence of any of
the events specified in Sections 10.1 or 10.2 hereof shall be without liability
of any character (including, but not limited to, loss of anticipated profits or
consequential damages) on the part of any party hereto, except that the Company
shall remain obligated to pay the costs and expenses, losses, claims, damages
and liabilities provided to be paid by it specified in Section 5.7 and Section 6
and the Underwriters shall remain liable to pay the costs and expenses, losses,
claims, damages and liabilities provided to be paid by it specified in Section
6.
-33-
<PAGE>
SECTION 11
NOTICES
Except as otherwise expressly provided in this Agreement:
11.1 Notice to the Company.
Whenever notice is required by the provisions of this Agreement to be
given to the Company such notice shall be considered given one (1) business day
after having been sent by Federal Express or similar reliable overnight delivery
courier, or upon delivery by hand, or by facsimile transmission and addressed to
the Company as follows:
Community Bank System, Inc.
5790 Widewaters Parkway
DeWitt, New York 13214
Attn: Sanford A. Belden
President and Chief Executive Officer
Tel: (315) 445-2282
Fax: (315) 445-2997
with a copy to:
Bond, Schoeneck & King, LLP
One Lincoln Center
Syracuse, New York 13202
Attn: George J. Getman, Esq.
Tel: (315) 422-0121
Fax: (315) 422-3598
11.2 Notice to the Underwriters.
Whenever notice is required by the provisions of this Agreement to be
given to the Underwriters such notice shall be considered given, one (1)
business day after having been sent by Federal Express or similar reliable
overnight delivery courier, or upon delivery by hand, or by facsimile
transmission and addressed to the Underwriters as follows:
-34-
<PAGE>
M.A. Schapiro & Co., Inc.
First Albany Corporation
c/o M.A. Schapiro & Co., Inc.
One Chase Manhattan Plaza
New York, New York 10005
Attn: Richard J. Kelly
Vice President and Director of
Investment Banking
Tel: (212) 530-7509
Fax: (212) 480-9122
with a copy to:
Cadwalader, Wickersham & Taft
100 Maiden Lane
New York, New York 10038
Attn: Lawrence A. Larose, Esq.
Tel: (212) 504-6000
Fax: (212) 504-6666
SECTION 12
MISCELLANEOUS
12.1 Benefit.
This Agreement is made solely for the benefit of the Underwriters, the
Company, their respective officers and directors and any controlling person
referred to in Section 15 of the Act or Section 20 of the Exchange Act, and
their respective successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. The term "successor" or
the term "successors and assigns" as used in this Agreement shall not include
any purchaser, as such, of the Shares.
12.2 Survival.
The respective indemnities, agreements, representations, warranties,
covenants and other statements of the Company and the Underwriters and of their
respective officers and directors as set forth in or made pursuant to this
Agreement and the indemnity agreements contained in Section 6 hereof shall
survive and remain in full force and effect, regardless of (i) any investigation
made by or on behalf of the Company or the Underwriters or any such officer or
director thereof or any controlling person of the Company or the Underwriters,
(ii) delivery of or payment for the Shares and (iii) the Closing Date or any
Additional Closing Date, as the case may be.
-35-
<PAGE>
12.3 Governing Law.
THE VALIDITY, INTERPRETATION AND CONSTRUCTION OF THIS AGREEMENT AND OF
EACH PART HEREOF WILL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
12.4 Underwriters' Information.
The statements set forth in the last paragraph on the cover page of
the Prospectus and under the caption "Underwriting" in the Prospectus, except
for the statements made under such caption relating to agreements with respect
to sales or dispositions of Common Stock or other securities by any party other
than the Underwriters, constitute the only written information furnished by or
on behalf of the Underwriters referred to in Section 2.2 hereof, in Section 6.1
hereof and Section 6.2 hereof.
12.5 Counterparts.
This Agreement may be executed in any number of counterparts, each of
which may be deemed an original and all of which together will constitute one
and the same instrument.
-36-
<PAGE>
Please confirm that the foregoing correctly sets forth the Agreement
between you and the Company.
Very truly yours,
COMMUNITY BANK SYSTEM, INC.
By:
-------------------------------------
Sanford A. Belden
President and Chief Executive Officer
WE HEREBY CONFIRM AS OF THE DATE HEREOF THAT THE ABOVE LETTER SETS
FORTH THE AGREEMENT BETWEEN THE COMPANY AND US.
M.A. SCHAPIRO & CO., INC.
By:
--------------------------------------
Richard J. Kelly
Director of Investment Banking
FIRST ALBANY CORPORATION
By:
---------------------------------------
Michael S. Burd
Senior Vice President
-37-
<PAGE>
Schedule I
----------
Underwriters
------------
<TABLE>
<CAPTION>
Number of Firm
Shares to be
Underwriter Purchased
- ----------- --------------
<S> <C>
M.A. Schapiro & Co., Inc.
First Albany Corporation
-----------
Total Firm Shares...
===========
</TABLE>
-38-
<PAGE>
EXHIBIT 1.2
DRAFT 6/8/95
COMMUNITY BANK SYSTEM, INC.
90,000 SHARES
CUMULATIVE PERPETUAL PREFERRED STOCK, SERIES A, PAR VALUE $1.00 PER SHARE
UNDERWRITING AGREEMENT
June [ ], 1995
M.A. Schapiro & Co., Inc.
One Chase Manhattan Plaza
New York, New York 10005
Ladies and Gentlemen:
COMMUNITY BANK SYSTEM, INC., a Delaware bank holding company (the
"Company"), located at 5790 Widewaters Parkway, DeWitt, New York, hereby
confirms its agreement with M.A. Schapiro & Co., Inc. (the "Underwriter"). The
term "Company" shall be deemed to include all subsidiaries and affiliates of the
Company. The Company's Cumulative Perpetual Preferred Stock, Series A, par
value $1.00 per share, is herein referred to as the "Preferred Stock."
SECTION 1
SALE OF SECURITIES
The Company proposes to issue and sell to the Underwriter up to 90,000
shares of Preferred Stock (the "Shares"). The Shares are more fully described
in the Registration Statement referred to below.
SECTION 2
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
In order to induce the Underwriter to enter into this Agreement, the
Company hereby represents and warrants to, and agrees with, the Underwriter
that:
2.1 Registration Statement and Prospectus.
A Registration Statement on Form S-2 (File No. 33-58539) in respect of
the Shares, including the related Prospectus, copies of which have heretofore
been delivered by the Company to the Underwriter, has been prepared by the
Company in conformity with the requirements of the Securities Act of 1933, as
amended (the "Act"), and the rules and
<PAGE>
regulations ("Rules and Regulations") of the Securities and Exchange Commission
(the "Commission") thereunder, and such Registration Statement has been filed
with the Commission under the Act; and the Company may file one or more
amendments to such Registration Statement, including the final Prospectus,
copies of which will be promptly delivered to the Underwriter. As used in this
Agreement, the term "Registration Statement" refers to and means such
Registration Statement on Form S-2 in the form heretofore delivered to the
Underwriter and all amendments thereto, including the Prospectus, all exhibits,
schedules and financial statements included therein, and all documents
incorporated by reference therein, as it became effective and including the
information contained in the form of Prospectus filed with the Commission
pursuant to Rule 424(b) under the Act and deemed by virtue of Rule 430A under
the Act to be part of the Registration Statement at the time it was declared
effective and, in the event of any amendment thereto after the effective date,
such term shall also mean (from and after the effective date of such amendment),
such Registration Statement as so amended. The term "Prospectus" refers to and
means the final Prospectus first filed pursuant to Rule 424(b) under the Act
and, in the event of any supplement or amendment after the effective date, such
term shall also mean (from and after the effective date of such supplement or
amendment) such Prospectus as so supplemented or amended; and the term
"Preliminary Prospectus" refers to and means any prospectus filed with the
Commission pursuant to Rule 424(a) under the Act and included in such
Registration Statement before it becomes effective. The terms "effective date"
and "effective" refer to the date and time the Commission declares the
Registration Statement effective pursuant to Section 8 of the Act.
2.2 Effectiveness and Accuracy of Registration Statement and
Prospectus.
The Registration Statement has been declared effective by the
Commission. No other document with respect to such Registration Statement or
document incorporated by reference therein has been filed or transmitted for
filing with the Commission other than (i) the Annual Report on Form 10-K and the
Annual Report to Stockholders, each for the year ended December 31, 1994, (ii)
the Quarterly Report on Form 10-Q for the quarter ended March 31, 1995, (iii)
the Quarterly Report on Form 10-Q for the quarter ended March 31, 1995, as
amended on Form 10-Q/A and (iv) a report on Form 8-K filed [ ] [ ], 1995.
The Commission has not issued any order preventing or suspending the
effectiveness of the Registration Statement or the use of any Preliminary
Prospectus or Prospectus with respect to the Shares and no proceeding for that
purpose has been initiated or threatened by the Commission. Each Preliminary
Prospectus, including the documents incorporated by reference therein, has
conformed in all material respects with the requirements of the Act and the
applicable Rules and Regulations and did not include at the time of filing any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein not misleading. When the Registration Statement
became effective and on the Closing Date (as defined below), the Registration
Statement and Prospectus, including the documents incorporated by reference
therein, and any further amendments or supplements thereto, conformed and will
conform to the requirements of the Act and the Rules and Regulations, contained
and will contain all statements which are required to be stated therein in
accordance with the Act and the Rules and Regulations for the purposes of the
proposed public offering of
-2-
<PAGE>
the Shares, and neither the Registration Statement nor the Prospectus, including
the documents incorporated by reference therein, included or will include any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading;
provided, however, the Company does not make any representations or warranties
- -------- -------
as to information contained in or omitted from the Registration Statement or the
Prospectus in reliance upon and in conformity with written information relating
to the Underwriter furnished by the Underwriter to the Company, specifically for
use in the preparation of the Registration Statement as set forth in Section
12.4 hereof. The documents incorporated by reference in the Registration
Statement, each Preliminary Prospectus and the Prospectus, when they became
effective, were filed with the Commission or amended, as the case may be,
conformed in all respects with the requirements of the Act or the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), as applicable, and the
rules and regulations of the Commission thereunder, and none of such documents
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading.
