Exhibit 1.1

 

Customers Bancorp, Inc.

$65,000,000

5.375% Subordinated Notes due December 30, 2034

Underwriting Agreement

December 4, 2019

B. Riley FBR, Inc.

299 Park Avenue, 21st Floor

New York, New York 10171

 

 

as Representative of the several Underwriters

 

Ladies and Gentlemen:

Customers Bancorp, Inc., a Pennsylvania corporation (the “Company”) and the
holding company for Customers Bank (the “Bank”), confirms its agreement with B.
Riley FBR, Inc. (“B. Riley FBR”) and each of the other Underwriters named in
Schedule I hereto (collectively, the “Underwriters”), for whom B. Riley FBR is
acting as representative (in such capacity, the “Representative”), with respect
to the issuance and sale by the Company and the purchase by the Underwriters,
acting severally and not jointly, of $65,000,000 aggregate principal amount of
the Company’s 5.375% Subordinated Notes due December 30, 2034 (the “Initial
Notes”), as set forth opposite their respective names in Schedule I hereto, and
with respect to the grant by the Company to the Underwriters, acting severally
and not jointly, of the option described in Section 2(b) hereof to purchase all
or any part of the additional Notes to cover over-allotments, if any. The
aforementioned $65,000,000 aggregate principal amount of Initial Notes and all
or part of the $9,750,000 aggregate principal amount of Notes subject to the
option described in Section 2(b) hereof (the “Option Notes”) are hereinafter
called, collectively, the “Notes.” The Notes are to be issued pursuant to an
indenture to be dated as of December 9, 2019 (the “Base Indenture”) between the
Company and Wilmington Trust, National Association, as trustee (the “Trustee”),
as supplemented by a supplemental indenture thereto to be dated as of December
9, 2019, between the Company and the Trustee (the “Supplemental Indenture” and,
together with the Base Indenture, the “Indenture”).

The Company understands that the Underwriters propose to make a public offering
of the Notes as soon as the Underwriters deem advisable after this Agreement has
been executed and delivered. Notes issued in book-entry form shall be issued to
Cede & Co. as nominee of The Depository Trust Company (“DTC”) pursuant to a
blanket issuer letter of representations entered into between the Company and
DTC.

The Company has filed with the Securities and Exchange Commission (the
“Commission”) a registration statement on Form S-3 (No. 333-218483), including
the related preliminary prospectus or prospectuses, covering the registration of
various securities, including the Notes, under the Securities Act of 1933, as
amended (the “1933 Act”). Such registration statement is effective under the
1933 Act, the Indenture has been duly qualified under the Trust Indenture Act of
1939, as amended (the “1939 Act”), and the Company has filed such post-effective
amendments thereto as may be required prior to the execution of this Agreement
and each such post-effective amendment is effective under the 1933 Act. Promptly
after execution and delivery of this Agreement, the Company will prepare and
file a prospectus supplement with respect to the Notes in accordance with the
provisions of Rule 430B (“Rule 430B”) of the rules and regulations of the
Commission under the 1933 Act (the “1933 Act Regulations”) and paragraph (b) of
Rule 424 (“Rule 424(b)”) of the 1933 Act Regulations. Any information included
in each such prospectus supplement that was omitted from such registration
statement at the time it became effective but that is deemed to be part of such
registration statement at the time it became effective pursuant to Rule 430B is
referred to as “Rule 430B Information.” Each base prospectus and prospectus
supplement used in connection with the offering of the Notes that omitted
Rule 430B Information is referred to herein collectively as a “preliminary
prospectus.” Such registration statement, at any given time, including any
amendments thereto, including post-effective amendments, the exhibits and any
schedules thereto at such time, the documents incorporated by reference therein
and the documents otherwise deemed to be a part thereof or included therein by

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the 1933 Act, is referred to herein as the “Registration Statement;” provided,
however, that the term “Registration Statement” without reference to a time
means such registration statement as of the time of the first contract of sale
for the Notes, which time shall be considered the “new effective date” of such
registration statement with respect to the Underwriters and the Notes (within
the meaning of Rule 430B(f)(2)). The final base prospectus and the prospectus
supplement, dated the date hereof, including the documents incorporated by
reference therein, are referred to herein collectively as the “Prospectus.”

For purposes of this Agreement, all references to the Registration Statement,
any preliminary prospectus, the Prospectus or any term sheet or any amendment or
supplement to any of the foregoing shall be deemed to include the copy thereof
filed with the Commission pursuant to its Electronic Data Gathering, Analysis
and Retrieval system (“EDGAR”).

All references in this Agreement to financial statements and schedules and other
information which is “contained,” “included” or “stated” in the Registration
Statement, any preliminary prospectus, the Prospectus or the General Disclosure
Package (as defined herein) (or other references of like import) shall be deemed
to mean and include all such financial statements and schedules and other
information which is incorporated by reference in the Registration Statement,
any preliminary prospectus, the Prospectus or the General Disclosure Package, as
the case may be, prior to the execution of this Agreement; and all references in
this Agreement to amendments or supplements to the Registration Statement, any
preliminary prospectus, the Prospectus or the General Disclosure Package shall
be deemed to include the filing of any document under the Securities Exchange
Act of 1934, as amended (the “1934 Act”), which is incorporated by reference in
the Registration Statement, such preliminary prospectus, the Prospectus or the
General Disclosure Package, as the case may be, after the execution of this
Agreement.

For the purpose of this Agreement, the term “subsidiary” or “subsidiaries” shall
include each direct or indirect “significant subsidiary” (as defined in
Rule 1-02 of Regulation S-X) of the Company listed on Schedule IV hereto.

1.                   Representations and Warranties. (a) The Company represents
and warrants to each Underwriter as of the date hereof, as of the Applicable
Time (as defined below) referred to in Section 1(a)(i) hereof, as of the Closing
Date (as defined below) referred to in Section 2(a) hereof and, if applicable,
as of each Date of Delivery (as defined below) referred to in Section 2(b)
hereof, and agrees with each Underwriter, as follows:

(i) The Company is eligible to use Form S-3 for the offering of the Notes. Each
of the Registration Statement and any post-effective amendment thereto has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement, or any post-effective amendment
thereto has been issued under the 1933 Act and no proceedings for that purpose
have been instituted by or are pending before or, to the knowledge of the
Company, are threatened by the Commission, and any request on the part of the
Commission to the Company for additional information has been complied with.

Each of the Registration Statement and any post-effective amendments thereto, at
the time it became effective, at the Closing Date and at each Date of Delivery,
if any, complied and will comply with in all material respects the requirements
of the 1933 Act, the 1933 Act Regulations, the 1939 Act and the rules and
regulations of the Commission under the 1939 Act (the “1939 Act Regulations”)
and did not and will not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that the Company makes no
representations or warranties as to that part of the Registration Statement
which shall constitute the Statement of Eligibility and Qualification (Form T-1)
under the 1939 Act of the Trustee. Neither the Prospectus nor any amendments or
supplements thereto, at the time the Prospectus or any such amendment or
supplement was delivered, at the Closing Date and at each Date of Delivery, if
any, included or will include an untrue statement of a material fact or omitted
or will omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by any Underwriter through
the Representative expressly for use therein, it being understood and agreed
that the only such information furnished by any Underwriter through the
Representative consists of the information described in Section 6(b) hereof.

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The Final Term Sheet (as defined below), the Issuer-Represented General Free
Writing Prospectus (as defined below) issued at or prior to the Applicable Time
and the Statutory Prospectus (as defined below), all considered together
(collectively, the “General Disclosure Package”), as of the Applicable Time did
not, and as of the Closing Date and at each Date of Delivery, if any, will not,
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.

As used in this subsection and elsewhere in this Agreement:

“Applicable Time” means 2:05 p.m. (Eastern Time) on December 4, 2019.

“Final Term Sheet” means the final term sheet in the form set forth on
Schedule II hereto, reflecting the final terms of the Notes.

“Issuer-Represented Free Writing Prospectus” means any “issuer free writing
prospectus,” as defined in Rule 433 of the 1933 Act Regulations (“Rule 433”),
relating to the Notes that (i) is required to be filed with the Commission by
the Company or (ii) is exempt from filing pursuant to Rule 433(d)(5)(i) because
it contains a description of the Notes or of the offering that does not reflect
the final terms, in each case in the form filed or required to be filed with the
Commission or, if not required to be filed, in the form retained in the
Company’s records pursuant to Rule 433(g).

“Issuer-Represented General Free Writing Prospectus” means any
Issuer-Represented Free Writing Prospectus that is intended for general
distribution to prospective investors, as evidenced by its being specified in
Schedule III hereto.

“Statutory Prospectus” as of any time means the prospectus relating to the Notes
that is included in the Registration Statement immediately prior to that time,
including any document incorporated by reference therein and any prospectus
supplement deemed to be a part thereof. For purposes of this definition,
information contained in a form of prospectus that is deemed retroactively to be
a part of the Registration Statement pursuant to Rule 430B shall be considered
to be included in the Statutory Prospectus as of the actual time that form of
prospectus is filed with the Commission pursuant to Rule 424(b).

Each Issuer-Represented Free Writing Prospectus, as of its issue date and at all
subsequent times through the completion of the public offer and sale of the
Notes or until any earlier date that the Company notified or notifies the
Underwriters, did not contain any untrue statement of material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading and, did not, does
not and will not include any information that conflicted, conflicts or will
conflict in any material respects with the information contained in the
Registration Statement, the Prospectus, including any document incorporated by
reference therein, and any preliminary prospectus, the Statutory Prospectus or
the Prospectus that has not been superseded or modified; provided, however, that
this representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in writing to
the Company by any Underwriter through the Representative expressly for use
therein, it being understood and agreed that the only such information furnished
by any Underwriter through the Representative consists of the information
described in Section 6(b) hereof. If at any time following issuance of an
Issuer-Represented Free Writing Prospectus there occurred or occurs an event or
development as a result of which such Issuer-Represented Free Writing Prospectus
conflicted or would conflict with the information then contained in the
Registration Statement in any material respect or as a result of which such
Issuer-Represented Free Writing Prospectus, if republished immediately following
such event or development, would include an untrue statement of a material fact
or omitted or would omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, (i) the Company has notified or will promptly notify the
Underwriters and (ii) the Company has amended or will promptly amend or
supplement such Issuer-Represented Free Writing Prospectus to eliminate or
correct such material conflict, untrue statement or omission.

(ii) (a) The documents incorporated or deemed to be incorporated by reference in
the Registration Statement, the General Disclosure Package and the Prospectus,
at the time they were filed with the Commission, complied, in each case, in all
material respects with the applicable requirements of the 1934 Act and the rules
and regulations of the Commission thereunder (the “1934 Act Regulations”) and,
when read together with the other

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information in the Registration Statement, the General Disclosure Package and
the Prospectus, at the time the Registration Statement became effective, or any
amendment thereto became effective, at the time the Prospectus was issued, at
the Closing Date and at each Date of Delivery, if any, did not and will not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading and (b) any further documents hereafter filed pursuant to the 1934
Act and incorporated or deemed to be incorporated by reference in the
Registration Statement, the General Disclosure Package and the Prospectus, when
they are filed with the Commission, will comply, in each case, in all material
respects with the applicable requirements of the 1934 Act and the 1934 Act
Regulations and, when read together with the other information in the
Registration Statement, the General Disclosure Package and the Prospectus, at
the time the Prospectus was issued, at the Closing Date and at each Date of
Delivery, if any, did not and will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading.

(iii) Any preliminary prospectus, the Prospectus and each Issuer-Represented
Free Writing Prospectus when filed, if filed by electronic transmission,
pursuant to EDGAR (except as may be permitted by Regulation S-T under the 1933
Act), was identical to the copy thereof delivered to the Underwriters for use in
connection with the offer and sale of the Notes.

