Exhibit 1.1
2,725,500 Shares of Common Stock
NET.B@NK, INC.
UNDERWRITING AGREEMENT
[_______], 1999
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇ & COMPANY, INC.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & ASSOCIATES, INC.
▇▇▇▇▇▇ INTERNATIONAL LTD.
as Representatives of the
several Underwriters named in
Schedule I attached hereto
c/o Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Net.B@nk, Inc., a corporation organized and existing under the laws of
the State of Georgia (the "Company"), and Carolina First Bank, a bank organized
under the laws of the State of South Carolina (the "Selling Shareholder"),
propose, subject to the terms and conditions stated herein, to issue and sell to
the several underwriters named in Schedule I hereto (the "Underwriters") an
aggregate of 2,370,000 shares (the "Firm Shares") of common stock, par value
$.01 per share, of the Company (the "Common Stock"), and, for the sole purpose
of covering over-allotments in connection with the sale of the Firm Shares, the
Company proposes to issue and sell to the Underwriters, at the option of the
Underwriters, up to an additional 355,500 shares (the "Additional Shares") of
Common Stock. Of the Firm Shares, 2,000,000 are being offered by the Company and
370,000 are being offered by the Selling Shareholder. The Firm Shares and any
Additional Shares purchased by the Underwriters are referred to herein
collectively as the "Shares". The Shares are more fully described in the
Registration Statement referred to below.
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to, and agrees with, the Underwriters that:
(a) The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement, and may have filed an
amendment or amendments thereto, on Form S-3 (No. 333-[______]), for the
registration of the Shares under the Securities Act of 1933, as amended (the
"Act"). Such registration statement, including the prospectus, financial
statements and schedules, exhibits and all other documents filed as a part
thereof, as amended at the time of effectiveness of the registration statement,
including any information deemed to be a part thereof as of the time of
effectiveness pursuant to paragraph (b) of Rule
430A or Rule 434 of the Rules and Regulations of the Commission under the Act
(the "Regulations"), is herein called the "Registration Statement". Any
registration statement filed pursuant to Rule 462(b) of the Regulations is
herein called the "462(b) Registration Statement", and after such filing the
term "Registration Statement" shall include the Rule 462(b) Registration
Statement. The prospectus, in the form first filed with the Commission pursuant
to Rule 424(b) of the Regulations or filed as part of the Registration Statement
at the time of effectiveness if no Rule 424(b) or Rule 434 filing is required,
is herein called the "Prospectus". The term "preliminary prospectus" as used
herein means a preliminary prospectus as described in Rule 430 of the
Regulations. Any reference herein to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12 of Form S-3 that
were filed under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), on or before the effective date of the Registration Statement, the date
of such preliminary prospectus or the date of the Prospectus, as the case may
be, and any reference herein to the terms "amend", "amendment" or "supplement"
with respect to the Registration Statement, any preliminary prospectus or the
Prospectus shall be deemed to refer to and include (i) the filing of any
document under the Exchange Act after the effective date of the Registration
Statement, the date of such preliminary prospectus or the date of the
Prospectus, as the case may be, that is incorporated therein by reference and
(ii) any such document so filed. Neither the Commission nor the Blue Sky or
securities authority of any jurisdiction has issued a stop order suspending the
effectiveness of the Registration Statement, preventing or suspending the use of
any preliminary prospectus, the Prospectus, the Registration Statement or any
amendment or supplement thereto, refusing to permit the effectiveness of the
Registration Statement or suspending the registration or qualification of the
Shares, nor, to the Company's knowledge, has any of such authorities instituted
or threatened to institute any proceedings with respect to a stop order.
(b) At the respective time of the effectiveness of the
Registration Statement or any 462(b) Registration Statement or the effectiveness
of any post-effective amendment to the Registration Statement, when the
Prospectus is first filed with the Commission pursuant to Rule 424(b) or Rule
434 of the Regulations, when any supplement to or amendment of the Prospectus is
filed with the Commission, when any document filed under the Exchange Act is
filed and at the Closing Date and the Additional Closing Date, if any (as
hereinafter respectively defined), the Registration Statement, any 462(b)
Registration Statement and the Prospectus and any amendments thereof and
supplements thereto complied or will comply in all material respects with the
applicable provisions of the Act and the Regulations and the Exchange Act and
the respective rules and regulations thereunder and does not or will not contain
an untrue statement of a material fact and does not or will not omit to state
any material fact required to be stated therein or necessary in order to make
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the statements therein (i), in the case of the Registration Statement, not
misleading and (ii), in the case of the Prospectus, in the light of the
circumstances under which they were made, not misleading. When any related
preliminary prospectus was first filed with the Commission (whether filed as
part of the Registration Statement or any amendment thereto or pursuant to Rule
424(a) of the Regulations) and when any amendment thereof or supplement thereto
was first filed with the Commission, such preliminary prospectus and any
amendments thereof and supplements thereto complied in all material respects
with the applicable provisions of the Act and the Regulations and the Exchange
Act and the respective rules and regulations thereunder and did not contain an
untrue statement of a material fact and did not omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. The Prospectus and any preliminary prospectus delivered to the
Underwriters for use in connection with the registration of the Shares was
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation S-T.
No representation and warranty is made in this subsection (b), however, with
respect to any information contained in or omitted from the Registration
Statement or the Prospectus or any related preliminary prospectus or any
amendment thereof or supplement thereto in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of any
Underwriter through Bear, ▇▇▇▇▇▇▇ & Co. Inc. as herein stated expressly for use
in connection with the preparation thereof. If Rule 434 is used, the Company
will comply with the requirements of Rule 434.
(c) Deloitte & Touche LLP, who have certified the financial
statements and supporting schedules included in the Registration Statement, are
independent public accountants, as required by the Act and the Regulations.
(d) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as set forth in
the Registration Statement and the Prospectus, there has been no material
adverse change or any development involving a prospective material adverse
change in the business, prospects, properties, operations, condition (financial
or other), stockholders' equity or results of operations of either the Company
or its sole subsidiary Net.B@nk, a federally-chartered stock savings bank (the
"Bank") (the effect of each such change or development being referred to herein
as a "Material Adverse Effect", whether or not arising from transactions in the
ordinary course of business, and since the date of the latest balance sheet
presented in the Registration Statement and the Prospectus, neither the Company
nor the Bank has incurred or undertaken any liabilities or obligations, direct
or contingent, which are material to the Company or the Bank, respectively,
except for liabilities or obligations which are reflected in the Registration
Statement and the Prospectus.
(e) This Agreement and the transactions contemplated hereby have
been duly and validly authorized by the Company, and this Agreement has been
duly and validly executed and delivered by the Company.
(f) The execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby do not and will not (i)
conflict with or result in a breach of any of the terms and provisions of, or
constitute a default (or an event which with notice or lapse of time, or both,
would constitute a default) under, require approval or consent under, or result
in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or the Bank, respectively, any agreement,
instrument, franchise, license or permit to which either of the Company or the
Bank is a party or by which any of the Company's or the Bank's respective
properties or assets may be bound or (ii) violate or conflict with any provision
of the charter or by-laws of the Company or the Bank, respectively, decree,
order, statute, rule or regulation of any court or any public, governmental or
regulatory agency or body having jurisdiction over either of the Company or the
Bank or any of
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their respective properties or assets. No consent, approval, authorization,
order, registration, filing, qualification, license or permit of or with any
court or any public, governmental or regulatory agency or body having
jurisdiction over either of the Company or the Bank or any of their respective
properties or assets is required for the execution, delivery and performance of
this Agreement or the consummation of the transactions contemplated hereby,
including the issuance, sale and delivery of the Shares to be issued, sold and
delivered by the Company hereunder, except the registration under the Act of the
Shares and such consents, approvals, authorizations, orders, registrations,
filings, qualifications, licenses and permits as may be required under state
securities or Blue Sky laws in connection with the purchase and distribution of
the Shares by the Underwriters.
(g) All of the outstanding shares of capital stock of the Company
(including the Shares to be sold by the Selling Shareholder hereunder) are duly
and validly authorized and issued, fully paid and nonassessable, and none of
such shares was issued in violation of or is now subject to any preemptive or
similar rights. The Shares to be issued and sold by the Company hereunder, when
issued, delivered and sold in accordance with this Agreement, will be duly and
validly issued and outstanding, fully paid and nonassessable, and will not have
been issued in violation of or be subject to any preemptive or similar rights.
The Company had, at [__________], 1999, an authorized and outstanding
capitalization as set forth in the Registration Statement and the Prospectus.
The Common Stock, the Firm Shares and the Additional Shares, conform to the
descriptions thereof contained in the Registration Statement and the Prospectus.
Except as disclosed in or specifically contemplated by the Registration
Statement and the Prospectus, there are no outstanding options, warrants or
other rights calling for the issuance of, and no commitments, obligations, plans
or arrangements to issue, any shares of capital stock of the Company or any
security convertible into or exchangeable for capital stock of the Company. The
outstanding stock options relating to the Common Stock have been duly authorized
and validly issued and conform to the descriptions thereof contained in the
Registration Statement and the Prospectus. Other than the Bank, the Company does
not own, directly or indirectly, any capital stock or other equity securities of
any corporation or have any ownership interest in any partnership, joint venture
or other association. All offers and sales of the Company's capital stock prior
to the date hereof were at all relevant times duly registered under the Act or
were exempt from the registration requirements of the Act and were duly
registered or the subject of an available exemption from the registration
requirements of the applicable state securities or Blue Sky laws.
(h) The Company has been duly organized and is validly existing
as a corporation in good standing under the laws of its jurisdiction of
incorporation. The Company is duly qualified and in good standing as a foreign
corporation in each jurisdiction in which the character or location of its
properties (owned, leased or licensed) or the nature or conduct of its business
makes such qualification necessary, except for those failures to be so qualified
or in good standing which will not in the aggregate have a Material Adverse
Effect on the Company and the Bank taken as a whole. The Company is duly
registered under the Savings and Loan Holding Company Act ("SLHCA") and the
Georgia Bank Holding Company Act ("GBHCA"). Neither the Company nor the Bank is
subject to any current formal arrangement or memorandum of understanding with,
or cease and desist order by, any banking or similar agency.
