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EXHIBIT 1.1
May 22, 1998 Draft
CNB HOLDINGS, INC.
900,000 COMMON SHARES
UNDERWRITING AGREEMENT
June ___, 1998
▇.▇. ▇▇▇▇▇▇▇▇ & CO., L.L.C.
As Representative of the Underwriters
c/o ▇.▇. ▇▇▇▇▇▇▇▇ & Co., L.L.C.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
CNB Holdings, Inc., a Georgia corporation (the "Company") and proposed
holding company for Chattahoochee National Bank (In Organization) (the "Bank"),
proposes to issue and sell to the underwriters named in Schedule I hereto (the
"Underwriters") for whom you are acting as the representative (the
"Representative") 900,000 shares (collectively, the "Firm Shares"), of the
common stock, $1.00 par value per share (the "Common Shares"), of the Company.
The Firm Shares are to be sold to the Underwriters, acting severally and not
jointly, in such amounts as are set forth in Schedule I hereto opposite the name
of such Underwriter. The Company proposes to grant to the Underwriters an option
to purchase up to 135,000 additional Common Shares as provided for in Section 2
of this Agreement for the purpose of covering over-allotments (the "Option
Shares"). The Firm Shares and the Option Shares purchased pursuant to this
Agreement are herein called the "Shares."
1. Representations and Warranties of the Company. The Company
represents and warrants with respect to itself and the Bank to, and agrees with,
each of the Underwriters that:
(a) The Company has filed with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Securities Act"), a registration statement on Form SB-2
(Registration No. 333-49137), including the related preliminary
prospectus relating to the Shares. Copies of the registration statement
and any amendments, including any post-effective amendments, and all
forms of the related prospectuses contained therein and any supplements
thereto, have
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been delivered to you. Such registration statement on Form SB-2,
including the prospectus, Part II, all financial schedules and exhibits
thereto, all information deemed to be a part of such registration
statements pursuant to Rule 430A under the Securities Act and any
related registration statement filed pursuant to Rule 462(b) under the
Securities Act, at the time when they shall become effective are herein
referred to as the "Registration Statement," and the prospectus
included as part of the Registration Statement on file with the
Commission that discloses all the information that was omitted from the
prospectus on the effective date pursuant to Rule 430A of the Rules and
Regulations (as defined below) and in the form filed pursuant to Rule
424(b) under the Securities Act is herein referred to as the "Final
Prospectus." The prospectus included as part of the Registration
Statement on the date when the Registration Statement became effective
is referred to herein as the "Effective Prospectus." Any prospectus
included in the Registration Statement and in any amendment thereto
prior to the effective date of the Registration Statement is referred
to herein as a "Preliminary Prospectus." For purposes of this
Agreement, "Rules and Regulations" mean the rules and regulations
promulgated by the Commission under either the Securities Act or the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as
applicable.
(b) The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus, and each Preliminary
Prospectus, at the time of filing thereof, complied with the
requirements of the Securities Act and the Rules and Regulations, and
did not include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; except that the foregoing does
not apply to statements or omissions made in reliance upon and in
conformity with written information relating to any Underwriter
furnished to the Company by any Underwriter specifically for use
therein. When the Registration Statement becomes effective and at all
times subsequent thereto up to and including the First Closing Date and
the Option Closing Date (as hereinafter defined), (i) the Registration
Statement, the Effective Prospectus and Final Prospectus and any
amendments or supplements thereto will contain all statements which are
required to be stated therein in accordance with the Securities Act and
the Rules and Regulations and will comply with the requirements of the
Securities Act and the Rules and Regulations, and (ii) neither the
Registration Statement, the Effective Prospectus nor the Final
Prospectus nor any amendment or supplement thereto will include any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they are made, not
misleading; except that the foregoing does not apply to statements or
omissions made in reliance upon and in conformity with written
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information relating to any Underwriter furnished to the Company by any
Underwriter specifically for use therein.
(c) The Company is duly formed and validly existing and in
good standing under the laws of the State of Georgia with full power
and authority to own its properties and conduct its business as now
conducted and is duly qualified or authorized to do business and is in
good standing in all jurisdictions where the failure to so qualify
could have a material adverse effect upon the conduct of business or
the ownership or leasing of property by the Company in such
jurisdiction. The Bank is a national banking association in
organization and upon the issuance of a charter by the Office of the
Comptroller of the Currency all shares of capital stock of the Bank
will be issued to the Company free and clear of any liens, claims, or
encumbrances of any kind, and the Bank will become a wholly owned
subsidiary of the Company. The Company and the Bank have obtained or
have filed for all material licenses, consents and approvals, and have
satisfied or have taken all action required at this time to satisfy all
material eligibility and other similar requirements imposed by federal
and state regulatory bodies, administrative agencies or other
governmental bodies, agencies or officials, in each case applicable to
the conduct of the business in which they are engaged or are
contemplated to be engaged as described in the Effective Prospectus and
the Final Prospectus. With respect to any material licenses, consents
and approvals, and any material eligibility and other similar
requirements that the Company or the Bank does not have at this time,
(i) all applications therefor are complete, accurate, and have been
filed with the appropriate regulatory authorities, and (ii) the Company
knows of no reason why the same will not be received or satisfied prior
to the time the same are required. Other than the Bank, the Company
does not have a direct or indirect ownership interest in any
corporation, joint venture, partnership or other entity.
(d) The capitalization of the Company is as set forth under
the caption "Capitalization" in the Effective Prospectus and the Final
Prospectus, and the Company's capital stock conform to the description
thereof contained under the caption "Description of Capital Stock of
the Company" in the Effective Prospectus and the Final Prospectus. All
the issued capital stock of the Company has been duly authorized and
validly issued, are fully paid and nonassessable. None of the issued
capital stock of the Company has been issued in violation of, or are
subject to, any preemptive or similar rights. The Shares to be sold by
the Company hereunder have been duly and validly authorized and, upon
issuance and delivery and payment therefor in the manner herein
described, will be validly issued, fully paid and nonassessable and
will not be subject to preemptive rights or other rights to subscribe
for or to purchase. Except as set forth in the Effective Prospectus and
the Final Prospectus, (i) the Company does not have outstanding any
options to
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purchase, or any rights or warrants to subscribe for, or any securities
or obligations convertible into, or any contracts or commitments to
issue or sell, any Common Shares and (ii) there are no preemptive
rights or other rights to subscribe for or to purchase, or any
restriction upon the transfer of, any Common Shares pursuant to the
Company's articles of incorporation, bylaws or any agreement or other
instrument to which the Company is a party or by which it may be bound.