(iv) The consolidated financial statements of the Company, including the related
schedules and notes, filed with the Commission as a part of the Registration
Statement and included in any preliminary prospectus and the Prospectus (the
“Financial Statements”) present fairly the consolidated financial position of
the Company and its consolidated subsidiaries as of and at the dates indicated
and the consolidated results of their operations, changes in shareholders’
equity and cash flows of the Company and its consolidated subsidiaries for the
periods specified. Such Financial Statements, unless otherwise noted therein,
have been prepared in conformity with generally accepted accounting principles
in effect in the United States (“GAAP”) applied on a consistent basis throughout
the periods involved. The selected financial data included in the Registration
Statement, the General Disclosure Package and the Prospectus present fairly in
all material respects the information therein and have been prepared on a basis
consistent with that of the audited consolidated financial statements contained
in the Registration Statement, any preliminary prospectus and the Prospectus. No
other financial statements or supporting schedules are required to be included
in the Registration Statement, any preliminary prospectus and the Prospectus. To
the extent applicable, all disclosures contained in the Prospectus regarding
“non-GAAP financial measures” as such term is defined by the rules and
regulations of the Commission comply in all material respects with Regulation G
of the 1934 Act, the rules and regulations of the Commission under the 1934 Act
(the “1934 Act Regulations”) and Item 10(e) of Regulation S-K. The pro forma
financial statements included in the Registration Statement, the General
Disclosure Package and Prospectus, if any, present fairly in all material
respects the information shown therein, have been prepared in accordance with
the Commission’s rules and guidelines with respect to pro forma financial
statements, and have been properly compiled on the bases described therein, and
the assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the transactions and
circumstances referred to therein. The interactive data in eXtensible Business
Reporting Language included in the Registration Statement, the General
Disclosure Package and the Prospectus presents fairly in all material respects
the information included therein and has been prepared in all material respects
in accordance with the Commission’s rules and guidelines applicable thereto.

(v) BDO USA, LLP (“BDO”), the independent registered public accounting firm that
audited certain of the financial statements of the Company and its subsidiaries
that are included in the Registration Statement and the Prospectus, are
independent public accountants as required by the 1933 Act and the 1933 Act
Regulations.

(vi) Deloitte & Touche LLP (“Deloitte”), the independent registered public
accounting firm that reviewed certain of the financial statements of the Company
and its subsidiaries that are included in the Registration Statement and the
Prospectus, are independent public accountants as required by the 1933 Act and
the 1933 Act Regulations.

(vii) Nothing has come to the attention of the Company that has caused the
Company to believe that the statistical and market-related information included
or incorporated by reference in the Registration Statement, the General
Disclosure Package and the Prospectus is not based on or derived from sources
that are reliable and accurate in all material respects.

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(viii) This Agreement has been duly authorized, executed and delivered by the
Company and, when duly executed by the Representative, will constitute the valid
and binding agreement of the Company enforceable against the Company in
accordance with its terms, except as enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors’ rights generally or by general equitable
principles (regardless of whether such enforceability is considered in a
proceeding in equity or at law) and except as any indemnification or
contribution provisions thereof may be limited under applicable securities laws
and banking laws.

(ix) Since the date of the most recently dated audited consolidated balance
sheet contained in the Financial Statements, (A) the Company and its
subsidiaries, considered as one enterprise, have not sustained any material loss
or material interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, and there has not been any
material change in the capital stock or long-term debt of the Company and its
subsidiaries or any material adverse change in or affecting the general affairs,
management, earnings, business, properties, assets, consolidated financial
position, business prospects, consolidated shareholders’ equity or consolidated
results of operations of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business (a
“Material Adverse Effect”), in each case in this clause (A) other than as set
forth or contemplated in the Registration Statement, the General Disclosure
Package and the Prospectus, (B) there have been no transactions entered into by
the Company or any of its subsidiaries which are material with respect to the
Company and its subsidiaries considered as one enterprise, otherwise than as set
forth or contemplated in the Registration Statement, the General Disclosure
Package and the Prospectus and (C) there has been no dividend or distribution of
any kind declared, paid or made by the Company on any class of its capital
stock, otherwise than as set forth or contemplated in the Registration
Statement, the General Disclosure Package and the Prospectus.

(x) The Company and its subsidiaries have good and marketable title to all real
property and good and marketable title to all personal property owned by them,
in each case free and clear of all mortgages, pledges, security interests,
claims, restrictions, liens, encumbrances and defects except such as are
described generally in the Registration Statement, the General Disclosure
Package and the Prospectus or such as would not have a Material Adverse Effect
and any real property and buildings held under lease by the Company and its
subsidiaries are held by them under valid, subsisting and enforceable leases
with such exceptions as are not material and do not interfere with the use made
and proposed to be made of such property and buildings by the Company and its
subsidiaries, and neither the Company nor any subsidiary has received any
written or oral notice of any material claim of any sort that has been asserted
by anyone adverse to the rights of the Company or any subsidiary under any of
the leases or subleases mentioned above, or affecting or questioning the rights
of the Company or such subsidiary to the continued possession of the leased or
subleased premises under any such lease or sublease.

(xi) The Company is a registered bank holding company under the Bank Holding
Company Act, and has been duly incorporated and is presently subsisting as a
corporation in good standing under the laws of the Commonwealth of Pennsylvania,
with the corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Registration Statement, the
General Disclosure Package and the Prospectus and to enter into and perform its
obligations under this Agreement. The Company is duly qualified as a foreign
corporation to transact business and is in good standing under the laws of each
other jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except where
the failure to so qualify or to be in good standing would not reasonably be
expected to result in a Material Adverse Effect.

(xii) Each of the Company’s subsidiaries, has been duly incorporated or
organized and is validly subsisting or existing as a corporation or limited
liability company in good standing under the laws of the jurisdiction of its
incorporation or organization, has corporate or limited liability company power
and authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement, the General Disclosure
Package and the Prospectus and is duly qualified as a foreign entity to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except in each case where the failure so to
qualify or to be in good standing would not result in a Material Adverse Effect.
The activities of the Company’s subsidiaries are permitted of subsidiaries of a
bank holding company under applicable law and the rules and regulations of the
Federal Reserve Board (the “FRB”) set forth in Title 12 of the Code of Federal
Regulations. Except as otherwise disclosed in the

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Registration Statement, the General Disclosure Package and the Prospectus, all
of the issued and outstanding capital stock or membership interests of each such
subsidiary has been duly authorized and validly issued, is fully paid and
non-assessable (to the extent applicable) and is owned by the Company, directly
or through subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity. None of the outstanding shares of
capital stock or membership interests of any subsidiary was issued in violation
of the preemptive or similar rights of any securityholder of such subsidiary.
There are no outstanding rights, warrants or options to acquire or instruments
convertible into or exchangeable for any capital stock or equity securities of
any of the subsidiaries. Except as otherwise disclosed in the Registration
Statement, the General Disclosure Package and the Prospectus, no subsidiary of
the Company is currently prohibited, directly or indirectly, from paying any
dividends to the Company, from making any other distributions on such
subsidiary’s capital stock or common securities, from repaying to the Company
any loans or advances to such subsidiary from the Company or from transferring
any of such subsidiary’s property or assets to the Company or any other
subsidiary of the Company. Schedule IV hereto lists each of the Company’s direct
and indirect subsidiaries that is a “significant subsidiary” as defined in Rule
1-02 of Regulation S-X.

(xiii) The Company has an authorized capitalization as set forth in the
Registration Statement, the General Disclosure Package and the Prospectus under
the heading “Capitalization,” and all of the issued shares of capital stock of
the Company have been duly and validly authorized and issued, are fully paid and
non-assessable and have been issued in compliance with applicable federal and
state securities laws. None of the outstanding shares of capital stock were
issued in violation of any preemptive rights, rights of first refusal or other
similar rights to subscribe for or purchase securities of the Company. The
description of the Company’s stock option, stock bonus and other stock plans or
compensation arrangements and the options or other rights granted thereunder,
incorporated by reference in the Registration Statement, the General Disclosure
Package and the Prospectus, accurately and fairly presents, in all material
respects, the information required to be described therein with respect to such
plans, arrangements, options and rights.

(xiv) Except as described in each of the General Disclosure Package and
Prospectus, (A) there are no outstanding rights (contractual or otherwise),
warrants or options to acquire, or instruments convertible into or exchangeable
for, or agreements or understandings with respect to the sale or issuance of,
the Notes and (B) there are no contracts, agreements or understandings between
the Company and any person granting such person the right to require the Company
to include any securities of the Company for resale in the Prospectus relating
to the offer and sale of the Notes.

(xv) The Base Indenture has been duly authorized by the Company and duly
qualified under the 1939 Act and, when duly executed and delivered by the
Company and the Trustee, will constitute the valid and legally binding agreement
of the Company, enforceable against the Company in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of creditors’ rights generally
or by general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law and except as any indemnification
or contribution provisions thereof may be limited under applicable securities
laws and banking laws). The Supplemental Indenture has been duly authorized by
the Company and, when duly executed and delivered by the Company and the
Trustee, will constitute the valid and legally binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of creditors’ rights generally
or by general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law and except as any indemnification
or contribution provisions thereof may be limited under applicable securities
laws and banking laws).

(xvi) The Notes to be issued and sold by the Company to the Underwriters
hereunder have been duly and validly authorized and, when delivered to and paid
for by the Underwriters, will have been duly executed by the Company in
accordance with the provisions of the Indenture. The Notes, when authenticated,
issued and delivered in the manner provided for in the Indenture and delivered
against payment of the purchase price for the Notes as provided in this
Agreement, will constitute valid and legally binding obligations of the Company
enforceable against the Company in accordance with their terms and the terms of
the Indenture, except as enforceability may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to

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fraudulent transfers), reorganization, moratorium or similar laws affecting
enforcement of creditors’ rights generally or by general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at
law and except as any indemnification or contribution provisions thereof may be
limited under applicable securities and banking laws), and will be entitled to
the benefits of the Indenture.

(xvii) The description of the Notes and the description of the Base Indenture
and the Supplemental Indenture contained in the Registration Statement, the
General Disclosure Package and the Prospectus conforms in all material respects
to the form of Note, the form of Base Indenture and the form of Supplemental
Indenture, as applicable, and the Notes, the Base Indenture and the Supplemental
Indenture will be in substantially the respective form filed or incorporated by
reference, as the case may be, as an exhibit to the Current Report on Form 8-K
filed in connection with the closing of the offer and sale of the Notes.

(xviii) The issue and sale of the Notes by the Company and the compliance by the
Company with all of the provisions of this Agreement and the consummation by the
Company of the transactions herein contemplated have been duly authorized by all
necessary corporate action of the Company and do not and will not, whether with
or without the giving of notice or passage of time or both, (A) conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default or result in a Repayment Event (as defined below) under,
any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is subject,
(B) result in any violation of the provisions of the certificate of
incorporation, certificate of organization, certificate of formation, articles
of incorporation, articles of association, or charter (as applicable), bylaws or
other governing documents of the Company or any of its subsidiaries, or
(C) subject to compliance by all necessary persons with the applicable
provisions of the Change in Bank Control Act of 1978 and Regulation Y
promulgated in part thereunder, result in any violation of any statute or any
order, rule or regulation of any federal, state, local or foreign court,
arbitrator, regulatory authority or governmental agency or body (each a
“Governmental Entity”) having jurisdiction over the Company or any of its
subsidiaries or any of their properties, except for, in the case of clauses (A)
and (C), those conflicts, breaches, violations, defaults or Repayment Events
that would not result in a Material Adverse Effect. No consent, approval,
authorization, order, registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of the Notes, the
performance by the Company of its obligations hereunder or the consummation by
the Company of the transactions contemplated by this Agreement, except the
registration under the 1933 Act of the Notes and except as may be required under
the rules and regulations of the New York Stock Exchange (“NYSE”) or the
Financial Industry Regulatory Authority (“FINRA”) and such consents, approvals,
authorizations, registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and distribution of
the Notes by the Underwriters. As used herein, a “Repayment Event” means any
event or condition, the occurrence or existence of which gives the holder of any
note, debenture or other evidence of indebtedness (or any person acting on such
holder’s behalf) the right to require the repurchase, redemption or repayment of
all or a portion of such indebtedness by the Company or any subsidiary prior to
its scheduled maturity.

(xix) Neither the Company nor any of its subsidiaries is (A) in violation of its
certificate of incorporation, certificate of organization, certificate of
formation, articles of incorporation, articles of association or charter (as
applicable), or its bylaws or other governing documents or (B) in breach,
violation or default (with or without notice or lapse of time or both) of any
obligation, agreement, covenant or condition contained in any indenture,
mortgage, deed of trust, loan or credit agreement, note, lease or other
agreement or instrument to which it is a party or by which it or any of its
properties may be bound or to which any of the property or assets of the Company
or any subsidiary is subject, except in each case for such breaches, violations
or defaults that would not result in a Material Adverse Effect.