(i) The Bank has been duly organized and is validly existing as a
federally-chartered stock savings bank under the laws of the United States. The
Bank is duly qualified and in good standing as a foreign corporation in each
jurisdiction in which the character or location of its properties (owned, leased
or licensed) or the nature or conduct of its business
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makes such qualification necessary, except for those failures to be so qualified
or in good standing which will not in the aggregate have a Material Adverse
Effect on the Bank. The Bank is a member in good standing of the Federal Home
Loan Bank of Atlanta (the "FHLB of Atlanta"), and the Bank's deposit accounts
are insured by the Federal Deposit Insurance Corporation (the "FDIC") and no
proceeding for the termination or revocation of such issuance is pending or
threatened.
(j) Each of the Company and the Bank has all requisite power and
authority, and all necessary consents, approvals, authorizations, orders,
registrations, qualifications, licenses and permits of and from all public,
regulatory or governmental agencies and bodies, to own, lease and operate its
respective properties and conduct its respective business as now being conducted
and as described in the Registration Statement and the Prospectus, and no such
consent, approval, authorization, order, registration, qualification, license or
permit contains a materially burdensome restriction not adequately disclosed in
the Registration Statement and the Prospectus. All of the outstanding shares of
capital stock of the Bank are duly and validly issued, fully paid and
nonassessable and are owned by the Company free and clear of any liens,
mortgages, pledges, charges, security interests, claims, encumbrances or other
defects in title whatsoever.
(k) Neither the Company nor the Bank is in violation of its
charter or by-laws, as the case may be, or in default in the performance or
observance of any material obligation, agreement, covenant or condition
contained in any material bond, debenture, note or other evidence of
indebtedness or in any material contract, indenture, mortgage, deed of trust,
loan or credit agreement, lease, joint venture or other agreement or instrument
to which either of the Company or the Bank is a party or by which any of its
respective properties may be bound, or in violation of any law, order, rule,
regulation, writ, injunction, judgment or decree of any court or governmental
agency or body, the violation of which would have a Material Adverse Effect on
the Company or the Bank.
(l) Except as described in the Prospectus, there is no litigation
or governmental proceeding to which either of the Company or the Bank is a party
or to which any property of the Company or the Bank is subject or which is
pending or, to the knowledge of the Company, contemplated against either the
Company or the Bank.
(m) Neither the Company nor the Bank has taken, nor will take,
directly or indirectly, any action designed to cause or result in, or which
constitutes or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the shares of Common Stock to
facilitate the sale or resale of the Shares.
(n) The financial statements, including the notes thereto, and
supporting schedules included in the Registration Statement and the Prospectus
present fairly the consolidated financial position of the Company and its
consolidated subsidiaries as of the dates indicated and the results of their
operations for the periods specified; except as otherwise stated in the
Registration Statement, said financial statements have been prepared in
conformity with generally accepted accounting principles ("GAAP") applied on a
consistent basis; and the supporting schedules included in the Registration
Statement present fairly the information required to be stated therein. The
selected financial data and the summary financial information
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included in the Registration Statement and the Prospectus present fairly the
information shown therein and have been compiled on a basis consistent with that
of the financial statements included in the Registration Statement and the
Prospectus. No other financial statements are required by Form S-3 or otherwise
to be included in the Registration Statement or the Prospectus other than those
included therein.
(o) Each of the Company and the Bank has filed all federal,
state, local and foreign tax returns that are required to be filed and have paid
all taxes shown thereon and all assessments received by either of them to the
extent that such taxes have become due and are not being contested in good
faith. Except as disclosed in the Registration Statement and the Prospectus,
there is no tax deficiency that has been or might reasonably be expected to be
asserted or threatened against the Company or the Bank.
(p) Each of the Company and the Bank has good and marketable
title in fee simple to all items of real property and good and marketable title
to all personal property owned by it, in each case free and clear of all liens,
encumbrances and defects except such as are described or referred to in the
Prospectus or such as do not materially affect the value of such property and do
not interfere with the use made or proposed to be made of such property by the
Company or the Bank, respectively. Any real property and buildings held under
lease by either of the Company or the Bank is held under valid, existing and
enforceable leases with such exceptions as are not material and do not interfere
with the use made or proposed to be made of such property and buildings by the
Company or the Bank, respectively.
(q) Each of the Company and the Bank owns or possesses adequate
patent rights, licenses, inventions, copyrights, know-how (including trade
secrets and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks, trade names and
other intellectual property (collectively, "Intellectual Property") necessary to
carry on the business it now operates, and neither the Company nor the Bank has
received any notice or is otherwise aware of (i) any claim, action or demand of
any person in the United States or elsewhere or any proceeding in the United
States or elsewhere, pending or threatened, that (A) challenges the ownership
interests of the Company or the Bank in any of the Intellectual Property or (B)
alleges that any product or service of the Company or the Bank infringes or
misappropriates the Intellectual Property rights of others, which claim, action,
demand or proceeding (including, without limitation, infringement,
misappropriation and unfair competition), if the subject of any unfavorable
decision, ruling or finding, or invalidity or inadequacy could reasonably be
expected to have, in the aggregate with all other such claims, actions, demands
and proceedings, a Material Adverse Effect on the Company or the Bank,
respectively or (ii) any facts or circumstances that would render any
Intellectual Property invalid or inadequate to protect the interest of the
Company or the Bank.
(r) No relationship, direct or indirect, exists between or among
the Company or the Bank, on the one hand, and the directors, officers,
shareholders, customers or suppliers of the Company or the Bank, on the other
hand, that is required by the Act to be described in the Registration Statement
and the Prospectus that is not so described.
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(s) The Common Stock currently outstanding is listed on the
Nasdaq SmallCap Market, and application has been made to list the Common Stock
and the Shares on the Nasdaq National Market.
(t) Except as described in the Prospectus, no holder of
securities of the Company has any rights to the registration of securities of
the Company as a result of the filing of the Registration Statement or otherwise
in connection with the sale of the Shares contemplated hereby.
(u) The Company is not, and upon consummation of the transactions
contemplated hereby will not be, subject to registration as an "investment
company" under the Investment Company Act of 1940, as amended.
(v) There are no existing or, to the knowledge of the Company,
threatened labor disputes with any employees of the Company or the Bank that are
likely, in the aggregate, to have a Material Adverse Effect on either the
Company or the Bank.
(w) Each of the Company and the Bank (i) is in compliance with
any and all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) has received all permits, licenses or other
approvals required of it under applicable Environmental Laws to conduct its
respective business and (iii) is in compliance with all terms and conditions of
any such permit, license or approval, except where such noncompliance, failure
to receive required permits, licenses or other approvals or failure to comply
with the terms and conditions of such permits, licenses or approvals will not in
the aggregate have a Material Adverse Effect on either the Company or the Bank.
(x) Each employee benefit plan, within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), that is maintained, administered or contributed to by either of the
Company or the Bank for employees or former employees of the Company or the
Bank, respectively, has been maintained in compliance with its respective terms
and the requirements of any applicable statutes, orders, rules and regulations,
including, but not limited to, ERISA and the Internal Revenue Code of 1986, as
amended, (the "Code"). No prohibited transaction, within the meaning of Section
406 of ERISA or Section 4975 of the Code, has occurred with respect to any such
plan, excluding transactions effected pursuant to a statutory or administrative
exemption. For each such plan that is subject to the funding rules of Section
412 of the Code or Section 302 of ERISA, no "accumulated funding deficiency", as
defined in Section 412 of the Code, has been incurred, whether or not waived,
and the fair market value of the assets of each such plan (excluding for these
purposes accrued but unpaid contributions) exceeded the present value of all
benefits accrued under such plan, as determined using reasonable actuarial
assumptions.
(y) Each of the Company and the Bank maintains a system of
internal accounting controls that, taken as a whole, are sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are recorded
as necessary to permit the preparation of financial statements in
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conformity with GAAP and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(z) Each of the Company and the Bank maintains insurance of the
types and in the amounts generally deemed adequate for its respective business,
including, without limitation, insurance covering real and personal property
owned or leased by it against theft, damage, destruction, acts of vandalism and
all other material risks customarily insured against, all of which insurance is
in full force and effect. Neither the Company nor the Bank has any reason to
believe that it will not be able to renew existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its respective business.
(aa) The conditions for use of Form S-3, as set forth in the
General Instructions thereto, have been satisfied.
(bb) The documents incorporated or deemed to be incorporated by
reference in the Registration Statement or the Prospectus, at the time they were
or hereafter are filed with the Commission, complied and will comply in all
material respects with the requirements of the Exchange Act and the rules and
regulations of the Commission under the Exchange Act, and, when read together
with the other information in the Prospectus, at the time the Registration
Statement and any amendments thereto become effective and at the Closing Date
and the Additional Closing Date, if any, 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, in the light of the circumstances
under which they were made, not misleading.
(cc) The descriptions in the Registration Statement and the
Prospectus of the contracts, leases and other legal documents therein described
present fairly the information required to be shown, and there are no contracts,
leases or other documents of a character required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement which are not described or filed as required.
(dd) The Bank is a member in good standing of the FHLB of
Atlanta, and the Bank's deposit accounts are insured by the FDIC to the fullest
extent provided under applicable law. No proceeding for the termination or
revocation of such insurance is pending or, to the knowledge of the Company or
the Bank, threatened.
(ee) The Company will comply with Rule 463 of the Regulations.
2. REPRESENTATIONS AND WARRANTIES OF THE SELLING SHAREHOLDER. The
Selling Shareholder represents and warrants to, and agrees with, the
Underwriters and the Company that:
(a) The Selling Shareholder is the lawful owner of the Shares to
be sold by the Selling Shareholder pursuant to this Agreement and has, and on
the Closing Date will have, good and clear title to such Shares, free of all
restrictions on transfer, liens, encumbrances, security interests and claims
whatsoever.
