1
Exhibit 1
GREENVILLE FIRST BANCSHARES, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
_________________, 1999
WACHOVIA SECURITIES, INC.
As representative of the several
Underwriters named in Schedule I hereto,
c/o Wachovia Securities, Inc.
IJL Financial Center
201 North Tryon Street
Charlotte, North Carolina 28202
Ladies and Gentlemen:
Greenville First Bancshares, Inc., a South Carolina corporation (the
"Company") and proposed holding company for Greenville First Bank, N.A., a
national banking association (the "Bank"), proposes, subject to the terms and
conditions stated herein, to issue and sell to the underwriters named in
Schedule I hereto (the "Underwriters") an aggregate of 1,200,000 shares of
common stock, par value $.01 per share (the "Common Stock"), of the Company
(the "Firm Shares"), and, at the election of the Underwriters, subject to the
terms and conditions stated herein, to sell to the Underwriters up to 180,000
additional shares of Common Stock (the "Optional Shares") solely to cover
overallotments, if any (the Firm Shares and the Optional Shares that the
Underwriters elect to purchase pursuant to Section 2 hereof are collectively
called the "Shares").
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to, and agrees with each of the Underwriters that:
(a) A registration statement on Form SB-2 (File No.
333-_____) with respect to the Shares, has been filed by the Company
with the Securities and Exchange Commission (the "Commission") under
the Securities Act of 1933, as amended (the "Securities Act"). Copies
of the registration statement and any amendments thereto, including
any post-effective amendments, have been delivered by the Company to
you, and have been declared effective by the Commission in such form.
No other document with respect to the registration statement or any
post effective amendment thereto has been filed with the Commission;
and no stop order suspending the effectiveness of the registration
statement has been issued and no proceeding for that purpose has been
instituted or threatened by the Commission. Any preliminary prospectus
included in the registration statement or filed with the Commission
pursuant to Rule 424 of the Rules and Regulations of the Commission
under the Securities Act (the "Rules and Regulations"), is
1
2
herein called a "Preliminary Prospectus." The various parts of such
registration statement, including the prospectus, Part II, all
financial schedules and exhibits thereto, and including the
information contained in the form of final prospectus filed with the
Commission pursuant to Rule 424(b) under the Securities Act, and
deemed by virtue of Rule 430A under the Securities Act to be part of
the registration statement at the time it was declared effective, as
amended at the time such part became effective, are herein called
collectively the "Registration Statement," and the final prospectus,
in the form first filed pursuant to Rule 424(b), is herein called the
"Prospectus."
(b) No order preventing or suspending the use of any
Prospectus, including any Preliminary Prospectus, has been issued and
no proceeding for that purpose has been instituted or threatened by
the Commission or the securities authority of any state or other
jurisdiction. No stop order suspending the effectiveness of the
Registration Statement or any part thereof has been issued and no
proceeding for that purpose has been instituted or threatened or, to
the best knowledge of the Company, contemplated by the Commission or
the securities authority of any state or other jurisdiction.
(c) Each Prospectus filed as part of the Registration
Statement as originally filed or as part of any amendment thereto
complied when so filed in all material respects with the requirements
applicable to it under the Securities Act and the Rules and
Regulations and none of such documents contained an untrue statement
of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading; and any further amendment or supplement thereto, when such
documents become effective or are filed with the Commission, as the
case may be, will conform in all material respects to the requirements
of the Securities Act, and the Rules and Regulations and will not
contain an untrue statement of material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter through Wachovia
Securities, Inc. (the "Representative") expressly for use therein.
When the Registration Statement or any amendment thereto was declared
effective, and at each Time of Delivery (as hereinafter defined), it
(i) contained all statements required to be stated therein in
accordance with, and complied or will comply in all material respects
with the requirements of the Securities Act and the Rules and
Regulations and (ii) did not include any untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements therein not misleading. When the Prospectus or any
amendment or supplement thereto is filed with the Commission pursuant
to Rule 424(b) (or, if the Prospectus or such amendment or supplement
is not required to be so filed, when the Registration Statement or the
amendment thereto containing such amendment or supplement to the
Prospectus was or is declared effective) and at each Time of Delivery,
the Prospectus, as amended or supplemented at any such time (i)
contained or will contain all statements required to be stated therein
in accordance with, and complied or will comply in all material
respects with the requirements of, the Securities Act and the Rules
and Regulations and (ii) did not or will not include any untrue
statement of a material fact or omit to state any material fact
2
3
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(d) The descriptions in the Registration Statement and
the Prospectus of statutes, rules, regulations, legal and governmental
proceedings or contracts and other documents that are required to be
so described are accurate and fairly present the information required
to be shown; and there are no statutes, rules, regulations or legal or
governmental proceedings required to be described in the Registration
Statement or the Prospectus that are not described as required and no
contracts or documents of a character that are required to be
described in the Registration Statement or the Prospectus or to be
filed as exhibits to the Registration Statement that are not described
and filed as required.
(e) The Company has been duly incorporated, is validly
existing as a corporation under the laws of the State of South
Carolina and has full power and authority to own or lease its
properties and conduct its business as described in the Prospectus.
The Bank is a national banking association in organization under the
laws of the United States of America and, upon the issuance of a
charter by the Office of the Comptroller of the Currency ("OCC"), will
have full power and authority to own or lease its properties and
conduct its business as described in the Prospectus. The Company has
full power and authority to enter into this Agreement and to perform
its obligations hereunder. Neither the Company nor the Bank is
required to be qualified to transact business as a foreign corporation
under the laws of any other jurisdiction.
(f) The capitalization of the Company is as disclosed
under the caption "Capitalization" in the Prospectus. All of the
issued shares of capital stock of the Company have been duly
authorized and validly issued, are fully paid and nonassessable and
conform to the description of the capital stock under the caption
"Description of Capital Stock of the Company" contained in the
Prospectus. None of the issued shares of capital stock of the Company
has been issued or is owned or held in violation of any preemptive or
similar rights, and no person or entity (including any holder of
outstanding shares of capital stock of the Company or its subsidiary)
has any preemptive or other rights to subscribe for any of the Shares.
None of the shares of capital stock of the Bank has been issued.
(g) Upon the issuance of a charter by the OCC and the
payment for the capital stock of the Bank, all of the issued shares of
the Bank will be duly authorized and validly issued, fully paid, and,
except as may be applicable under the National Bank Act, nonassessable
and will be owned beneficially by the Company free and clear of all
liens, security interests, pledges, charges, encumbrances, defects,
shareholders' agreements, voting trusts, equities or claims of any
nature whatsoever. The Company has made application
(i) to the Board of Governors of the Federal
Reserve System to become a bank holding company;
3
4
(ii) to the OCC, to charter a national bank; and
(iii) to the Federal Deposit Insurance
Corporation for Federal Deposit Insurance for Bank deposits
(collectively, the "Regulatory Approvals").