(xx) Except as disclosed in the Registration Statement, the General Disclosure
Package and the Prospectus, the Company and its subsidiaries have conducted and
are conducting their respective businesses in compliance in all material
respects with all federal, state, local and foreign statutes, laws, rules,
regulations, decisions, directives and orders applicable to them (including,
without limitation, all regulations and orders of, or agreements with, the FRB,
the Pennsylvania Department of Banking and Securities (the “PDB”) and the
Federal Deposit Insurance Corporation (the “FDIC”), the Equal Credit Opportunity
Act, the Fair Housing Act, the Community Reinvestment Act, the Home Mortgage
Disclosure Act, all other applicable fair lending laws or other

7 

 

laws relating to discrimination and the Bank Secrecy Act and Title III of the
USA Patriot Act), and neither the Company nor any of its subsidiaries has
received any written or oral communication from any Governmental Entity
asserting that the Company or any of its subsidiaries is not in material
compliance with any statute, law, rule, regulation, decision, directive or
order.

(xxi) There are no legal or governmental actions or suits, investigations,
inquiries or proceedings before or by any court or Governmental Entity, now
pending or, to the knowledge of the Company, threatened or contemplated, to
which the Company or any of its subsidiaries is a party or of which any property
of the Company or any of its subsidiaries is the subject (A) that are required
to be disclosed in the Registration Statement by the 1933 Act or the 1933 Act
Regulations and is not disclosed therein or (B) which, if determined adversely
to the Company or any of its subsidiaries, would be reasonably expected to
result, individually or in the aggregate, in a Material Adverse Effect; all
pending legal or governmental proceedings to which the Company or any of its
subsidiaries is a party or of which any of their property is the subject which
are not described in the Registration Statement, including ordinary routine
litigation incidental to their respective businesses, are not reasonably
expected to result, individually or in the aggregate, in a Material Adverse
Effect, and there are no contracts or documents of the Company or any of its
subsidiaries which would be required to be described in the Registration
Statement or to be filed as exhibits thereto by the 1933 Act or the 1933 Act
Regulations, which have not been so described or filed.

(xxii) Each of the Company and its subsidiaries (A) possesses all permits,
licenses, approvals, consents and other authorizations (collectively,
“Governmental Licenses”) of any Governmental Entity, (B) has made all filings,
applications and registrations with, any Governmental Entity necessary to permit
the Company or such subsidiary to conduct the business now operated by the
Company or such subsidiary, and (C) is in compliance with the terms and
conditions of all such Governmental Licenses, except where the failure to so
possess, file, apply, register or comply would not, individually or in the
aggregate, have a Material Adverse Effect. All of the Governmental Licenses
currently held by the Company or any of its subsidiaries are valid and in full
force and effect, except where the invalidity of such Governmental Licenses or
the failure of such Governmental Licenses to be in full force and effect would
not, individually or in the aggregate, have a Material Adverse Effect, and
neither the Company nor any of its subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such Governmental
Licenses.

(xxiii) Except as disclosed in the Registration Statement, the General
Disclosure Package and the Prospectus or except as would not, individually or in
the aggregate, result in a Material Adverse Effect, (A) neither the Company nor
any of its subsidiaries is in violation of any federal, state or local statute,
law, rule, regulation, ordinance, or code or any applicable judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent, decree or judgment, relating to pollution or protection of human
health, the environment (including, without limitation, ambient air, surface
water, groundwater, land surface or subsurface strata) or wildlife, including,
without limitation, laws and regulations relating to the release or threatened
release of chemicals, pollutants, contaminants, wastes, toxic substances,
hazardous substances, petroleum or petroleum products, asbestos-containing
materials or mold (collectively, “Hazardous Materials”) or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials (collectively, “Environmental Laws”), (B) each
of the Company and its subsidiaries has all permits, authorizations and
approvals required to be held by it under any applicable Environmental Laws and
is in compliance in all material respects with the requirements of each such
permit, authorization and approval held by it, (C) there are no pending or, to
the knowledge of the Company, threatened administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, notices of noncompliance
or violation, investigation or proceedings relating to any Environmental Law
against the Company or any of its subsidiaries, and (D) there are no events or
circumstances that might reasonably be expected to form the basis of an order
for clean-up or remediation, or an action, suit or proceeding by any private
party or Governmental Entity, against or affecting the Company or any of its
subsidiaries relating to Hazardous Materials or any Environmental Laws.

(xxiv) The Company and each of its subsidiaries own or possess adequate rights
to use or can acquire on reasonable terms ownership or rights to use all
patents, patent applications, patent rights, licenses, trademarks, service
marks, trade names, trademark registrations, service mark registrations,
copyrights and know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures and
excluding generally commercially available “off the shelf” software programs
licensed pursuant to shrink wrap or “click and accept” licenses) and licenses
(collectively, “Intellectual Property”) necessary

8 

 

for the conduct of their respective businesses, except in each case where the
failure to own or possess such rights would not, individually or in the
aggregate, result in a Material Adverse Effect, and have not received any notice
of any claim of infringement or conflict with, any such rights of others or any
facts or circumstances that would render any Intellectual Property invalid or
inadequate to protect the interest of the Company or any of its subsidiaries
therein, except in each case where such infringement or conflict (if the subject
of any unfavorable decision, ruling or finding) or invalidity or inadequacy,
individually or in the aggregate, would not result in a Material Adverse Effect.

(xxv) No relationship, direct or indirect, exists between or among the Company
or any of its subsidiaries on the one hand, and the directors, officers,
shareholders, customers or suppliers of the Company or any of its subsidiaries
on the other hand, which is required to be disclosed in the Registration
Statement and the Prospectus by the 1933 Act or the 1933 Act Regulations which
has not been so disclosed.

(xxvi) The Company is not, and after giving effect to the offering and sale of
the Notes, and after receipt of payment for the Notes and the application of the
net proceeds as described in each of the Registration Statement, the General
Disclosure Package and the Prospectus, will not, be required to register as an
“investment company,” as such term is defined in the Investment Company Act of
1940, as amended (the “Investment Company Act”).

(xxvii) The Company is in compliance in all material respects with the
provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations of
the Commission thereunder applicable to the Company and as to which compliance
is currently required by the Company.

(xxviii) Neither the Company nor any of its subsidiaries, nor any affiliates of
the Company or any of its subsidiaries, has taken or will take, directly or
indirectly, any action designed to or that would be reasonably expected to cause
or result in stabilization or manipulation of the price of any securities of the
Company to facilitate the sale or resale of the Notes.

(xxix) None of the Company, its subsidiaries and, to the knowledge of the
Company, their respective directors, officers, employees and agents and other
persons, in each case, acting on behalf of the Company or any of its
subsidiaries has (A) used any corporate funds of the Company or any of its
subsidiaries to make any unlawful contribution, gift, entertainment or other
unlawful expense relating to political activity, (B) made any direct or indirect
unlawful payment to any foreign or domestic government official or employee from
corporate funds of the Company or any of its subsidiaries, (C) violated or is in
violation of any provision of the Foreign Corrupt Practices Act of 1977, and the
Company has instituted and maintains policies and procedures designed to ensure
compliance therewith, or (D) made any bribe, illegal rebate, payoff, influence
payment, kickback or other unlawful payment.

(xxx) The Company and its subsidiaries maintain a system of internal accounting
controls sufficient to provide reasonable assurances that (A) transactions are
executed in accordance with management’s general or specific authorization,
(B) transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain accountability for assets,
(C) access to assets is permitted only in accordance with management’s general
or specific authorization, and (D) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences. The Company and each of its subsidiaries
maintain a system of internal control over financial reporting (as such term is
defined in Rule 13a-15(f) and Rule 15d-15(f) under the 1934 Act), that complies
with the requirements of the 1934 Act, as applicable to them; the Company’s
internal control over financial reporting is effective; and since the end of the
Company’s most recent audited fiscal year, there has been (X) no material
weakness in the Company’s internal control over financial reporting (whether or
not remediated) of which the Company is aware and (Y) no change in the Company’s
internal control over financial reporting that has materially affected
adversely, or is reasonably likely to materially affect adversely, the Company’s
internal control over financial reporting.

(xxxi) The Company maintains “disclosure controls and procedures” (as such term
is defined in Rule 13a-15(e) and Rule 15d-15(e) under the 1934 Act) that comply
with the requirements of the 1934 Act that are applicable to an issuer that has
a class of securities registered under Section 12 of the 1934 Act.

(xxxii) None of the Company, the Bank and any of their subsidiaries is in
violation of any order or directive from the FRB, the PDB, the FDIC, the
Commission or any regulatory authority to make any material

9 

 

change in the method of conducting its respective businesses. Except as
disclosed in the Registration Statement, the General Disclosure Package and the
Prospectus, neither the Company nor any of its subsidiaries is subject or is
party to, or has received any notice or advice that any of them may become
subject or party to, any investigation with respect to, any corrective,
suspension or cease-and-desist order, agreement, consent agreement, memorandum
of understanding or other regulatory enforcement action, proceeding or order
with or by, or is a party to any commitment letter, or is subject to any
directive by, or has been a recipient of any supervisory letter from any
Regulatory Agency (as defined below) that, in each case, currently relates to or
materially restricts in any respect the conduct of their business or that in any
manner relates to capital adequacy, credit policies or management, nor at the
request or direction of any Regulatory Agency has the Company or any of its
subsidiaries adopted any board resolution that is reasonably likely to have a
Material Adverse Effect (each, a “Regulatory Agreement”), nor has the Company or
any of its subsidiaries been advised by any Regulatory Agency that such
Regulatory Agency is considering issuing or requesting any such Regulatory
Agreement or any such Regulatory Agreement is pending or, to the knowledge of
the Company, threatened. Except as disclosed in the Registration Statement, the
General Disclosure Package and the Prospectus, the Company and its subsidiaries
are each in substantial compliance with any Regulatory Agreements, and there is
no unresolved violation, criticism or exception by any Regulatory Agency with
respect to any report or statement relating to any examinations of the Company
or any of its subsidiaries which, in the reasonable judgment of the Company,
currently results in or is expected to result in a Material Adverse Effect. As
used herein, the term “Regulatory Agency” means any Governmental Entity having
supervisory or regulatory authority with respect to the Company or any of its
subsidiaries, including, but not limited to, any federal or state agency charged
with the supervision or regulation of depositary institutions or holding
companies of depositary institutions, or engaged in the insurance of depositary
institution deposits.

(xxxiii) Each “employee benefit plan” (as defined under the Employee Retirement
Income Security Act of 1974, as amended, and the regulations and published
interpretations thereunder (collectively, “ERISA”)) established or maintained by
the Company, its subsidiaries or their “ERISA Affiliates” (as defined below) is
in compliance with ERISA, except where the failure to be in compliance with
ERISA would not result in a Material Adverse Effect. “ERISA Affiliate” means,
with respect to the Company or a subsidiary, any member of any group of
organizations described in Section 414(b), (c), (m) or (o) of the Internal
Revenue Code of 1986, as amended, and the regulations and published
interpretations thereunder (the “Code”) of which the Company or such subsidiary
is a member. No “reportable event” (as defined under ERISA) has occurred or is
reasonably expected to occur with respect to any “employee benefit plan”
established or maintained by the Company, its subsidiaries or any of their ERISA
Affiliates. The fair market value of the assets of each ERISA Affiliate defined
benefit pension plan exceeds the present value of such plan’s “benefit
liabilities” (as defined in Section 4001(a)(16) of ERISA), and no ERISA
Affiliate defined benefit pension plan has an “accumulated funding deficiency”
(as defined in Section 302 of ERISA). None of the Company, its subsidiaries nor
any of their ERISA Affiliates has incurred or reasonably expects to incur any
liability under (A) Title IV of ERISA with respect to termination of, or
withdrawal from, any “employee benefit plan” or (B) Sections 412, 4971 or 4975
of the Code. Each “employee benefit plan” established or maintained by the
Company, its subsidiaries or any of their ERISA Affiliates that is intended to
be qualified under Section 401(a) of the Code has received a favorable
determination or opinion letter from the Internal Revenue Service regarding its
qualification under such section and, to the knowledge of the Company, its
subsidiaries and its ERISA affiliates, nothing has occurred whether by action or
failure to act, which would cause the loss of such qualification.