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(b) Upon delivery of and payment for such Shares pursuant to this
Agreement, good and clear title to such Shares will pass to the Underwriters,
free of all restrictions on transfer, liens, encumbrances, security interests
and claims whatsoever.
(c) The Selling Shareholder has, and on the Closing Date will
have, full legal right, power and authority to enter into this Agreement and the
Custody Agreement between the Selling Shareholder and [______________], as
Custodian (the "Custody Agreement") and to sell, assign, transfer and deliver
such Shares in the manner provided herein and therein, and this Agreement and
the Custody Agreement have been duly authorized, executed and delivered by the
Selling Shareholder and each of this Agreement and the Custody Agreement is a
valid and binding agreement of the Selling Shareholder enforceable in accordance
with its terms, except to the extent which rights to indemnity and contribution
provided hereunder may be limited by applicable law.
(d) The power of attorney signed by the Selling Shareholder
appointing [___________] and [____________], or either one of them, as the
Selling Shareholder's attorney-in-fact, to the extent set forth therein with
regard to the transactions contemplated hereby and by the Registration
Statement, the Prospectus and the Custody Agreement, has been duly authorized,
executed and delivered by or on behalf of the Selling Shareholder and is a valid
and binding instrument of the Selling Shareholder enforceable in accordance with
its terms, and, pursuant to such power of attorney, the Selling Shareholder has
authorized [___________] and [____________], or either one of them, to execute
and deliver, except for this Agreement, any document necessary or desirable in
connection with the transactions contemplated hereby and to deliver the Shares
to be sold by the Selling Shareholder pursuant to this Agreement.
(e) The Selling Shareholder has not taken, and will not take,
directly or indirectly, any action designed to, or which might reasonably be
expected to, cause or result in stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the Shares
pursuant to the distribution contemplated by this Agreement, and other than as
permitted by the Act, the Selling Shareholder has not distributed and will not
distribute any prospectus or other offering material in connection with the
offering and sale of the Shares.
(f) The execution, delivery and performance of this Agreement by
the Selling Shareholder, compliance by the Selling Shareholder with all the
provisions hereof and the consummation of the transactions contemplated hereby
will not require any consent, approval, authorization or other order of any
court, regulatory body, administrative agency or other governmental body (except
as such may be required under the Act, state securities laws or Blue Sky laws)
and will not conflict with or constitute a breach of any of the terms or
provisions of, or a default under, the charter or by-laws of the Selling
Shareholder or any agreement, indenture or other instrument to which the Selling
Shareholder is a party or by which the Selling Shareholder or property of the
Selling Shareholder is bound, or violate or conflict with any laws,
administrative regulation or ruling or court decree applicable to the Selling
Shareholder or property of the Selling Shareholder.
(g) The Registration Statement does not, and will not on the
Closing Date (or the Additional Closing Date, if any), contain any untrue
statement of a material fact or omit to state
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any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(h) Neither the Selling Shareholder nor any of the Selling
Shareholder's affiliates directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
or had any other association with (within the meaning of Article I of the Bylaws
of the National Association of Securities Dealers, Inc. (the "NASD")), any
member firm of the NASD.
(i) At any time during the period described in Section 5(a)(ii)
hereof, if there is any change in the information referred to in Section 2(g)
above, the Selling Shareholder will immediately notify you of such change.
(j) The Selling Shareholder has been duly organized and is
validly existing as a federally-chartered stock savings bank under the laws of
the United States.
(k) To the best of the Selling Shareholder's knowledge, all of
the Company's representations and warranties set forth in Section 1 above are
true and correct.
3. PURCHASE, SALE AND DELIVERY OF THE SHARES.
(a) On the basis of the representations, warranties, covenants
and agreements herein contained, but subject to the terms and conditions herein
set forth, the Company and the Selling Shareholder agree to issue and sell, as
applicable, to the Underwriters the number of Firm Shares set forth opposite
their respective names in Schedule II hereto, and the Underwriters, severally
and not jointly, agree to purchase from the Company and the Selling Shareholder,
at a purchase price per share of $[_______], the number of Firm Shares set forth
opposite the respective names of the Underwriters in Schedule I hereto, plus any
additional number of Shares which they may individually become obligated to
purchase pursuant to the provisions of Section 10 hereof.
(b) Payment of the purchase price for and delivery of the Firm
Shares shall be made at the offices of [____________], or at such other place as
shall be agreed upon by you, the Company and the Selling Shareholder, at [_____]
A.M., [_________] time, on the third Business Day (as permitted under Rule
15c6-1 under the Exchange Act) (unless postponed in accordance with the
provisions of Section 10 hereof) following the date of the effectiveness of the
Registration Statement (or, if the Company has elected to rely upon Rule 430A of
the Regulations, the third Business Day (as permitted under Rule 15c6-1 under
the Exchange Act) after the determination of the public offering price of the
Shares), or such other time not later than ten Business Days after such date as
shall be agreed upon by you, the Company and the Selling Shareholder (such time
and date of payment and delivery being herein called the "Closing Date"). As
used herein, the term "Business Day" means any day other than a day on which
banks are permitted or required to be closed in New York City. Payment shall be
made by wire transfer in same day funds against delivery to you at the offices
of Bear, ▇▇▇▇▇▇▇ & Co. Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ for the
respective accounts of the Underwriters of certificates for the Shares to be
purchased by them. Certificates for the Shares shall be registered in such name
or names and in such authorized denominations as you may request in
10
writing at least two full Business Days prior to the Closing Date. The Company
and the Selling Shareholder shall permit you to examine and package such
certificates for delivery at least one full Business Day prior to the Closing
Date.
(c) In addition, the Company hereby grants to the Underwriters
the option to purchase up to 355,500 Additional Shares at the same purchase
price per share to be paid by the Underwriters to the Company and the Selling
Shareholder for the Firm Shares as set forth in this Section 3, for the sole
purpose of covering over-allotments in the sale of Firm Shares by the
Underwriters. This option may be exercised at any time, or from time to time, in
whole or in part, on or before the thirtieth day following the date of the
Prospectus, by written notice by you to the Company. Such notice shall set forth
the aggregate number of Additional Shares as to which the option is being
exercised and the date and time, as reasonably determined by you, when the
Additional Shares are to be delivered (such date and time herein referred to as
the "Additional Closing Date"); PROVIDED, HOWEVER, that an Additional Closing
Date shall not be earlier than the Closing Date or earlier than the second full
Business Day after the date on which the option shall have been exercised nor
later than the eighth full Business Day after the date on which the option shall
have been exercised (unless such time and date are postponed in accordance with
the provisions of Section 10 hereof). Certificates for the Additional Shares
shall be registered in such name or names and in such authorized denominations
as you may request in writing at least two full Business Days prior to the
Additional Closing Date. The Company shall permit you to examine and package
such certificates for delivery at least one full Business Day prior to the
Additional Closing Date.
The number of Additional Shares to be sold to each Underwriter shall be
the number which bears the same ratio to the aggregate number of Additional
Shares being purchased as the number of Firm Shares set forth opposite the name
of such Underwriter in Schedule I hereto (or such number increased as set forth
in Section 10 hereof) bears to [__________], subject, however, to such
adjustments to eliminate any fractional shares as you in your sole discretion
shall make.
Payment of the purchase price for the Additional Shares shall be made
to the Company by wire transfer in same day funds at the offices of [________],
or at such other place as shall be agreed upon by you and the Company, against
delivery to you at the offices of Bear, ▇▇▇▇▇▇▇ & Co. Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ for the respective accounts of the Underwriters of
certificates for the Additional Shares to be purchased by them.
4. OFFERING. Upon your authorization of the release of the Firm Shares,
the Underwriters propose to offer the Shares for sale to the public upon the
terms set forth in the Prospectus.
5. COVENANTS OF THE COMPANY; COVENANTS OF THE SELLING SHAREHOLDER.
(a) The Company covenants and agrees with the Underwriters that:
(i) If the Registration Statement has not yet been declared
effective, the Company will use its best efforts to cause the
Registration Statement and any amendments thereto to become effective
as promptly as possible, and if Rule 430A is
11
used or the filing of the Prospectus is otherwise required under Rule
424(b) or Rule 434, the Company will file the Prospectus (properly
completed if Rule 430A has been used) pursuant to Rule 424(b) or Rule
434 within the prescribed time period and will provide evidence
satisfactory to you of such timely filing. If the Company elects to
rely on Rule 434, the Company will prepare and file a term sheet that
complies with the requirements of Rule 434.
The Company will notify you immediately (and, if requested by you, will
confirm such notice in writing) (i) when the Registration Statement and any
amendments thereto become effective, (ii) of any request by the Commission for
any amendment of or supplement to the Registration Statement or the Prospectus
or for any additional information, (iii) of the mailing or the delivery to the
Commission for filing of any amendment of or supplement to the Registration
Statement or the Prospectus, (iv) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto or of the initiation, or the threatening, of
any proceedings therefor, (v) of the receipt of any comments from the
Commission, and (vi) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Shares for sale in any
jurisdiction or the initiation or threatening of any proceeding for that
purpose. If the Commission shall propose or enter a stop order at any time, the
Company will make every reasonable effort to prevent the issuance of any such
stop order and, if issued, to obtain the lifting of such order as soon as
possible. The Company will not file any amendment to the Registration Statement,
any filing under Rule 462(b) of the Regulations, or any amendment of or
supplement to the Prospectus (including the prospectus required to be filed
pursuant to Rule 424(b) or Rule 434 of the Regulations) that differs from the
prospectus on file at the time of the effectiveness of the Registration
Statement before or after the effective date of the Registration Statement or
file any document under the Exchange Act if such document would be deemed to be
incorporated by reference into the Prospectus to which you shall reasonably
object in writing after being timely furnished in advance a copy thereof.
(ii) If at any time when a prospectus relating to the Shares
is required to be delivered under the Act any event shall have occurred
as a result of which the Prospectus as then amended or supplemented
would, in the judgment of the Underwriters or the Company, include an
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, or if it shall be necessary at any time to amend or
supplement the Prospectus or Registration Statement to comply with the
Act or the Regulations, or to file under the Exchange Act so as to
comply therewith any document incorporated by reference in the
Registration Statement or the Prospectus or in any amendment thereof or
supplement thereto, the Company will notify you promptly and prepare
and file with the Commission an appropriate amendment or supplement (in
form and substance satisfactory to you) which will correct such
statement or omission or which will effect such compliance and will use
its best efforts to have any amendment to the Registration Statement
declared effective as soon as possible.