Neither the filing of the Registration Statement nor the offer or sale
of the Shares as contemplated by this Agreement gives rise to any
rights, other than those which have been waived or satisfied, for or
relating to the registration of any Common Shares or any other
securities of the Company. The Underwriters will receive good and
marketable title to the Shares to be issued and delivered hereunder,
free and clear of all liens, encumbrances, claims, security interests,
restrictions, shareholders' agreements and voting trusts whatsoever.
(e) The form of share certificate to be used to evidence the
Common Shares will be in due and proper form and will comply with all
applicable legal requirements.
(f) All offers and sales by the Company of the Company's
securities prior to the date hereof were at all relevant times duly
registered or the subject of an available exemption from the
registration requirements of the Securities Act, were duly registered
or the subject of an available exemption from the registration
requirements of the applicable state securities or Blue Sky laws, and
were otherwise made in compliance with applicable law.
(g) The Company has full legal right, power and authority to
enter into this Agreement and to sell and deliver the Shares to be sold
by it to the several Underwriters as provided herein, and this
Agreement has been duly authorized, executed and delivered by the
Company and constitutes a valid and binding agreement of the Company
enforceable against the Company in accordance with its terms. No
consent, approval, authorization or order of any court or governmental
agency or body or third party is required for the performance of this
Agreement by the Company or the consummation by the Company of the
transactions contemplated hereby, except such as have been obtained and
such as may be required by the National Association of Securities
Dealers, Inc. ("NASD") or under the Securities Act or state securities
or Blue Sky laws in connection with the purchase and distribution of
the Shares by the several Underwriters. The issue and sale of the
Shares by the Company, the Company's performance of this Agreement and
the consummation of the transactions contemplated hereby will not
result in a breach or violation of, or conflict with, any of the terms
and provisions of, or constitute a default by the Company under, any
indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which the Company is a party or to which the
Company or any of its properties is
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subject, the articles of incorporation, bylaws or other governing
instruments of the Company or any statute or any judgment, decree,
order, rule or regulation of any court or governmental agency or body
applicable to the Company or any of its properties. Neither the Company
nor the Bank is in violation of its articles of incorporation or
association, bylaws or other governing instruments or any law,
administrative rule or regulation or arbitrators' or administrative
court decree, judgment or order or in violation or default (there being
no existing state of facts which with notice or lapse of time or both
would constitute a default) in the performance or observance of any
material obligation, agreement, covenant or condition contained in any
contract, indenture, deed of trust, mortgage, loan agreement, note,
lease, agreement or other instrument or permit to which it is a party
or by which it or any of its properties is or may be bound, except for
such violation or conflict which could not, singly or in the aggregate,
have a material adverse effect on the Company or the Bank or could not,
singly or in the aggregate, materially impair the performance by the
Company of its obligations under this Agreement.
(h) The consolidated financial statements, together with the
related schedules and notes, of the Company, included in the
Registration Statement, the Effective Prospectus and the Final
Prospectus, conform to the requirements of the Securities Act and the
Rules and Regulations. Such financial statements fairly present the
consolidated financial position of the Company at the respective dates
indicated in accordance with generally accepted accounting principles
applied on a consistent basis for the periods indicated. The financial
and statistical data set forth in the Effective Prospectus and the
Final Prospectus fairly presents the information set forth therein on
the basis stated in the Effective Prospectus and the Final Prospectus.
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.A., whose report is included in the Effective
Prospectus and the Final Prospectus, are independent accountants as
required by the Securities Act and the Rules and Regulations.
(i) Neither the Company nor the Bank has sustained any
material loss or interference with its business or properties which is
not disclosed in the Effective Prospectus and the Final Prospectus; and
subsequent to the respective dates as of which information is given in
the Registration Statement, the Effective Prospectus and the Final
Prospectus, (i) neither the Company nor the Bank has incurred any
material liabilities or obligations, direct or contingent, or entered
into any transactions not in the ordinary course of business, (ii)
there has not been any issuance of options, warrants or rights to
purchase interests in, or the capital stock of, the Company except as
set forth in the Registration Statement, the Effective Prospectus and
the Final Prospectus, and (iii) there has not been any material adverse
change, or any development involving a prospective material adverse
change, in the general affairs, management, business, prospects,
financial position, net
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worth or results of operations of the Company or the Bank, except in
each case as described in the Effective Prospectus and the Final
Prospectus.
(j) Except as described in the Effective Prospectus and the
Final Prospectus, there is not pending, or to the knowledge of the
Company threatened, any legal or governmental action, suit, proceeding,
inquiry or investigation, to which the Company, the Bank, or any of
their respective executive officers or directors in such capacities, is
a party, or to which the property of the Company or the Bank is
subject, before or brought by any court or governmental agency or body,
wherein an unfavorable decision, ruling or finding could prevent or
materially hinder the consummation of this Agreement or result in a
material adverse change in the business condition (financial or other),
prospects, financial position, net worth or results of operations of
the Company or the Bank.
(k) [INTENTIONALLY OMITTED].
(l) Neither the Company, nor any of its directors, executive
officers or controlling persons, has taken or will take, directly or
indirectly, any action resulting in a violation of Regulation M under
the Exchange Act, or designed to cause or result under the Exchange Act
or otherwise in, or which has constituted or which reasonably might be
expected to constitute, the stabilization or manipulation of the price
of any securities of the Company or facilitation of the sale or resale
of the Shares.