2.3 Financial Statements.
The Company's financial statements and related notes thereto as set
forth in the Registration Statement and Prospectus present fairly the financial
position of the Company and the results of its operations and the changes in its
stockholders' equity at the respective dates and for the respective periods to
which they apply; such financial statements have been prepared in accordance
with generally accepted accounting principles consistently applied throughout
the periods concerned except as otherwise stated therein and the other financial
and statistical information and data set forth in the Registration Statement and
the Prospectus is accurately presented and prepared on a basis consistent with
such financial statements and the books and records of the Company.
2.4 Forward-Looking and Other Information.
All statements in the Registration Statement and the Prospectus that
(i) contain or are derived from a projection of revenues, income (loss),
earnings (loss) per share, capital expenditures, dividends, capital structure or
other financial items, (ii) relate to management's plans and objectives for
future operations or (iii) contain generally projections, forecasts or other
forward-looking information, including, without limitation, the statements,
dollar amounts, percentages and other financial information contained in the
Prospectus under the headings "Prospectus Summary -- Pending Acquisition,"
"Prospectus Summary -- Potential Disposition," "Risk Factors -- Negative Effect
of Acquisition on Regulatory Capital," "Risk Factors -- Investment of Acquired
Funds and Impact on Net Interest Margin," "Risk Factors -- Possible Inability to
Dispose of Branches and Related Deposits," "The Acquisition -- Terms and
Conditions of the Acquisition," "The Acquisition -- Reasons for the
Acquisition," "The Acquisition -- Potential Disposition," "The Acquisition --
Unaudited Pro Forma Financial Information," "The Acquisition -- Impact of the
Acquisition on Operating Performance," "The Acquisition -- Impact of the
Acquisition on Operating Performance
-3-
<PAGE>
Assuming Intended Potential Disposition" and "Certain Regulatory
Considerations--Federal Deposit Insurance Corporation Improvement Act of 1991"
were made by the Company with a reasonable basis and disclosed in good faith.
All such statements represent the Company's best available estimate and judgment
as to the future financial performance of the Company based on the assumptions
disclosed in the Registration Statement and the Prospectus, which assumptions
reflect the Company's best available estimates of the events, contingencies and
circumstances described therein. The Company is not aware of any presently
existing facts or circumstances that could adversely affect the reasonableness
of such assumptions. The market share data under the heading "Business --
Competition" and the information in the table under the heading "Security
Ownership of Certain Beneficial Owners and Management" are true and accurate in
all material respects.
2.5 Independent Public Accountant.
Coopers & Lybrand L.L.P., which has audited and rendered an opinion on
certain of the financial statements filed or to be filed with the Commission as
part of the Registration Statement and Prospectus, are independent certified
public accountants within the meaning of the Act and the Rules and Regulations.
2.6 No Material Adverse Change.
Subsequent to the date of the latest audited financial statements
included in the Registration Statement and Prospectus and prior to the Closing
Date, (i) there shall not be any material adverse change, or, to the Company's
knowledge, any development involving a prospective material adverse change, in
or affecting the general affairs, management, financial position, stockholders'
equity or results of operations of the Company or in the business or proposed
business of the Company; (ii) there shall not have been any material transaction
entered into by the Company other than transactions in the ordinary course of
business; (iii) the Company shall not have incurred any material obligations,
contingent or otherwise, which are not disclosed in the Prospectus; (iv) there
shall not have been nor will there be any change in the capital stock or long-
term debt (except current payments) of the Company other than issuance under the
Company's Dividend Reinvestment Plan and exercises under outstanding stock
options; and (v) the Company shall not have sustained any material loss or
interference with its business from any labor dispute or court or governmental
action, order or decree.
2.7 No Defaults.
Except as set forth in the Prospectus, the Company is not (i) in
violation of its certificate of incorporation or bylaws, (ii) in violation of
any law, ordinance, administrative or governmental rule or regulation applicable
to the Company or of any order of any court or governmental agency or body
having jurisdiction over the Company, which might result in any material adverse
change in the condition (financial or otherwise), the business or prospects of
the Company, or (iii) in default in the performance of any obligation, agreement
or condition contained in any bond, debenture, note or other evidence of
indebtedness or in any agreement, indenture, mortgage, deed of trust, lease or
other agreement or instrument to which the
-4-
<PAGE>
Company is a party or by which the Company or any of its properties may be
bound. The execution and delivery of this Agreement, the issue and sale of the
Shares and compliance with all the terms of this Agreement, and the consummation
of the transactions contemplated herein, will not conflict with or result in a
breach or violation of any of the terms, conditions or provisions of, or
constitute a default under, the certificate of incorporation or bylaws of the
Company, any bond, debenture, note or other evidence of indebtedness or any
agreement, indenture, mortgage, deed of trust, lease or other agreement or
instrument to which the Company is a party or by which the Company or any of its
properties or assets is bound, or any existing law, statute, order, rule,
regulation, writ, injunction, or decree of any government, governmental
instrumentality, agency or body, arbitration tribunal or court, domestic or
foreign, having jurisdiction over the Company or any of its properties or result
in the imposition of any lien, charge or encumbrance upon any property or asset
of the Company. The consent, approval, authorization, order, registration or
qualification of any court or governmental instrumentality, agency or body is
not required for the consummation of the transactions herein contemplated except
such as have been obtained for the registration of the Shares under the Act or
the Exchange Act, or under the blue sky or securities laws of any state or
jurisdiction. Except as set forth in the Prospectus, the Company owns, possesses
or has obtained all governmental and other (including those obtainable from
third parties) licenses, permits, certifications, registrations, approvals or
consents and other authorizations (collectively, "Permits") necessary to own or
lease, as the case may be, and to operate its properties, whether tangible or
intangible, where the failure to own or possess such Permits might result in any
material adverse change in the condition (financial or otherwise), the business
or prospects of the Company, and to conduct any of the business or operations of
the Company as presently conducted and all such Permits are outstanding and in
good standing, and there are no proceedings pending or threatened, or any basis
therefor, seeking to cancel, terminate or limit such Permits and, except as
described in the Prospectus, such Permits contain no restrictions that are
materially burdensome to the Company.
2.8 Incorporation and Standing.
(a) The Company is and at the Closing Date (as defined below) will be
duly incorporated and validly existing in good standing under the laws of the
State of Delaware, with authorized and outstanding capital stock as set forth in
the Registration Statement and the Prospectus, and with full power and authority
(corporate and other) to own or lease its properties and conduct its business,
present and proposed, as described in the Registration Statement and Prospectus
and is duly qualified and in good standing as a foreign corporation in each
jurisdiction in which it owns or leases real property or transacts business
requiring such qualification, if any.
(b) The Company has no subsidiaries other than Community Bank,
National Association (the "Bank") and a currently inactive nonbanking
subsidiary. All of the authorized and outstanding capital stock of the Bank is
owned by the Company. The Bank is and at the Closing Date (as defined below)
will be duly incorporated and validly existing in good standing under the laws
of the United States, with full power and authority (corporate and
-5-
<PAGE>
other) to own or lease its properties and conduct its business, present and
proposed, as described in the Registration Statement and Prospectus and is duly
qualified and in good standing as a foreign corporation in each jurisdiction in
which it owns or leases real property or transacts business requiring such
qualification, if any.
2.9 Power and Authority.
The Company has all requisite power and authority to execute, deliver
and perform its obligations under this Agreement; the execution, delivery and
performance by the Company of its obligations under this Agreement has been duly
and validly authorized by all requisite corporate acts of the Company, and this
Agreement constitutes the legal, valid and binding agreement of the Company
enforceable against the Company in accordance with its terms. The Company has
full power and authority to authorize, issue and sell the Shares as contemplated
by this Agreement, free of any preemptive rights.
2.10 Legality of Outstanding Securities.
The outstanding securities of the Company have been duly and validly
authorized and issued and are fully paid and non-assessable, are free of any
preemptive or similar rights, and conform to all statements with regard thereto
contained in the Registration Statement and Prospectus. No sales of securities
have been made by the Company in violation of the provisions of the Act, the
Exchange Act or state securities laws. The authorized capital stock of the
Company conforms to the description thereof in the Registration Statement and
the Prospectus; the authorized and outstanding capital stock of the Company is
as set forth under the caption "Capitalization" in the Prospectus; no holder of
any securities of the Company has any right to require registration of any
securities of the Company without the consent of the Underwriter because of the
filing of the Registration Statement or the consummation of the transactions
contemplated thereby and there are no outstanding options, warrants or other
rights calling for the issuance of, and there are no commitments or arrangements
to issue, any shares of capital stock of the Company or any security convertible
into or exchangeable or exercisable for capital stock of the Company, except for
share purchase rights for each outstanding share of the Company's common stock,
par value $1.25 per share (the "Common Stock"), pursuant to the Stockholder
Protection Rights Plan of the Company as described in "Description Of Capital
Stock -- Rights Plan" in the Prospectus. The offers and sales of all
outstanding securities were at all relevant times either registered under the
Act and the applicable state securities or blue sky laws or exempt from such
registration requirements. All of the outstanding shares of the Bank have been
duly authorized and validly issued, are fully paid and non-assessable and are
owned beneficially by the Company free from any security interest, lien, adverse
claim or other encumbrance.