(iii) The Company will promptly deliver to you three signed
copies of the Registration Statement, including exhibits and all
documents incorporated by
12
reference therein and all amendments thereto, and the Company will
promptly deliver to each of the Underwriters such number of copies of
any preliminary prospectus, the Prospectus, the Registration Statement,
all amendments of and supplements to such documents, if any, and all
documents incorporated by reference in the Registration Statement and
Prospectus or any amendment thereof or supplement thereto, without
exhibits, as you may reasonably request.
(iv) The Company will endeavor in good faith, in cooperation
with you, at or prior to the time of effectiveness of the Registration
Statement, to qualify the Shares for offering and sale under the
securities laws relating to the offering or sale of the Shares of such
jurisdictions as you may designate and to maintain such qualification
in effect for so long as required for the distribution thereof; except
that in no event shall the Company be obligated in connection therewith
to qualify as a foreign corporation or to execute a general consent to
service of process.
(v) The Company will make generally available (within the
meaning of Section 11(a) of the Act) to its security holders and to you
as soon as practicable, but not later than 45 days after the end of its
fiscal quarter in which the first anniversary date of the effective
date of the Registration Statement occurs, an earning statement (in
form complying with the provisions of Rule 158 of the Regulations)
covering a period of at least twelve consecutive months beginning after
the effective date of the Registration Statement.
(vi) During the period of 180 days from the date of the
Prospectus, the Company will not, without the prior written consent of
Bear, ▇▇▇▇▇▇▇ & Co. Inc., directly or indirectly, issue, sell, offer or
agree to sell, except pursuant to any stock option or incentive plan
described in the Prospectus or the sale of Shares hereunder, grant any
option for the sale of, pledge, make any short sale, establish an open
"put equivalent position" within the meaning of Rule 16a-1(h) under the
Exchange Act or otherwise dispose of or transfer, whether directly or
synthetically, any shares of Common Stock or any securities convertible
into, or exchangeable or exercisable for Common Stock, except as
provided in Section 3 of this Agreement, and the Company will obtain
the undertaking of each of its officers and directors who is not a
Selling Shareholder and such of its other shareholders as have been
heretofore designated by you and listed in Schedule III attached hereto
not to engage in any of the aforementioned transactions on their own
behalf.
(vii) During a period of three years from the effective date
of the Registration Statement, the Company will furnish to you copies
of (A) all reports to its shareholders and (B) all reports, financial
statements and proxy or information statements filed by the Company
with the Commission or any national securities exchange.
(viii) The Company will apply the proceeds from the sale of
the Shares as set forth under "Use of Proceeds" in the Prospectus.
13
(ix) The Company will use its best efforts to cause the Common
Stock and the Shares to be quoted on the Nasdaq National Market and to
maintain such quotation so long as any of the Common Stock or Shares
are outstanding.
(x) The Company, during the period when the Prospectus is
required to be delivered under the Act or the Exchange Act, will file
all documents required to be filed with the Commission pursuant to
Section 13, 14 or 15 of the Exchange Act within the time periods
required by the Exchange Act and the rules and regulations thereunder.
(xi) The Company is familiar with the Investment Company Act
of 1940, as amended, and the rules and regulations thereunder, and has
in the past conducted its affairs, and will in the future conduct its
affairs, in such a manner so as to ensure that the company was not and
will not be an "investment company" or an entity "controlled" by an
"investment company" within the meaning of the Investment Company Act
of 1940, as amended.
(xii) The Company will not take, prior to the termination of
the underwriting syndicate contemplated by this Agreement, directly or
indirectly, any action designed to cause or result in, or which
constitutes or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the shares of Common
Stock to facilitate the sale or resale of the Shares.
(xiii) The Company will use its best efforts to do and perform
all things required or necessary to be done and performed under this
Agreement by the Company prior to or after the Closing Date or any
Additional Closing Date, as the case may be, and to satisfy all
conditions precedent to the delivery of the Shares.
(b) The Selling Shareholder covenants and agrees with the
Underwriters that:
(i) During the period of 365 days from the date of the
Prospectus, the Seller Shareholder will not, without the prior written
consent of Bear, ▇▇▇▇▇▇▇ & Co. Inc., directly or indirectly, issue,
sell, offer or agree to sell, except pursuant to any stock option or
incentive plan described in the Prospectus or the sale of Shares
hereunder, grant any option for the sale of, pledge, make any short
sale, establish an open "put equivalent position" within the meaning of
Rule 16a-1(h) under the Exchange Act or otherwise dispose of or
transfer, whether directly or synthetically, any shares of Common Stock
or any securities convertible into, or exchangeable or exercisable for
Common Stock, except as provided in Section 3 of this Agreement.
(ii) The Selling Shareholder will not take, prior to the
termination of the underwriting syndicate contemplated by this
Agreement, directly or indirectly, any action designed to cause or
result in, or which constitutes or which might reasonably be expected
to constitute, the stabilization or manipulation of the price of the
shares of Common Stock to facilitate the sale or resale of the Shares.
6. PAYMENT OF EXPENSES. Whether or not the transactions contemplated by
this Agreement are consummated or this Agreement is terminated, the Company
hereby agrees to pay all costs and expenses incident to the performance of the
obligations of the Company and the
14
Selling Shareholder hereunder, including those in connection with (i) preparing,
printing, duplicating, filing and distributing the Registration Statement, as
originally filed and all amendments thereof (including all exhibits thereto),
any preliminary prospectus, the Prospectus and any amendments or supplements
thereto (including, without limitation, fees and expenses of the Company's
accountants and counsel), the underwriting documents (including this Agreement
and the Master Agreement among Underwriters and the Master Selling Agreement)
and all other documents related to the public offering of the Shares (including
those supplied to the Underwriters in quantities as hereinabove stated), (ii)
the issuance, transfer and delivery of the Shares to the Underwriters, including
any transfer or other taxes payable thereon, (iii) the qualification of the
Shares under state or foreign securities or Blue Sky laws, including the costs
of printing and mailing any preliminary or final "Blue Sky Survey" and the fees
of counsel for the Underwriters and such counsel's disbursements in relation
thereto, (iv) quotation of the Shares on the Nasdaq National Market, (v) filing
fees of the Commission and the NASD, (vi) the cost of printing certificates
representing the Shares, (vii) the cost and charges of any transfer agent or
registrar, (viii) the fees and disbursement of the Company's accountants and the
fees and expenses of counsel for the Company and the Selling Shareholder, (ix)
all miscellaneous expenses referred to in Part II of the Registration Statement,
(x) costs related to travel and lodging incurred by the Company and its
representatives relating to meetings with and presentations to prospective
purchasers of the Shares reasonably determined by the Underwriters to be
necessary or desirable to effect the sale of the Shares to the public and (xi)
all other costs and expenses incident to the performance of the Company's and
the Selling Shareholder's obligations hereunder (including costs incurred in
closing the purchase of the Additional Shares, if any) that are not otherwise
specifically provided for in this section
7. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the
Underwriters to purchase and pay for the Firm Shares and the Additional Shares,
as provided herein, shall be subject to the accuracy of the representations and
warranties of the Company and the Selling Shareholder herein contained, as of
the date hereof and as of the Closing Date (for purposes of this Section 7,
"Closing Date" shall refer to the Closing Date for the Firm Shares and any
Additional Closing Date, if different, for the Additional Shares), to the
absence from any certificates, opinions, written statements or letters furnished
to you or to ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP ("Underwriters' Counsel") pursuant to this
Section 7 of any misstatement or omission, to the performance by the Company and
the Selling Shareholder of their respective obligations hereunder, and to the
following additional conditions:
(a) The Registration Statement, including any Rule 462(b)
Registration Statement, shall have become effective and all necessary approvals
of the Nasdaq National Market shall have been received not later than, if
pricing pursuant to Rule 430A, 5:30 P.M., New York City time, on the date of
this Agreement, or at such later time and date as shall have been consented to
in writing by you; if the Company shall have elected to rely upon Rule 430A or
Rule 434 of the Regulations, the Prospectus shall have been filed with the
Commission in a timely fashion in accordance with Section 5(a)(i) hereof; and at
or prior to the Closing Date, no stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereof shall have been
issued and no proceedings therefor shall have been initiated or threatened by
the Commission.
15
(b) All the representations and warranties of the Selling
Shareholder contained in this Agreement shall be true and correct on the Closing
Date with the same force and effect as if made on and as of the Closing Date,
and you shall have received a certificate to such effect, dated the Closing
Date, from the Selling Shareholder.
(c) At the Closing Date, you shall have received the opinion of
Powell, Goldstein, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, counsel for the Company, dated the
Closing Date, addressed to the Underwriters and in form and substance
satisfactory to Underwriters' Counsel, to the effect that:
(i) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation. The Company is duly qualified and in
good standing as a foreign corporation in each jurisdiction in which
the character or location of its properties (owned, leased or licensed)
or the nature or conduct of its business makes such qualification
necessary, except for those failures to be so qualified or in good
standing which will not in the aggregate have a Material Adverse Effect
on the Company and the Bank taken as a whole. The Company is duly
registered under [THE SLHCA AND] the GBHCA. Neither the Company nor the
Bank is subject to any current formal arrangement or memorandum of
understanding with, or cease and desist order by, any banking or
similar agency.
(ii) The Bank has been duly organized and is validly existing
as a federally-chartered stock savings bank under the laws of the
United States. The Bank is duly qualified and in good standing as a
foreign corporation in each jurisdiction in which the character or
location of its properties (owned, leased or licensed) or the nature or
conduct of its business makes such qualification necessary, except for
those failures to be so qualified or in good standing which will not in
the aggregate have a Material Adverse Effect on the Bank. The Bank is a
member in good standing of the FHLB of Atlanta, and the Bank's deposit
accounts are insured by the FDIC and, to such counsel's knowledge, no
proceeding for the termination or revocation of such insurance is
pending or threatened.