The Company and the Bank have obtained or have filed for all other
material licenses, consents and approvals, and have satisfied or have taken all
action required at this time to satisfy all material eligibility and other
similar requirements imposed by federal and state regulatory bodies,
administrative agencies or other governmental bodies, agencies or officials, in
each case applicable to the conduct of the business in which they are engaged
or are contemplated to be engaged as described in the Registration Statement.
With respect to the Regulatory Approvals, as well as all other material
licenses, consents and approvals, and any other similar requirements that the
Company or the Bank does not have at this time, (i) all applications therefor
are complete, accurate, and have been filed with the appropriate regulatory
authorities, (ii) the Company has received preliminary notice that each
application for Regulatory Approval will be approved, and (iii) the Company
knows of no reason why the same will not be received or satisfied prior to the
time the same are required. Other than the Bank, the Company does not own,
directly or indirectly, any capital stock or other equity securities of any
corporation or any ownership interest in any partnership, joint venture or
other association.
(h) Except as disclosed in the Prospectus, there are no
outstanding (i) securities or obligations of the Company or the Bank
convertible into or exchangeable for any capital stock of the Company
or the Bank, (ii) warrants, rights or options to subscribe for or
purchase from the Company or the Bank any such capital stock or any
such convertible or exchangeable securities or obligations, or (iii)
obligations of the Company or the Bank to issue any shares of capital
stock, any such convertible or exchangeable securities or obligations,
or any such warrants, rights or options.
(i) Since the date as of which information is given in
the Prospectus, neither the Company nor the Bank has sustained any
material loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree,
otherwise than as disclosed in or contemplated by the Prospectus.
(j) Since the date as of which information is given in
the Prospectus, (i) neither the Company nor the Bank has incurred any
liabilities or obligations, direct or contingent, or entered into any
transactions, not in the ordinary course of business, that are
material to the Company and the Bank, (ii) the Company has not
purchased any of its outstanding capital stock or declared, paid or
otherwise made any dividend or distribution of any kind on its capital
stock, (iii) there has not been any change in the capital stock,
long-term debt or short-term debt of the Company or the Bank (except
with respect to such changes in the balance due under the Company's
line of credit described in the Prospectus), and (iv) there has not
been any material adverse change, or any development involving a
prospective material adverse change, in or affecting the financial
position, general affairs, management, business or prospects of the
Company and the Bank, in each case other than as disclosed in or
contemplated by the Prospectus.
4
5
(k) The consolidated financial statements of the
Company, together with related notes and schedules as set forth in the
Registration Statement, conform to the requirements of the Securities
Act and the Rules and Regulations. Such financial statements fairly
present the consolidated financial position of the Company at the
respective dates indicated in accordance with generally accepted
accounting principles applied on a consistent basis for the periods
indicated. The Company and the Bank have no material contingent
obligations which are not disclosed in the Company's financial
statements which are included in the Registration Statement. Elliott,
Davis & Company, L.L.P. whose report is included in the Registration
Statement, are independent accountants as required by the Securities
Act and the Rules and Regulations.
(l) The Shares to be sold by the Company hereunder have
been duly authorized and, when issued and delivered against payment
therefor as provided therein, will be validly issued and fully paid
and nonassessable and will conform to the description of the Common
Stock contained in the Prospectus; and all corporate action required
to be taken for the authorization, issuance and sale of the Shares has
been validly taken. The Underwriters will receive good and marketable
title to the Shares to be issued and delivered hereunder, free and
clear of all liens, encumbrances, claims, security interests,
restrictions, shareholders' agreements and voting trusts whatsoever.
The certificates evidencing the Shares will be in due and proper form
and will comply with all applicable legal requirements.
(m) There are no contracts, agreements or understandings
between the Company and any person granting such person the right to
require the Company to file a registration statement under the
Securities Act with respect to any securities of the Company owned or
to be owned by such person or to require the Company to include such
securities in the securities registered pursuant to the Registration
Statement or any securities being registered pursuant to any other
registration statement filed by the Company under the Securities Act.
(n) Neither the Company nor the Bank is, or (with or
without the giving of notice or passage of time or both) would be: (i)
in violation of its Articles of Incorporation, Articles of
Association, Bylaws or other governing instruments; or (ii) in default
under any indenture, mortgage, deed of trust, loan agreement, lease or
other agreement or instrument to which the Company or the Bank is a
party or to which any of their respective properties or assets are
subject, except, in the case of clause (ii) above, where such default
would not have a material adverse effect on either the Company or the
Bank.
(o) The issue and sale of the Shares and the performance
of this Agreement and the consummation of the transactions herein
contemplated will not conflict with, or (with or without the giving of
notice or the passage of time or both) result in a breach or violation
of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which the Company or the Bank is a party or
to which any of their respective properties or
5
6
assets is subject, nor will such action conflict with or violate any
provision of the Articles of Incorporation, Articles of Association,
Bylaws or other governing instruments of the Company or the Bank, or
any statute, rule or regulation or any order, judgment or decree of
any court or governmental agency or body having jurisdiction over the
Company or the Bank or any of their respective properties or assets.
(p) The Company and the Bank have good and marketable
title in fee simple to all real property, if any, and good title to
all personal property owned by them, in each case free and clear of
all liens, security interests, pledges, charges, encumbrances,
mortgages and defects, except such as are disclosed in the Prospectus
or such as do not materially and adversely interfere with the
operations of the Company and the Bank; and any real property and
buildings held under lease by the Company or the Bank are held under
valid, subsisting and enforceable leases, with such exceptions as are
disclosed in the Prospectus or are not material and do not interfere
with the operations of the Company or the Bank.
(q) No consent, approval, authorization, order or
declaration of or from, or registration, qualification or filing with,
any court or governmental agency or body or third party is required
for the issue and sale of the Shares or the consummation of the
transactions contemplated by this Agreement, except (i) the
registration of the Shares under the Securities Act and such as may be
required by the National Association of Securities Dealers, Inc. (the
"NASD") and under state securities or blue sky laws in connection with
the offer, sale and distribution of the Shares by the Underwriters,
and (ii) as required in connection with the Regulatory Approvals.
(r) Other than as disclosed in the Prospectus, there is
no litigation, arbitration, claim, proceeding (formal or informal) or
investigation pending or, to the knowledge of any director or
executive officer of the Company, threatened (or any reasonable basis
therefor) in which the Company or the Bank is a party or of which any
of their respective properties or assets are the subject which, if
determined adversely to the Company or the Bank, would individually or
in the aggregate have a material adverse effect on the financial
position, general affairs, management, business or prospects of the
Company and the Bank.
(s) This Agreement has been duly authorized, executed
and delivered by the Company and constitutes the valid and binding
agreement of the Company enforceable against the Company in accordance
with its terms subject, as to enforcement, to applicable bankruptcy,
insolvency, reorganization and moratorium laws and other laws relating
to or affecting the enforcement of creditors' rights generally and to
general equitable principles, and except as the enforceability of
rights to indemnity and contribution under this Agreement may be
limited under applicable securities laws or the public policy
underlying such laws.