2.11 Legality of Shares.
The Shares have been duly and validly authorized and, when issued and
delivered against payment therefor as provided in this Agreement, will be duly
and validly issued, fully paid and non-assessable. The Shares, upon issuance,
will not be subject to the
-6-
<PAGE>
preemptive rights of any shareholders of the Company. The Shares will conform to
all statements and descriptions with regard thereto in the Registration
Statement and Prospectus.
2.12 Litigation.
Except as set forth in the Registration Statement and Prospectus,
there is and at the Closing Date there will be no action, suit or proceeding
before any court or governmental agency, authority or body pending or threatened
which might result in judgments against the Company or the Bank not adequately
covered by insurance or which collectively might result in any material adverse
change in the condition (financial or otherwise), the business or the prospects
of the Company or the Bank, or could materially adversely affect the properties
or assets of the Company or the Bank.
2.13 Finder.
There are no claims for services in the nature of a finder's fee with
respect to the sale of the Shares hereunder resulting directly or indirectly
from the acts of the Company or its agents or affiliates for which the
Underwriter may be responsible.
2.14 Exhibits.
There are no contracts or other documents which are required by the
Act or by the Rules and Regulations to be filed as exhibits to the Registration
Statement which have not been so filed and each written contract to which the
Company is a party and to which reference is made in the Prospectus has been
duly and validly executed, is in full force and effect in accordance with its
respective terms, and, except as set forth in the Prospectus, none of such
contracts has been assigned by the Company; and, except as set forth in the
Prospectus, the Company knows of no present fact, condition or act which could
prevent compliance with the terms of such contracts, as amended to date. Except
for amendments or modifications of such contracts in the ordinary course of
business, the Company has no intention of exercising any right which it may have
to cancel any of its obligations under any of such contracts, and has no
knowledge that any other party to any of such contracts has any intention not to
render full performance under such contracts. None of the provisions of such
contracts or documents violates any existing applicable law, rule, regulation,
judgment, order or decree of any governmental agency or court having
jurisdiction over the Company or any of its assets or businesses.
2.15 Tax Returns.
The Company has filed all foreign, federal, state and local tax
returns which are required to be filed by it and has paid all taxes shown on
such returns and on all assessments received by it to the extent such taxes have
become due. All taxes with respect to which the Company is obligated have been
paid or adequate accruals have been made to cover any such unpaid taxes.
-7-
<PAGE>
2.16 Property.
Except as otherwise set forth in or contemplated by the Registration
Statement and Prospectus, the Company has good and marketable title, free and
clear of all liens, encumbrances and defects, except liens for current taxes not
due and payable, to all property and assets which are described in the
Registration Statement and the Prospectus as being owned by the Company and all
the properties described in the Prospectus as being held under lease by the
Company are held thereby under valid, existing and enforceable leases, except to
the extent that any such liens, encumbrances or defects would not have a
material adverse effect on the condition (financial or otherwise), the business,
or prospects of the Company, and do not interfere with the use made and proposed
to be made of such property by the Company.
2.17 Not An Investment Company.
The Company is not an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
2.18 Accounting Controls.
The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
2.19 Certain Payments.
To the best knowledge of the Company, after reasonable investigation,
neither the Company nor any employee or agent of the Company has made any
payment of funds of the Company or received or retained any funds in violation
of any law, rule or regulation which payment, receipt or retention of funds is
of a character required to be disclosed in the Prospectus.
2.20 Form S-2.
The conditions for use of Form S-2, set forth in the General
Instructions thereto, have been satisfied by the Company.
2.21 Purchase and Assumption Agreement.
The Company and the Bank have all requisite power and authority to
execute, deliver and perform their respective obligations under the Purchase and
Assumption
-8-
<PAGE>
Agreement dated December 6, 1994 among the Company, the Bank and The Chase
Manhattan Bank, N.A., as amended (the "P&A Agreement"); the execution, delivery
and performance by the Company and the Bank of their respective obligations
under the P&A Agreement have been duly and validly authorized by all requisite
corporate acts of the Company and the Bank, and the P&A Agreement constitutes
the legal, valid and binding agreement of the Company and the Bank, enforceable
against them in accordance with its terms. The execution and delivery of the P&A
Agreement and the consummation of the transactions contemplated thereby, will
not conflict with or result in a breach or violation of any of the terms,
conditions or provisions of, or constitute a default under, the certificate of
incorporation or bylaws of the Company or the Bank, any bond, debenture, note or
other evidence of indebtedness or any agreement, indenture, mortgage, deed of
trust, lease or other agreement or instrument to which the Company or the Bank
is a party or by which the Company or the Bank or any of their respective
properties or assets is bound, or any existing law, statute, order, rule,
regulation, writ, injunction, or decree of any government, governmental
instrumentality, agency or body, arbitration tribunal or court, domestic or
foreign, having jurisdiction over the Company or the Bank or any of their
respective properties or result in the imposition of any lien, charge or
encumbrance upon any property or asset of the Company or the Bank. All consents,
approvals, authorizations, orders, registrations, filings and qualifications of
or with any court or governmental body or agency required for the execution and
delivery of the P&A Agreement by the Company and the Bank, the performance of
their respective obligations under, and the consummation of the transactions
contemplated by the P&A Agreement have been obtained or made and are in full
force and effect.
SECTION 3
PURCHASE OF SHARES
3.1 Purchase, Sale and Delivery of the Shares.
On the basis of the representations, warranties, covenants and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Company agrees to sell to the Underwriter and the Underwriter agrees
to purchase from the Company the number of Shares set forth in Schedule I hereto
opposite the name of the Underwriter at a purchase price of $[ ] per Share.
Delivery of certificates and payment of the purchase price for the
Shares shall be made at the offices of Cadwalader, Wickersham & Taft, 100 Maiden
Lane, New York, New York 10038, or such other location as shall be agreed upon
by the Underwriter and the Company. Such delivery and payment shall be made at
10:00 A.M., New York time, on the fourth business day following (i) the date the
Registration Statement becomes effective or (ii) if the Prospectus omits certain
information by virtue of Rule 430A on the date the Registration Statement
becomes effective, the date of the filing of the form of Prospectus under Rule
424(b) containing such omitted information, unless in either case such time and
date are postponed in accordance with the provisions hereof, or at such other
time as shall be agreed upon by the
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Underwriter and the Company. The time and date of such delivery and payment are
herein called the "Closing Date." Delivery of the certificates for the Shares
shall be made to the Underwriter for its account against payment of the purchase
price as herein above described, by certified or official bank check or checks
payable to the order of the Company in New York Clearing House funds.
Certificates for the Shares shall be registered in such name or names
and in such denominations as the Underwriter may request in writing at least two
full business days prior to the Closing Date. The Company will permit the
Underwriter to examine and package such certificates for delivery at the office
of M.A. Schapiro & Co., Inc. at least one full business day prior to the Closing
Date.
3.2 Offering.
It is understood that the Underwriter proposes to offer the Shares for
sale to the public and initially to offer the Shares upon the terms set forth in
the Prospectus.
3.3 Post-Closing Information.
The Underwriter covenants that, reasonably promptly after the Closing
Date, it will supply the Company with such additional information as the Company
may reasonably request to be supplied to the securities commissions of such
states in which the Shares have been qualified for sale.
SECTION 4
REGISTRATION STATEMENT, PROSPECTUS AND
OFFERING OF THE SHARES OF THE COMPANY
4.1 Delivery of Registration Statements.
The Company shall deliver to the Underwriter without charge two signed
copies of the Registration Statement, including all financial statements and
exhibits and schedules filed therewith and any amendments or supplements
thereto, and shall deliver without charge to the Underwriter as many conformed
copies as the Underwriter shall reasonably request of the Registration Statement
and any amendment or supplement thereto, including such financial statements and
exhibits and schedules. The signed copies of the Registration Statement so
furnished to the Underwriter will include signed copies of any and all consents
and certificates of the independent public accountants certifying to the
financial statements included in the Registration Statement and Prospectus and
signed copies of any and all consents, certificates and opinions of any other
persons whose profession give authority to statements made by them and who are
named in the Registration Statement or Prospectus as having prepared, certified,
reviewed or opined on any part thereof.
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4.2 Delivery of Preliminary Prospectus.
The Company will deliver to the Underwriter, without charge, prior to
the effective date of the Registration Statement, as many copies as the
Underwriter may reasonably request of each Preliminary Prospectus filed with the
Commission bearing in red ink the statement required by Item 501(c)(8) of the
Commission's Regulation S-K. The Company consents to the use of such documents
by the Underwriter, prior to the effective date of the Registration Statement.
4.3 Delivery of Prospectus.
The Company will deliver, at its expense, as many printed copies of
the Prospectus as the Underwriter may reasonably request for the purposes
contemplated by this Agreement and shall deliver such printed copies of the
Prospectus to the Underwriter, as directed by the Underwriter, within one
business days after the effective date. The Company consents to the use of the
Prospectus in accordance with the provisions of the Act and with the securities
or blue sky laws of the jurisdictions in which the Shares are offered by the
Underwriter, both in connection with the offering and sale of the Shares and for
such period of time thereafter as the Prospectus is required by the Act to be
delivered in connection with sales by the Underwriter.