(xxxiv) The Company and its subsidiaries, taken as a whole, are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as the Company reasonably believes are prudent and customary
in the business in which the Company and its subsidiaries are engaged. Neither
the Company nor any of its subsidiaries has any reason to believe that it will
not be able to obtain insurance coverage from insurers similar to their current
insurers as may be necessary to continue its business at a cost that would not
have a Material Adverse Effect. To the knowledge of the Company, neither the
Company nor any subsidiary has been denied any insurance coverage which it has
sought or for which it has applied in any instance in which such insurance
coverage was offered by the carrier from which the Company or such subsidiary
sought such coverage or to which it applied for such coverage.

(xxxv) There are no contracts, agreements or understandings between the Company
and any person that would give rise to a valid claim against the Company, or any
Underwriter, for a brokerage commission, finder’s fee or other like payment in
connection with the sale of the Notes.

10 

 

(xxxvi) The Company and its subsidiaries have (i) filed all necessary federal,
state and foreign income and franchise tax returns that they are required to
have filed or have properly requested extensions of the deadline for the filing
therefor and all such tax returns as filed are true, complete and correct in all
material respects and (ii) have paid all taxes required to be paid by any of
them, other than such taxes as may be paid at a later date without any penalty
or fine and except for any such tax, assessment, fine or penalty that is
currently being contested in good faith by appropriate actions and except for
such taxes, assessments, fines or penalties, the nonpayment or late payment of
which would not, individually or in the aggregate, be reasonably expected to
have a Material Adverse Effect.

(xxxvii) No labor dispute with the employees of the Company or any subsidiary
exists or, to the knowledge of the Company, is imminent, which, in any case,
would reasonably be expected to result in a Material Adverse Effect.

(xxxviii) The operations of the Company and its subsidiaries are and have been
conducted at all times in compliance in all material respects with applicable
financial recordkeeping and reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, money laundering statutes
applicable to the Company and its subsidiaries, the rules and regulations
thereunder and any related or similar rules, regulations or guidelines, issued,
administered or enforced by any governmental agency (collectively, the “Money
Laundering Laws”), and no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the Company
or any of its subsidiaries with respect to the Money Laundering Laws is pending
or, to the knowledge of the Company, threatened.

(xxxix) The Company has not distributed and, prior to the later to occur of
(i) the Closing Date and (ii) completion of the distribution of the Notes, will
not distribute any prospectus (as such term is defined in the 1933 Act and the
1933 Act Regulations) in connection with the offering and sale of the Notes
other than the Registration Statement, any preliminary prospectus, the
Prospectus or such other materials, if any, permitted by the 1933 Act or the
1933 Act Regulations and approved by the Representative.

(xl) No forward-looking statement (within the meaning of Section 27A of the 1933
Act and Section 21E of the 1934 Act) contained in the Registration Statement,
the General Disclosure Package, the Prospectus and any Issuer-Represented Free
Writing Prospectus has been made or reaffirmed without a reasonable basis or has
been disclosed other than in good faith. No forward-looking statement (within
the meaning of Section 27A of the Securities Act or Rule 175 under the
Securities Act) included or incorporated by reference in the Registration
Statement, the Preliminary Prospectus or the Prospectus has been made or
reaffirmed without a reasonable basis or has been disclosed other than in good
faith.

(xli) Neither the Company nor any of its subsidiaries has participated in any
reportable transaction, as defined in Treasury Regulation
Section 1.6011-(4)(b)(1).

(xlii) Except as disclosed in the Registration Statement, any preliminary
prospectus and the Prospectus, each of the Company and its subsidiaries has good
and indefeasible title to all securities held by it (except securities sold
under repurchase agreements, pledged to secure deposits or derivative contracts
or held in any fiduciary or agency capacity) free and clear of any lien, claim,
charge, option, encumbrance, mortgage, pledge or security interest or other
restriction of any kind, except to the extent such securities are pledged in the
ordinary course of business consistent with prudent business practices to secure
obligations of the Company or any of its subsidiaries and except for such
defects in title or liens, claims, charges, options, encumbrances, mortgages,
pledges or security interests or other restrictions of any kind that would not,
individually or in the aggregate, result in a Material Adverse Effect. Such
securities are valued on the books of the Company and its subsidiaries in
accordance with GAAP.

(xliii) Any and all material swaps, caps, floors, futures, forward contracts,
option agreements (other than employee stock options and restricted stock units)
and other derivative financial instruments, contracts or arrangements, whether
entered into for the account of the Company or one of its subsidiaries or for
the account of a customer of the Company or one of its subsidiaries, were
entered into in the ordinary course of business and in accordance with prudent
business practice and applicable laws, rules, regulations and policies of all
applicable regulatory agencies and with counterparties believed to be
financially responsible at the time of execution of such instruments, contracts
or arrangements. The Company and each of its subsidiaries have duly performed
all of their

11 

 

respective obligations thereunder to the extent that such obligations to perform
have accrued, and there are no breaches, violations or defaults or allegations
or assertions of such by any party thereunder, except for such breaches,
violations, defaults, allegations or assertions that, individually or in the
aggregate, would not result in a Material Adverse Effect.

(xliv) Neither the Company nor, to the knowledge of the Company, any director,
officer, agent, employee or affiliate of the Company is (a) currently subject to
any U.S. sanctions administered by the Office of Foreign Assets Control of the
U.S. Treasury Department (“OFAC”); or (b) located, organized or resident in a
country or territory that is the subject of such sanctions (including, without
limitation, Burma/Myanmar, Cuba, Iran, North Korea, Sudan and Syria). The
Company will not, directly or indirectly, use the proceeds of the offering
contemplated hereby, or lend, contribute or otherwise make available such
proceeds to any of its subsidiaries, any joint venture partner of the Company or
any of its subsidiaries or any other person or entity, for the purpose of
financing the activities of any person in, or engage in dealings or transactions
with any person, or in any country, or territory, subject to any U.S. sanctions
administered by OFAC.

(xlv) Except as described in the Registration Statement, the General Disclosure
Package or the Prospectus, there are no material off-balance sheet transactions,
arrangements, obligations (including contingent obligations), or any other
relationships with unconsolidated entities or other persons to which the Company
or any of its subsidiaries is a party, that would reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.

(xlvi) To the knowledge of the Company, after due inquiry, there are no
affiliations with any FINRA member firm among the Company’s officers, directors,
or principal shareholders, except as set forth in the Registration Statement,
the General Disclosure Package and the Prospectus, or as otherwise disclosed in
writing to the Underwriters.

(xlvii) No “nationally recognized statistical rating organization” (as defined
in Section 3(a)(62) of the 1934 Act) has (i) imposed (or has informed the
Company that it is considering imposing) any condition (financial or otherwise)
to retain any rating assigned to the Company or any of the subsidiaries or to
any securities of the Company or any of the subsidiaries, or (ii) publicly
announced that it has placed under surveillance or review, with possible
negative implications, its rating of the Company’s debt securities.

(xlviii) (a) There has been no security breach or incident, unauthorized access
or disclosure, or other compromise of or relating to the Company’s, the Bank’s
or any of their subsidiaries’ information technology and computer systems,
networks, hardware, software, data and databases (including the data and
information of their respective customers, employees, suppliers, vendors and any
third party data maintained, processed or stored by the Company, the Bank and
their subsidiaries, and any such data processed or stored by third parties on
behalf of the Company, the Bank and their subsidiaries), equipment or technology
(collectively, “IT Systems and Data”); (b) neither the Company, the Bank nor
their subsidiaries have been notified of, and each of them have no knowledge of
any event or condition that could result in, any security breach or incident,
unauthorized access or disclosure or other compromise to their IT Systems and
Data and (c) the Company, the Bank and their subsidiaries have implemented
appropriate controls, policies, procedures, and technological safeguards to
maintain and protect the integrity, continuous operation, redundancy and
security of their IT Systems and Data reasonably consistent with industry
standards and practices, or as required by applicable regulatory standards. The
Company, the Bank and their subsidiaries are presently in material compliance
with all applicable laws or statutes and all judgments, orders, rules and
regulations of any court or arbitrator or governmental or regulatory authority,
internal policies and contractual obligations relating to the privacy and
security of IT Systems and Data and to the protection of such IT Systems and
Data from unauthorized use, access, misappropriation or modification.

(b) The Bank represents and warrants to each Underwriter as of the date hereof,
as of the Applicable Time referred to in Section 1(a)(i) hereof, as of the
Closing Date referred to in Section 2(a) hereof and, if applicable, as of each
Date of Delivery (as defined below) referred to in Section 2(b) hereof, and
agrees with each Underwriter, as follows:

(i) The Bank has been duly chartered as a bank in the Commonwealth of
Pennsylvania and is presently subsisting as a corporation in good standing under
the laws of the Commonwealth of Pennsylvania with the corporate power and
authority to own, lease and operate its properties and conduct its business as
described in

12 

 

the Prospectus and to enter into and perform its obligations under this
Agreement. The Bank is the only depository institution subsidiary of the Company
and the Bank is a member in good standing of the Federal Home Loan Bank System.
The Bank is duly qualified as a foreign corporation to transact business and is
in good standing in each other jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to so qualify or to be in good
standing would not reasonably be expected to result in a Material Adverse
Effect. The activities of the Bank and its subsidiaries are permitted under the
laws and regulations of the Commonwealth of Pennsylvania for state-chartered
banks.

(ii) The Bank is not in violation of its articles of incorporation or bylaws or
in default in the performance or observance of any obligation, agreement,
covenant or condition contained in any indenture, mortgage, deed of trust, loan
agreement, note, lease or other agreement or instrument to which it is a party
or by which it or any of its properties may be bound or to which any of the
property or assets of the Bank is subject, except for such defaults that would
not be expected to result in a Material Adverse Effect.

(iii) The deposit accounts in the Bank are insured up to the applicable limits
by the FDIC and no proceeding for the termination or revocation of such
insurance is pending or, to the knowledge of the Bank, threatened against the
Bank.

(iv) This Agreement has been duly authorized, executed and delivered by the Bank
and, when duly executed by the Representative, will constitute the valid and
binding agreement of the Bank, enforceable against the Bank in accordance with
its terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors’ rights generally or by general equitable principles (regardless of
whether such enforceability is considered in a proceeding in equity or at law)
and except as any indemnification or contribution provisions thereof may be
limited under applicable securities laws and banking laws. The Bank has the full
corporate power and authority to enter into this Agreement.

(v) The execution and delivery of this Agreement by the Bank and the compliance
and performance by the Bank with the provisions of this Agreement have been duly
authorized by all necessary corporate action on the part of the Bank and do not
and will not, whether with or without the giving of notice or passage or time or
both, (A) conflict with or result in a breach or violation of any of the terms
or provisions of, or constitute a default or result in a Repayment Event under,
any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Bank or any of its subsidiaries is a party or by which
the Bank or any of its subsidiaries is bound or to which any of the property or
assets of the Bank or any of its subsidiaries is subject, (B) result in any
violation of the provisions of the certificate of incorporation of the Bank or
result in any violation of the provisions of the bylaws of the Bank or (C)
result in any violation of the provisions of any statute or any order, rule or
regulation of any Governmental Entity having jurisdiction over the Bank or any
of its subsidiaries or any of their properties, except for, in the case of
clauses (A) and (C), those conflicts, breaches, violations, defaults or
Repayment Events that would not result in a Material Adverse Effect.

(c) Any certificate signed by an officer of the Company or the Bank, as
applicable, and delivered to the Representative or to counsel for the
Underwriters in connection with the offering of Notes shall be deemed to be a
representation and warranty by the Company or the Bank, as applicable, to the
Underwriters as to the matters set forth therein as of the date of such
certificate.