(t) Neither the Company nor any of its officers,
directors or affiliates has (i) taken, directly or indirectly, any
action designed to cause or result in, or that has constituted or
might reasonably be expected to constitute, the stabilization or
6
7
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Shares or (ii) since the filing of the
Registration Statement (A) sold, bid for, purchased or paid anyone any
compensation for soliciting purchases of, the Shares or (B) paid or
agreed to pay to any person any compensation for soliciting another to
purchase any other securities of the Company.
(u) None of the Company, the Bank, nor, to the knowledge
of the Company, any director or executive officer, agent, employee or
other person acting on behalf of the Company or the Bank has (i) used
or authorized the use of, any corporate or other funds for unlawful
payments, or contributions, (ii) made unlawful expenditures relating
to political activity to government officials, or (iii) established or
maintained any unlawful or unrecorded funds in violation of any
federal, state, or local law or regulation, including Section 30A of
the Exchange Act. None of the Company, the Bank, nor, to the knowledge
of the Company, any director or executive officer of the Company or
the Bank has accepted or received any unlawful contributions or
payments.
(v) The Company has obtained for the benefit of the
Company and the Underwriters from each of its directors and executive
officers a written agreement (the "Lockup Agreements") that for a
period of 180 days from the date of the Prospectus such director or
officer will not, without your prior written consent, offer, pledge,
sell, contract to sell, grant any option for the sale of, or otherwise
dispose of (or announce any offer, pledge, sale, grant of an option to
purchase or other disposition), directly or indirectly, any shares of
Common Stock or securities convertible into, or exercisable or
exchangeable for, shares of Common Stock.
(w) The Bank, upon the issuance of a charter by the OCC,
will not be prohibited, directly or indirectly, from paying any
dividends to the Company, from making any other distributions on the
Bank's capital stock, from repaying to the Company any loans or
advances to the Bank or from transferring the Bank's property or
assets to the Company, except under federal regulations as disclosed
in the Prospectus.
(x) The Company and the Bank have filed all material
foreign, federal, state and local tax returns that are required to be
filed by them and have paid all taxes shown as due on such returns as
well as all other taxes, assessments and government charges that are
due and payable; and no deficiency with respect to any such return has
been assessed or proposed in any material respects. All tax
liabilities have been adequately provided for in the financial
statements of the Company.
(y) The Company is not, nor will it become as a result
of transactions contemplated hereby, and does not intend to conduct
its business in a manner that would cause it to become an "investment
company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940.
2. PURCHASE AND SALE OF SHARES. Subject to the terms and
conditions herein set forth, (a) the Company agrees to issue and sell to each
of the Underwriters, and each of the Underwriters agree, severally and not
jointly, to purchase from the Company the number of
7
8
Firm Shares set opposite the name of such Underwriter in Schedule 1 hereto, at
the following purchase prices: (i) with respect to the Firm Shares not
purchased by the Company's directors, executive officers and certain other
investors identified in writing by the Company, as described in (ii) below, at
a purchase price of $9.25 per share, and (ii) with respect to the Firm Shares
purchased by the Company's directors, executive officers and certain other
investors identified in writing by the Company, but only up to a maximum of
360,000 Firm Shares, at a purchase price of $9.65 per share, (b) in the event
and to the extent that the Underwriters shall exercise the election to purchase
Optional Shares as provided below, the Company agrees to issue and to sell to
each of the Underwriters, and each of the Underwriters agree, severally and not
jointly, to purchase from the Company, at a purchase price of $9.25 per share,
that portion of the number of Optional Shares as to which such election shall
have been exercised (to be adjusted by you so as to eliminate fractional
shares) determined by multiplying such number of Optional Shares by a fraction,
the numerator of which is the maximum number of Optional Shares that such
Underwriter is entitled to purchase as set forth opposite the name of such
Underwriter in Schedule I hereto and the denominator of which is the maximum
number of the Optional Shares that all of the Underwriters are entitled to
purchase hereunder.
The Company hereby grants to the Underwriters the right to purchase at
its election in whole or in part from time to time up to 180,000 Optional
Shares, at the purchase price of $9.25 per share for the sole purpose of
covering over-allotments in the sale of Firm Shares. Any such election to
purchase Optional Shares may be exercised by written notice from you to the
Company, given from time to time within a period of 30 calendar days after the
date of this Agreement and setting forth the aggregate number of Optional
Shares to be purchased and the date on which the Optional Shares are to be
delivered, as determined by you but in no event earlier than the First Time of
Delivery (as hereinafter defined) or, unless you and the Company otherwise
agree in writing earlier than two or later than ten business days after the
date of such notice. In the event you elect to purchase all or a portion of the
Optional Shares, the Company agrees to furnish or cause to be furnished to you
the certificates, letters and opinions, and to satisfy all conditions set forth
in Section 7 hereof at each Subsequent Time of Delivery (as hereinafter
defined).
3. OFFERING BY THE UNDERWRITERS. Upon the authorization by you
of the release of the Shares, the several Underwriters propose to offer the
Shares for sale upon the terms and conditions disclosed in the Prospectus.
4. DELIVERY OF SHARES; CLOSING. Certificates in definitive form
for the Shares to be purchased by each Underwriter hereunder, and in such
denominations and registered in such names as the Representative may request
upon at least 48 hours prior notice to the Company shall be delivered by or on
behalf of the Company to you for your account against payment by you of the
purchase price therefor by official bank check or checks (payable in next day
funds unless closing is on a Friday in which case it shall be payable in same
day funds), payable to the order of the Company. The closing of the sale and
purchase of the Shares shall be held at the offices of Smith Helms Mulliss &
Moore, LLP, Charlotte, North Carolina. The time and date of such delivery and
payment shall be, with respect to the Firm Shares, at 10:00 a.m., Charlotte,
North Carolina time, on the 3rd (or if the Firm Shares are priced, as
contemplated by Rule 15c6-1(c) under the Exchange Act, after 4:30 p.m.,
Washington, D.C.
8
9
time, the 4th) full business day after the execution of this Agreement or at
such other legally permissible time and date as you and the Company may agree
upon in writing, and, with respect to the Optional Shares, at 10:00 a.m.,
Charlotte, North Carolina time, on the date specified by you in the written
notice given by you of the Underwriters' election to purchase all or part of
such optional shares, or at such other time and date as you and the Company may
agree upon in writing. Such time and date for delivery of the Firm Shares is
herein called the "First Time of Delivery," such time and date for delivery of
the Optional Shares, if not the First Time of Delivery, is herein called a
"Subsequent Time of Delivery," and each such time and date for delivery is
herein called a "Time of Delivery." The Company will make such certificates
available for checking and packaging at least 24 hours prior to each Time of
Delivery at your office at the address set forth above or such other location
designated by you to the Company. If the Representative so elects, delivery of
the Firm Shares and the Optional Shares, if any, may be made by credit through
full fast transfer to the accounts at the Depositary Trust Company designated
by the Representative.