4.4 Further Amendments and Supplements.
If during such period of time that a Prospectus is required to be
delivered under the Act or the Rules and Regulations, any event occurs or any
event known to the Company relating to or affecting the Company shall occur as a
result of which, in the judgment of the Company or in the opinion of counsel for
the Underwriter, the Prospectus as then amended or supplemented could include an
untrue statement of a material fact, or omit to state any material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, or if, in the judgment of the Company or
in the opinion of counsel for the Underwriter, it might be necessary prior to
the Closing Date to amend or supplement the Prospectus to comply with the Act or
the Rules and Regulations or any other law, the Company will forthwith notify
the Underwriter thereof and prepare and, subject to the provisions of Section
5.1 hereof, file with the Commission such further amendment to the Registration
Statement or supplemental or amended Prospectus as may be required and promptly
furnish and deliver to the Underwriter and to others whose names and addresses
are designated by the Underwriter, all at the cost of the Company, such number
of copies of the amended or supplemented Prospectus as requested by the
Underwriter which as so amended or supplemented will not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the Prospectus not misleading in the light of the circumstances
when it is delivered to a purchaser or prospective purchaser, and which will
comply in all respects with the Act and the Rules and Regulations; and in the
event the Underwriter is required to deliver a Prospectus or Prospectuses, such
additional changes shall be included therein as may be necessary to permit
compliance with the requirements of the Act and the Rules and Regulations. In
the event that the Prospectus is to be amended or
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supplemented as provided in this Section 4.4, the Company, if requested by the
Underwriter, will promptly make a press release announcing or disclosing the
matters to be covered by the proposed amendment or supplement.
SECTION 5
COVENANTS OF THE COMPANY
The Company covenants and agrees with the Underwriter that:
5.1 Objection of Underwriter to Amendments or Supplements.
After the date hereof, the Company will not at any time file any
amendment or supplement to the Registration Statement or Prospectus unless and
until a copy of such amendment or supplement has been previously furnished to
the Underwriter and counsel for the Underwriter within a reasonable time period
prior to the proposed filing thereof, or of which the Underwriter or counsel for
the Underwriter has objected to, in writing, on the ground that such amendment
or supplement is not in compliance with the Act or the Rules and Regulations.
5.2 Company's Best-Efforts to Cause Registration Statement to Remain
Effective.
The Company will use its best efforts to cause the Registration
Statement and any post-effective amendment subsequently filed, to remain
effective during such period of time that a Prospectus is required to be
delivered under the Act or the Rules and Regulations, and will promptly advise
the Underwriter and counsel for the Underwriter, and will confirm such advice in
writing (i) when the Registration Statement became effective and when any
amendment thereto shall have become effective and when any amendment or
supplement to the Prospectus shall be filed with the Commission, (ii) when the
Commission shall make a request or suggestion for any amendment to the
Registration Statement or the Prospectus or for additional information and the
nature and substance thereof, and (iii) of the issuance by the Commission of any
order suspending the effectiveness of the Registration Statement pursuant to
Section 8 of the Act or of the initiation of any proceedings for that purpose,
(iv) of the happening of any event which makes any material statement in the
Registration Statement or Prospectus untrue or which requires the making of any
changes in the Registration Statement or Prospectus in order to make the
statements therein not misleading, and (v) of the refusal to qualify or the
suspension of the qualification of the Shares for offering or sale in any
jurisdiction or the suspension of the quotation of the Common Stock on The
Nasdaq National Market, or of the institution of any proceedings for any of such
proposes. The Company will promptly use its best efforts to prevent any such
refusal to qualify or any such suspension, and to obtain promptly a lifting of
any such order, the reversal of any such refusal and the termination of any such
suspension.
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5.3 Preparation and Filing of Amendments and Supplements.
The Company shall prepare the Prospectus in a form approved by the
Underwriter and file such Prospectus pursuant to Rule 424(b) under the Act not
later than the Commission's close of business on the second business day
following the execution of this Agreement or, if applicable, such earlier time
as may be required by Rule 424(b) or Rule 430A to avoid the requirement of
filing a post-effective amendment. If any event shall occur, or if in the
opinion of counsel for the Underwriter any event shall occur, as a result of
which it is necessary to amend or supplement the Prospectus in order to make the
Prospectus not misleading in light of the circumstances existing at the time it
is delivered to a purchaser, the Company will forthwith amend or supplement the
Prospectus (in form and substance satisfactory to counsel for the Underwriter)
so that, as so amended or supplemented, the Prospectus will not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in light
of the circumstances existing at the time the Prospectus is delivered to a
purchaser, not misleading.
5.4 Blue Sky Qualification.
The Company at its own expense will promptly take such actions, when
and as requested by the Underwriter, to qualify the Shares for offering and sale
under the securities laws of such states or jurisdictions as the Underwriter may
request, and to comply with such laws so as to permit the continuance of sales
and dealings therein in such jurisdictions for so long as may be necessary to
complete the distribution of the Shares; provided, however, the Company shall
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not be required to consent to jurisdiction in general or qualify as a foreign
corporation in any jurisdiction in connection therewith. The Company shall
promptly pay all blue sky counsel fees and disbursements as and when billed by
counsel for the Underwriter. The Company will also promptly pay all blue sky
filing fees, costs and expenses to be undertaken by counsel for the Underwriter
as and when billed.
5.5 Financial Statements and Reports.
The Company at its own expense will prepare and file promptly all
financial statements, reports and definitive proxy statements or information
statements required to be filed with the Commission pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act or under any applicable state securities
laws, for so long as the delivery of a prospectus is required in connection with
the offering and sale of the Shares.
5.6 Reports and Financial Statements to the Underwriter.
During the period of five years from the Closing Date, the Company
will deliver to the Underwriter copies of each annual report of the Company, and
will deliver to the Underwriter: (i) as soon as available after the close of
each fiscal year of the Company, a financial report of the Company and its
subsidiaries, if any, on a consolidated basis, and a similar financial report of
all unconsolidated subsidiaries, if any, all such reports to include a
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balance sheet as of the end of the preceding fiscal year, a statement of income,
a statement of cash flows and a statement of stockholders' equity covering such
fiscal year, and all to be in reasonable detail and audited by the then
independent public accountants for the Company; (ii) as soon as available after
the end of each quarter, copies of the consolidated income statement and
statement of cash flows for that period, and the balance sheet as of the end of
that period of the Company and its subsidiaries, if any, and the income
statement, statement of cash flows and the balance sheet of each unconsolidated
subsidiary, if any, of the Company for that period, all subject to year-end
adjustment, certified by the principal financial or accounting officer of the
Company; (iii) copies of all other statements, documents, or other information
which the Company shall mail or otherwise make available generally to any class
of its security holders, or shall file with the Commission; and (iv) upon
request in writing from the Underwriter, furnish to the Underwriter such other
information as may reasonably be requested and which may be properly disclosed
to the Underwriter with reference to the property, business and affairs of the
Company and its subsidiaries, if any.
If the Company shall fail to furnish the Underwriter with financial
statements as herein provided, within the times specified herein, the
Underwriter shall have the right to have such financial statements prepared by
independent public accountants of its own choosing and the Company agrees to
furnish such independent public accountants such data and assistance and access
to such records as they may reasonably require to enable them to prepare such
statements and to pay their reasonable fees and expenses in preparing the same.
The Underwriter shall provide the Company with 10 days written notice of the
exercise of its right to cause independent public accountants to prepare
financial statements.
5.7 Expenses Paid by the Company.
The Company will pay, whether or not the transaction contemplated
hereunder is consummated or this Agreement becomes effective or is terminated,
all costs and expenses incident to the performance of its obligations under this
Agreement, including all expenses incident to the authorization of the Shares
and their issue and delivery to the Underwriter; any original issue taxes in
connection therewith; all transfer taxes, if any, incident to the initial sale
of the Shares to the public; the fees and expenses of the Company's counsel and
accountants; the costs and expenses incident to the preparation, printing,
distribution and filing under the Act and with the National Association of
Securities Dealers, Inc. (the "NASD") of the Registration Statement, any
Preliminary Prospectus and the Prospectus and any amendments or supplements
thereto; the cost of printing, reproducing and filing all exhibits to the
Registration Statement and this Agreement; the cost of printing and furnishing
to the Underwriter copies of the Registration Statement and copies of the
Preliminary Prospectus and the Prospectus as herein provided; the cost of
preparation and printing of the certificates for the Shares and such other
instruments required in connection with the offering; the cost and charges of
any transfer agent or registrar or dividend agent for the Shares; the cost of
"tombstone advertisements" and six (6) bound volumes; the cost of qualifying the
Shares under the state securities or blue sky laws, and related expenses, as
more fully provided in Section 5.4 herein; and all other costs and expenses
incident to the performance of the Company's obligations hereunder. It is
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understood, however, that, except as specifically provided in this Section,
Section 3.3, Section 5.4, and Section 6 hereof, the Underwriter will pay all of
its own costs and expenses, including the fees of its counsel, transfer taxes on
any resale of Shares by it, and any expenses connected with any offers made by
it.
In addition, if the purchase and sale of the Shares provided for
herein is not consummated because any condition to the obligations of the
Underwriter set forth in Section 8 hereof is not satisfied, because of any
termination pursuant to Section 10 hereof, or because of any refusal, inability
or failure on the part of the Company to perform any agreement herein or comply
with any provision hereof other than by reason of a default by any of the
Underwriter, the Company will reimburse the Underwriter upon demand for all out-
of-pocket expenses (including fees and disbursements of counsel) that shall have
been incurred by it in connection with the proposed purchase and sale of the
Shares.