2.                   Sale and Delivery to Underwriters; Closing

(a) Subject to the terms and conditions herein set forth, the Company agrees to
issue and sell to each Underwriter, severally and not jointly, and each
Underwriter, severally and not jointly, agrees to purchase from the Company, at
a purchase price equal to 96.85% of the aggregate principal amount of the Notes,
the respective principal amount of the Initial Notes set forth opposite such
Underwriter’s name in Schedule I hereto. Delivery to the Underwriters of and
payment by the Representative for the Initial Notes shall be made at a closing
(the “Closing”) to be held at 10:00 a.m., New York time, on December 9, 2019
(the “Closing Date”) at Sidley Austin llp, 787 Seventh Avenue, New York, NY
10019 (or at such other place as shall be reasonably acceptable to the
Representative); provided, however, that if the Closing has not taken place on
the Closing Date because of a failure to satisfy one or more of the conditions
specified in Section 5 hereof and this Agreement has not otherwise been
terminated by the Representative in accordance with its terms, “Closing Date”
shall mean 10:00 a.m. New York

13 

 

time on the first business day following the satisfaction (or waiver) of all
such conditions after notification by the Company to the Representative of the
satisfaction (or waiver) of such conditions.

(b) In addition, on the basis of the representations, warranties and agreements
herein contained and subject to the terms and conditions herein set forth, the
Company hereby grants an option to the Underwriters, severally and not jointly,
to purchase up to an additional $9,750,000 aggregate principal amount of Notes
equal to the price per Initial Note plus accrued interest, if any, from December
9, 2019 to the date of delivery and payment. Such option will expire 30 days
after the date of this Agreement and may be exercised in whole or in part from
time to time only for the purpose of covering over-allotments which may be made
in connection with the offering and distribution of the Initial Notes upon
written notice by the Representative to the Company setting forth the number of
Option Notes to which the several Underwriters are then exercising the option
and the time, date and place of payment and delivery for such Option Notes (with
the understanding that an email or other form of electronic communication agreed
to by the parties hereto shall constitute written notice for the purposes
hereof). Any such time and date of payment and delivery (each, a “Date of
Delivery”) shall be determined by the Representative and the Company, but shall
not be later than seven full business days after the exercise of said option,
nor in any event prior to the Closing Date, unless otherwise agreed upon by the
Representative and the Company. If the option is exercised as to all or any
portion of the Option Notes, each of the Underwriters, severally and not
jointly, will purchase that proportion of the total number of Option Notes then
being purchased which the number of Initial Notes each such Underwriter has
severally agreed to purchase bears to the total number of Initial Notes, subject
to such adjustments as the Representative in its discretion shall make to
subject, in each case, to such adjustment as the Representative may determine to
ensure that the Option Notes are issued in minimum denominations of no less than
$25 and whole multiples of $25 in excess thereof.

(c) Payment for the Notes shall be made by wire transfer of immediately
available funds to the account(s) specified by the Company to the Representative
against delivery to the nominee of DTC, for the respective accounts of the
several Underwriters, of one or more global notes representing the Notes
(collectively, the “Global Note”), with any transfer or other taxes payable in
connection with the sale of the Notes duly paid by the Company. The Global Note
shall be made available to the Representative for inspection at the office of
Sidley Austin llp (or such other place as shall be reasonably acceptable to the
Representative) not later than 10:00 a.m. New York time one business day
immediately preceding the Closing Date or the Date of Delivery, as the case may
be. It is understood that each Underwriter has authorized the Representative,
for its account, to accept delivery of, receipt for, and make payment of the
purchase price for, the Notes which it has agreed to purchase. Securities to be
represented by the Global Note will be deposited on the Closing Date or the Date
of Delivery, as the case may be, by or on behalf of the Company, with DTC or its
designated custodian, and registered in the name of Cede & Co.

(d) The documents to be delivered by or on behalf of the parties hereto,
including the cross receipt for the Notes, will be delivered at 10:00 A.M. at
the Closing Date or the Date of Delivery, as the case may be, at the offices of
Sidley Austin llp, 787 Seventh Avenue, New York, NY 10019, or at such other time
and date as the Representative and the Company may agree upon in writing.

3.                   Covenants of the Company. The Company further covenants and
agrees with each Underwriter as follows:

(a) The Company will prepare the Prospectus in a form approved by the
Representative and will file such Prospectus pursuant to Rule 424(b) under the
1933 Act not later than the Commission’s close of business on the second
business day following the execution and delivery of this Agreement, or, if
applicable, such earlier time as may be required by Rule 430B under the 1933 Act
and will make no further amendment or any supplement to the Registration
Statement or the Prospectus that shall be reasonably disapproved by the
Representative promptly after reasonable notice thereof. The Company will advise
the Representative, promptly after it receives notice thereof, of the time when
any amendment to the Registration Statement has been filed with the Commission
or becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed with the Commission and furnish the Underwriters with
copies thereof and will advise the Underwriters, promptly after it receives
notice thereof, of the issuance by the Commission of any stop order with respect
to the Registration Statement or of any order preventing or suspending the use
of any preliminary prospectus, any Issuer-Represented Free Writing Prospectus or
the Prospectus, of the suspension of the qualification of the Notes for offering
or sale in any jurisdiction, of the initiation or threatening of any proceeding
for any such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement, any preliminary prospectus, any

14 

 

Issuer-Represented Free Writing Prospectus or the Prospectus or for additional
information, and, in the event of the issuance of any stop order or of any order
preventing or suspending the use of any preliminary prospectus, any
Issuer-Represented Free Writing Prospectus or the Prospectus or suspending any
such qualification, promptly use its reasonable best efforts to obtain the
withdrawal of such order.

(b) The Company will give the Representative notice of its intention to file or
prepare any amendment to the Registration Statement, any term sheet or any
amendment, supplement or revision to either any preliminary prospectus
(including the prospectus included in the Registration Statement at the time it
became effective) or to the Prospectus, whether pursuant to the 1933 Act, the
1934 Act or otherwise, will furnish the Underwriters with copies of any such
documents a reasonable amount of time prior to such proposed filing or use, as
the case may be, and will not file or use any such document to which the
Representative or counsel for the Underwriters shall reasonably object.

(c) The Company has furnished or will deliver to the Underwriters and counsel
for the Underwriters, without charge and upon request, signed copies of the
Registration Statement as originally filed and of each amendment thereto
(including exhibits filed therewith) and signed copies of all consents and
certificates of experts, and will also deliver to the Underwriters, without
charge and upon request, a conformed copy of the Registration Statement as
originally filed and of each amendment thereto (without exhibits). The copies of
the Registration Statement and each amendment thereto furnished to the
Underwriters will be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.

(d) Promptly from time to time, the Company will take such action as the
Representative may reasonably request to qualify the Notes for offering and sale
under the securities laws of such states and other jurisdictions as the
Representative may reasonably request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such jurisdictions for
as long as may be necessary to complete the distribution of the Notes, provided
that in connection therewith the Company shall not be required to qualify as a
foreign corporation or to file a general consent to service of process in any
jurisdiction. In each state or other jurisdiction in which the Notes have been
so qualified, the Company will file such statements and reports as may be
required by the laws of such state or other jurisdiction to continue such
qualification in effect until the completion of the distribution of the Notes.
The Company will also supply the Underwriters with such information as is
necessary for the determination of the legality of the Notes for investment
under the laws of such jurisdiction as the Underwriters may reasonably request.

(e) On the business day next succeeding the date of this Agreement and from time
to time, the Company will furnish the Underwriters with copies of the Prospectus
in New York City in such quantities as the Underwriters may from time to time
reasonably request, and, if the delivery of a prospectus is required at any time
prior to the expiration of nine months after the time of issue of the Prospectus
in connection with the offering or sale of the Notes and if at such time any
event shall have occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it shall be necessary
during such period to amend or supplement the Prospectus in order to comply with
the 1933 Act, notify the Representative and upon the Representative’s request
prepare and furnish without charge to the Underwriters and to any dealer in
securities as many copies as the Underwriters may from time to time reasonably
request of an amended Prospectus or a supplement to the Prospectus that will
correct such statement or omission or effect such compliance, and in case any
Underwriter is required to deliver a prospectus in connection with sales of any
of the Notes at any time nine months or more after the time of issue of the
Prospectus, upon such Underwriter’s request, but at the expense of such
Underwriter, prepare and deliver to such Underwriter as many copies as it may
request of an amended or supplemented Prospectus complying with Section 10(a)(3)
of the 1933 Act.

(f) The Company will comply with the 1933 Act and the 1933 Act Regulations, the
1939 Act and the 1939 Act Regulations and the 1934 Act and the 1934 Act
Regulations so as to permit the completion of the distribution of the Notes as
contemplated in this Agreement and in the Prospectus. If at any time when a
prospectus is required by the 1933 Act to be delivered in connection with sales
of the Notes, any event shall occur or condition shall exist as a result of
which it is necessary, in the opinion of counsel for the Underwriters or for the
Company, to amend the Registration Statement or amend or supplement the
Prospectus in order that the Prospectus will not include any untrue statements
of a material fact or omit to state a material fact necessary in order to make
the statements therein

15 

 

not misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the opinion of such
counsel, at any such time, to amend the Registration Statement or amend or
supplement the Prospectus in order to comply with the requirements of the 1933
Act or the 1933 Act Regulations, the Company will promptly prepare and file with
the Commission, subject to Section 3(b) hereof, such amendment or supplement as
may be necessary to correct such statement or omission or to make the
Registration Statement or the Prospectus comply with such requirements, and the
Company will furnish to the Underwriters such number of copies of such amendment
or supplement as such Underwriter may reasonably request. If at any time
following issuance of an Issuer-Represented Free Writing Prospectus there
occurred or occurs an event or development as a result of which such
Issuer-Represented Free Writing Prospectus conflicted or would conflict in any
material respect with the information contained in the Registration Statement or
included or would include an untrue statement of a material fact or omitted or
would omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances prevailing at that subsequent time,
not misleading, the Company has promptly notified or will promptly notify the
Representative and has promptly amended or will promptly amend or supplement, at
its own expense, such Issuer-Represented Free Writing Prospectus to eliminate or
correct such material conflict, untrue statement or omission.

(g) The Company will make generally available to its securityholders as soon as
practicable, an earnings statement of the Company and its subsidiaries (which
need not be audited) complying with Section 11(a) of the 1933 Act and the 1933
Act Regulations (including, at the option of the Company, Rule 158).

(h) During a period of three years from the effective date of the Registration
Statement, the Company will furnish to the holders of the Notes as soon as
practicable after the end of each fiscal year an annual report (including
balance sheets and statements of income, shareholders’ equity and cash flows of
the Company and its consolidated subsidiaries certified by independent public
accountants) and, as soon as practicable after the end of each of the first
three quarters of each fiscal year (beginning with the fiscal quarter ending
after the effective date of the Registration Statement), to make available to
such holders consolidated summary financial information of the Company and its
subsidiaries for such quarter in reasonable detail; provided that if the Company
files an annual report on Form 10-K or quarterly report on Form 10-Q by means of
EDGAR, the Company shall be deemed to have furnished such report to such holders
in compliance with the requirements of this section.

(i) During a period of three years from the effective date of the Registration
Statement, the Company will furnish to the Underwriters copies of all reports or
other communications (financial or other) furnished to holders of the Notes, and
to deliver to the Underwriters (i) as soon as they are available, copies of any
reports and financial statements furnished to or filed with the Commission or
any national securities exchange on which any class of securities of the Company
is listed and (ii) subject to an appropriate confidentiality agreement, such
additional information concerning the business and financial condition of the
Company as the Underwriters may from time to time reasonably request (such
financial statements to be on a consolidated basis to the extent the accounts of
the Company and its subsidiaries are consolidated in reports furnished to its
shareholders generally or to the Commission); provided that if the Company files
any such reports or other communications of the type contemplated by clauses (i)
or (ii) above with the Commission and such report or materials are or will
become available on EDGAR, the Company shall be deemed to have furnished such
report or other communications to the Underwriters in compliance with the
requirements of this section.

(j) The Company will use the net proceeds received by it from the sale of the
Notes pursuant to this Agreement in the manner specified in the Registration
Statement, the General Disclosure Package and the Prospectus under the caption
“Use of Proceeds.”

(k) Until completion of the distribution of the Notes, the Company will file
(i) all documents required to be filed with the Commission pursuant to the 1934
Act within the time periods required by the 1934 Act and the 1934 Act
Regulations and (ii) such information on Form 10-K or Form 10-Q as may be
required by Rule 463 under the 1933 Act.