5. COVENANTS OF THE COMPANY. The Company covenants and agrees
with the Underwriters:
(a) The Company shall comply with the provisions of and
make all requisite filings with the Commission pursuant to and in
accordance with Rule 430A and subparagraph (1) (or, if applicable and
if consented to by you, subparagraph (4)) of Rule 424(b) not later
than the earlier of (i) the second business day following the
execution and delivery of this Agreeme__ or (ii) the date on which the
Prospectus is first used after the Registration Statement is declared
effective. The Company will advise you promptly of any such filing
pursuant to Rules 430A or 424(b).
(b) The Company will not file with the Commission the
Prospectus or any amendment or supplement to the Prospectus or any
amendment to the Registration Statement unless you have received a
reasonable period of time to review any such proposed amendment or
supplement and consented to the filing thereof and will use its best
efforts to cause any such amendment to the Registration Statement to
be declared effective as promptly as possible. Upon the request of the
Representative or counsel for the Representative, the Company will
promptly prepare and file with the Commission, in accordance with the
Rules and Regulations, any amendments to the Registration Statement or
amendments or supplements to the Prospectus that may be necessary or
advisable in connection with the distribution of the Shares by the
Underwriters and will use its best efforts to cause any such amendment
to the Registration Statement to be declared effective as promptly as
possible. If required, the Company will file any amendment or
supplement to the Prospectus with the Commission in the manner and
within the time period required by Rule 424(b) under the Securities
Act. The Company will advise the Representative, promptly after
receiving notice thereof, of the time when the Registration Statement
or any amendment thereto has been filed or declared effective or the
Prospectus or any amendment or supplement thereto has been filed and
will provide evidence to the Representative of each such filing or
effectiveness.
9
10
(c) The Company will advise you promptly after receiving
notice or obtaining knowledge of (i) the issuance by the Commission of
any stop order suspending the effectiveness of the Registration
Statement or any part thereof or any order preventing or suspending
the use of any Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto, (ii) the suspension of the
qualification of the Shares for offer or sale in any jurisdiction or
of the initiation or threatening of any proceeding for any such
purpose, or (iii) any request made by the Commission or any securities
authority of any other jurisdiction for amending the Registration
Statement, for amending or supplementing the Prospectus or for
additional information. The Company will use its best efforts to
prevent the issuance of any such stop order and, if any such stop
order is issued, to obtain the withdrawal thereof as promptly as
possible.
(d) If during the period in which a prospectus is
required by law to be delivered by an Underwriter or dealer, any
events shall have occurred as a result of which, in the judgment of
the Company or the opinion of the Underwriters, 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 light of the circumstances under which
they were made, not misleading, or if for any reason it is necessary
during such same period to amend or supplement the Prospectus to
comply with the Securities Act or the Rules and Regulations or any
law, the Company will promptly notify you and upon your request (but
at the Company's expense) prepare and file with the Commission and any
state or other governmental securities commissions in jurisdictions
where the Shares have been sold by the Underwriters, an amendment or
supplement to the Prospectus that corrects such statement or omission
or effects such compliance and will furnish without charge to each
Underwriter and to any dealer in securities, as many copies of such
amended or supplemented Prospectus as you may from time to time
reasonably request. Neither your consent to, nor the Underwriter's
delivery of, any such amendment or supplement shall constitute a
waiver of any of the conditions set forth in Section 7.
(e) The Company promptly from time to time will take
such action as you may reasonably request to qualify the Shares for
offering and sale under the securities or blue sky laws of such
jurisdictions as you may request and will continue such qualifications
in effect for as long as may be necessary to complete the distribution
of the Shares, provided that in connection therewith the Company shall
not be required to qualify as a foreign corporation or to file a
general consent to service of process in any jurisdiction. In the
event that the qualification of the Shares in any jurisdiction is
suspended, the Company shall so advise the Representative promptly in
writing.
(f) The Company will deliver to, or upon the order of,
the Representative, from time to time, as many copies of the
Preliminary Prospectus as the Representative may reasonably request.
The Company will deliver to, or upon the order of, the Representative,
during the period when delivery of a Prospectus is required under the
Securities Act, as many copies of the Prospectus in final form, or as
thereafter amended or supplemented, as the Representative may
reasonably request. The Company will deliver to the Representative at
or before the Time of Delivery, four signed copies of the
10
11
Registration Statement and all amendments thereto including all
exhibits filed therewith, and will deliver to the Representative such
number of copies of the Registration Statement (including such number
of copies of the exhibits filed therewith that may be reasonably
requested), and of all amendments thereto, as the Representative may
reasonably request.
(g) The Company will, from time to time, after the
effective date of the Registration Statement file with the Commission
such reports as are required by the Securities Act, the Exchange Act
and the Rules and Regulations, and shall also file with foreign, state
and other governmental securities commissions in jurisdictions where
the Shares have been sold by the Underwriters such reports as are
required to be filed by the securities acts and the regulations of
those jurisdictions.
(h) As soon as practicable, but in any event not later
than the last day of the thirteenth month after the effective date of
the Registration Statement, the Company will make generally available
to its security holders an earnings statement (which need not be
audited) in reasonable detail covering a period of at least 12
consecutive months beginning after the effective date of the
Registration Statement, complying with Section 11(a) of the Securities
Act and the Rules and Regulations and will advise you in writing when
such statement has been so made available.
(i) The Company will, for a period of five years from
the Time of Delivery, deliver to the Representative copies of annual
reports and copies of all other documents, reports and information
furnished by the Company to its shareholders or filed with the NASD or
any securities exchange pursuant to the requirements of such exchange
or with the Commission pursuant to the Securities Act or the Exchange
Act. The Company will deliver to the Representative similar reports
with respect to significant subsidiaries, as that term is defined in
the Rules and Regulations, which are not consolidated in the Company's
financial statements.
(j) During the period beginning from the date hereof and
continuing to and including the date 180 days after the date of the
Prospectus, the Company will not, without your prior written consent,
offer, pledge, issue, sell, contract to sell, grant any option for the
sale of, or otherwise dispose of (or announce any offer, pledge, sale,
grant of an option to purchase or other disposition), directly or
indirectly, any shares of Common Stock or securities convertible into,
exercisable or exchangeable for, shares of Common Stock, except as
provided in Section 2 and except as described in the Prospectus.
(k) Neither the Company nor any of its officers,
directors or affiliates will (i) take, directly or indirectly, prior
to the closing of the purchase and sale of the Shares, any action
designed to cause or to result in, or that might reasonably be
expected to constitute, the stabilization or manipulation of the price
of any security of the Company to facilitate the sale or resale of any
of the Shares, (ii) sell, bid for, purchase or pay anyone any
compensation for soliciting purchases of, the Shares or (iii) pay or
agree to
11
12
pay to any person any compensation for soliciting another to purchase any other
securities of the Company.