5.8 Reports to Stockholders.
During the period of five years from and after the Closing Date, the
Company will, as promptly as possible, not to exceed 120 calendar days after
each fiscal year, render and distribute reports to its stockholders which will
include audited statements of its operations and cash flows during such period
and its balance sheet as of the end of such period, which statements shall be
audited in accordance with generally accepted auditing standards by the
Company's independent certified public accountants.
5.9 Section 11(a) Financials.
The Company will make generally available to its security holders and
will deliver to the Underwriter, as soon as practicable, but in any event not
later than eighteen months after the effective date of the Registration
Statement (as defined in Rule 158(c) under the Act), an earning statement of the
Company and its subsidiaries (which need not be audited) complying with Section
11(a) of the Act and the Rules and Regulations relating thereto (including, at
the option of the Company, Rule 158).
5.10 Post-Effective Availability of Prospectus.
During the period in which the Prospectus is required to be delivered
under the Act or the Rules and Regulations, the Company will comply, at its own
expense, with all requirements imposed upon it by the Act, as now or hereafter
amended, by the Rules and Regulations, as from time to time may be in force, and
by any order of the Commission, so far as necessary to permit the continuance of
sales or dealing in the Shares.
5.11 Nasdaq National Market Filings.
The Company will file with The Nasdaq National Market all documents
and notices required by The Nasdaq National Market of companies that have issued
securities quoted on The Nasdaq National Market.
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5.12 Application of Proceeds.
The Company will apply the net proceeds from the sale of the Shares in
the manner set forth in the Registration Statement and Prospectus, as amended or
supplemented in the manner set forth herein.
5.13 Undertaking of the Company.
The Company hereby agrees that, without the prior written consent of
M.A. Schapiro & Co., Inc. on behalf of the Underwriter, it will not, during the
period ending 180 days after the date of the Prospectus, (i) offer, pledge,
sell, contract to sell (including, without limitation, by means of any short
sale or any purchase of an option to sell), sell any contract to purchase, grant
an option (other than pursuant to the Company's 1994 Long-term Executive
Compensation Program), right or warrant to purchase or otherwise transfer or
dispose of, directly or indirectly, any shares of Common Stock, any securities
the value of which is determined by reference to the value of the Common Stock
or any securities convertible into or exercisable or exchangeable for Common
Stock, whether any such transaction is to be settled by delivery of Common Stock
or other such securities, in cash or otherwise (other than (A) the Shares to be
sold hereunder and (B) any shares of Common Stock issued by the Company upon the
exercise of an option or warrant or the conversion of a security outstanding on
the date hereof of which the Underwriter have been advised in writing), or (ii)
enter into any derivative instrument the value of which is determined by
reference to the value of the Common Stock.
5.14 Undertakings of Certain Shareholders.
The Company will deliver to the Underwriter, prior to or
simultaneously with the execution of this Agreement, the written undertaking of
each executive officer and director of the Company, and each person who owns
beneficially 5% or more of the Common Stock of the Company (based on the number
of shares of Common Stock outstanding prior to the issuance of the Shares) that
such person shall not directly or indirectly offer or sell to the public any
portion of the shares of Common Stock owned prior to the date of this Agreement
for a period of 180 days from the effective date of the Registration Statement
without the prior written consent of M.A. Schapiro & Co., Inc.
5.15 Cooperation With Underwriter's Due Diligence.
At all times prior to the Closing Date, the Company will cooperate
with the Underwriter and its counsel in such investigation as the Underwriter
and its counsel may make or cause to be made of all the properties, business and
operations of the Company in connection with the purchase and public offering of
the Shares, and the Company will make available to the Underwriter and its
counsel in connection therewith such information in its possession as the
Underwriter or its counsel may reasonably request.
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5.16 Appointment of Transfer Agent.
The Company has appointed Chemical Bank, as Transfer Agent for the
Shares, subject to the consummation of the offering.
5.17 Compliance With Conditions Precedent.
The Company will use its best efforts to comply or cause compliance
with the conditions precedent to the obligations of the Underwriter set forth in
Section 8 hereof.
5.18 Filing of Form 10-C.
The Company hereby agrees to file with the Commission and NASD Form
10-C in accordance with the provisions of Rule 13a-17 promulgated under the
Exchange Act and to provide a copy of such filing to the Underwriter and its
counsel.
5.19 Document Volumes.
Within sixty (60) days after the Closing Date, the Company will
furnish to the Underwriter, at the Company's expense, six (6) commercially bound
document volumes containing all relevant documents and correspondence in
connection with the offering and sale of the Shares.
5.20 Transfer Sheets.
For a period of 18 months from the effective date, the Company, at its
own expense, shall provide, on a weekly basis, the Underwriter with copies of
the Company's Daily Transfer Sheets and Depository Trust Company reports.
5.21 No Manipulation.
The Company has not taken, nor will it take, directly or indirectly,
any action designed to or that might reasonably be expected to cause or result
in the stabilization or manipulation of the price of the Common Stock to
facilitate the sale or resale of the Shares.
SECTION 6
INDEMNIFICATION
6.1 Indemnification by the Company.
The Company agrees to indemnify and hold harmless the Underwriter and
each person, if any, who controls the Underwriter within the meaning of Section
15 of the Act or Section 20 of the Exchange Act, and the agents thereof, and
each and all and any of them, jointly and severally, from and against any and
all losses, claims, damages or liabilities, joint or several, to which they or
any of them may become subject under the Act or the Exchange
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Act, under any other statute, at common law or otherwise, and to reimburse the
Underwriter and each such controlling person and agent thereof for any legal or
other expenses (including the cost of any investigation and preparation and the
cost of recovering any claim for indemnification under this provision) incurred
by it or any of them in connection with any claim or litigation as such expenses
are incurred, whether or not resulting in any liability, insofar as such losses,
claims, damages, liabilities (or actions in respect thereof), arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus or in the Registration Statement or
the Prospectus or any amendment or supplement thereto, or any application or
other document filed in order to qualify the Shares under the blue sky or
securities laws of the states or jurisdictions where filings were made, or any
amendment or supplement thereto, or arising out of or based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, or arising out of or
based upon the Company's breach of the representation contained in Section 2.4
hereof; provided, however, that the Company shall not be liable in any such case
to the extent that any such loss, claim, damage, or liability arises out of or
is based upon any untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement thereto, or arises out of or is based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
which statement or omission was made solely in reliance upon and in conformity
with written information furnished to the Company by the the Underwriter
specifically for use in the Registration Statement or Prospectus or any
amendment or supplement thereto pursuant to Section 12.4 hereof; and provided,
further, that the foregoing indemnity agreement with respect to any preliminary
prospectus shall not inure to the benefit of the Underwriter from whom the
person asserting such losses, claims, damages or liabilities purchases Shares,
or any person controlling the Underwriter, if a copy of the Prospectus (as then
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of the Underwriter to
such person, if required by law so to have been delivered, at or prior to the
written confirmation of the sale of the Shares to such person, and if the
Prospectus (as so amended or supplemented) would have cured the defect giving
rise to such losses, claims, damages or liabilities. The foregoing
indemnification is in addition to any other liabilities that the Company may
otherwise have.
6.2 Indemnification by the Underwriter.
The Underwriter agrees to indemnify and hold harmless the Company,
each director of the Company and each officer of the Company from and against
any and all losses, claims, damages or liabilities, joint or several, to which
they or any of them may become subject under the Act or the Exchange Act, under
any other statute, at common law or otherwise, and to reimburse each such person
so indemnified for any legal or other expenses (including the cost of any
investigation and preparation and the cost of recovering any claim for
indemnification under this provision) incurred by it or him in connection with
any claim or litigation as such expenses are incurred, whether or not resulting
in any liability, insofar as
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such losses, claims, damages, liabilities (or actions in respect thereof), arise
out of or are based solely upon any untrue statement or alleged untrue statement
of a material fact contained in any Preliminary Prospectus or in the
Registration Statement or the Prospectus or any amendment or supplement thereto,
or solely arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, but only to the extent such statement or
omission was made solely in reliance upon and in conformity with written
information furnished to the Company by the Underwriter specifically for use in
the Registration Statement or the Prospectus or any amendment or supplement
thereto pursuant to Section 12.4 hereof.
6.3 Notice of Defense Against Claims.
Promptly after receipt by an indemnified party under Sections 6.1 or
6.2 above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such section, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party.
In case any such action shall be brought against any indemnified party, and it
shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate therein, and, to the extent
that it shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party). Upon receipt of notice from the
indemnifying party, to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to such indemnified
party under such section for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than
reasonable costs of investigation.