(m) There are no contracts or other documents required by the
Securities Act or by the Rules and Regulations to be described in the
Registration Statement, the Effective Prospectus or the Final
Prospectus or to be filed as exhibits to the Registration Statement
which have not been described or filed as required. All such contracts
to which the Company or the Bank is a party have been duly authorized,
executed and delivered by such party, constitute valid and binding
agreements of such party and are enforceable against such party in
accordance with the terms thereof. The Company and the Bank have
performed all material obligations required to be performed by them,
and are neither in default in any material respect nor have they
received notice of any default or dispute under, any such contract or
other material instrument to which they are a party or by which their
property is bound or affected. To the knowledge of the Company, no
other party under any such contract or other material instrument to
which it or the Bank is a party is in default in any material respect
thereunder.
(n) The Company's system of internal accounting controls for
itself and the Bank is sufficient to meet applicable regulatory
requirements and the broad objectives of internal accounting controls
insofar as those objectives pertain to the prevention or detection of
errors or irregularities in amounts
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that would be material in relation to the Company's consolidated
financial statements.
(o) The Company and the Bank have filed all foreign, federal,
state and local income and franchise tax returns required to be filed
through the date hereof and have paid all taxes shown as due therefrom
to the extent such taxes have become due and are not being contested in
good faith; and there is no tax deficiency that has been, nor does the
Company have knowledge of any tax deficiency which is likely to be,
asserted against the Company or the Bank, which if determined adversely
could materially and adversely affect the earnings, assets, affairs,
business prospects or condition (financial or other) of the Company or
the Bank.
(p) Neither the Company nor the Bank has failed to file with
the applicable regulatory authorities any material statements, reports,
information or forms required by applicable laws, regulations or
orders; all such filings or submissions were in material compliance
with applicable laws when filed, and no material deficiencies have been
asserted by any regulatory commission, agency or authority with respect
to such filings or submissions. Neither the Company nor the Bank has
failed to maintain in full force and effect any material licenses,
registrations or permits necessary or proper for the conduct of its
business, or received any notification that any revocation or
limitation thereof is threatened or pending, and there is not to the
knowledge of the Company pending any change under any law, regulation,
license or permit which would materially adversely affect the business,
operations, property or business prospects of the Company or the Bank.
Neither the Company nor the Bank has received any notice of violation
of or to the Company's knowledge, been threatened with a charge of
violating and to the Company's knowledge is not under investigation
with respect to a possible violation of any provision of any law,
regulation or order.
(q) No labor dispute exists or is imminent with any of the
employees of the Company or the Bank or otherwise which could
materially adversely affect the Company or the Bank. The Company is not
aware of any existing or imminent labor disturbance by employees of the
Company or the Bank which could be expected to materially adversely
affect the condition (financial or otherwise), results of operations,
properties, affairs, management, business affairs or business prospects
of the Company or the Bank. The Company and the Bank are in compliance
with all federal, state and local employment and labor laws, including,
but not limited to, laws relating to non-discrimination in hiring,
promotion and pay of employees.
(r) The Company and the Bank own or is in the process of
obtaining or can obtain on reasonable terms all material licenses,
copyrights, trademarks, service marks and trade names presently
employed by them in
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connection with the businesses proposed to be operated by them,
respectively, and neither the Company nor the Bank has received any
notice of infringement of or conflict with asserted rights of others
with respect to any of the foregoing which, alone or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, could
result in any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects
of the Company or the Bank.
(s) The Company and the Bank are insured by insurers of
recognized financial responsibility against such losses and risks and
in such amounts as are prudent and customary in the businesses in which
they are engaged and in which they propose to engage; and the Company
has no reason to believe that it or the Bank will not be able to renew
its existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to
continue its business.
(t) None of the Company, the Bank, nor, to the knowledge of
the Company, any director or executive officer, agent, employee or
other person acting on behalf of the Company or the Bank has (i) used,
or authorized the use of, any corporate or other funds for unlawful
payments, or contributions, (ii) made unlawful expenditures relating to
political activity to government officials, or (iii) established or
maintained any unlawful or unrecorded funds in violation of any
federal, state, or local law or regulation, including Section 30A of
the Exchange Act. None of the Company, the Bank, nor, to the knowledge
of the Company, any director or executive officer of the Company or the
Bank has accepted or received any unlawful contributions, or payments.
(u) The Company is not, will not become as a result of the
transactions contemplated hereby, and does not intend to conduct its
business in a manner that would cause it to become, an "investment
company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940.
2. Purchase, Sale and Delivery of the Shares.
(a) On the basis of the representations, warranties,
agreements and covenants herein contained and subject to the terms and
conditions herein set forth, the Company agrees to sell to the several
Underwriters the Firm Shares, and each of the Underwriters, severally
and not jointly, agrees to purchase at a purchase price of $________
per share, the number of Firm Shares set forth opposite such
Underwriter's name in Schedule I hereto. The Underwriters agree to
offer the Firm Shares to the public on the terms set forth in the Final
Prospectus under the caption "Underwriting."
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(b) The Company hereby grants to the Underwriters an option to
purchase, solely for the purpose of covering over-allotments in the
sale of Firm Shares, all or any portion of the Option Shares at the
purchase price per share set forth above. The option granted hereby may
be exercised as to all or any part of the Option Shares at any time
(but only once) within 30 days after the date of the Final Prospectus.
The Underwriters shall not be under any obligation to purchase any
Option Shares prior to the exercise of such option. The option granted
hereby may be exercised by the Underwriters by the Representative
giving written notice to the Company setting forth the number of Option
Shares to be purchased and the date and time for delivery of and
payment for such Option Shares and stating that the Option Shares
referred to therein are to be used for the purpose of covering
over-allotments in connection with the distribution and sale of the
Firm Shares. If such notice is given prior to the First Closing Date
(as defined herein), the date set forth therein for such delivery and
payment shall not be earlier than two full business days thereafter or
the First Closing Date, whichever occurs later. If such notice is given
on or after the First Closing Date, the date set forth therein for such
delivery and payment shall not be earlier than three full business days
thereafter. In either event, the date so set forth shall not be more
than four full business days after the date of such notice. The date
and time set forth in such notice is herein called the "Option Closing
Date." Upon exercise of the option, the Company shall become obligated
to sell to the Underwriters, and, subject to the terms and conditions
herein set forth, the Underwriters shall become obligated to purchase,
for the account of each Underwriter, from the Company, severally and
not jointly, the number of Option Shares specified in such notice.