(l) The Company will apply the net proceeds from the
offering in the manner set forth under the heading "Use of Proceeds"
in the Prospectus, including the capitalization of the Bank, and will
timely report such use of proceeds pursuant to Item 701 of Regulation
S-B and S-K in its periodic reports filed pursuant to Section 13(a)
and 15(d) of the Exchange Act in accordance with Rule 463 of the
Securities Act or any successor provision.
(m) If at any time during the 60-day period after the
Registration Statement becomes effective, any rumor, publication or
event relating to or affecting the Company shall occur as a result of
which in your reasonable opinion the market price of the Common Stock
has been or is likely to be materially affected (regardless of whether
such rumor, publication or event necessitates a supplement to or
amendment of the Prospectus) and after written notice from you
advising the Company to the effect set forth above, the Company agrees
to forthwith prepare, consult with you concerning the substance of,
and disseminate a press release or other public statement, reasonably
satisfactory to you, responding to or commenting on such rumor,
publication or event.
(n) The Company will cause the Shares to be quoted on
the Nasdaq OTC Bulletin Board at each Time of Delivery and for at
least one year from the date hereof.
6. EXPENSES. The Company will pay all costs and expenses
incident to the performance of its obligations under this Agreement, whether or
not the transactions contemplated hereby are consummated or this Agreement is
terminated pursuant to Section 10 hereof, including without limitation all
costs and expenses incident to (i) the fees, disbursements and expenses of the
Company's counsel and accountants in connection with the registration of the
Shares under the Securities Act and all other expenses in connection with the
preparation, printing and filing of the Registration Statement (including all
amendments thereto), any Preliminary Prospectus, the Prospectus and any
amendments and supplements thereto, this Agreement and any blue sky memoranda;
(ii) the delivery of copies of the foregoing documents to the Underwriters;
(iii) the filing fees of the Commission and the National Association of
Securities Dealers, Inc. relating to the Shares; (iv) the preparation, issuance
and delivery to the Underwriters of any certificates evidencing the Shares,
including transfer agent's and registrar's fees; (v) the qualification of the
Shares for offering and sale under state securities and blue sky laws,
including filing fees and fees and disbursements of counsel for the
Underwriters relating thereto; (vi) any expenses of listing the Shares on the
Nasdaq OTC Bulletin Board; (vii) any expenses for travel, lodging and meals
incurred by the Company and any of its officers, directors and employees in
connection with any meetings with prospective investors in the Shares. It is
understood, however, that, except as provided in this Section, Section 8 and
Section 10 hereof, the Underwriters will pay all of their own costs and
expenses, including the fees of their counsel (other than those related to
qualification of the Shares under state securities or blue sky laws), stock
transfer taxes on resale of any of the Shares by them, and any advertising
expenses relating to the offer and sale of the Shares.
12
13
7. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations
of the Underwriters hereunder to purchase and pay for the Shares to be
delivered at each Time of Delivery shall be subject, in their discretion, to
the accuracy of the representations and warranties of the Company contained
herein as of the date hereof and as of such Time of Delivery, to the accuracy
of the statements of Company officers made pursuant to the provisions hereof,
to the performance by the Company of its covenants and agreements hereunder,
and to the following additional conditions precedent:
(a) The Registration Statement as amended to date shall
have become effective prior to the execution of this Agreement or at
such later date and/or time as shall have been consented to by you in
writing. The Prospectus and any amendment or supplement thereto shall
have been filed with the Commission pursuant to Rule 424(b) within the
applicable time period prescribed for such filing and in accordance
with Section 5(a) of this Agreement; no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall
have been issued and no proceedings for that purpose shall have been
instituted, threatened or, to the knowledge of the Company and the
Representative, contemplated by the Commission; and all requests for
additional information on the part of the Commission shall have been
complied with to your satisfaction.
(b) Smith Helms Mulliss & Moore, L.L.P., counsel for the
Underwriters, shall have furnished to you such opinion or opinions,
dated such Time of Delivery, with respect to the incorporation of the
Company, the validity of the Shares being delivered at such Time of
Delivery, the Registration Statement, the Prospectus, and other
related matters as you may reasonably request and which are customary,
and the Company shall have furnished to such counsel such documents as
they request for the purpose of enabling them to pass upon such
matters.
(c) You shall have received an opinion, dated such Time
of Delivery, of Nelson Mullins Riley & Scarborough, L.L.P., counsel
for the Company in form and substance satisfactory to you and your
counsel, to the effect that:
(i) The Company has been duly incorporated and
is validly existing as a corporation under the laws of the
State of South Carolina and has the corporate power and
authority to own or lease its properties and conduct its
business as described in the Registration Statement and the
Prospectus and to enter into this Agreement and perform its
obligations hereunder. The Company is duly qualified to
transact business as a foreign corporation in states where
required and where failure to so qualify would have a
material adverse effect on the Company.
(ii) The Company has received evidence of the
receipt of each of the Regulatory Approvals.
(iii) The Bank is a national banking association
in organization under the laws of the United States of
America and, upon the issuance of a charter by the OCC, will
have the corporate power and authority to own or lease its
13
14
properties and conduct its business as described in the
Registration Statement and the Prospectus.
(iv) The Company's authorized, issued and
outstanding capital stock is as disclosed under the caption
"Capitalization" in the Prospectus. None of the issued shares
have been issued in violation of or subject to any preemptive
rights provided for by law, agreement or the Company's
Articles of Incorporation or Bylaws.
(v) Upon the issuance of a charter by the OCC,
all of the shares of capital stock of the Bank will be issued
to the Company free and clear of any liens, claims or
encumbrances of any kind, and the Bank will become a wholly
owned subsidiary of the Company.
(vi) The Shares to be sold by the Company have
been duly authorized and, when issued and delivered against
payment therefor as provided herein, will be validly issued
and fully paid and nonassessable and will conform to the
description of the Common Stock contained in the Prospectus.
The Underwriters will receive valid title to the Shares to be
issued and delivered by the Company pursuant to this
Agreement, free and clear of all liens, encumbrances, claims,
security interests, restrictions, shareholders' agreements
and voting trusts whatsoever.
(vii) To the knowledge of such counsel, the
Company does not have outstanding any options to purchase, or
any rights or warrants to subscribe for, or any securities or
obligations convertible into, or any contracts or commitments
to issue or sell any capital stock, and there are no
preemptive rights or other rights to subscribe for or
purchase any capital stock of the Company, or any restriction
upon the transfer of, the Shares pursuant to the Company's
Articles of Incorporation or Bylaws or any agreement or other
instrument to which the Company is a party or by which it may
be bound, except as described in the Prospectus. To the
knowledge of such counsel, neither the filing of the
Registration Statement nor the offer or sale of the Shares as
contemplated by this Agreement gives rise to any rights for
or relating to the registration of any Common Stock or any
other securities of the Company.