6.4 Contribution.
In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in Sections 6.1 or 6.2
is applicable but for any reason is held to be unavailable from an indemnifying
party or insufficient to hold an indemnified party harmless, such indemnifying
party shall contribute to the aggregate amount paid or payable by such
indemnified party as a result of such losses, claims, or liabilities (including
actions in respect thereof and any investigation, legal and other expenses
incurred in connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claim asserted, but after deducting any contribution
received by the Company from persons other than the Underwriter, such as persons
who control the Company within the meaning of the Act or the Exchange Act,
officers of the Company who signed the Registration Statement and directors of
the Company, who may also be liable for contribution), to which an indemnified
party is subject in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriter on the
other from the offering of the Shares to which such loss, claim, damage or
liability (or action in respect thereof) relates. If, however,
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the allocation provided by the immediately preceding sentence is not permitted
by applicable law, or if the indemnified party failed to give the notice
required under Section 6.3 above, then each indemnifying party shall contribute
to such amount paid or payable by such indemnified party in such proportion as
is appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Underwriter on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriter on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering contemplated
by this Agreement bear to the total underwriting discounts and commissions
received by the Underwriter. The relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company on the one hand or the
Underwriter (in the manner contemplated by Section 6.2 hereof) on the other and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
The Company and the Underwriter agree that it would not be just and
equitable if contributions pursuant to this Section 6.4 were determined by pro-
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to above in this Section 6.4. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
in this Section 6.4 shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 6.4, the Underwriter shall not be required to contribute an amount in
excess of the percentage that the underwriting discount appearing on the cover
page of the Prospectus bears to the public offering price of the Shares
underwritten by it and distributed to the public. 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. For purposes of this Section 6.4, each person, if any, who
controls the Underwriter within the meaning of the Act or the Exchange Act shall
have the same rights to contributions as the Underwriter, and each officer of
the Company who shall have signed the Registration Statement and each director
of the Company shall have the same rights to contribution as the Company,
subject in each case to the limitations of this Section 6.4.
SECTION 7
EFFECTIVENESS OF AGREEMENT
This Agreement shall become effective at the later of (i) the time of
effectiveness on the effective date of the Registration Statement or (ii) the
date hereof.
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SECTION 8
CONDITIONS TO THE UNDERWRITER'S OBLIGATIONS
The Underwriter's obligations hereunder to purchase the Shares and to
make payment to the Company hereunder on the Closing Date shall be subject to
the accuracy, as of the Closing Date, of the representations and warranties on
the part of the Company herein contained, to the performance by the Company of
all its agreements herein contained, to the fulfillment of or compliance by the
Company with all covenants and conditions hereof, and to the following
additional conditions:
8.1 Filing of Prospectus.
The Prospectus shall have been filed with the Commission pursuant to
Rule 424(b) within the applicable time period prescribed for such filing under
the Rules and Regulations and the Act and in accordance with Section 5.3 hereof.
On or prior to the Closing Date, no stop order suspending the effectiveness of
the Registration Statement or any part thereof shall have been issued and no
proceeding for that purpose shall have been initiated or threatened by the
Commission or be pending; any request for additional information on the part of
the Commission (to be included in the Registration Statement or Prospectus or
otherwise) shall have been complied with to the satisfaction of the Commission;
and neither the Registration Statement nor the Prospectus nor any amendment or
supplement thereto shall have been filed to which counsel to the Underwriter
shall have objected in writing or had not given its consent. In addition, the
NASD shall have indicated that it has no objection to the underwriting
arrangements pertaining to the sale of the Shares by the Underwriter and no
action shall have been taken by the Commission or the NASD the effect of which
would make it improper, at any time prior to the Closing Date for any member
firm of the NASD to execute transactions (as principal or as agent) in the
Shares, and no proceedings for the purpose of taking such action shall have been
instituted or shall be pending, or, to the best of the Underwriter's or the
Company's knowledge, shall be contemplated by the Commission or the NASD. The
Company represents at the date hereof, and shall represent as of the Closing
Date, that it has no knowledge that any such action is in fact contemplated by
the Commission or the NASD.
8.2 Accuracy of Registration Statement.
The Underwriter shall not have disclosed in writing to the Company
that the Registration Statement or the Prospectus or any amendment thereof or
supplement thereto contains an untrue statement of a fact which, in the opinion
of counsel to the Underwriter, is material, or omits to state a fact which, in
the opinion of such counsel, is material and is required to be stated therein,
or is necessary to make the statements therein not misleading.
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8.3 Regulatory Approvals.
The Company shall have obtained all regulatory consents and approvals
and satisfied all other requirements (including the expiration of any required
waiting period) prescribed by law which are necessary to the consummation of the
transactions contemplated by the P&A Agreement; provided, however, that no such
-------- -------
approval or consent shall be deemed to have been received if it shall impose any
conditions or requirements which would reduce the benefits to the Company or the
Bank of the transactions contemplated by the P&A Agreement to such a degree that
(i) there could be a material adverse effect on the operations or financial
condition of the Company or the Bank, considered as an entire entity, or (ii) in
the reasonable judgment of the Underwriter, it would be impracticable or
inadvisable to offer and sell the Shares. All such approvals and consents shall
be in full force and effect as of the date hereof and the Closing Date.
8.4 Common Stock Offering.
The Company, M.A. Schapiro & Co., Inc. and First Albany Corporation
shall have entered into the underwriting agreement (the "Common Stock
Underwriting Agreement") relating to the Common Stock and the issuance, purchase
and sale of the Common Stock as contemplated by such agreement shall have been
consummated on the terms and conditions set forth in the Common Stock
Underwriting Agreement.
8.5 Casualty and Other Calamity.
Between the date hereof and the Closing Date, the Company and the Bank
shall not have sustained any loss on account of fire, explosion, flood,
accident, calamity or any other cause, of such character as materially adversely
affects its business or properties, considered as an entire entity, whether or
not such loss is covered by insurance.
8.6 Litigation and Other Proceedings.
Between the date hereof and the Closing Date, there shall be no
litigation instituted or threatened against the Company or the Bank and there
shall be no proceeding instituted or threatened against the Company or the Bank
before or by any federal or state commission, regulatory body or administrative
agency or other governmental body, domestic or foreign, wherein an unfavorable
ruling, decision or finding could materially adversely affect the business,
franchises, licenses, operations or financial condition or income of the Company
or the Bank, considered as an entire entity, or the ability of the Company or
the Bank to perform its obligations under the P&A Agreement.
8.7 Lack of Material Change.
Except as contemplated herein or as set forth in the Registration
Statement and Prospectus, during the period subsequent to the date of the last
audited balance sheet included in the Registration Statement and prior to the
Closing, the Company and the Bank (A) shall
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<PAGE>
have conducted their respective businesses in the usual and ordinary manner as
the same was being conducted on the date of the last audited balance sheet
included in the Registration Statement, (B) except in the ordinary course of
business, the Company and the Bank shall not have incurred any liabilities or
obligations (direct or contingent) or disposed of any of its assets, or entered
into any material transaction or (C) shall not have suffered or experienced any
material adverse change or any development involving a prospective material
adverse change in or affecting its general affairs, management or condition,
financial or otherwise. At the Closing Date, the capital stock and capital
surplus account of the Company shall be substantially the same as the date of
the last audited balance sheet included in the Registration Statement, without
considering the proceeds from the sale of the Shares.
8.8 Review by Underwriter's Counsel.
The authorization of the Shares, the Registration Statement, the
Prospectus and all corporate proceedings and other legal matters incident
thereto and to this Agreement shall be reasonably satisfactory in all respects
to Cadwalader, Wickersham & Taft, counsel to the Underwriter, and such counsel
shall have furnished to the Underwriter such opinion or opinions, dated the
Closing Date, with respect to the Registration Statement, the Prospectus and
other related matters as the Underwriter may reasonably request.
8.9 Opinion of Company Counsel.
The Company shall have furnished to the Underwriter the opinion, dated
as of the Closing Date, addressed to the Underwriter from Bond, Schoeneck &
King, LLP, counsel to the Company, in form and substance satisfactory to the
Underwriter and counsel to the Underwriter and to the effect that based upon a
review by it of the Registration Statement, Prospectus, the Company's
Certificate of Incorporation, Bylaws, relevant corporate proceedings, and an
examination of such statutes and other documents it deems necessary to express
such opinion:
(i) The Company has been duly incorporated and is validly
existing and in good standing under the laws of the State of Delaware,
with full corporate power and authority to own and operate its
properties and to conduct its business as set forth in the
Registration Statement and Prospectus. The Company is qualified or
registered as a foreign corporation to transact business and is in
good standing in such states in which ownership of its property or its
conduct of business requires such qualification or restriction.
(ii) The Bank has been duly incorporated and is validly
existing and in good standing under the laws of the United States,
with full corporate power and authority to own and operate its
properties and to conduct its business as set forth in the
Registration Statement and Prospectus. The Bank is qualified or
registered as a foreign corporation to transact business and is in
good standing in such states in which ownership of its property or its
conduct of business requires such qualification or registration.
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<PAGE>
(iii) The Company and the Bank had all requisite power and
authority to execute, deliver and perform their respective obligations
under the P&A Agreement; the execution, delivery and performance by
the Company and the Bank of their respective obligations under the P&A
Agreement have been duly and validly authorized by all requisite
corporate acts of the Company and the Bank and the P&A Agreement
constitutes the legal, valid and binding agreement of the Company and
the Bank, enforceable against them in accordance with its terms;
(iv) The execution and delivery of the P&A Agreement and the
consummation of the transactions contemplated thereby, will not
conflict with or result in a breach or violation of any of the terms,
conditions or provisions of, or constitute a default under, the
certificate of incorporation or bylaws of the Company or the Bank, any
bond, debenture, note or other evidence of indebtedness or any
agreement, indenture, mortgage, deed of trust, lease or other
agreement or instrument to which the Company or the Bank is a party or
by which the Company or the Bank or any of their respective properties
or assets is bound, or any existing law, statute, order, rule,
regulation, writ, injunction, or decree of any government,
governmental instrumentality, agency or body, arbitration tribunal or
court, domestic or foreign, having jurisdiction over the Company or
the Bank or any of their respective properties or result in the
imposition of any lien, charge or encumbrance upon any property or
asset of the Company or the Bank.