(iii) Each of the Company and the Bank has all requisite
corporate authority to own, lease and license its properties and
conduct its business as now being conducted and as described in the
Registration Statement and the Prospectus. All of the outstanding
shares of capital stock of the Bank have been duly and validly issued,
are fully paid and nonassessable and are owned directly or indirectly
by the Company, free and clear of any lien, encumbrance, claim,
security interest, restriction on transfer, shareholders' agreement,
voting trust or other defect of title whatsoever, and none of such
shares was issued in violation of or is now subject to any preemptive
or similar rights.
(iv) The Company had, at [__________], 1999, authorized
capital stock as set forth in the Registration Statement and the
Prospectus. All of the outstanding shares of capital stock of the
Company (including the Shares to be sold by the Selling Shareholder)
are duly and validly authorized and issued, are fully paid and
nonassessable, and none of such shares was issued in violation of or is
now subject to any preemptive or similar rights. The Shares have been
duly and validly authorized and, when delivered by the Company in
accordance with this Agreement, will be duly and validly issued, fully
16
paid and nonassessable and will not have been issued in violation of or
be subject to any preemptive or similar rights. The Common Stock, the
Firm Shares and the Additional Shares conform to the descriptions
thereof contained in the Registration Statement and the Prospectus.
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. All offers and sales of the Company's capital stock prior
to the date hereof were at all relevant times duly registered under the
Act or were exempt from the registration requirements of the Act and
were duly registered or the subject of an available exemption from the
registration requirements of the applicable state securities or Blue
Sky laws, provided, however, that such counsel need not express any
option with respect to the registration or availability of an exemption
under applicable state securities or Blue Sky laws for shares of Common
stock issued pursuant to an underwritten public offering.
(v) The Common Stock currently outstanding is listed, and the
Shares to be sold under this Agreement to the Underwriters are duly
authorized for listing, on the Nasdaq National Market.
(vi) This Agreement has been duly and validly authorized,
executed and delivered by the Company and is a valid and binding
agreement of the Company.
(vii) There is no litigation or governmental or other action,
suit, proceeding or investigation before any court or before or by any
public, regulatory or governmental agency or body pending or, to the
best of such counsel's knowledge, threatened against, or involving the
respective properties or businesses of, the Company or the Bank which
is of a character required to be disclosed in the Registration
Statement and the Prospectus which has not been properly disclosed
therein.
(viii) The execution, delivery, and performance of this
Agreement and the consummation of the transactions contemplated hereby
by the Company do not and will not (A) conflict with or result in a
breach of any of the terms and provisions of, or constitute a default
(or an event which with notice or lapse of time, or both, would
constitute a default) under, require approval or consent under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of either of the Company or the Bank
pursuant to, any agreement, instrument, franchise, license or permit
known to such counsel to which either of the Company or the Bank is a
party or by which any of such persons or its respective properties or
assets may be bound or (B) violate or conflict with any provision of
the charter or by-laws of either of the Company or the Bank, or, to the
best knowledge of such counsel, any judgment, decree, order, statute,
rule or regulation of any court or any public, governmental or
regulatory agency or body having jurisdiction over either of the
Company or the Bank or any of its respective properties or assets. No
consent, approval, authorization, order, registration, filing,
qualification, license or permit of or with any court or any public,
governmental, or regulatory agency or body having jurisdiction over
either of the Company or the Bank, or any of its respective properties
or assets, is required for the execution, delivery and performance of
this Agreement or the consummation of the transactions contemplated
hereby, including the issuance, sale and delivery of the Shares, except
(1) such consents,
17
approvals, authorizations, orders, registrations, filings,
qualifications, licenses and permits as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution of the Shares by the Underwriters (as to which such
counsel need express no opinion) and (2) such as have been made or
obtained under the Act.
(ix) The Company is not, and upon consummation of the
transactions contemplated hereby will not be, subject to registration
as an "investment company" under the Investment Company Act of 1940, as
amended.
(x) The Registration Statement and the Prospectus and any
amendments thereof or supplements thereto (other than the financial
statements and schedules and other financial data included or
incorporated by reference therein, as to which no opinion need be
rendered) comply as to form in all material respects with the
requirements of the Act and the Regulations. The documents filed under
the Exchange Act and incorporated by reference in the Registration
Statement and the Prospectus or any amendment thereof or supplement
thereto (other than the financial statements and schedules and other
financial data included or incorporated by reference therein, as to
which no opinion need be rendered) when they became effective or were
filed with the Commission, as the case may be, complied as to form in
all material respects with the Act or the Exchange Act, as applicable,
and the rules and regulations of the Commission thereunder; and such
counsel has no reason to believe that any of such documents, when such
documents became effective or were so filed, as the case may be,
contained, in the case of a registration statement which became
effective under the Act, 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, in the case
of other documents which were filed under the Exchange Act with the
Commission, an untrue statement of a material fact or omitted to state
a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made when such
documents were so filed, not misleading.
(xi) The Registration Statement is effective under the Act,
all filings required by Rule 424(b) of the Regulations have been made
and, to the best knowledge of such counsel, no stop order suspending
the effectiveness of the Registration Statement or any post-effective
amendment thereof or supplement thereto has been issued and no
proceedings therefor have been initiated or threatened by the
Commission.
(xii) Except as disclosed in or specifically contemplated by
the Registration Statement and the Prospectus, to such counsel's
knowledge, there are no outstanding options, warrants or other rights
calling for the issuance of, and no commitments, obligations, plans or
arrangements to issue, any shares of capital stock of the Company or
any security convertible into or exchangeable for capital stock of the
Company. The outstanding stock options relating to the Common Stock
have been duly authorized and validly issued and conform to the
descriptions thereof contained in the Registration Statement and the
Prospectus.
(xiii) The statements in the Registration Statement and the
Prospectus under the captions "The Company", "Business-- the Net.B@nk
Solution, -- Lending and
18
Investment Activities Security, --Supervision and Regulation, --Legal
Proceedings", "Management", "Relationship with Carolina First
Corporation", "Description of Capital Stock", "Legal Matters" and in
Item 15 of Part II of the Registration Statement, insofar as such
statements constitute a summary of the terms of the Shares, legal
matters, documents or proceedings referred to therein, fairly present
the information called for with respect to such terms, legal matters,
documents or proceedings.
(xiv) The form of certificate used to evidence the Common
Stock complies in all material respects with all applicable statutory
requirements, with any applicable requirements of the certificate of
incorporation and by-laws of the Company and the requirements of the
Nasdaq National Market.
(xv) Each of the Company and the Bank has good and marketable
title in fee simple to all items of personal property owned by it, in
each case free and clear of all liens, encumbrances and defects except
such as are described or referred to in the Registration Statement or
the Prospectus or such as do not materially affect the value of such
property and do not interfere with the use made or proposed to be made
of such property by the Company or the Bank, respectively. Any real
property and buildings held under lease by either of the Company or the
Bank is held under valid, existing and enforceable leases with such
exceptions as are not material and do not interfere with the use made
or proposed to be made of such property and buildings by the Company or
the Bank, respectively.
(xvi) The descriptions in the Registration Statement and the
Prospectus of the contracts, leases and other legal documents therein
described present fairly the information required to be shown and there
are no contracts, leases or other documents known to such counsel of a
character required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
which are not described or filed as required.
(xvii) Except as described in the Prospectus, no holder of
securities of the Company has any rights to the registration of
securities of the Company as a result of the filing of the Registration
Statement or the Prospectus or otherwise in connection with the sale of
the Shares contemplated hereby.
In addition, such opinion shall also contain a statement that such
counsel has participated in conferences with officers and representatives of the
Company, representatives of the independent public accountants for the Company
and the Underwriters at which the contents of the Registration Statement and the
Prospectus and related matters were discussed and that no facts have come to the
attention of such counsel which would lead such counsel to believe that either
the Registration Statement at the time it became effective (including the
information deemed to be part of the Registration Statement at the time of
effectiveness pursuant to Rule 430A(b) or Rule 434, if applicable), or any
amendment thereof made prior to the Closing Date as of the date of such
amendment, contained an untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus as of its date (or any
amendment thereof or supplement thereto made prior to the Closing Date as of the
date of such amendment or supplement) and as
19
of the Closing Date contained or contains an untrue statement of a material fact
or omitted or omits to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading (it being understood that such
counsel need express no belief or opinion with respect to the financial
statements and schedules and other financial data included or incorporated by
reference therein).
(d) At the Closing Date, you shall have received the opinion of
Wyche, Burgess, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇,P.A., counsel for the Selling Shareholder,
dated the Closing Date, addressed to the Underwriters and in form and substance
satisfactory to Underwriters' Counsel, to the effect that:
(i) The Selling Shareholder has full legal right, power and
authority, and any approval required by law (other than any approval
imposed by the applicable state securities and Blue Sky laws), to sell,
assign, transfer and deliver the Shares to be sold by the Selling
Shareholder in the manner provided in this Agreement and the Custody
Agreement.
(ii) The Selling Shareholder has good and clear title to the
certificates for the Shares to be sold by the Selling Shareholder, and
upon delivery thereof pursuant hereto and payment therefor, good and
clear title will pass to the Underwriters, severally, free of all
restrictions on transfer, liens, encumbrances, security interests and
claims whatsoever.
(iii) This Agreement has been duly and validly authorized,
executed and delivered by the Selling Shareholder and is a valid and
binding agreement of the Selling Shareholder.
(iv) The Custody Agreement has been duly authorized, executed
and delivered by the Selling Shareholder and is a valid and binding
agreement of the Selling Shareholder enforceable in accordance with its
terms.