Option Shares shall be purchased for the accounts of the Underwriters
in proportion to the number of Firm Shares set forth opposite such
Underwriter's name in Schedule I hereto, except that the respective
purchase obligations of each Underwriter shall be adjusted so that no
Underwriter shall be obligated to purchase fractional Option Shares.
(c) The Company shall not be obligated to deliver any of the
Shares to be delivered on the First Closing Date or on the Option
Closing Date, as the case may be, except upon payment for all the
Shares to be purchased on such Closing Date, as provided herein.
(d) Certificates in definitive form for the Firm Shares which
each Underwriter has agreed to purchase hereunder shall be delivered by
or on behalf of the Company to the Representative for the account of
each Underwriter against payment by each such Underwriter or on its
behalf of the purchase price therefor by wire transfer of federal or
other immediately available funds to the order of the Company at an
account previously designated by the Company, at the offices of the
Representative, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at
such other place as may be agreed upon by the Representative and the
Company, at 10:00 A.M.,
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Nashville time, on the third full business day after this Agreement
becomes effective, or, at the election of the Representative, on the
fourth full business day after this Agreement becomes effective, if it
becomes effective after 4:30 P.M. Eastern time, or at such other time
not later than the seventh full business day thereafter as the
Representative and the Company may determine, such time of delivery
against payment being herein referred to as the "First Closing Date."
The First Closing Date and the Option Closing Date are herein
individually referred to as the "Closing Date" and collectively
referred to as the "Closing Dates." Certificates in definitive form for
the Option Shares which each Underwriter shall have agreed to purchase
hereunder shall be similarly delivered by or on behalf of the Company
on the Option Closing Date. The certificates in definitive form for the
Shares to be delivered will be in good delivery form and in such
denominations and registered in such names as the Representative may
request not less than 48 hours prior to the First Closing Date or the
Option Closing Date, as the case may be. Such certificates will be made
available for checking and packaging at a location in New York, New
York as may be designated by the Representative, on a business day at
least 24 hours prior to the First Closing Date or the Option Closing
Date, as the case may be. It is understood that the Representative may
(but shall not be obligated to) make payment on behalf of any
Underwriter or Underwriters for the Shares to be purchased by such
Underwriter or Underwriters. No such payment shall relieve such
Underwriter or Underwriters from any of its or their obligations
hereunder.
3. Offering by the Underwriters. After the Registration Statement
becomes effective, the several Underwriters propose to offer for sale to the
public the Firm Shares and any Option Shares which may be sold at the price and
upon the terms set forth in the Final Prospectus.
4. Covenants of the Company. The Company covenants and agrees
with each of the Underwriters that:
(a) The Company shall comply with the provisions of and make
all requisite filings with the Commission pursuant to Rules 424 and
430A of the Rules and Regulations and shall notify the Representative
promptly (in writing, if requested) of all such filings. The Company
shall notify the Representative promptly of any request by the
Commission for any amendment of or supplement to the Registration
Statement, the Effective Prospectus or the Final Prospectus or for
additional information; the Company shall prepare and file with the
Commission, promptly upon the Representative's reasonable request, any
amendments of or supplements to the Registration Statement, the
Effective Prospectus or the Final Prospectus which, in the
Representative's reasonable opinion, may be necessary or advisable in
connection with the distribution of the Shares; and the Company shall
not file any amendment of or supplement to the Registration Statement,
the Effective Prospectus or the Final Prospectus which the
Representative promptly objects to after reasonable notice thereof. The
Company shall advise the Representative promptly of the issuance by the
Commission or any jurisdiction or other regulatory body of any stop
order or other order suspending the effectiveness of the Registration
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Statement, suspending or preventing the use of any Preliminary
Prospectus, the Effective Prospectus or the Final Prospectus or
suspending the qualification of the Shares for offering or sale in any
jurisdiction, or of the institution of any proceedings for any such
purpose; and the Company shall use its best efforts to prevent the
issuance of any stop order or other such order and, should a stop order
or other such order be issued, to obtain as soon as possible the
lifting thereof.
(b) The Company will take or cause to be taken all necessary
action and furnish to whomever the Representative direct such
information as may be reasonably required in qualifying the Shares for
offer and sale under the securities or Blue Sky laws of such
jurisdictions as the Underwriters may designate and will continue such
qualifications in effect for as long as may be reasonably necessary to
complete the distribution of the Shares.
(c) Within the time during which a Final Prospectus relating
to the Shares is required to be delivered under the Securities Act, the
Company shall comply with all requirements imposed upon it by the
Securities Act, as now and hereafter amended, and by the Rules and
Regulations, as from time to time in force, so far as is necessary to
permit the continuance of sales of or dealings in the Shares as
contemplated by the provisions hereof and the Final Prospectus. If
during such period any event occurs as a result of which the Final
Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances then
existing, not misleading, or if during such period it is necessary to
amend the Registration Statement or supplement the Final Prospectus to
comply with the Securities Act, the Company shall promptly notify the
Representative and shall amend the Registration Statement or supplement
the Final Prospectus (at the expense of the Company) so as to correct
such statement or omission or effect such compliance.
(d) The Company will furnish without charge to the
Representative and make available to the Underwriters copies of the
Registration Statement (four of which shall be signed and shall be
accompanied by all exhibits), each Preliminary Prospectus, the
Effective Prospectus and the Final Prospectus, and all amendments and
supplements thereto, including any prospectus or supplement prepared
after the effective date of the Registration Statement, in each case as
soon as available and in such quantities as the Underwriters may
reasonably request.