(v) All consents, approvals, authorizations, orders,
registrations, filings or qualifications of or with any court or
governmental body or agency required for the execution and delivery of
the Company and the Bank of the performance of their respective
obligations under, and the consummation of the transactions
contemplated by the P&A Agreement have been obtained or made and are
in full force and effect.
(vi) The Company has authorized and outstanding capital stock
as set forth in the Registration Statement and Prospectus; the
outstanding Common Stock of the Company, the Shares, and all the
securities and classes and series thereof described in the
Registration Statement under the heading "Description of Capital
Stock" and elsewhere in the Registration Statement conform to the
statements concerning them in the Registration Statement and
Prospectus.
(vii) All of the outstanding Common Stock of the Company has
been duly and validly issued and is fully paid and non-assessable and
contains no preemptive rights; all of the outstanding capital stock of
the Bank has been duly authorized and validly issued, is fully paid
and non-assessable and is owned by the Company free and clear of any
mortgage, pledge, lien, encumbrance, claim or equity; the Shares have
been duly and validly authorized, and upon issuance
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<PAGE>
thereof and payment therefor in accordance with this Agreement will be
duly and validly issued, fully paid and non-assessable, and will not
be subject to any preemptive or similar rights (except for share
purchase rights for each outstanding share of Common Stock pursuant to
a Stockholders Protection Rights Plan of the Company, as described in
"Description of Capital Stock -- Rights Plan" in the Prospectus).
(viii) No consents, approvals, authorizations, orders,
registrations or qualifications of any court or other governmental
instrumentality are necessary for the valid authorization, issue or
sale by the Company of the Shares hereunder, except such as have been
obtained under the Act or blue sky or state securities laws.
(ix) The Company has all requisite power and authority to
execute, deliver and perform its obligations under this Agreement; the
execution, delivery and performance by the Company of its obligations
under this Agreement have been duly and validly authorized by all
requisite corporate acts of the Company and this Agreement constitutes
the legal, valid and binding agreement of the Company, enforceable
against it in accordance with its terms.
(x) The execution and delivery of this agreement and issuance
and sale of the Shares will not conflict with or result in a breach or
violation of any of the terms, conditions or provisions of, or
constitute a default under, the articles of incorporation or bylaws of
the Company or the Bank, any bond, debenture, note, or other evidence
of indebtedness or any agreement, indenture, mortgage, deed or trust,
lease or other agreement or instrument to which the Company or the
Bank, is a party or by which the Company or the Bank or any of their
respective properties, or assets is bound, or any existing law,
statute, order, rule, regulation, writ, injunction, or decree of any
government, governmental instrumentality, agency or body, arbitration
court or tribunal, domestic or foreign, having jurisdiction over the
Company or the Bank or any of their respective properties or result in
the imposition of any lien, charge or encumbrance upon any property or
asset of the Company or the Bank.
(xi) The Company is not an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
(xii) the statements (1) in the Prospectus under the captions
"Prospectus Summary," "Risk Factors," "The Company," "The
Acquisition," "Use of Proceeds," "Capitalization," "Market for Common
Stock and Dividends," "Management's Discussion and Analysis of
Financial Condition and Results of Operations," "Business,"
"Management," "Security Ownership of Certain Beneficial Owners and
Management," "Certain Regulatory Considerations," "Description of
Capital Stock" and "Underwriter" and (2) in the Registration Statement
in Items 14 and 15, in each case in so far as such
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<PAGE>
statements constitute summaries of the legal matters, documents or
proceedings referred to therein, fairly represent the information
called for with respect to such legal matters, documents and
proceedings and fairly summarize the matters referred to therein.
(xiii) The Registration Statement has become effective under
the Act and, to such counsel's actual knowledge, after reasonable
investigation, no order suspending the effectiveness of the
Registration Statement or the use of any Preliminary Prospectus or
Prospectus has been issued and no proceedings for that purpose have
been instituted or are pending or threatened by the Commission; based
on the information which such counsel developed in the course of the
performance of their services for the Company (including their review
of material documents and contracts), their examination of the
corporate minutes of the Company and other conversations with and
certificates from principal executive officers of the Company, such
counsel confirms that the Registration Statement and the Prospectus
(including the documents incorporated by reference therein), and any
amendment or supplement thereto, at the time it became effective,
appear on their face to comply as to form to the requirements of the
Act and the Rules and Regulations and that such counsel has no reason
to believe that either the Registration Statement or the Prospectus
(including the documents incorporated by reference therein) or any
amendment or supplement thereto, at the time it became effective,
contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances under
which made (except that no opinion need be expressed as to financial
statements and financial data contained in the Registration Statement
or Prospectus); and to such counsel's actual knowledge, after
reasonable investigation, any statutes, regulations, contracts,
agreements or other documents that are required to be described in the
Registration Statement or Prospectus or to be filed as an exhibit to
the Registration Statement have been described or filed as required,
and to such counsel's actual knowledge, after reasonable
investigation, there are no legal or governmental proceedings pending
or threatened to which the Company is subject of such a character
required to be disclosed in the Registration Statement or the
Prospectus which are not disclosed and properly described therein as
required.
(xiv) Such counsel does not know of any legal or beneficial
owner of any securities of the Company who has any rights, not
effectively satisfied or waived, to require registration of any shares
of Common Stock in connection with the filing of the Registration
Statement.
As to certain factual matters such as the issuance of stock and
receipt of payment therefor, the states in which the Company transacts business,
the adoption of
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<PAGE>
resolutions reflected by the Company's minute books and the like, such counsel
may rely on the certificates of appropriate public officials and officers of the
Company.
8.10 Auditors' Letters.
The Underwriter shall have received, on each of the date hereof and
the Closing Date, letters dated the date hereof or the Closing Date, as the case
may be, in form and substance satisfactory to the Underwriter, from Coopers &
Lybrand L.L.P. and Price Waterhouse LLP, independent Accountants, containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to Underwriter with respect to the financial statements and
certain financial information contained in the Registration Statement and the
Prospectus.
8.11 Consultant's Letter.
The Underwriter shall have received, on each of the date hereof and
the Closing Date, a letter dated the date hereof or the Closing Date, as the
case may be, in form and substance satisfactory to the Underwriter, from Darling
Consulting Group, Inc., consultants to the Company, stating that (i) on the
basis of certain indicated procedures and inquiries of the officers of the
Company responsible for financial and accounting matters and on the basis of
such consultant's expertise and experience in asset/liability consulting, in
their opinion, the statements, dollar amounts, percentages and other financial
information contained in the Prospectus under the headings "The Acquisition --
Reasons for the Acquisition", "The Acquisition -- Impact of the Acquisition on
Operating Performance" and "The Acquisition -- Impact of the Acquisition on
Operating Performance Assuming Intended Potential Disposition" represent a
reasonable estimate and judgment as to the future financial performance of the
Company based on the assumptions disclosed in the Prospectus under such
headings, which assumptions are a reasonable estimate of the events,
contingencies and circumstances described therein, (ii) they have compared
certain dollar amounts, percentages and other financial information contained in
the Prospectus under the headings "The Acquisition -- Reasons for the
Acquisition," "The Acquisition -- Impact of the Acquisition on Operating
Performance" and "The Acquisition -- Impact of the Acquisition on Operating
Performance Assuming Intended Potential Disposition" and found such amounts,
percentages and other financial information to be in agreement with the
financial analysis of the Company prepared by such consultant, and (iii) they
are not aware of any event or occurrence which could cause a material change in
such consultant's view of the likelihood of achievement of the statements made
under the headings referred to in clauses (i) and (ii) above or the
reasonableness of the assumptions underlying such statements.
The letter required by this Section shall also cover such other
matters as the Underwriter shall reasonably request.
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<PAGE>
8.12 Officer's Certificate.
The Company shall have furnished to the Underwriter a certificate of
the President and the Chief Financial Officer of the Company, dated as of the
Closing Date, to the effect that:
(i) The representations and warranties of the Company in this
Agreement are true and correct at and as of such date, and the Company
has complied with all the agreements and has satisfied all the
conditions on its part to be performed or satisfied at or prior to
such date;
(ii) The Registration Statement has become effective and no
order suspending the effectiveness of the Registration Statement has
been issued and no proceeding relating to the foregoing has been
initiated or is threatened by the Commission;
(iii) The respective signers of the certificate have each
carefully examined the Registration Statement and Prospectus and any
amendments and supplements thereto, and the Prospectus and any
amendments and supplements thereto contain all statements required to
be stated therein, and neither the Registration Statement nor
Prospectus nor any amendment or supplement thereto includes any untrue
statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading and, since the effective date of the
Registration Statement, there has occurred no event required to be set
forth in a supplemented Prospectus which has not been so set forth;
and
(iv) Except as set forth in the Registration Statement and
Prospectus, since the date of the latest audited financial statements
in the Registration Statement and Prospectus and on or prior to the
date of such certificate, there has not been any materially adverse
change, financial or otherwise, in the affairs or condition of the
Company, the Company has not incurred any material liabilities, direct
or contingent, or entered into any transaction, otherwise than in the
ordinary course of business.
Such certificate shall also cover such other matters as the
Underwriter may reasonably request.
8.13 Delivery of Documents.
The Company shall have furnished to the Underwriter true and correct
copies of the Certificate of Incorporation of the Company and all amendments
thereto, the Bylaws of the Company and of the minutes of all meetings of the
directors and shareholders of the Company held prior to the Closing Date which
in any way relate to the subject matter of this Agreement; and such other
documents or certificate as counsel to the Underwriter may reasonably request.
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8.14 Tender of Delivery of Shares.