(viii) The issue and sale of the Shares being
issued at such Time of Delivery and the performance of this
Agreement and the consummation of the transactions herein
contemplated will not conflict with, or (with or without the
giving of notice or the passage of time or both) result in a
breach or violation of any of the terms or provisions of, or
constitute a default under any document or agreement which is
an Exhibit to the Registration Statement, or violate any
provision of the Articles of Incorporation, Articles of
Association, Bylaws or other governing instruments of the
Company or the Bank or any statute, rule or regulation or, to
such counsel's knowledge after diligent inquiry, any order,
judgment or decree of any court or governmental agency or
body having
14
15
jurisdiction over the Company or the Bank or any of their
respective properties or assets.
(ix) No consent, approval, authorization or
order from, or registration, qualification or filing with,
any governmental agency or body or third party is required
for the issue and sale of the Shares or the consummation of
the transactions contemplated by this Agreement, except (a)
the registration of the Shares under the Securities Act and
such as may be required by the NASD and under state
securities or blue sky laws in connection with the offer,
sale and distribution of the Shares by the Underwriters, and
(b) as required in connection with the Regulatory Approvals.
(x) This Agreement has been duly authorized,
executed and delivered by the Company and constitutes the
valid and binding agreement of the Company enforceable
against the Company in accordance with its terms subject, as
to enforcement, to applicable bankruptcy, insolvency,
reorganization and moratorium laws and other laws relating to
or affecting the enforcement of creditors' rights generally
and to general equitable principles, and except as the
enforceability of rights to indemnity and contribution under
this Agreement may be limited under applicable securities
laws or the public policy underlying such laws.
(xi) The Company and the Bank have obtained or
have filed for all licenses, consents and approvals, and have
satisfied or have taken all action required at this time to
satisfy all eligibility and other similar requirements
imposed by federal and state regulatory bodies,
administrative agencies or other governmental bodies,
agencies or officials, in each case necessary for the conduct
of the business in which they are engaged or are contemplated
to be engaged as described in the Prospectus (except where
the failure to have any such licenses, consents, and
approvals, or to have satisfied or taken such action to
satisfy the requirements, individually or in the aggregate,
would not have a material adverse effect on the business,
properties, operations, or financial condition of the Company
or its subsidiaries, taken as a whole). With respect to any
necessary licenses, consents and approvals, and any necessary
eligibility and other similar requirements that the Company
or the Bank does not have at this time, (i) all applications
therefor are, to such counsel's knowledge, complete and
accurate, and have been filed with the appropriate regulatory
authorities, and (ii) counsel knows of no reason why the same
will not be received or satisfied prior to the time the same
are required to conduct business as described in the
Prospectus.
(xii) To such counsel's knowledge after diligent
inquiry, there is not pending or threatened any action, suit,
proceeding, inquiry or investigation, to which the Company or
the Bank is a party, or to which property of the Company or
the Bank is subject, before or brought by any court or
governmental agency or body.
15
16
(xiii) To the knowledge of such counsel, neither
the Company nor the Bank is in violation of any law,
ordinance, administrative or governmental rule or regulation
applicable to the Company or the Bank, or any decree of any
court or governmental agency or body having jurisdiction over
the Company or the Bank, except where such violation does not
and will not have a material adverse effect on the Company
and the Bank as a whole.
(xiv) The Registration Statement and the
Prospectus and each amendment or supplement thereto (other
than the financial statements and schedules and other
financial information included therein, as to which such
counsel need express no opinion), as of their respective
effective or issue dates, complied as to form in all material
respects with the requirements of the Securities Act and the
Rules and Regulations. The descriptions in the Registration
Statement and the Prospectus of statutes, rules and
regulations are accurate and fairly present the information
required to be shown; and such counsel does not know of any
statutes, rules, regulations or legal or governmental
proceedings required to be described in the Registration
Statement or Prospectus that are not described as required or
of any contracts or documents of a character required to be
described in the Registration Statement or Prospectus or to
be filed as exhibits to the Registration Statement which are
not described and filed as required.
(xv) The Registration Statement and all
post-effective amendments thereto have become effective under
the Securities Act; any required filing of the Prospectus
pursuant to Rule 430A and Rule 424(b) has been made in the
manner and within the time period required by such rules; and
to such counsel's knowledge no stop order suspending the
effectiveness of the Registration Statement or any part
thereof has been issued and, to such counsel's knowledge, no
proceedings for that purpose have been instituted or
threatened or are contemplated by the Commission.
(i) The Company is not, and will not be as a result of
the consummation of the transactions contemplated by this
Agreement, an "investment company," or a company "controlled"
by an "investment company," within the meaning of the
Investment Company Act of 1940.
Such counsel shall also state that no facts have
come to their attention which lead them to believe that, as
of its effective date, the Registration Statement or any
further amendment thereto made by the Company prior to the
date hereof (other than the financial statements and related
schedules therein or other
16
17
financial data derived from accounting records, as to which
they need express no opinion) contained an untrue statement
of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading or that, as of its date,
the Prospectus or any further amendment or supplement thereto
made by the Company prior to the date hereof (other than the
financial statements and related schedules therein or other
financial data derived from accounting records, as to which
they need express no opinion) contained an untrue statement
of a material fact or omitted to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading or
that, as of the date hereof, either the Registration
Statement or the Prospectus or any further amendment or
supplement thereto made by the Company prior to the date
hereof (other than the financial statements and related
schedules therein or other financial data derived from
accounting records, as to which they need express no opinion)
contains an untrue statement of a material fact or omits to
state a material fact necessary to make the statements
therein, in the light of the circumstances under which they
were made, not misleading.
In rendering any such opinion, such counsel may
rely, as to matters of fact, to the extent such counsel deem
proper, on certificates of responsible officers of the
Company and public officials.
(d) You shall have received from Elliott, Davis &
Company, L.L.P., letters dated, respectively, the date of this
Agreement and the effective date of the most recently filed
post-effective amendment to the Registration Statement and also at
each Time of Delivery, in form and substance satisfactory to you,
containing statements and information of the type ordinarily included
in accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in
the Registration Statement and the Prospectus.
(e) You shall have received on each Time of Delivery a
certificate or certificates of the Chief Executive Officer and the
President of the Company to the effect that:
(i) the representations and warranties of the
Company in Section 1 of this Agreement are true and correct,
as if made at and as of the First Time of Delivery or the
Subsequent Time of Delivery, as the case may be, and the
Company has complied with all the agreements and satisfied
all the conditions on its part to be performed or satisfied
at or prior to the Time of Delivery and as to such other
matters as you may reasonably request;
(ii) no stop order suspending the effectiveness
of the Registration Statement has been issued, and no
proceedings for that purpose have been initiated or are
pending, or to their knowledge, contemplated under the
Securities Act;
(iii) all filings required by Rule 424 and Rule
430A of the Rules and Regulations have been made;
(iv) they have carefully examined the
Registration Statement and the Prospectus, and any amendments
or supplements thereto, and in his or her opinion, such
documents do not include any untrue statement of a material
fact or
17
18
omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading in
light of the circumstances under which they were made; and
(v) since the effective date of the
Registration Statement, there has occurred no event required
to be set forth in an amendment or supplement to the
Registration Statement or the Prospectus which has not been
so set forth.