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(e) The Company will (A) deliver to the Representative at such
office or offices as the Representative may designate as many copies of
the Preliminary Prospectus and Final Prospectus as the Representative
may reasonably request, (B) for a period of not more than nine months
after the Registration Statement becomes effective, send to the
Underwriters as many additional copies of the Final Prospectus and any
supplement thereto as the Representative may reasonably request, and
(C) following nine months after the Registration Statement becomes
effective, send to the Underwriters at their expense as many additional
copies of the Final Prospectus and any supplement thereto as the
Representative may reasonably request.
(f) The Company shall make generally available to its security
holders, in the manner contemplated by Rule 158(b) under the Securities
Act as promptly as practicable and in any event no later than 45 days
after the end of its fiscal quarter in which the first anniversary of
the effective date of the Registration Statement occurs, an earnings
statement satisfying the provisions of Section 11(a) of the Securities
Act covering a period of at least 12 consecutive months beginning after
the effective date of the Registration Statement.
(g) The Company will apply the net proceeds from the sale of
the Shares to be sold by it as set forth under the caption "Use of
Proceeds" in the Final Prospectus and will timely report such use of
proceeds pursuant to Item 701 of Regulations S-B and S-K in its
periodic reports filed pursuant to Section 13(a) and 15(d) of the
Exchange Act in accordance with Rule 463 of the Securities Act or any
successor provision.
(h) During a period of five years from the effective date of
the Registration Statement or such longer period as the Representative
may reasonably request, the Company will furnish to the Representative
copies of all reports and other communications (financial or other)
furnished by the Company to its shareholders and, as soon as available,
copies of any reports or financial statements furnished or filed by the
Company to or with the Commission or any national securities exchange
or market on which any class of securities of the Company may be
listed.
(i) The Company will, from time to time, after the effective
date of the Registration Statement file with the Commission such
reports as are required by the Securities Act, the Exchange Act and the
Rules and Regulations, and shall also file with foreign, state and
other governmental securities commissions in jurisdictions where the
Shares have been sold by the Underwriters (as the Representative shall
have advised the Company in writing) such reports as are required to be
filed by the securities acts and the regulations of those
jurisdictions.
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(j) Except pursuant to this Agreement or with the
Representative's written consent, for a period of 180 days after
beginning on the effective date of the Registration Statement, the
Company will not, and the Company has provided agreements (the "Lockup
Agreements") executed by (i) each of its executive officers and
directors providing that for a period of 180 days after beginning on
the effective date of the Registration Statement, such person will not,
offer for sale, sell (other than the issuance by the Company of Common
Shares pursuant to the exercise of warrants or options granted pursuant
to existing warrants or employee benefit plans and agreements), grant
any options (other than pursuant to existing employee benefit plans and
agreements), rights or warrants with respect to any Common Shares,
securities convertible into Common Shares or any other capital stock of
the Company, or otherwise dispose of, directly or indirectly, any
Common Shares or such other securities or capital stock.
(k) Neither the Company nor any of its executive officers,
directors or affiliates will take, directly or indirectly, any action
resulting in a violation of Regulation M under the Exchange Act, or
designed to cause or result in, or which might constitute or be
expected to constitute, stabilization or manipulation of the price of
the Common Shares.
(l) The Company will either conduct its business and
operations as described in the Final Prospectus or, if the Company
makes any material change to its business or operations as so
conducted, promptly disclose such change generally to the Company's
security holders.
(m) If at any time during the 25 day period after the
Registration Statement is declared effective, any rumor, publication or
event relating to or affecting the Company shall occur as a result of
which, in the Representative's opinion, the market price for the Shares
has been or is likely to be materially affected (regardless of whether
such rumor, publication or event necessitates a supplement to or
amendment of the Final Prospectus), the Company will, after written
notice from the Representative advising it as to the effect set forth
above, prepare, consult with the Representative concerning the
substance of and, subject to the Rules and Regulations, disseminate a
press release or other public statement, reasonably satisfactory,
responding to or commenting on such rumor, publication or event.
(n) [INTENTIONALLY OMITTED].
5. Expenses. The Company agrees with the Underwriters that
(a) whether or not the transactions contemplated by this Agreement are
consummated or this Agreement becomes effective or is terminated, the
Company will pay all fees and expenses incident to the performance of
the
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obligations of the Company hereunder, including, but not limited to,
(i) the Commission's registration fee, (ii) the expenses of printing
(or reproduction) and distributing the Registration Statement
(including the financial statements therein and all amendments and
exhibits thereto), each Preliminary Prospectus, the Effective
Prospectus, the Final Prospectus, any amendments or supplements
thereto, any Marketing Materials (as defined herein) and this Agreement
and other underwriting documents, including Underwriter's
Questionnaires, Underwriter's Powers of Attorney, Blue Sky Memoranda,
Agreements Among Underwriters and Selected Dealer Agreements, (iii)
fees and expenses of accountants and counsel for the Company, (iv)
expenses of registration or qualification of the Shares under state
Blue Sky and securities laws, including the fees and disbursements of
counsel to the Underwriters in connection therewith, (v) filing fees
paid or incurred by the Underwriters in connection with filings with
the NASD, (vi) expenses of listing the outstanding Common Shares for
quotation on the OTCBB; (vii) all travel, lodging and living expenses
incurred by the Company in connection with marketing, dealer and other
meetings attended by the Company and the Underwriters in marketing the
Shares, (viii) the costs and charges of the Company's transfer agent
and registrar and the cost of preparing the certificates for the
Shares, and (ix) all other costs and expenses incident to the
performance of its obligations hereunder not otherwise provided for in
this Section; and (b) all out-of-pocket expenses, including counsel
fees, disbursements and expenses, incurred by the Underwriters in
connection with investigating, preparing to market and marketing the
Shares and proposing to purchase and purchasing the Shares under this
Agreement, will be borne and paid by the Company if the sale of the
Shares provided for herein is not consummated (x) by reason of the
termination of this Agreement by the Company pursuant to Section
12(a)(i) or (y) by reason of the termination of this Agreement by the
Representative pursuant to Section 12(b)(ii), (iii), (iv) or (v) of
this Agreement, provided that reimbursement as a result of this clause
(y) shall be limited to $60,000, including the fees and expenses of
Underwriter's counsel relating to the proposed offering.