All the Shares being purchased from the Company by the Underwriter
shall be tendered for delivery in accordance with the terms and provisions of
this Agreement.
8.15 Blue Sky Qualification.
The Shares shall be qualified in such states and jurisdictions as the
Underwriter may reasonably request pursuant to Section 5.4, and each such
qualification shall be in effect and not subject to any stop order or other
proceeding on the Closing Date.
8.16 Approval of Underwriter's Counsel.
All opinions, letters, certificates and evidence mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if in form and substance satisfactory to counsel to the
Underwriter. A draft of such documents shall be provided to such counsel at
least two business days prior to the Closing Date.
8.17 Officers' Certificate as a Company Representation.
Any certificate signed by an officer of the Company and delivered to
the Underwriter or to counsel for the Underwriter will be deemed a
representation and warranty by the Company to the Underwriter as to the
statements made therein.
8.18 Restriction on Sale of Securities.
Certain of the Company's current stockholders, officers and directors
shall have agreed with the Underwriter not to sell or otherwise dispose of any
of their shares of Common Stock owned directly or indirectly by them prior to
this offering for a period of 180 days after the effective date of the
Registration Statement without the prior written consent of M.A. Schapiro & Co.,
Inc. on behalf of the Underwriter, all as contemplated by Section 5.14 hereof.
SECTION 9
CONDITIONS TO THE COMPANY'S OBLIGATIONS
The Company's obligations hereunder to sell and deliver the Shares to
the Underwriter on the Closing Date shall be subject to the accuracy, as of the
Closing Date, of the representations and warranties on the part of the
Underwriter herein contained, to the performance by the Underwriter of all its
agreements herein contained and to the fulfillment of or compliance by the
Underwriter with all covenants and conditions hereof applicable to it
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<PAGE>
SECTION 10
TERMINATION
10.1 Termination Because of Non-Compliance.
This Agreement may be terminated by the Underwriter by notice to the
Company in the event that the Company shall have failed or been unable to comply
with any of the terms, conditions or provisions of this Agreement on the part of
the Company to be performed, complied with or fulfilled (including but not
limited to those specified in Sections 2, 3, 4, 5 and 8 hereof) within the
respective times herein provided for, unless compliance therewith or performance
or satisfaction thereof shall have been expressly waived by the Underwriter in
writing.
10.2 Termination.
This Agreement may be terminated at any time at or prior to the
Closing Date by written notice given by the Underwriter to the Company as herein
set forth at or prior to such Closing Date if after the date hereof and at or
prior to such time:
(i) an outbreak or escalation of armed hostilities or other
national or international calamity or crisis between or involving the
United States or any foreign power or Act of God or any change in
financial markets shall have occurred which has a material adverse
impact on the Company's operations or financial condition or which in
the reasonable judgment of the Underwriter could render it
impracticable or inadvisable to offer and sell the Shares;
(ii) the Company or the Bank shall have sustained a loss on
account of fire, flood, accident, or other calamity of such a
character as to interfere with the continuous operation of the
Company's or the Bank's business and which materially and adversely
affects the financial position or the business of the Company or the
Bank, regardless of whether or not such loss shall have been insured;
(iii) there shall have been, since the respective dates as of
which information is given in the Registration Statement and the
Prospectus, any material adverse change in or affecting the condition
(financial or other) of the Company not described in the Prospectus,
or any material adverse change in the earnings, operations, management
or business prospects of the Company, whether or not arising in the
ordinary course of business;
(iv) an action, suit or proceeding shall be threatened or
pending, at law or in equity, against the Company or the Bank, by any
federal, state or other commission, board or agency, which is not
disclosed in the Prospectus and in which an unfavorable result or
decision could materially adversely affect
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<PAGE>
the business, prospects, property, financial condition or income or
earnings of the Company or the Bank, or the ability of the Company or
the Bank to perform their respective obligations under the P&A
Agreement;
(v) trading in securities generally on the New York Stock
Exchange, the American Stock Exchange, the Nasdaq National Market, the
Chicago Board of Options Exchange, the Chicago Mercantile Exchange or
the Chicago Board of Trade shall have been suspended or materially
limited;
(vi) trading of any of the securities of the Company shall
have been suspended on any exchange or in any over-the-counter market;
(vii) a moratorium on commercial banking activities in New
York shall have been declared by any State or Federal authority or a
moratorium in foreign exchange trading shall have been declared;
(viii) the enactment, publication, decree or other
promulgation of any federal or state (domestic or foreign) statute,
regulation, rule or order of any court or other governmental authority
which in the Underwriter's sole judgment materially and adversely
affects or could materially and adversely affect the business,
operations or prospects of the Company or the Bank; or
(ix) the Company shall have breached or otherwise failed to
perform or failed to comply with its obligations under the Common
Stock Underwriting Agreement.
The Company agrees and acknowledges that the Underwriter shall be the
sole determining party as to the presence of any such condition, event or
occurrence and as to its materiality, which determination shall be made in the
reasonable judgment of the Underwriter.
10.3 Effect of Termination Hereunder.
Any termination of this Agreement pursuant to the occurrence of any of
the events specified in Sections 10.1 or 10.2 hereof shall be without liability
of any character (including, but not limited to, loss of anticipated profits or
consequential damages) on the part of any party hereto, except that the Company
shall remain obligated to pay the costs and expenses, losses, claims, damages
and liabilities provided to be paid by it specified in Section 5.7 and Section 6
and the Underwriter shall remain liable to pay the costs and expenses, losses,
claims, damages and liabilities provided to be paid by it specified in Section
6.
SECTION 11
NOTICES
Except as otherwise expressly provided in this Agreement:
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11.1 Notice to the Company.
Whenever notice is required by the provisions of this Agreement to be
given to the Company such notice shall be considered given one (1) business day
after having been sent by Federal Express or similar reliable overnight delivery
courier, or upon delivery by hand, or by facsimile transmission and addressed to
the Company as follows:
Community Bank System, Inc.
5790 Widewaters Parkway
DeWitt, New York 13214
Attn: Sanford A. Belden
President and Chief Executive Officer
Tel: (315) 445-2282
Fax: (315) 445-2997
with a copy to:
Bond, Schoeneck & King, LLP
One Lincoln Center
Syracuse, New York 13202
Attn: George J. Getman, Esq.
Tel: (315) 422-0121
Fax: (315) 422-3598
11.2 Notice to the Underwriter.
Whenever notice is required by the provisions of this Agreement to be
given to the Underwriter such notice shall be considered given, one (1) business
day after having been sent by Federal Express or similar reliable overnight
delivery courier, or upon delivery by hand, or by facsimile transmission and
addressed to the Underwriter as follows:
M.A. Schapiro & Co., Inc.
One Chase Manhattan Plaza
New York, New York 10005
Attn: Richard J. Kelly
Director of Investment Banking
Tel: (212) 530-7509
Fax: (212) 480-9122
with a copy to:
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Cadwalader, Wickersham & Taft
100 Maiden Lane
New York, New York 10038
Attn: Lawrence A. Larose, Esq.
Tel: (212) 504-6000
Fax: (212) 504-6666
SECTION 12
MISCELLANEOUS
12.1 Benefit.
This Agreement is made solely for the benefit of the Underwriter, the
Company, their respective officers and directors and any controlling person
referred to in Section 15 of the Act or Section 20 of the Exchange Act, and
their respective successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. The term "successor" or
the term "successors and assigns" as used in this Agreement shall not include
any purchaser, as such, of the Shares.
12.2 Survival.
The respective indemnities, agreements, representations, warranties,
covenants and other statements of the Company and the Underwriter and of their
respective officers and directors as set forth in or made pursuant to this
Agreement and the indemnity agreements contained in Section 6 hereof shall
survive and remain in full force and effect, regardless of (i) any investigation
made by or on behalf of the Company or the Underwriter or any such officer or
director thereof or any controlling person of the Company or the Underwriter,
(ii) delivery of or payment for the Shares and (iii) the Closing Date.
12.3 Governing Law.
THE VALIDITY, INTERPRETATION AND CONSTRUCTION OF THIS AGREEMENT AND OF
EACH PART HEREOF WILL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
12.4 Underwriter's Information.
The statements set forth in the last paragraph on the cover page of
the Prospectus and under the caption "Underwriting" in the Prospectus, except
for the statements made under such caption relating to agreements with respect
to sales or dispositions of Common Stock or other securities by any party other
than the Underwriter, constitute the only written information furnished by or on
behalf of the Underwriter referred to in Section 2.2 hereof, in Section 6.1
hereof and Section 6.2 hereof.
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12.5 Counterparts.
This Agreement may be executed in any number of counterparts, each of
which may be deemed an original and all of which together will constitute one
and the same instrument.
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<PAGE>
Please confirm that the foregoing correctly sets forth the Agreement
between you and the Company.
Very truly yours,
COMMUNITY BANK SYSTEM, INC.
By:
-------------------------------------
Sanford A. Belden
President and Chief Executive Officer
WE HEREBY CONFIRM AS OF THE DATE HEREOF THAT THE ABOVE LETTER SETS
FORTH THE AGREEMENT BETWEEN THE COMPANY AND US.
M.A. SCHAPIRO & CO., INC.
By:
-------------------------------------
Richard J. Kelly
Director of Investment Banking
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Schedule I
----------
Underwriter
-----------
<TABLE>
<CAPTION>
Number of Shares
to be
Underwriter Purchased
- ----------- ----------------
<S> <C>
M.A. Schapiro & Co., Inc. 90,000
----------------
Total Shares ..... 90,000
================
</TABLE>
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