(v) The power of attorney signed by the Selling Shareholder
appointing [__________] and [_________], or either of them, as the
Selling Shareholder's attorney-in-fact, to the extent set forth therein
with regard to the transactions contemplated hereby and by the
Registration Statement, has been duly authorized, executed and
delivered by or on behalf of the Selling Shareholder and is the valid
and binding instrument of the Selling Shareholder enforceable in
accordance with its terms, and pursuant to such power of attorney, the
Selling Shareholder has authorized [___________] and [_________], or
either of them, to execute and deliver on the Selling Shareholder's
behalf this Agreement and any other document necessary or desirable in
connection with the transactions contemplated hereby and to deliver the
Shares to be sold by the Selling Shareholder pursuant to this
Agreement.
(vi) The Selling Shareholder has been duly organized and is
validly existing as a federally-chartered stock savings bank under the
laws of the United States.
(vii) The execution, delivery and performance of this
Agreement by the Selling Shareholder, compliance by the Selling
Shareholder with all the provisions hereof
20
and the consummation of the transactions contemplated hereby will not
require any consent, approval, authorization or other order of any
court, regulatory body, administrative agency or other governmental
body (except as such may be required under the Act, state securities
laws or Blue Sky laws) and will not conflict with or constitute a
breach of any of the terms or provisions of, or a default under, the
charter or by-laws of the Selling Shareholder or any agreement,
indenture or other instrument to which the Selling Shareholder is a
party or by which the Selling Shareholder or property of the Selling
Shareholder is bound, or violate or conflict with any laws,
administrative regulation or ruling or court decree applicable to the
Selling Shareholder or property of the Selling Shareholder.
In rendering each of such opinions, such counsel may rely (A) as to
matters involving the application of laws other than the laws of the United
States and jurisdictions in which they are admitted, to the extent such counsel
deems proper and to the extent specified in such opinion, if at all, upon an
opinion or opinions (in form and substance reasonably satisfactory to
Underwriters' Counsel) of other counsel reasonably acceptable to Underwriters'
Counsel, familiar with the applicable laws; (B) as to matters of fact, to the
extent they deem proper, on certificates of responsible officers of the Company
and certificates or other written statements of officers of departments of
various jurisdictions having custody of documents respecting the corporate
existence or good standing of the Company and the Bank, provided that copies of
any such statements or certificates shall be delivered to Underwriters' Counsel.
The opinion of counsel for the Company shall state that the opinion of any such
other counsel is in form satisfactory to such counsel and, in their opinion, you
and they are justified in relying thereon.
(e) All proceedings taken in connection with the sale of the Firm
Shares and the Additional Shares as hereby contemplated shall be satisfactory in
form and substance to you and to Underwriters' Counsel, and the Underwriters
shall have received from said Underwriters' Counsel a favorable opinion, dated
as of the Closing Date, with respect to the issuance and sale of the Shares, the
Registration Statement and the Prospectus and such other related matters as you
may reasonably require, and the Company and the Selling Shareholder shall have
furnished to Underwriters' Counsel such documents as they request for the
purpose of enabling them to pass upon such matters.
(f) At the Closing Date you shall have received a certificate of
the Chief Executive Officer and Chief Financial Officer of the Company, dated
the Closing Date, to the effect that (i) the condition set forth in subsection
(a) of this Section 7 has been satisfied, (ii) as of the date hereof and as of
the Closing Date, the representations and warranties of the Company set forth in
Section 1 hereof are accurate, (iii) as of the Closing Date, the obligations of
the Company to be performed hereunder on or prior thereto have been duly
performed and (iv) subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, the Company and the Bank
have not sustained any material loss or interference with their respective
businesses or properties from fire, flood, hurricane, accident or other
calamity, whether or not covered by insurance, or from any labor dispute or any
legal or governmental proceeding, and there has not been any prospective
material adverse change, or any development involving a material adverse change,
in the business prospects, properties, operations, condition (financial or
otherwise), or results of operations of the Company and the Bank taken as a
whole, except in each case as described in or contemplated by the Prospectus.
21
(g) At the time this Agreement is executed and at the Closing
Date, you shall have received a letter from Deloitte & Touche LLP, independent
public accountants for the Company, dated, respectively, as of the date of this
Agreement and as of the Closing Date addressed to the Underwriters and in form
and substance satisfactory to you, stating that they are independent certified
public accountants with respect to the Company within the meaning of the Act and
the Regulations and that the answer to Item 10 of the Registration Statement is
correct insofar as it relates to them and that they have performed a review of
the unaudited interim financial information of the Company for the nine-month
period ended September 30, 1998, and as at September 30, 1998, in accordance
with Statements on Auditing Standards No. 71 and stating in effect that:
(i) in their opinion, the audited financial statements and
schedules of the Company included in and incorporated by reference in
the Registration Statement and the Prospectus and covered by their
opinion therein comply as to form in all material respects with the
applicable accounting requirements of the Act and the Exchange Act and
the applicable published rules and regulations of the Commission
thereunder;
(ii) on the basis of procedures consisting of a reading of the
latest available unaudited interim consolidated financial statements of
the Company and the Bank, their limited review (in accordance with
standards established under Statement of Accounting Standards No. 71)
of the unaudited financial information for the nine-month period ended
September 30, 1998 (and as at September 30, 1998), carrying out certain
procedures (but not an examination in accordance with generally
accepted auditing standards) which would not necessarily reveal matters
of significance with respect to the comments set forth in such letter,
a reading of the minutes of meetings and consents of the shareholders
and boards of directors of the Company and the Bank and the committees
of such boards subsequent to December 31, 1997, inquiries of officers
and other employees of the Company and the Bank who have responsibility
for financial and accounting matters of the Company and the Bank with
respect to transactions and events subsequent to December 31, 1997 to a
date not more than five days prior to the date of such letter, nothing
has come to their attention that would cause them to believe that: (A)
the unaudited consolidated financial statements and schedules of the
Company presented in the Registration Statement and the Prospectus do
not comply as to form in all material respects with the applicable
accounting requirements of the Act and, if applicable, the Exchange Act
and the applicable published rules and regulations of the Commission
thereunder or that such unaudited consolidated financial statements are
not fairly presented in conformity with GAAP, except to the extent
certain footnote disclosures have been omitted in accordance with
applicable rules of the Commission under the Exchange Act, applied on a
basis substantially consistent with that of the audited consolidated
financial statements incorporated by reference in the Registration
Statement and the Prospectus; (B) with respect to the period subsequent
to September 30, 1998, there was, as of the date of the most recent
available monthly consolidated financial statements of the Company and
the Bank, and as of a specified date not more than five days prior to
the date of such letter, any increase in deposits of the Company or any
decrease in total assets or shareholders' equity of the Company, in
each case as compared with the amounts shown in the September 30, 1998
balance sheet incorporated by reference in the Registration Statement
and the Prospectus, except for increases or
22
decreases which the Registration Statement and the Prospectus disclose
have occurred or may occur or which are set forth in such letter; or
(C) that during the period from October 1, 1998 to the date of the most
recent available monthly consolidated financial statements of the
Company and the Bank, and to a specified date not more than five days
prior to the date of such letter, there was any decrease, as compared
with the corresponding period in the prior fiscal year, in net interest
income, non-interest income or net income, except for decreases which
the Registration Statement and the Prospectus disclose have occurred or
may occur or which are set forth in such letter; and
(iii) they have compared specific dollar amounts, numbers of
shares, percentages of revenues and earnings and other financial
information pertaining to the Company and its subsidiary set forth in
the Registration Statement and the Prospectus, which have been
specified by you prior to the date of this Agreement, to the extent
that such amounts, numbers, percentages and information may be derived
from the general accounting and financial records of the Company and
the Bank or from schedules furnished by the Company, and excluding any
questions requiring an interpretation by legal counsel, with the
results obtained from the application of specified readings, inquiries,
and other appropriate procedures specified by you set forth in such
letter, and found them to be in agreement.
(h) Prior to the Closing Date, the Company and the Selling
Shareholder shall have furnished to you such further information, certificates
and documents as you may reasonably request.
(i) You shall have received from each person who is a director or
officer of the Company and such shareholders as have been heretofore designated
by you and listed in Schedule III hereto, an agreement to the effect that such
person will not, without the prior written consent of Bear, ▇▇▇▇▇▇▇ & Co. Inc.,
directly or indirectly, sell, offer or agree to sell, grant any option for the
sale of, pledge, make any short sale, establish an open "put equivalent
position" within the meaning of Rule 16a-1(h) under the Exchange Act or
otherwise dispose of any shares of Common Stock or any securities convertible
into, or exchangeable or exercisable for Common Stock (or securities which are
convertible into, exercisable for or exchangeable for Common Stock) for a period
of 180 days after the date of the Prospectus.
(j) At the Closing Date, the Common Stock and the Shares shall
have been approved for listing on the Nasdaq National Market.
(k) The Bank shall have guaranteed the obligations of the Company
under this agreement, in such form that is reasonably satisfactory to you.
If any of the conditions specified in this Section 7 shall not have
been fulfilled when and as required by this Agreement, or if any of the
certificates, opinions, written statements or letters furnished to you or to
Underwriters' Counsel pursuant to this Section 7 shall not be in all material
respects reasonably satisfactory in form and substance to you and to
Underwriters' Counsel, all obligations of the Underwriters hereunder may be
cancelled by you on, or at any time prior to, the Closing Date and the
obligations of the Underwriters to purchase the Additional Shares may be
cancelled by you on, or at any time prior to, the Additional Closing Date.
Notice
23
of such cancellation shall be given to the Company in writing or by telephone,
facsimile, telex or telegraph, confirmed in writing.
8. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act against
any and all losses, liabilities, claims, damages and expenses whatsoever as
incurred (including but not limited to attorneys' fees and any and all expenses
whatsoever incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim whatsoever, and any and all
amounts paid in settlement of any claim or litigation), joint or several, to
which it may become subject under the Act, the Exchange Act or otherwise,
insofar as such losses, liabilities, claims, damages or expenses (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement, as
originally filed or any amendment thereof, or any related preliminary prospectus
or the Prospectus, or in any supplement thereto or amendment thereof, 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; PROVIDED, HOWEVER, that the Company will not be liable
in any such case to the extent, but only to the extent, that any such loss,
liability, claim, damage or expense arises out of or is based upon any such
untrue statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written information
furnished to the Company by or on behalf of any Underwriter through Bear,
▇▇▇▇▇▇▇ & Co. Inc. expressly for use therein. This indemnity agreement will be
in addition to any liability which the Company may otherwise have, including
under this Agreement.