6. Conditions of the Underwriters' Obligations. The respective
obligations of the Underwriters to purchase and pay for the Firm Shares shall be
subject to the accuracy of the representations and warranties of the Company
herein as of the date hereof and as of the Closing Date as if made on and as of
the Closing Date, to the accuracy of the statements of the Company's officers
made pursuant to the provisions hereof, to the performance by the Company of all
of its covenants and agreements hereunder and to the following additional
conditions:
(a) The Registration Statement and all post-effective
amendments thereto shall have become effective not later than 5:30
P.M., Washington, D.C. time, on the day following the date of this
Agreement, or such later time
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and date as shall have been consented to by the Representative and all
filings required by Rule 424 and Rule 430A of the Rules and Regulations
shall have been made; no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for
that purpose shall have been instituted or to the knowledge of the
Company threatened or the Underwriters, shall be contemplated by the
Commission; any request of the Commission for additional information
(to be included in the Registration Statement or the Final Prospectus
or otherwise) shall have been complied with to the Representative's
reasonable satisfaction; and the NASD, upon review of the terms of the
public offering of the Shares, shall not have objected to such
offering, such terms or the Underwriters' participation in the same.
(b) The Representative shall not have advised the Company that
the Registration Statement, Preliminary Prospectus, the Effective
Prospectus or Final Prospectus, or any amendment or any supplement
thereto, contains an untrue statement of fact which, in the
Representative's reasonable judgment, is material, or omits to state a
fact which, in the Representative's reasonable judgment, is material
and is required to be stated therein or necessary to make the
statements therein not misleading.
(c) The Representative shall have received an opinion, dated
the Closing Date, from ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP, counsel for the Company,
to the effect that:
(i) The Company has been duly formed and is validly
existing as a corporation under the laws of the State of
Georgia, with corporate power and authority to own its
properties and conduct its business as now conducted, and,
based solely on certificates from public officials, the
Company is duly qualified to transact business as a foreign
corporation in states where required and where failure to so
qualify would have a material adverse effect on the Company.
and is in good standing under the laws of Georgia. The Bank is
a national banking association in organization and upon the
issuance of a charter by the Office of the Comptroller of the
Currency all shares of capital stock of the Bank will be
issued to the Company free and clear of any liens, claims, or
encumbrances of any kind, and the Bank will become a wholly
owned subsidiary of the Company.
(ii) The Company does not have any interest, directly
or indirectly, in any corporation, joint venture, partnership
or other entity other than the Bank.
(iii) As of the dates specified therein, the Company
had authorized and issued capital stock as set forth under the
caption
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"Capitalization" in the Final Prospectus. All of the
outstanding Common Shares have been duly authorized and are
validly issued, fully paid and nonassessable, and the Shares
to be sold by the Company have been duly authorized, and upon
issuance thereof and payment therefor as provided herein, will
be validly issued, fully paid and nonassessable; none of the
issued shares have been issued in violation of or subject to
any preemptive rights provided for by law, agreement or the
Company's articles of incorporation or bylaws. To the
knowledge of such counsel, the Company does not have
outstanding any options to purchase, or any rights or warrants
to subscribe for, or any securities or obligations convertible
into, or any contracts or commitments to issue or sell any
capital stock, and there are no preemptive rights or other
rights to subscribe for or purchase any capital stock of the
Company, or any restriction upon the transfer of, the Shares
pursuant to the Company's articles of incorporation or bylaws
or any agreement or other instrument to which the Company is a
party or by which it may be bound, except as described in the
Effective Prospectus and Final Prospectus. Neither the filing
of the Registration Statement nor the offer or sale of the
Shares as contemplated by this Agreement gives rise to any
rights, other than those which have been waived or satisfied,
for or relating to the registration of any Common Shares or
any other securities of the Company. The Underwriters will
receive valid title to the Shares to be issued and delivered
by the Company pursuant to this Agreement, free and clear of
all liens, encumbrances, claims, security interests,
restrictions, shareholders agreements and voting trusts
whatsoever. The capital stock of the Company and the Shares
conform in all material respects to the description thereof
contained in the Final Prospectus. All offers and sales of the
Company's securities prior to the date hereof were at all
relevant times duly registered or exempt from the registration
requirements of the Securities Act, were duly registered or
the subject of an exemption from the registration requirements
of applicable state securities or Blue Sky laws, and were
otherwise made in compliance with applicable law.
(iv) The form of share certificate used to evidence
the Common Shares is in due and proper form and complies with
all applicable legal requirements under the Georgia Business
Corporation Act.
(v) No consent, approval, authorization or order of
any court or federal or state governmental agency or body or
third party is required for the performance of this Agreement
by the Company or the consummation by the Company of the
transactions contemplated hereby, except such as have been
obtained under the Securities Act
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and such as may be required by the NASD and under state
securities or Blue Sky laws in connection with the purchase
and distribution of the Shares by the several Underwriters, as
to which such counsel need not express an opinion. The
performance of this Agreement by the Company and the
consummation by the Company of the transactions contemplated
hereby will not conflict with or result in a breach or
violation by the Company of any of the terms or provisions of,
or constitute a default by the Company under, any indenture,
mortgage, deed of trust, loan agreement, lease or other
agreement or instrument known to such counsel to which the
Company is a party or to which the Company or its properties
is subject, the articles of incorporation or bylaws of the
Company, any statute, or any judgment, decree, order, rule or
regulation of any court or governmental agency or body known
to such counsel to be applicable to the Company or its
properties.