(f) Since the date of the latest audited financial
statements included in the Prospectus, neither the Company nor the
Bank shall have sustained (i) any loss or interference with their
respective businesses from fire, explosion, flood, hurricane or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as disclosed in or contemplated by the Prospectus, or (ii) any
change, or any development involving a prospective change (including
without limitation a change in management or control of the Company),
in or affecting the position (financial or otherwise), results of
operations, net worth or business prospects of the Company and the
Bank, otherwise than as disclosed in or contemplated by the Prospectus
(including any amendment), the effect of which, in either such case,
is in your judgment so material and adverse as to make it
unpracticable or inadvisable to proceed with the purchase, sale and
delivery of the Shares being delivered at such Time of Delivery as
contemplated by the Registration Statement, as amended as of the date
hereof.
(g) Subsequent to the date hereof there shall not have
occurred any of the following: (i) any suspension or limitation in
trading in securities generally on the New York Stock Exchange or the
over-the-counter market (other than normal market breaks or cooling
periods), or any setting of minimum prices for trading on such
exchange, or if trading in any securities of the Company has been
suspended by the Commission, or limitations on prices for trading
(other than limitations on hours or numbers of days of trading) have
been fixed, or maximum ranges for prices for securities have been
required, by the Nasdaq OTC Bulletin Board or the NASD or by order of
the Commission or any other governmental authority; (ii) a moratorium
on commercial banking activities in New York declared by either
federal or state authorities; (iii) any major outbreak or major
escalation of hostilities involving the United States, declaration by
the United States of a national emergency (other than with respect to
natural disasters) or war or any other national or international
calamity or emergency or any material adverse change in general
economic, political or financial conditions if the effect of any such
event specified in this clause (iii) in your judgment makes it
impracticable or inadvisable to proceed with the purchase, sale and
delivery of the Shares being delivered at such Time of Delivery as
contemplated by the Registration Statement.
(h) The Shares shall be approved for quotation on the
Nasdaq OTC Bulletin Board when issued.
(i) The Company shall have furnished the Representative
with evidence of its receipt of each of the Regulatory Approvals.
18
19
(j) The Representative shall have received the Lockup
Agreements as described in Section 1(v).
8. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to
indemnify and hold harmless each Underwriter against any losses, claims,
damages or liabilities, joint or several, to which such Underwriter may become
subject, under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon: (i) any untrue statement or alleged untrue statement made by the
Company in Section 1 of this Agreement; (ii) any untrue statement or alleged
untrue statement of any material fact contained in (A) the Registration
Statement or any amendment thereto, any Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto, or (B) any application or
other document, or any amendment or supplement thereto, executed by the Company
or based upon written information furnished by or on behalf of the Company
filed in any jurisdiction in order to qualify the Shares under the securities
or blue sky laws thereof or filed with the Commission or any securities
association or securities exchange (each an "Application"); or (iii) the
omission or alleged omission to state in the Registration Statement or any
amendment thereto, any Preliminary Prospectus, the Prospectus or any amendment
or supplement thereto, or any Application, material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse each Underwriter for any legal or other expenses reasonably incurred
by such Underwriter in connection with investigating, defending against or
appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action; provided, however, that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage,
liability or action arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in the
Registration Statement or any amendment thereto, any Preliminary Prospectus,
the Prospectus or any amendment or supplement thereto or any Application in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter. The Company will not, without the prior written
consent of each Underwriter, settle or compromise or consent to the entry of
any judgment in any pending or threatened claim, action, suit or proceeding (or
related cause of action or portion thereof) in respect of which indemnification
may be sought hereunder (whether or not such Underwriter is a party to such
claim, action, suit or proceeding), unless such settlement, compromise or
consent includes an unconditional release of such Underwriter from all
liability arising out of such claim, action, suit or proceeding or related
cause of action or portion thereof.
(b) Each Underwriter agrees to indemnify and hold harmless the
Company and its officers, directors, agents, representatives and affiliates
against any losses, claims, damages or liabilities to which the Company or its
officers, directors, agents, representatives and affiliates may become subject
under the Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact contained
in the Registration Statement or any amendment thereto, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto or any
Application or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, in each case to the extent, but
only to
19
20
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by the Underwriter through the
Representative expressly for use therein; and will reimburse the Company for
any legal or other expenses reasonably incurred by the Company in connection
with investigating or defending any such loss, claim, damage, liability or
action.
(c) Promptly after receipt by an indemnified party under
subsection (a) and (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against
the indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the
indemnifying party); provided, however, that if the defendants in any such
action included the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be one or more
legal defenses available to it or other indemnified parties which are different
from or additional to those available to the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such
action on behalf of such indemnified party and such indemnified party shall
have the right to select separate counsel to defend such action on behalf of
such indemnified party. After such notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof and approval
by such indemnified party of counsel appointed to defend such action, the
indemnifying party will not be liable to such indemnified party under this
Section 8 for any legal or other expenses, other than reasonable costs of
investigation, subsequently incurred by such indemnified party in connection
with the defense thereof, unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the next preceding sentence
(it being understood, however, that in connection with such action the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (in addition to local counsel) in any one action or separate
but substantially similar actions in the same jurisdiction arising out of the
same general allegations or circumstances, which separate counsel shall be
designated by the Representative in the case of indemnity arising under
paragraph (a) of this Section 8) or (ii) the indemnifying party has authorized
the employment of counsel for the indemnified party at the expense of the
indemnifying party. Nothing in this Section 8(c) shall preclude an indemnified
party from participating at its own expense in the defense of any such action
so assumed by the indemnifying party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and the
Underwriter on the other from the offering of the Shares. If, however, the
20
21
allocation provided by the immediately preceding sentence is not permitted by
applicable law or if the indemnified party failed to give the notice required
under subsection (c) above, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Underwriter on the other in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriter 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. The relative fault
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company on the
one hand or the Underwriters on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Underwriters agree that it would not
be just and equitable if contributions pursuant to this subsection (d) were
determined by pro rata allocation (even if the Underwriters were treated as one
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to above in this subsection
(d). The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions in respect thereof) referred
to above in this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), the Underwriter shall not be required to
contribute any amount in excess of the amount by which the total price at which
the Shares underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages which such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled
to contribution from any person who was not guilty of such fraudulent
misrepresentation.
(e) The obligations of the Company under this Section 8 shall be
in addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Securities Act; and the
obligations of the Underwriters under this Section 8 shall be in addition to
any liability which the Underwriters may otherwise have and shall extend, upon
the same terms and conditions, to each officer and director of the Company and
to each person, if any, who controls the Company within the meaning of The
Securities Act.