(b) The Selling Shareholder agrees to indemnify and hold harmless
each Underwriter and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act
against any and all losses, liabilities, claims, damages and expenses whatsoever
as incurred (including but not limited to attorneys' fees and any and all
expenses whatsoever incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever, and any and
all amounts paid in settlement of any claim or litigation), joint or several, to
which it may become subject (i) as a result of or based upon any breach of any
warranty or covenant of the Selling Shareholder herein contained or (ii) under
the Act, the Exchange Act or otherwise, insofar as such losses, liabilities,
claims, damages or expenses (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, as originally filed or any amendment
thereof, or any related preliminary prospectus or the Prospectus, or in any
supplement thereto or amendment thereof, 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;
PROVIDED, HOWEVER, that with regard to liability under clause (ii) of this
Section, the Selling Shareholder shall only be liable to the extent that any
such loss, liability, claim, damage or expense arises out of or is based upon
any such untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Underwriter through
Bear, ▇▇▇▇▇▇▇ & Co. Inc. expressly for use therein; PROVIDED, FURTHER, HOWEVER,
that the Selling Shareholder
24
shall be liable hereunder in any case only to the extent of the total net
proceeds from the Underwriters for the Shares sold by the Selling Shareholder.
This indemnity agreement will be in addition to any liability which the Selling
Shareholder may otherwise have, including under this Agreement.
(c) Each Underwriter severally, and not jointly, agrees to
indemnify and hold harmless the Company, each of the directors of the Company,
each of the officers of the Company who shall have signed the Registration
Statement, the Selling Shareholder and each other person, if any, who controls
the Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act against any losses, liabilities, claims, damages and expenses
whatsoever as incurred (including but not limited to attorneys' fees and any and
all expenses whatsoever incurred in investigating, preparing or defending
against any litigation, commenced or threatened, or any claim whatsoever, and
any and all amounts paid in settlement of any claim or litigation), joint or
several, to which they or any of them may become subject under the Act, the
Exchange Act or otherwise, insofar as such losses, liabilities, claims, damages
or expenses (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, as originally filed or any amendment thereof, or any
related preliminary prospectus or the Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that any such loss, liability, claim, damage or
expense arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of any Underwriter through Bear, ▇▇▇▇▇▇▇ & Co Inc. expressly for use
therein; PROVIDED, HOWEVER, that in no case shall any Underwriter be liable or
responsible for any amount in excess of the underwriting discount applicable to
the Shares purchased by such Underwriter hereunder. This indemnity will be in
addition to any liability which any Underwriter may otherwise have, including
under this Agreement. The Company acknowledges that the statements set forth in
the last paragraph of the cover page regarding delivery of the Shares and in the
[______] paragraph[s]] under the caption "Underwriting" in the Prospectus
constitute the only information furnished in writing by or on behalf of any
Underwriter expressly for use in the Registration Statement or in any amendment
thereof, any related preliminary prospectus or the Prospectus or in any
amendment thereof or supplement thereto, as the case may be.
(d) 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 each party against whom
indemnification is to be sought in writing of the commencement of such action
(but the failure to so notify an indemnifying party shall not relieve it from
any liability which it may otherwise have under this Section 8). In case any
such action is brought against any indemnified party, and it notifies an
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein, and to the extent it may elect by written
notice delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof with counsel
satisfactory to such indemnified party. Notwithstanding the foregoing, the
indemnified party or parties shall have the right to employ its or their own
counsel in any such case, but the fees and expenses of such counsel shall
25
be at the expense of such indemnified party or parties unless (i) the employment
of such counsel shall have been authorized in writing by one of the indemnifying
parties in connection with the defense of such action, (ii) the indemnifying
parties shall not have employed counsel to have charge of the defense of such
action within a reasonable time after notice of commencement of the action, or
(iii) such indemnified party or parties shall have reasonably concluded that
there may be defenses available to it or them which are different from or in
addition to those available to one or all of the indemnifying parties (in which
case the indemnifying parties shall not have the right to direct the defense of
such action on behalf of the indemnified party or parties), in any of which
events such fees and expenses shall be borne by the indemnifying parties.
Anything in this subsection to the contrary notwithstanding, an indemnifying
party shall not be liable for any settlement of any claim or action effected
without its written consent; PROVIDED, HOWEVER, that such consent was not
unreasonably withheld.
9. CONTRIBUTION.
(a) In order to provide for contribution in circumstances in
which the indemnification provided for in Section 8 hereof is for any reason
held to be unavailable from any indemnifying party or is insufficient to hold
harmless a party indemnified thereunder, the Company, the Selling Shareholder
and the Underwriters shall contribute to the aggregate losses, claims, damages,
liabilities and expenses of the nature contemplated by such indemnification
provision (including any investigation, legal and other expenses incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claims asserted, but after deducting, in the case of losses,
claims, damages, liabilities and expenses suffered by the Company or the Selling
Shareholder, any contribution received by the Company or the Selling Shareholder
from persons, other than the Underwriters, who may also be liable for
contribution, including persons who control the Company within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act, officers of the
Company who signed the Registration Statement and directors of the Company) as
incurred to which the Company and the Selling Shareholder and one or more of the
Underwriters may be subject, in such proportions as is appropriate to reflect
the relative benefits received by the Company and the Selling Shareholder on the
one hand and the Underwriters on the other hand from the offering of the Shares
or, if such allocation is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to above but
also the relative fault of the Company and the Selling Shareholder on the one
hand and the Underwriters on the other hand in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Selling Shareholder on the one hand and
the Underwriters on the other hand shall be deemed to be in the same proportion
as (x) the total proceeds from the offering (net of underwriting discounts and
commissions but before deducting expenses) received by the Company and the
Selling Shareholder and (y) the underwriting discounts and commissions received
by the Underwriters, respectively, in each case as set forth in the table on the
cover page of the Prospectus. The relative fault of the Company and the Selling
Shareholder on the one hand and of the Underwriters on the other hand 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, the Selling
Shareholder or the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company, the
26
Selling Shareholder and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this Section 9, (i) in no case shall any Underwriter be liable or responsible
for any amount in excess of the underwriting discount applicable to the Shares
purchased by such Underwriter hereunder, and (ii) no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. Notwithstanding the provisions of this Section 9 and the
preceding sentence, no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Shares underwritten
by it and distributed to the public were offered to the public exceeds the
amount of any damages that such Underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. For purposes of this Section 9, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act shall have the same rights to contribution as such Underwriter,
each person, if any, who controls the Company within the meaning of Section 15
of the Act or Section 20(a) of the Exchange Act, each officer of the Company who
shall have signed the Registration Statement and each director of the Company
shall have the same rights to contribution as the Company, subject in each case
to clauses (i) and (ii) of this Section 9. Any party entitled to contribution
will, promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution may
be made against another party or parties, notify each party or parties from whom
contribution may be sought, but the omission to so notify such party or parties
shall not relieve the party or parties from whom contribution may be sought from
any obligation it or they may have under this Section 9 or otherwise. No party
shall be liable for contribution with respect to any action or claim settled
without its consent; PROVIDED, HOWEVER, that such consent was not unreasonably
withheld. Each of the Company and the Selling Shareholder hereby designates CT
Corporation, whose address is ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, as its
authorized agent, upon which process may be served in any action, suit or
proceeding which may be instituted in any state or federal court in the State of
New York by any Underwriter or person controlling an Underwriter asserting a
claim for indemnification or contribution under or pursuant to Section 8 hereof
or this Section 9, and each of the Company and the Selling Shareholder shall
accept the jurisdiction of such court in such action, and waives, to the fullest
extent permitted by applicable law, any defense based upon lack of personal
jurisdiction or venue together with any right to trial by jury. A copy of any
such process shall be sent or given to the Company or the Selling Shareholder at
the address for notices specified in Section 13 hereof.
(b) The obligations of the Company under Sections 8 and 9 herein
shall be in addition to any liability which the Company may otherwise have.
10. DEFAULT BY AN UNDERWRITER.
(a) If any Underwriter or Underwriters shall default in its or
their obligation to purchase Firm Shares or Additional Shares hereunder, and if
the Firm Shares or Additional Shares to which such default relates do not (after
giving effect to arrangements, if any, made by you pursuant to subsection (b)
below) exceed in the aggregate 10% of the total number of Firm
27
Shares or Additional Shares, as the case may be, the Firm Shares or Additional
Shares to which such default relates shall be purchased by the non-defaulting
Underwriters in proportion to the respective proportions which the numbers of
Firm Shares set forth opposite their respective names in Schedule I hereto bear
to the aggregate number of Firm Shares set forth opposite the names of the
non-defaulting Underwriters.
(b) In the event that such default relates to more than 10% of
the total number of Firm Shares or Additional Shares, as the case may be, you
may in your discretion arrange for yourself or for another party or parties
(including any non-defaulting Underwriter or Underwriters who so agree) to
purchase the Firm Shares or Additional Shares to which such default relates on
the terms contained herein. In the event that within five calendar days after
such default you do not arrange for the purchase of the Firm Shares or
Additional Shares to which such default relates as provided in this Section 10,
this Agreement or, in the case of a default with respect to Additional Shares,
the obligations of the Underwriters to purchase, and of the Company to sell, the
Additional Shares shall thereupon terminate without liability on the part of the
Company, the Selling Shareholder (except, in each case, as provided in Section
6, 8(a) and 9 hereof) or the Underwriters with respect thereto, but nothing in
this Agreement shall relieve a defaulting Underwriter or Underwriters of its or
their liability, if any, to the other Underwriters and the Company and the
Selling Shareholder for damages occasioned by its or their default hereunder.