(l) During the period of 180 days from the date of the Prospectus, the Company
will not make any offer relating to the Notes that would constitute an
Issuer-Represented Free Writing Prospectus unless it obtains the prior written
consent of the Representative, which consent shall not be unreasonably withheld,
conditioned or delayed, and has complied and will comply with the requirements
of Rule 433 applicable to any Issuer-Represented Free

16 

 

Writing Prospectus, including, where and when required, timely filing with the
Commission, legending and record keeping.

(m) During the period beginning on the date hereof and continuing to and
including the Closing Date and the latest additional time of purchase, if any,
of the Notes, the Company will not, and will not permit any subsidiary to,
without the prior written consent of the Representative, directly or indirectly,
issue, sell, offer or contract to sell, grant any option for the sale of, or
otherwise transfer or dispose of, any debt securities or nonconvertible
preferred stock of the Company or any of its subsidiaries.

(n) The Company will not take, directly or indirectly, any action designed to or
that might be reasonably expected to cause or result in stabilization or
manipulation of the price of any securities of the Company, whether to
facilitate the sale or resale of the Notes or otherwise, and the Company will,
and shall use its commercially reasonable efforts to cause each of its
affiliates to, comply with all applicable provisions of Regulation M with
respect to any securities of the Company. If the limitations of Rule 102 of
Regulation M (“Rule 102”) do not apply with respect to the Notes or any other
reference security pursuant to any exception set forth in Section (d) of
Rule 102, then promptly upon notice from the Representative (or, if later, at
the time stated in the notice), the Company will, and shall use its commercially
reasonable efforts to cause each of its affiliates to, comply with Rule 102 as
though such exception were not available, but the other provisions of Rule 102
(as interpreted by the Commission) did apply.

(o) The Company will prepare the Final Term Sheet in form and substance
satisfactory to the Underwriters, and the Company represents and agrees that,
unless it obtains the prior consent of the Representative, it has not made and
will not make any offer relating to the Notes that would constitute an “issuer
free writing prospectus,” as defined in Rule 433, or that would otherwise
constitute a “free writing prospectus,” as defined in Rule 405 of the 1933 Act
Regulations, required to be filed with the Commission. Any such free writing
prospectus consented to by the Representative and the Company is hereinafter
referred to as a “Permitted Free Writing Prospectus.” The Company represents
that it has treated or agrees that it will treat each Permitted Free Writing
Prospectus as an “issuer free writing prospectus,” as defined in Rule 433, and
has complied and will comply with the requirements of Rule 433 applicable to any
Permitted Free Writing Prospectus, including timely filing with the Commission
where required, legending and record keeping. Notwithstanding the foregoing, the
Company consents to the use by the Underwriters of a free writing prospectus
that contains only (a)(i) information describing the preliminary terms of the
Notes or their offering, (ii) information meeting the requirements of Rule 134
of the 1933 Act Regulations or (iii) information that describes the final terms
of the Notes or their offering and that is included in the Final Term Sheet or
(b) other customary information that is neither “issuer information,” as defined
in Rule 433, nor otherwise an Issuer-Represented Free Writing Prospectus.

(p) The Company shall use its reasonable best efforts to permit the Notes to be
eligible for clearance, settlement and trading in book-entry-only form through
the facilities of DTC.

(q) The Company shall use its reasonable best efforts to effect the listing of
the Notes on the New York Stock Exchange within 30 days of the Closing Date.

4.                   Payment of Expenses. The Company covenants and agrees with
the Underwriters that the Company will pay or cause to be paid the following,
whether or not the transactions contemplated herein are completed: (i) the
reasonable out-of-pocket expenses incurred by the Underwriters in connection
with their engagement, including without limitation, outside counsel legal fees
and expenses (such legal fees and expenses of counsel not to exceed $100,000 in
the aggregate), marketing, syndication and travel expenses; (ii) the cost of
obtaining all securities and bank regulatory approvals, including any required
FINRA fees, including the filing fees incident thereto; (iii) all fees and
disbursements of the Company’s counsel and accountants in connection with the
registration of the Notes under the 1933 Act and all other expenses in
connection with the preparation, printing and filing of amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Underwriters; (iv) all expenses in connection with the qualification of the
Notes for offering and sale under state securities as provided in Section 3(d)
hereof, including the fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky survey;
(v) the cost of printing or reproducing this Agreement, the Blue Sky survey,
closing documents (including any compilations thereof) and any other documents
in connection with the offering, purchase, sale and delivery of the Notes;
(vi) the fees and expenses of the Trustee, including fees and disbursements of
counsel for the Trustee in connection with the Indenture and the Notes;
(vii) the

17 

 

cost and charges of any transfer agent or registrar; (viii) the costs and
expenses of the Company relating to investor presentations or any “road show”
undertaken in connection with the marketing of the Notes, including, without
limitation, expenses associated with the production of road show slides and
graphics, fees and expenses of any consultants engaged in connection with the
road show presentations, travel and lodging expenses of the Underwriters and
officers of the Company and any such consultants, and the cost of aircraft and
other transportation chartered in connection with the road show with the consent
of the Company; (ix) any fees payable in connection with the rating of the
Notes; (x) the fees and expenses incurred in connection with having the Notes
eligible for clearance, settlement and trading through the facilities of DTC;
and (xi) all other costs and expenses incident to the performance of the
Company’s obligations hereunder which are not otherwise specifically provided
for in this Section 4.

5.                   Conditions of the Underwriters’ Obligations. The
obligations of the several Underwriters hereunder to purchase and pay for the
Initial Notes or the Option Notes as provided herein on the Closing Date or the
Date of Delivery, as the case may be, shall be subject, in the Representative’s
discretion, to the condition that all representations and warranties and other
statements of the Company herein are, at and as of such Closing Date or the Date
of Delivery, as the case may be, true and correct, the condition that the
Company shall have performed all of its obligations hereunder theretofore to be
performed, and the following additional conditions:

(a) The Prospectus shall have been filed with the Commission pursuant to
Rule 424(b) within the applicable time period prescribed for such filing by the
1933 Act Regulations and in accordance with Section 3(a) hereof (or a
post-effective amendment shall have been filed and declared effective in
accordance with the requirements of Rule 430B), no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission, and all requests for additional information on the
part of the Commission shall have been complied with to the Representative’s
reasonable satisfaction, the Final Term Sheet and any other material required to
be filed by the Company pursuant to Rule 433(d) under the 1933 Act shall have
been filed with the Commission within the applicable time periods prescribed in
such filings by Rule 433, and FINRA shall have raised no objection to the
fairness and reasonableness of the underwriting terms and arrangements.

(b) At the Closing Date and each Date of Delivery, the Representative shall have
received the opinion, dated as of the Closing Date or the Date of Delivery, as
the case may be, of Stradley Ronon Stevens & Young, LLP, counsel for the
Company, in form and substance reasonably satisfactory to counsel for the
Underwriters, together with signed or reproduced copies of such letter for each
of the other Underwriters. Such counsel may also state that, insofar as either
such opinion involves factual matters, they have relied, to the extent they deem
proper, upon certificates of officers of the Company and its subsidiaries and
certificates of public officials.

(c) At the Closing Date and each Date of Delivery, the Representative shall have
received the opinion, dated as of Closing Date or the Date of Delivery, as the
case may be, of Sidley Austin llp, counsel for the Underwriters, together with
signed or reproduced copies of such letter for each of the other Underwriters.
The opinion shall address the matters as the Representative may reasonably
request. In giving such opinion such counsel may rely, as to all matters
governed by the laws of jurisdictions other than the law of the State of New
York and the Federal law of the United States, upon the opinions of counsel
satisfactory to the Representative. Such counsel may also state that, insofar as
such opinion involves factual matters, they have relied, to the extent they deem
proper, upon certificates of officers of the Company and its subsidiaries and
certificates of public officials.

(d) On the date of this Agreement, at the Closing Date and each Date of
Delivery, BDO USA, LLP shall have furnished to the Representative a letter,
together with signed or reproduced copies of such letter for each of the other
Underwriters, dated the respective dates of delivery thereof, in form and
substance satisfactory to the Representative, containing statements and
information of the type ordinarily included in accountants “comfort letters” to
underwriters with respect to the financial statements of the Company and certain
financial information contained in the Registration Statement, the General
Disclosure Package and the Prospectus, provided that the letter delivered as of
the Closing Date shall use a “cut-off” date no more than three business days
prior to the Closing Date or such Date of Delivery.

(e) On the date of this Agreement, at the Closing Date and each Date of
Delivery, Deloitte & Touche LLP shall have furnished to the Representative a
letter, together with signed or reproduced copies of such letter for each of the
other Underwriters, dated the respective dates of delivery thereof, in form and
substance satisfactory to the

18 

 

Representative, containing statements and information of the type ordinarily
included in accountants “comfort letters” to underwriters with respect to the
financial statements of the Company and certain financial information contained
in the Registration Statement, the General Disclosure Package and the
Prospectus, including, among other things, a statement that as of a specified
date in the letter, there were not any changes, in the capital stock, increases
in long-term debt, or decreases in consolidated shareholders’ equity or any
decreases, as compared to the corresponding period in the preceding year, in
consolidated net interest income, non-interest income, or in the total or
per-share amounts of net income, except in all instances for increases or
decreases which the Registration Statement discloses have occurred or may occur,
provided that the letter delivered as of the Closing Date shall use a “cut-off”
date no more than three business days prior to the Closing Date or such Date of
Delivery.

(f) (i) Neither the Company nor any of its subsidiaries shall have sustained
since the date of the latest audited financial statements included in the
Registration Statement, the General Disclosure Package and the Prospectus any
loss or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental or regulatory action, order or decree, otherwise than as
set forth or contemplated in the Registration Statement, the General Disclosure
Package and the Prospectus, and (ii) since the respective dates as of which
information is given in the Registration Statement, the General Disclosure
Package and the Prospectus there shall not have been any change in the capital
stock or long-term debt of the Company or any of its subsidiaries or any change
in or affecting the general affairs, management, financial position, capital
adequacy for regulatory purposes, shareholders' equity or results of operations
of the Company and its subsidiaries, otherwise than as set forth or contemplated
in the Registration Statement, the General Disclosure Package and the
Prospectus, or their business affairs, business prospects or regulatory affairs,
the effect of which, in any such case described in clause (i) or (ii), is in the
reasonable judgment of the Representative so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Notes being delivered at the Closing Date or Date of Delivery, as the
case may be, on the terms and in the manner contemplated in the Prospectus.

(g) On or after the date hereof there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in securities
generally on the NYSE or on NASDAQ; (ii) a suspension or material limitation in
trading in the Company’s securities on NYSE; (iii) a general moratorium on
commercial banking activities declared by either federal or New York authorities
or a material disruption in commercial banking or securities settlement or
clearance services in the United States; (iv) the outbreak or escalation of
hostilities involving the United States or the declaration by the United States
of a national emergency or war; or (v) the occurrence of any other calamity or
crisis or any change in financial, political or economic conditions in the
United States or elsewhere, including, without limitation, as a result of
terrorist activities occurring after the date hereof, if the effect of any such
event specified in clause (iv) or (v), in the reasonable judgment of the
Representative makes it impracticable or inadvisable to proceed with the public
offering or the delivery of the Notes being delivered at the Closing Date or
Date of Delivery, as the case may be, on the terms and in the manner
contemplated in the Prospectus.

(h) The Representative shall have received a certificate of the Chief Executive
Officer of the Company and of the Chief Financial Officer of the Company, dated
as of the Closing Date and each Date of Delivery, to the effect that (i) no
Material Adverse Effect has occurred; (ii) the representations and warranties in
Section 1(a) hereof are true and correct with the same force and effect as
though made at and as of the Closing Date or Date of Delivery, as the case may
be, (ii) the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to the Closing
Date or Date of Delivery, as the case may be, (iv) no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been instituted or are pending or are to their knowledge
contemplated by the Commission and (v) no event of default under the Indenture
or default with notice and/or lapse of time that would be an event of default in
respect of the Notes has occurred and is continuing.

(i) The Representative shall have received a certificate from the President of
the Bank and of the Chief Financial Officer of the Bank, dated as of the Closing
Date and each Date of Delivery to the effect that the representations and
warranties in Section 1(b) are true and correct with the same force and effect
as though made at and as of the Closing Date or such Date of Delivery.