(vi) The Company has full legal right, power and
authority to enter into this Agreement and to issue, sell and
deliver the Shares to be sold by it to the Underwriters as
provided herein, and this Agreement has been duly authorized,
executed and delivered by the Company and constitutes the
valid and legally binding obligation of the Company
enforceable against the Company in accordance with its terms,
subject to the effect of bankruptcy, insolvency,
reorganization, arrangement, moratorium, fraudulent
conveyance, fraudulent transfer and other similar laws
relating to or affecting the rights of creditors.
(vii) The Company and the Bank have obtained or have
filed for all licenses, consents and approvals, and have
satisfied or have taken all action required at this time to
satisfy all eligibility and other similar requirements imposed
by federal and state regulatory bodies, administrative
agencies or other governmental bodies, agencies or officials,
in each case necessary for the conduct of the business in
which they are engaged or are contemplated to be engaged as
described in the Effective Prospectus and the Final Prospectus
(except where the failure to have any such licenses, consents,
and approvals, or to have satisfied or taken such action to
satisfy the requirements, individually or in the aggregate,
would not have a material adverse effect on the business,
properties, operations, or financial condition of the Company
or its subsidiaries, taken as a whole. With respect to any
necessary licenses, consents and approvals, and any necessary
eligibility and other similar requirements that the Company or
the Bank does not have at this time, (i) all applications
therefor are complete, accurate, and have been filed with the
appropriate regulatory authorities, and (ii) counsel knows of
no reason why the same will not be received or satisfied prior
to the time the same are
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required to conduct business as described in the Effective
Prospectus and the Final Prospectus.
(ix) Except as described in the Final Prospectus,
there is not pending or, to the knowledge of such counsel,
threatened any action, suit, proceeding, inquiry or
investigation, to which the Company or the Bank is a party, or
to which the property of the Company or the Bank is subject,
before or brought by any court or governmental agency or body.
(x) To the knowledge of such counsel, no default
exists, and no event has occurred which with notice or after
the lapse of time to cure or both, would constitute a default,
in the due performance and observance of any term, covenant or
condition of any material indenture, mortgage, deed of trust,
loan agreement, lease or other agreement or instrument known
to such counsel to which the Company or the Bank is a party or
to which properties are subject, or of the articles of
incorporation, articles of association, bylaws, or other
governing documents of the Company or the Bank.
(xi) To the knowledge of such counsel, neither the
Company nor the Bank is in violation of any law, ordinance,
administrative or governmental rule or regulation applicable
to the Company or the Bank, or any decree of any court or
governmental agency or body having jurisdiction over the
Company or the Bank except for violations which would not have
a material adverse effect on the Company or the Bank.
(xii) To the knowledge of such counsel, there are no
contracts or documents of the Company or the Bank which are
required to be filed as exhibits to the Registration Statement
by the Securities Act or by the Rules and Regulations which
have not been so filed.
(xiii) The Company is not an "investment company" or
an entity "controlled" by an "investment company," as such
terms are defined in the Investment Company Act of 1940, as
amended.
(xiv) The Registration Statement and all
post-effective amendments thereto have become effective under
the Securities Act, and, to the knowledge of such counsel, no
stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose
have been instituted or, to the knowledge of such counsel, are
threatened, pending or contemplated by the Commission. All
filings required by Rule 424 and Rule 430A of the Rules and
Regulations have been made; the Registration Statement, the
Effective Prospectus and Final Prospectus, and any amendments
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or supplements thereto (other than financial statements,
including notes, schedules, and other financial and
statistical data), as of their respective effective or issue
dates, complied as to form in all material respects with the
applicable requirements of the Securities Act and the Rules
and Regulations; the descriptions in the Registration
Statement, the Effective Prospectus and the Final Prospectus
of statutes, regulations, legal and governmental proceedings,
and contracts and other documents are accurate in all material
respects and present fairly in all material respects the
information required to be stated; and such counsel does not
know of any pending or threatened legal or governmental
proceedings, statutes or regulations required to be described
in the Final Prospectus which are not described as required
nor of any contracts or documents of a character required to
be described in the Registration Statement or the Final
Prospectus or to be filed as exhibits to the Registration
Statement which are not described and filed as required.
In addition to the matters set forth above, such opinion shall
also include a statement to the effect that nothing has come to the
attention of such counsel which leads them to believe that the
Registration Statement, the Effective Prospectus and the Final
Prospectus or any amendment or supplement thereto contains an untrue
statement of a material fact or omits to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances under which they were made
(except that such counsel need express no view as to financial
statements, schedules and other financial or statistical information
included therein).
The opinions to be rendered pursuant to paragraph (c) may be
limited to federal law, and as to foreign and state law matters, to the
laws of the states or jurisdictions in which such counsel is admitted
to practice.
(d) The Underwriters shall have received an opinion or
opinions, dated the Closing Date, of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇,
PLLC, counsel for the Underwriters, with respect to the Registration
Statement and the Final Prospectus, and such other related matters as
the Underwriters may require, and the Company shall have furnished to
such counsel such documents as they may reasonably request for the
purpose of enabling them to pass upon such matters.
(e) The Representative shall have received from ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇, P.A., a letter dated the date hereof and, at the Closing Date,
a second letter dated the Closing Date, in form and substance
satisfactory to the Representative, stating that they are independent
public accountants with respect to the Company within the meaning of
the Securities Act and the
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applicable Rules and Regulations, and containing statements and
information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information of the Company contained in the
Registration Statement and the Prospectus. In the event that the
letters to be delivered referred to above set forth any such changes,
decreases or increases, it shall be a further condition to the
obligations of the-Underwriters that the Underwriters shall have
determined, after discussions with officers of the Company responsible
for financial and accounting matters and with ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.A.,
that such changes, decreases or increases as are set forth in such
letters do not reflect a material adverse change in the total assets,
stockholders' equity or long-term debt of the Company registrant as
compared with the amounts shown in the latest balance sheets of the
Company included in the Final Prospectus, or a material adverse change
in revenues or net income of the Company, in each case as compared with
the corresponding period of the prior year.