9. DEFAULT OF UNDERWRITERS. (a) If any Underwriter defaults in
its obligation to purchase Shares at a Time of Delivery, you may in your
discretion arrange for you or another party, or other parties to purchase such
shares on the terms contained herein. If within 36 hours after such default by
any Underwriter you do not arrange for the purchase of such Shares, the Company
shall be entitled to a further period of 36 hours within which to procure
another party or other parties satisfactory to you to purchase such Shares on
such terms. In the event that, within the respective prescribed periods, you
notify the Company that you have so
21
22
arranged for the purchase of such Shares, or the Company notifies you that it
has so arranged for the purchase of such Shares, you or the Company shall have
the right to postpone a Time of Delivery for a period of not more than 7 days
in order to effect whatever change is made necessary thereby in the
Registration Statement or the Prospectus, or in any other documents or
arrangements, and the Company agrees to file promptly any amendments to the
Registration Statement or the Prospectus that in your opinion may thereby be
made necessary. The cost of preparing, printing and filing any such amendments
shall be paid for by the Underwriters. The term "Underwriter" as used in this
Agreement shall include any person substituted under this Section with effect
as if such person had originally been a party to this Agreement with respect to
such Shares.
(b) If, after giving effect to any arrangements for the purchase
of the Shares of a defaulting Underwriter or Underwriters by you and the
Company as provided in subsection (a) above, the aggregate number of such
Shares which remains unpurchased does not exceed one-eleventh of the aggregate
number of Shares to be purchased at such Time of Delivery, then the Company
shall have the right to require each non-defaulting Underwriter to purchase the
number of Shares which such Underwriter agreed to purchase hereunder at such
Time of Delivery and, in addition, to require each non-defaulting Underwriter
to purchase its pro rata share (based on the number of Shares which such
Underwriter agreed to purchase hereunder) of the Shares of such defaulting
Underwriter or Underwriters for which such arrangements have not been made, but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
10. TERMINATION. (a) This Agreement may be terminated with
respect to the Shares or any Optional Shares in the sole discretion of the
Representative by notice to the Company given prior to the First Time of
Delivery or any Subsequent Time of Delivery, respectively, in the event that
(i) any condition to the obligations of the Underwriters set forth in Section 7
hereof has not been satisfied, or (ii) the Company shall have failed, refused
or been unable to deliver the Shares or to perform all obligations and satisfy
all conditions on its part to be performed or satisfied hereunder at or prior
to such Time of Delivery, in either case other than by reason of a default by
any of the Underwriters. If this Agreement is terminated pursuant to this
Section 10(a), the Company will reimburse the Underwriters upon demand for all
out-of-pocket expenses (including counsel fees and disbursements) that shall
have been incurred by it in connection with the proposed purchase and sale of
the Shares.
(b) If, after giving effect to any arrangements for the purchase
of the Shares of a defaulting Underwriter or Underwriters by you and the
Company as provided in Section 10(a), the aggregate number of such Shares which
remain unpurchased exceeds one-eleventh of the aggregate number of Shares to be
purchased at such Time of Delivery, or if the Company shall not exercise the
right described in Section 9(b) to require non-defaulting Underwriters to
purchase Shares of a defaulting Underwriter or Underwriters, then this
Agreement (or, with respect to a Subsequent Time of Delivery, the obligations
of the Underwriters to purchase and of the Company to sell the Optional Shares)
thereupon will terminate, without liability on the part of any nonfaulting
Underwriter or the Company, except for the expenses to be borne by the Company
and the Underwriters as provided in Section 6 hereof and the indemnity and
contribution agreements in Section 8 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
22
23
11. SURVIVAL. The respective indemnities, agreements,
representations, warranties and other statements of the Company, its officers
and the Underwriter, 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 the Underwriter or any controlling person
referred to in Section 8(e) or the Company, or any officer or director or
controlling person of the Company referred to in Section 8(e), and shall
survive delivery of and payment for the Shares. The respective agreements,
covenants, indemnities and other statements set forth in Sections 6, 8 and 13
hereof shall remain in full force and effect, regardless of any termination or
cancellation of this Agreement.
12. NOTICES. All communications hereunder shall be in writing
and, if sent to the Underwriter, shall be mailed, delivered or telegraphed and
confirmed in writing to Wachovia Securities, Inc., IJL Financial Center, 201
North Tryon Street, Charlotte, North Carolina 28202, Attention: Corporate
Finance Department (with a copy to Ronald W. Goff at Wachovia Securities, Inc.,
Resurgens Plaza, 945 E. Paces Ferry Road, Atlanta, Georgia 30326, and Boyd C.
Campbell, Jr. at Smith Helms Mulliss & Moore L.L.P., 201 North Tryon Street,
Charlotte, North Carolina 28202), and if sent to the Company, shall be mailed,
delivered or telegraphed and confirmed in writing to the Company at 1805
Laurens Road, Greenville, South Carolina 29607, Attention: President and Chief
Executive Officer (with a copy to C. Russell Pickering, Esq., Nelson Mullins
Riley & Scarborough, L.L.P., 999 Peachtree Street, N.E., Suite 1400, Atlanta,
Georgia 30309).
13. RIGHT OF FIRST REFUSAL. The Company grants to the
Representative an unconditional right of first refusal to serve as exclusive or
lead advisor to the Company on all corporate finance transactions undertaken or
considered by the Company for three years from the effective date of the
Prospectus. The Representative shall not be entitled to more than one payment
or fee in exchange for the waiver or termination of this right of first
refusal, and any payment or fee to waive or terminate the right of first
refusal shall be paid in cash and will not exceed the greater of (a) one
percent (1%) of the aggregate purchase price of the Shares purchased pursuant
to this Agreement, and (b) five percent (5%) of the underwriting discount or
commission paid in connection with the future financing (including any
overallotment option that my be exercised).
14. REPRESENTATIVE. You will act for the several Underwriters in
connection with the transactions contemplated by this Agreement, and any action
under this Agreement taken by you will be binding upon all the Underwriters.
15. BINDING EFFECT. This Agreement shall be binding upon, and
inure solely to the benefit of, each Underwriter and the Company and to the
extent provided in Sections 8 and 10 hereof, the officers and directors and
controlling persons referred to therein and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of the
Shares from the Underwriters shall be deemed a successor or assign by reason
merely of such purchase.
23
24
16. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of North Carolina without
giving effect to any provisions regarding conflicts of laws.
17. 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.
18. If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us one of the counterparts hereof, and
upon the acceptance hereof by Wachovia Securities, Inc., this letter will
constitute a binding agreement among the Underwriters and the Company.
Very truly yours,
GREENVILLE FIRST BANCSHARES, INC.
By:
----------------------------------------
Name: R. Arthur Seaver, Jr.
Title: Chief Executive Officer and President
WACHOVIA SECURITIES, INC.
By:
--------------------------------------
Name:
------------------------------
Title:
------------------------------
24
25
SCHEDULE I
GREENVILLE FIRST BANCSHARES, INC.
1,200,000 SHARES
COMMON STOCK
NUMBER OF
OPTIONAL SHARES
TOTAL NUMBER OF TO BE PURCHASED
FIRM SHARES TO IF MAXIMUM
UNDERWRITER BE PURCHASED OPTION EXERCISED
- ----------- ------------ ----------------
Wachovia Securities, Inc.
Total
25