(j) Since the execution of this Agreement, there shall not have been any
decrease in or withdrawal of the rating of any securities of the Company or any
of its subsidiaries by any “nationally recognized statistical rating

19 

 

organization” (as defined for purposes of Section 3(a)(62) of the 1934 Act) of
which the Company has notice or any notice given of any intended or potential
decrease in or withdrawal of any such rating or of a possible change in any such
rating that does not indicate the direction of the possible change.

(k) Prior to the Closing Date, the Company, the Trustee, as securities registrar
for the Notes (or another transfer agent acceptable to the Representative) and
DTC shall have executed and delivered the Letter of Representations and the
Notes shall be eligible for clearance, settlement and trading through the
facilities of DTC.

(l) If any condition specified in this Section 5 shall not have been satisfied
when and as required to be satisfied or shall not have been waived by such time,
this Agreement may be terminated by the Representative by notice to the Company
at any time on or prior to the Closing Date or any relevant Date of Delivery. If
the sale of any of the Notes provided for herein is not consummated because any
condition set forth in this Section 5 is not satisfied 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, the Company will reimburse
the Underwriters upon demand for all documented out-of-pocket expenses
(including reasonable fees and disbursements of counsel) that shall have been
incurred by the Underwriters in connection with the proposed offering of the
Notes as to which such sale is not consummated. In addition, such termination
shall be subject to Section 4 hereof, and Sections 1, 6, 7, 8 and 14 hereof
shall survive any such termination and remain in full force and effect.

6.                   Indemnification. (a) The Company and the Bank, jointly and
severally, will indemnify and hold harmless each Underwriter, each person, if
any, who controls any Underwriter within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act, and their respective partners, directors,
officers, employees and agents and each affiliate of such Underwriter within the
meaning of Rule 405 of the 1933 Act Regulations against any losses, claims,
damages or liabilities, joint or several, to which such Underwriter may become
subject, under the 1933 Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Issuer-Represented Free Writing Prospectus, any preliminary
prospectus, the Registration Statement, the General Disclosure Package, the
Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, and will reimburse
each Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such action or
claim as such expenses are incurred; provided, however, that the Company and the
Bank shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any
Issuer-Represented Free Writing Prospectus, any preliminary prospectus, the
Registration Statement, the General Disclosure Package, the Prospectus or any
such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through the
Representative expressly for use therein. The Company, the Bank and each
Underwriter hereby acknowledge and agree that the only information that any
Underwriter through the Representative has furnished to the Company consists
solely of the information described as such in subsection (b) below.
Notwithstanding the foregoing, the indemnification provided for by the Bank in
this paragraph shall be limited with respect to the Bank to the extent necessary
if (a) a Governmental Entity having jurisdiction over the Bank by written
communication addressed to the Bank or its board of directors, including in
connection with any examination of the Bank, informs the Bank or its board of
directors that such Governmental Entity has determined that such indemnification
violates Sections 23A or 23B of the Federal Reserve Act, as amended, or another
law, rule, regulation or policy applicable to the Bank or the Company, (b) a
Governmental Entity notifies the Bank that this indemnification would result in
an adverse impact on the Bank’s examination ratings, (c) such indemnification
would give rise to civil money penalties or other sanctions or (d) the Bank
determines, upon the written advice of counsel, that payment of any
indemnification hereunder by the Bank would violate any law, rule, regulation or
policy applicable to the Bank or the Company. The Company and the Bank agree to
notify the Representative immediately upon receipt of such written advisement or
notice. The Representative agrees to cooperate with the Company in implementing
any modification required by the foregoing.

(b) Each Underwriter severally agrees to indemnify and hold harmless the Company
and the Bank, each of its officers, directors and each person, if any, who
controls the Company or the Bank, within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act, against any losses, claims, damages or
liabilities to which

20 

 

the Company or the Bank may become subject, under the 1933 Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Issuer-Represented Free Writing
Prospectus, any preliminary prospectus, the Registration Statement, the General
Disclosure Package, the Prospectus, or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission was
made in any Issuer-Represented Free Writing Prospectus, preliminary prospectus,
the Registration Statement, the General Disclosure Package, the Prospectus, or
any amendment or supplement thereto, in reliance upon and in conformity with
written information furnished to the Company by any Underwriter through the
Representative expressly for use therein (provided, however, that the Company
and the Underwriters hereby acknowledge and agree that the only such information
that any Underwriter through the Representative has furnished to the Company
consists solely of the following: (i) the first paragraph under the heading
“Discounts”; (ii) the third sentence of the paragraph under the heading “No
Public Trading Market” and (iii) the paragraph under the heading “Price
Stabilization, Short Positions,” in each case appearing in the Prospectus in the
section entitled “Underwriting”) and will reimburse the Company and the Bank for
any legal or other expenses reasonably incurred by the Company and the Bank in
connection with investigating or defending any such action or claim as such
expenses are incurred.

(c) Promptly after receipt by an indemnified party under subsection (a) or (b)
above of notice of the commencement of any action, such indemnified party shall,
if a claim in respect thereof is to be made against the indemnifying party under
such subsection, notify the indemnifying party in writing of the commencement
thereof, but the omission so to notify the indemnifying party shall not relieve
it from any liability that it may have to any indemnified party otherwise than
under such subsection, unless the indemnifying party has been prejudiced
thereby. 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 reasonably satisfactory to
such indemnified party (who shall not, except with the consent of the
indemnified party which consent shall not be unreasonably withheld, conditioned
or delayed, be counsel to the indemnifying party), provided, however, if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that a conflict may arise between the positions of the indemnifying party and
the indemnified party in conducting the defense of any such action or that there
may be legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate counsel to
assume the legal defenses of such indemnified party or parties (but not to
control the defense of such action as to the indemnifying party) and to
otherwise participate in the defense of such action on behalf of such
indemnified party or parties. 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
subsection for any legal expenses of other counsel or any other expenses, in
each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the fees and expenses of more than
one separate counsel (together with, to the extent necessary in the
circumstances, one separate local counsel in the jurisdiction in which such
action is pending) to represent all indemnified parties, approved by the
indemnifying party) or (ii) the indemnifying party shall not have employed
counsel satisfactory to the indemnified party within a reasonable time after
notice of commencement of the action, in each of which cases the fees and
expenses of one counsel for the indemnified party or parties (in addition to
local counsel) shall be at the expense of the indemnifying party. The
indemnifying party under this Section 6 shall not be liable for any settlement
or compromise of or agreed judgment in any proceedings effected or agreed to
without its prior express written consent, but if any such proceeding is settled
or compromised, or an agreed judgment is entered into, with such consent or if
there be a final judgment (other than an agreed judgment) rendered in favor of
for the plaintiff, the indemnifying party agrees to indemnify the indemnified
party against any loss, claim, damage, liability or expense by reason of such
settlement, compromise, agreed judgment or other judgment. No indemnifying party
shall, without the written consent of the indemnified party, effect the
settlement or compromise of, or consent to the entry of any judgment with
respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement,

21 

 

compromise or judgment (i) includes an unconditional release of the indemnified
party from all liability arising out of such action or claim and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of any indemnified party.

(d) If the indemnification provided for in this Section 6 is unavailable to or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above in respect of any losses, claims, damages or liabilities (or actions in
respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Underwriters on the other from the
offering of the Notes. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law, then each indemnifying
party shall contribute to such amount paid or payable by such indemnified party
in such proportion as is appropriate to reflect not only such relative benefits
but also the relative fault of the Company, on the one hand, and the
Underwriters, on the other, in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by the Company, on the one hand, and the Underwriters, on the
other, shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by the Underwriters,
in each case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company, on the one hand, or the Underwriters, on the other, and the parties’
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company, the Bank and the Underwriters
agree that it would not be just and equitable if contributions pursuant to this
subsection (d) 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 subsection (d). The amount paid or payable by an indemnified
party as a result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above in this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Notes underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such Underwriter
has otherwise been required to pay by reason of any such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 6, each officer and employee of
any Underwriter and each person, if any, who controls any Underwriter within the
meaning of the 1933 Act and the 1934 Act shall have the same rights to
contribution as such Underwriter, and each director of the Company and the Bank,
each officer of the Company who signed the Registration Statement, and each
person, if any, who controls the Company or the Bank within the meaning of the
1933 Act and the 1934 Act shall have the same rights to contribution as the
Company. The Underwriters’ respective obligations to contribute pursuant to this
Section 6 are several in proportion to the principal amount of Notes set forth
opposite their respective names in Schedule I hereto and not joint.
Notwithstanding the foregoing, the contribution obligation of the Bank in this
paragraph shall be limited with respect to the Bank to the extent necessary if
(a) a Governmental Entity having jurisdiction over the Bank by written
communication addressed to the Bank or its board of directors, including in
connection with any examination of the Bank, informs the Bank or its board of
directors that such Governmental Entity has determined that such contribution
violates Sections 23A or 23B of the Federal Reserve Act, as amended, or another
law, rule, regulation or policy applicable to the Bank or the Company, (b) a
Governmental Entity notifies the Bank that any contribution would result in an
adverse impact on the Bank’s examination ratings, (c) such contribution would
give rise to civil money penalties or other sanctions or (d) the Bank
determines, upon the written advice of counsel, that any contribution made by
the Bank hereunder would violate any law, rule, regulation or policy applicable
to the Bank or the Company.

(e) The obligations of the Company and the Bank under this Section 6 shall be in
addition to any liability which the Company and the Bank may otherwise have and
shall extend, upon the same terms and conditions, to each person, if any, who
controls (within the meaning of the 1933 Act) any Underwriter, or any of the
respective partners, directors, officers and employees of any Underwriter or any
such controlling person. The obligations of each Underwriter under this
Section 6 shall be in addition to any liability which such Underwriter may
otherwise have

22 

 

and shall extend, upon the same terms and conditions, to each person, if any,
who controls (within the meaning of the 1933 Act) the Company or the Bank or any
of the directors and officers of the Company or the Bank or any such controlling
person.

(f) The remedies provided for in this Section 6 are not exclusive and shall not
limit any rights or remedies which may otherwise be available to an indemnified
party at law or in equity.

7.                   Survival of Representations and Warranties. The respective
indemnities, agreements, representations, warranties and other statements of the
Company, the Bank and the Underwriters, as set forth in this Agreement or made
by or on behalf of them, respectively, pursuant to this Agreement, shall remain
in full force and effect, regardless of any investigation (or any statement as
to the results thereof) made by or on behalf of any Underwriter or any
controlling person of any Underwriter, or the Company or the Bank, or any
officer or director or controlling person of the Company or the Bank, and shall
survive delivery of and payment for the Notes.

8.                   Termination of Agreement. If this Agreement is terminated
pursuant to Section 5(l) hereof, such termination shall be without liability of
any party to any other party except as provided in Section 4 hereof and provided
further that Sections 1, 6, 7, 8 and 14 hereof shall survive such termination
and remain in full force and effect.

9.                   Notices. All statements, requests, notices and agreements
hereunder shall be in writing, and if to the Underwriters shall be delivered or
sent by mail, telex or facsimile transmission to the Representative at B. Riley
FBR, Inc., 299 Park Avenue, 21st Floor, New York, NY 10171, Attention: General
Counsel; and if to the Company shall be delivered or sent by mail or facsimile
to Customers Bancorp, Inc., 1015 Penn Avenue Wyomissing, Pennsylvania 19610,
Attention: Jay S. Sidhu, Chairman and Chief Executive Officer, with a copy to
Stradley Ronon Stevens & Young, LLP, 2005 Market Street, Suite 2600,
Philadelphia, PA 19103-7018, Attention: Christopher S. Connell, Esq. Any such
statements, requests, notices or agreements shall take effect upon receipt
thereof.

10.                Recognition of the U.S. Special Resolution Regimes.

(a) In the event that any Underwriter that is a Covered Entity becomes subject
to a proceeding under a U.S. Special Resolution Regime, the transfer from such
Underwriter of this Agreement, and any interest and obligation in or under this
Agreement, will be effective to the same extent as the transfer would be
effective under the U.S. Special Resolution Regime if this Agreement, and any
such interest and obligation, were governed by the laws of the United States or
a state of the United States.