(c) In the event that the Firm Shares or Additional Shares to
which such default relates are to be purchased by the non-defaulting
Underwriters or are to be purchased by another party or parties as aforesaid,
either you on the one hand or the Company and the Selling Shareholder on the
other hand shall have the right to postpone the Closing Date or Additional
Closing Date, as the case may be, for a period not exceeding five Business Days,
in order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus or in any other documents and
arrangements, and the Company agrees to file promptly any amendment or
supplement to the Registration Statement or the Prospectus which, in the opinion
of Underwriters' Counsel, may thereby be made necessary or advisable. The term
"Underwriter" as used in this Agreement shall include any party substituted
under this Section 10 with like effect as if it had originally been a party to
this Agreement with respect to such Firm Shares or Additional Shares, as the
case may be.
11. SURVIVAL OF REPRESENTATIONS AND AGREEMENTS. All representations and
warranties, covenants and agreements of the Underwriters, the Company and the
Selling Shareholder contained in this Agreement, including the agreements
contained in Section 6 hereof, the indemnity agreements contained in Section 8
hereof and the contribution agreements contained in Section 9 hereof, shall
remain operative and in full force and effect regardless of any investigation
made by or on behalf of any Underwriter or any controlling person thereof, by or
on behalf of the Company, any of its officers and directors or any controlling
person thereof or by or on behalf of any of the Selling Shareholder, and shall
survive delivery of and payment for the Shares to and by the Underwriters. The
representations contained in Section 1 and Section 2 hereof and the agreements
contained in Sections 6, 8, 9 and 12(d) hereof shall survive the termination of
this Agreement, including termination pursuant to Section 10 or 12 hereof.
12. EFFECTIVE DATE OF AGREEMENT; TERMINATION.
28
(a) This Agreement shall become effective upon the later of (i)
such time as you and the Company shall have received notification of the
effectiveness of the Registration Statement and (ii) the execution of this
Agreement. If either the public offering price or the purchase price per Share
has not been agreed upon prior to 5:00 P.M., New York City time, on the fifth
full Business Day after the Registration Statement shall have become effective,
this Agreement shall thereupon terminate without liability to the Company or the
Underwriters except as herein expressly provided. Until this Agreement becomes
effective as aforesaid, it may be terminated by the Company by notifying you or
by you notifying the Company. Notwithstanding the foregoing, the provisions of
this Section 12 and of Sections 1, 2, 6, 8 and 9 hereof shall at all times be in
full force and effect.
(b) You shall have the right to terminate this Agreement at any
time prior to the Closing Date or the obligations of the Underwriters to
purchase the Additional Shares at any time prior to the Additional Closing Date,
as the case may be, if (i) any domestic or international event or act or
occurrence has materially disrupted, or in your opinion will in the immediate
future materially disrupt, the market for the Company's securities or securities
in general, (ii) if trading on the New York Stock Exchange, the American Stock
Exchange or the Nasdaq National Market has been suspended, or minimum or maximum
prices for trading have been fixed, or maximum ranges for prices for securities
have been required, on the New York Stock Exchange, the American Stock Exchange
or the Nasdaq National Market by the New York Stock Exchange, the American Stock
Exchange or the Nasdaq Stock Market or by order of the Commission or any other
governmental authority having jurisdiction, (iii) if a banking moratorium has
been declared by a state or federal authority or if any new restriction
materially adversely affecting the distribution of the Firm Shares or the
Additional Shares has become effective, (iv) if any downgrading in the rating of
the Company's debt securities or preferred stock by any "nationally recognized
statistical rating-organization" (as defined for purposes of Rule 436(g) under
the Act has occurred or (v) (A) if the United States becomes engaged in
hostilities or there is an escalation of hostilities involving the United States
or there is a declaration of a national emergency or war by the United States or
(B) if there has been a change in political, financial or economic conditions
and the effect of any such event in (A) or (B), in your judgment, makes it
impracticable or inadvisable to proceed with the offering, sale and delivery of
the Firm Shares or the Additional Shares, as the case may be, on the terms
contemplated by the Prospectus.
(c) Any notice of termination pursuant to this Section 12 shall
be by telephone, facsimile, telex or telegraph, confirmed in writing by letter.
(d) If this Agreement shall be terminated pursuant to any of the
provisions hereof (otherwise than pursuant to (i) notification by you as
provided in Section 12(a) hereof or (ii) Section 10(b) or 12(b) hereof), or if
the sale of the Shares provided for herein is not consummated because any
condition to the obligations of the Underwriters set forth herein is not
satisfied or because of any refusal, inability or failure on the part of the
Company or the Selling Shareholder to perform any agreement herein or comply
with any provision hereof, the Company and the Selling Shareholder, jointly and
severally, agree to reimburse the Underwriters, subject to demand by you, for
all out-of-pocket expenses (including the fees and expenses of their counsel)
incurred by the Underwriters in connection herewith.
29
13. NOTICE. All communications hereunder, except as may be otherwise
specifically provided herein, shall be in writing and, if sent to any
Underwriter, shall be mailed or delivered, or sent by facsimile, telex or
telegraph and confirmed in writing by letter, to such Underwriter c/o Bear,
▇▇▇▇▇▇▇ & Co. Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
[__________], Facsimile No. 212-[__________]; if sent to the Company, shall be
mailed or delivered, or sent by facsimile, telex or telegraph and confirmed in
writing by letter, to the Company, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: [__________], Facsimile No.
818-[__________]; and if sent to the Selling Shareholder, shall be mailed or
delivered, or sent by facsimile, telex or telegraph and confirmed in writing by
letter, to [Attorney-in-Fact] [address of Attorney-in-Fact], Facsimile No.
[__________].
14. AGREEMENTS OF THE SELLING SHAREHOLDER. The Selling Shareholder
severally covenants and agrees with the Underwriters and the Company:
(a) To pay or to cause to be paid all transfer taxes with respect
to the Shares to be sold by the Selling Shareholder; and
(b) To take all reasonable actions in cooperation with the
Company and the Underwriters to cause the Registration Statement to become
effective at the earliest possible time, to do and perform all things to be done
and performed under this Agreement prior to the Closing Date and to satisfy all
conditions precedent to the delivery of the Shares pursuant to this Agreement.
15. PARTIES. This Agreement shall inure solely to the benefit of, and
shall be binding upon, the Underwriters, the Company and the Selling Shareholder
and the controlling persons, directors, officers, employees and agents referred
to in Sections 8 and 9 hereof, and their respective successors and assigns, and
no other person shall have or be construed to have any legal or equitable right,
remedy or claim under or in respect of or by virtue of this Agreement or any
provision contained herein. The term "successors and assigns" shall not include
a purchaser, in its capacity as such, of Shares from any of the Underwriters.
16. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, but without regard to
principles of conflicts of law.
17. COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be an original and all of which together shall constitute one and
the same instrument.
30
If the foregoing correctly sets forth the understanding between you,
the Company and the Selling Shareholder, please so indicate in the space
provided below for that purpose, whereupon this letter shall constitute a
binding agreement among us.
Very truly yours,
NET.B@NK, INC.
By:
Name:
Title:
CAROLINA FIRST CORPORATION
By:
Attorney-in-Fact
31
Accepted as of the date first above written:
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇ & COMPANY, INC.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & ASSOCIATES, INC.
▇▇▇▇▇▇ INTERNATIONAL LTD.
By: Bear, ▇▇▇▇▇▇▇ & Co. Inc.
By:
Name:
Title:
On behalf of themselves and the other
Underwriters named in Schedule I hereto.
32
SCHEDULE I
Number of Firm
NAME OF UNDERWRITER SHARES TO BE PURCHASED
------------------- ----------------------
Bear, ▇▇▇▇▇▇▇ & Co. Inc................................................ [_________]
▇▇▇▇▇▇ ▇▇▇▇▇▇ & Company, Inc........................................... [_________]
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc........................................ [_________]
▇▇▇▇▇▇ International Ltd............................................... [_________]
----------
Total [__________]
SCHEDULE II
Number of Firm
NAME SHARES TO BE SOLD
Company................................................................ [_________]
Carolina First Bank.................................................... [_________]
----------
Total [__________]
SCHEDULE III
[Names of shareholders subject to lock-up]
LOCK-UP AGREEMENT
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇ & COMPANY, INC.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & ASSOCIATES, INC.
▇▇▇▇▇▇ INTERNATIONAL LTD.
As Representatives
of the several Underwriters
c/o Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
In consideration of the agreement of the several Underwriters,
for which Bear, ▇▇▇▇▇▇▇ & Co. Inc., ▇▇▇▇▇▇ ▇▇▇▇▇▇ & Company, Inc., ▇▇▇▇▇▇▇ ▇▇▇▇▇
& Associates, Inc., and ▇▇▇▇▇▇ International Ltd. intend to act as
Representatives to underwrite a proposed public offering (the "Offering") of
Common Stock, par value $.01 per share (the "Common Stock"), of Net.B@nk, Inc.,
a corporation organized and existing under the laws of the State of Georgia (the
"Company"), as contemplated by a registration statement filed with the
Securities and Exchange Commission on Form S-3 (No. 333-[_____]) (the
"Registration Statement"), the undersigned hereby agrees that the undersigned
will not, directly or indirectly, during a period of 180 days from the date of
the final prospectus for the Offering, without the prior written consent of
Bear, ▇▇▇▇▇▇▇ & Co. Inc., issue, sell, offer or agree to sell, grant any option
for the sale of, pledge, make any short sale, establish an open "put equivalent
position" within the meaning of Rule 16a-1(h) under the Securities Exchange Act
of 1934, as amended, or otherwise dispose of, any shares of Common Stock (or
securities convertible into, exercisable for or exchangeable for Common Stock)
of the Company or of any of its subsidiaries. The foregoing sentence shall not
apply to (A) the issuance of any shares of Common Stock upon the exercise of an
option or warrant or the conversion of a security outstanding on the date hereof
and referred to in the Registration Statement, (B) transfers of shares of Common
Stock to immediate family members or trusts for the benefit of such family
members, provided such transferee enters into a similar lock-up agreement or (C)
shares of Common Stock issued in connection with a merger, recapitalization or
consolidation of the Company.
Very truly yours,
By:
--------------------
Print Name:
--------------------
Date:
--------------------