(b) In the event that any Underwriter that is a Covered Entity or a BHC Act
Affiliate of such Underwriter becomes subject to a proceeding under a U.S.
Special Resolution Regime, Default Rights under this Agreement that may be
exercised against such Underwriter are permitted to be exercised to no greater
extent than such Default Rights could be exercised under the U.S. Special
Resolution Regime if this Agreement were governed by the laws of the United
States or a state of the United States.

For purposes of this Section 10, a “BHC Act Affiliate” has the meaning assigned
to the term “affiliate” in, and shall be interpreted in accordance with, 12
U.S.C. § 1841(k). “Covered Entity” means any of the following: (i) a “covered
entity” as that term is defined in, and interpreted in accordance with, 12
C.F.R. § 252.82(b); (ii) a “covered bank” as that term is defined in, and
interpreted in accordance with, 12 C.F.R. § 47.3(b); or (iii) a “covered FSI” as
that term is defined in, and interpreted in accordance with, 12 C.F.R. §
382.2(b). “Default Right” has the meaning assigned to that term in, and shall be
interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as
applicable. “U.S. Special Resolution Regime” means each of (i) the Federal
Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title
II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the
regulations promulgated thereunder.

11.                Parties. This Agreement shall be binding upon, and inure
solely to the benefit of, the Underwriters, the Company, the Bank and, to the
extent provided in Sections 6 and 7 hereof, the officers and directors of the
Company and the Bank and each person who controls the Company and the Bank or
any Underwriter, and their respective heirs, executors, administrators,
successors and assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement. No purchaser of any of the Notes from any
Underwriter shall be deemed a successor or assign by reason merely of such
purchase.

23 

 

12.                Time. Time shall be of the essence of this Agreement. As used
herein, the term “business day” shall mean any day when the Commission’s office
in Washington, D.C. is open for business.

13.                No Advisory or Fiduciary Relationship. The Company
acknowledges and agrees that (i) the purchase and sale of the Notes pursuant to
this Agreement, including the determination of the public offering price of the
Notes and any related discounts and commissions, is an arm’s-length commercial
transaction between the Company, on the one hand, and the several Underwriters,
on the other hand, and the Company is capable of evaluating and understanding
and understands and accepts the terms, risks and conditions of the transactions
contemplated by this Agreement, (ii) in connection with the offering
contemplated hereby and the process leading to such transaction each Underwriter
is and has been acting solely as principal and is not the agent or fiduciary of
the Company, its subsidiaries or the Company’s shareholders, creditors,
employees or any other third party, (iii) no Underwriter has not assumed or will
assume an advisory or fiduciary responsibility in favor of the Company or its
subsidiaries with respect to the offering contemplated hereby or the process
leading thereto (irrespective of whether such Underwriter has advised or is
currently advising the Company or its subsidiaries on any other matters) and no
Underwriter has any obligation to the Company or its subsidiaries with respect
to the offering contemplated hereby except the obligations expressly set forth
in this Agreement, (iv) the Underwriters and their respective affiliates may be
engaged in a broad range of transactions that involve interests that differ from
those of the Company or its subsidiaries and each Underwriter does not have any
obligation to disclose such interests and transactions to the Company by virtue
of any fiduciary, advisory or agency relationship, (v) the Company and its
subsidiaries waive, to the fullest extent permitted by law, any claims the
Company may have against any Underwriter for breach of fiduciary duty or alleged
breach of fiduciary duty and agree that each Underwriter shall have no liability
(whether direct or indirect) to the Company or its subsidiaries in respect of
such a fiduciary duty claim or to any person asserting a fiduciary duty claim on
behalf of or in right of the Company, including shareholders, employees or
creditors of the Company, and (vi) the Underwriters have not provided any legal,
accounting, regulatory or tax advice with respect to the offering contemplated
hereby and the Company and the Bank consulted their own legal, accounting,
regulatory and tax advisors to the extent they deemed appropriate.

14.                GOVERNING LAW; CONSENT TO JURISDICTION. THIS AGREEMENT SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES OF SAID STATE OTHER THAN
SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

THE COMPANY, ON BEHALF OF ITSELF AND ITS SUBSIDIARIES, HEREBY IRREVOCABLY
SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE FEDERAL AND NEW YORK STATE COURTS
LOCATED IN THE CITY OF NEW YORK IN CONNECTION WITH ANY SUIT, ACTION OR
PROCEEDING RELATED TO THIS AGREEMENT OR ANY OF THE MATTERS CONTEMPLATED HEREBY,
IRREVOCABLY WAIVES ANY DEFENSE OF LACK OF PERSONAL JURISDICTION AND IRREVOCABLY
AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING MAY BE HEARD
AND DETERMINED IN ANY SUCH COURT. THE COMPANY, ON BEHALF OF ITSELF AND ITS
SUBSIDIARIES, IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO
UNDER APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT
AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

15.                Counterparts. This Agreement may be executed by any one or
more of the parties hereto in any number of counterparts, each of which shall be
deemed to be an original, but all such counterparts shall together constitute
one and the same instrument. Any facsimile or electronically transmitted copies
hereof or signatures hereon shall, for all purposes, be deemed originals.

16.                Amendment: Waiver. No amendment or waiver of any provision of
this Agreement, nor any consent or approval to any departure therefrom, shall in
any event be effective unless the same shall be in writing and signed by the
parties hereto.

17.                Partial Enforceability. The invalidity or unenforceability of
any Section, paragraph or provision of this Agreement shall not affect the
validity or enforceability of any other Section, paragraph or provision hereof.
If any Section, paragraph or provision of this Agreement is for any reason
determined to be invalid or unenforceable,

24 

 

there shall be deemed to be made such minor changes (and only such minor
changes) as are necessary to make it valid and enforceable.

18.                Entire Agreement. This Agreement supersedes all prior
agreements and understandings (whether written or oral) between the Company, the
Bank and the Underwriters, or any of them, with respect to the subject matter
hereof.

[Signatures on Next Page]

 

25 

 

 

If the foregoing is in accordance with your understanding, please sign and
return to us four counterparts hereof, and upon the acceptance hereof by you,
this letter and such acceptance hereof shall constitute a binding agreement
among the Underwriters, the Bank and the Company.

Very truly yours,

CUSTOMERS BANCORP, INC.

By: /s/ Carla A. Leibold
Name: Carla A. Leibold
Title: Executive Vice President and Chief Financial Officer

CUSTOMERS BANK

By: /s/ Carla A. Leibold
Name: Carla A. Leibold
Title: Executive Vice President and Chief Financial Officer

26 

 

Accepted as of the date hereof:

B. RILEY FBR, INC.

 

By: /s/ Patrice McNicoll
Name: Patrice McNicoll
Title: Co-Head of Investment Banking

As Representative of the several Underwriters named in

Schedule I hereto

27 

 

Schedule I

Name of Underwriter Principal Amount of Notes to be Purchased     B. Riley FBR,
Inc. $15,925,000 D.A. Davidson & Co. 14,625,000 Janney Montgomery Scott LLC
14,625,000 William Blair & Company, L.L.C. 7,475,000 Boenning & Scattergood,
Inc. 5,200,000 Incapital LLC 3,900,000 Maxim Group LLC 1,625,000 Wedbush
Securities Inc. 1,625,000 Total  $65,000,000

 

28 

 

Schedule II

Pricing Term Sheet

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

29 

 

Filed Pursuant to Rule 433

Supplementing the Preliminary Prospectus Supplement Dated December 4, 2019

Registration No. 333-218483

December 4, 2019

 

[image_001.jpg]

 

$65,000,000

 

5.375% SUBORDINATED NOTES DUE DECEMBER 2034

FINAL TERMS AND CONDITIONS

 

This term sheet relates only to the securities described below and supplements
and should be read together with the preliminary prospectus supplement dated
December 4, 2019 and the accompanying prospectus (including the documents
incorporated by reference therein) relating to those securities. Capitalized
terms used in this term sheet but not defined have the meanings given to them in
such preliminary prospectus supplement.

Issuer:

Customers Bancorp, Inc. (the “Company”)

 

Security:

5.375% Subordinated Notes Due December 2034

 

Type:

 

SEC Registered

Rating:*

 

Kroll: BBB-

Trade Date:

 

December 4, 2019

Settlement Date (T+3):**

 

December 9, 2019 Listing:

Expected NYSE 

 

Size:

$65,000,000

 

Overallotment Option:

15.0%

 

Final Maturity:

 

December 30, 2034 Annual Coupon:

5.375%, paid quarterly in arrears

 

Interest Payment Dates:

 

March 30, June 30, September 30 and December 30 of each year, commencing on
March 30, 2020 (long first coupon).

 

Price to Public:

100.0%

 

Day Count Convention:

30/360, unadjusted

 

30 

 

 

Optional Redemption:

The Company may redeem the notes, at its option, in whole or in part on any
Interest Payment Date beginning with the Interest Payment Date of December 30,
2029, at a redemption price equal to 100% of the principal amount of the notes
plus any accrued and unpaid interest to but excluding the redemption date.

 

The Company also may redeem the notes, at its option, in whole but not in part
at any time, including prior to December 30, 2029 if (i) a change or prospective
change in law occurs that could prevent the Company from deducting interest
payable on the notes for U.S. federal income tax purposes, (ii) a subsequent
event occurs that could preclude the notes from being recognized as Tier 2
capital for regulatory capital purposes or (iii) the Company becomes required to
register as an investment company under the Investment Company Act of 1940, as
amended, at a redemption price equal to 100% of the principal amount of the
notes plus any accrued and unpaid interest to but excluding the redemption date.
Any redemption of notes will be subject to the prior approval of the Board of
Governors of the Federal Reserve System, to the extent that such approval is
then required.

 

Minimum Denominations/Multiples:

$25 and integral multiples of $25 in excess thereof

 

CUSIP/ISIN:

23204G 803/ US23204G8033

 

Joint Booking-Running Managers:

B. Riley FBR, Inc.

D.A. Davidson & Co.

Janney Montgomery Scott LLC

 

Lead Managers:

William Blair & Company, L.L.C.

Boenning & Scattergood, Inc.

 

Co-Managers:

Incapital LLC

Maxim Group LLC

Wedbush Securities Inc.

* A securities rating is not a recommendation to buy, sell or hold securities
and may be subject to revision or withdrawal at any time by the assigning rating
organization.

** Under Rule 15c6-1 under the Securities Exchange Act of 1934, as amended,
trades in the secondary market are required to settle in two business days
(“T+2”), unless the parties to any such trade expressly agree otherwise.
Accordingly, purchasers who wish to trade notes prior to the delivery of the
notes hereunder will generally be required, by virtue of the fact that the notes
initially settle on the third business day following the Pricing Date (“T+3”),
to specify an alternate settlement arrangement at the time of any such trade to
prevent a failed settlement. Purchasers of the notes who wish to trade the notes
prior to their date of delivery hereunder should consult their own advisors.

The Company has filed a registration statement (including a prospectus) on Form
S-3 (File No. 333-218483) and a preliminary prospectus supplement dated December
4, 2019, with the Securities and Exchange Commission (the “SEC”) for the
offering to which this communication relates. Before you invest, you should read
the prospectus in that registration statement, the preliminary prospectus
supplement and the other documents incorporated by reference therein that the
Company has filed with the SEC for more complete information about the Company
and this offering. Investors may obtain these documents without charge by
visiting EDGAR on the SEC website at www.sec.gov. Alternatively, you may request
these documents by contacting B. Riley FBR, Inc.by telephone at 1-703-312-9580
or by email at prospectuses@brileyfbr.com, contacting D.A. Davidson & Co. by
telephone at 1-800-332-5915 or by email at prospectusrequest@dadco.com or
contacting Janney Montgomery Scott LLC by telephone at 215-665-4450 or by email
at prospectus@janney.com.

This pricing term sheet does not constitute an offer to sell, or a solicitation
of an offer to buy, any security in any state or jurisdiction in which such
offer, solicitation or sale would be unlawful.

31 

 

Schedule III

Issuer-Represented General Free Writing Prospectus

Investor Presentation, dated December 4, 2019

Pricing Term Sheet filed with the Commission on December 4, 2019 pursuant to
Rule 433 (Registration Statement No. 333-218483)

 

32 

 

Schedule IV

List of Subsidiaries

Subsidiary

Jurisdiction of
Organization

Customers Bank PA