(f) There shall have been furnished to the Representative a
certificate, dated the Closing Date and addressed to you, signed by the
President and Chief Financial Officer of the Company, to the effect
that:
(i) the representations and warranties of the Company
in Section 1 of this Agreement are true and correct, as if
made at and as of the Closing Date, and the Company has
complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or
prior to the Closing Date;
(ii) no stop order suspending the effectiveness of
the Registration Statement has been issued, and no proceedings
for that purpose have been initiated or are pending, or to
their knowledge, threatened under the Securities Act;
(iii) all filings required by Rule 424 and Rule 430A of
the Rules and Regulations have been made;
(iv) they have carefully examined the Registration
Statement, the Effective Prospectus and the Final Prospectus,
and any amendments or supplements thereto, and such documents
do not include any untrue statement of a material fact or omit
to state any material fact required to be stated therein or
necessary to make the statements therein not misleading in
light of the circumstances under which they were made; and
(v) since the effective date of the Registration
Statement, there has occurred no event required to be set
forth in an amendment or supplement to the Registration
Statement, the Effective Prospectus
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or the Final Prospectus which has not been so set forth.
(g) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Final Prospectus, and
except as stated therein, the Company has not sustained any material
loss or interference with its business or properties from fire, flood,
hurricane, accident or other calamity, whether or not covered by
insurance, or from any labor dispute or any court or governmental
action, order or decree, or become a party to or the subject of any
litigation which is material and adverse to the Company, nor shall
there have been any material adverse change, or any development
involving a prospective material adverse change, in the business,
properties, key personnel, capitalization, prospects, net worth,
results of operations or condition (financial or other) of the Company,
which loss, interference, litigation or change, in the Representative's
reasonable judgment shall render it inadvisable to commence or continue
the offering of the Shares at the offering price to the public set
forth on the cover page of the Prospectus or to proceed with the
delivery of the Shares.
(h) The Shares shall be approved for quotation on the OTCBB
system when issued.
(i) The Representative shall have received the Lockup
Agreements.
All such opinions, certificates, letters and documents delivered
pursuant to this Agreement will comply with the provisions hereof only if they
are reasonably satisfactory to the Representative and its counsel. The Company
shall furnish to the Representative such conformed copies of such opinions,
certificates, letters and documents in such quantities as the Representative
shall reasonably request.
The respective obligations of the Underwriters to purchase and pay for
the Option Shares shall be subject, in their discretion, to the conditions of
this Section 6, except that all references to the "Closing Date" shall be deemed
to refer to the Option Closing Date, if it shall be a date other than the
Closing Date.
7. Condition of the Company's Obligations. The obligation of the
Company to sell the Firm Shares is subject to the condition set forth in Section
6(a) hereof.
8. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each
Underwriter, and each person, if any, who controls any Underwriter
within the meaning of the Securities Act, against any losses, claims,
damages or liabilities to which such Underwriter or controlling person
may become subject under the Securities Act or otherwise, insofar as
such losses, claims,
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damages or liabilities (or actions in respect thereof) arise out of or
are based in whole or in part upon: (i) any inaccuracy in the
representations and warranties of the Company contained herein; (ii)
any failure of the Company to perform its obligations hereunder or
under law; (iii) any untrue statement or alleged untrue statement of
any material fact contained in (A) the Registration Statement, any
Preliminary Prospectus, the Effective Prospectus or Final Prospectus,
or any amendment or supplement thereto, (B) any audio or visual
materials supplied by the Company expressly for use in connection with
the marketing of the Shares, including without limitation, slides,
videos, films, computer files, and tape recordings (the "Marketing
Materials") or (C) in any Blue Sky application or other written
information prepared or executed by the Company filed in any state or
other jurisdiction in order to qualify any or all of the Shares under
the securities laws thereof (a "Blue Sky Application"); or (iv) the
omission or alleged omission to state in the Registration Statement,
any Preliminary Prospectus, the Effective Prospectus or Final
Prospectus or any amendment or supplement thereto, any Marketing
Materials or a material fact required to be stated therein or necessary
to make the statements therein not misleading; and will reimburse each
Underwriter and each such controlling person for any legal or other
expenses reasonably incurred by such Underwriter or such controlling
person in connection with investigating or defending any such loss,
claim, damage, liability or action as such expenses are incurred;
provided, however, that the Company will not be liable in any such case
to the extent that any such loss, claim, damage, or liability arises
out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in the Registration
Statement, the Preliminary Prospectus, the Effective Prospectus or
Final Prospectus, or any amendment or supplement thereto, or any
Marketing Materials or Blue Sky Application in reliance upon and in
conformity with written information relating to any Underwriter
furnished to the Company by any Underwriter specifically for use
therein; and, provided, further, that the foregoing indemnity with
respect to any Preliminary Prospectus shall not inure to the benefit of
any Underwriter from whom the person asserting any such loss, claim,
damage or liability purchased Shares if a copy of the Final Prospectus
(or any Preliminary Prospectus as supplemented) was not sent or given
by or on behalf of such Underwriter to such person at or prior to the
written confirmation of the sale of such Shares to such person in any
case where such delivery is required by the Securities Act and the
Final Prospectus would have cured the defect giving rise to such loss,
claim, damage or liability.
(b) Each Underwriter will indemnify and hold harmless the
Company, each of its directors, each of the Company's officers who
signed the Registration Statement and each person, if any, who controls
the Company within the meaning of the Securities Act against any
losses, claims, damages or liabilities to which the Company or any such
director, officer or controlling
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person may become subject, under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the
Registration Statement, any Preliminary Prospectus, the Effective
Prospectus or Final Prospectus, or any amendment or supplement thereto,
or arise out of or are based upon the omission or the alleged omission
to state in the Registration Statement, any Preliminary Prospectus, the
Effective Prospectus or Final Prospectus, or any amendment or
supplement thereto, 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 such untrue statement or
alleged untrue statement or omission or alleged omission was made in
reliance upon and in conformity with written information relating to
any Underwriter furnished to the Company by any Underwriter
specifically for use therein; and will reimburse any legal or other
expenses reasonably incurred by the Company and each such controlling
person in connection with investigating or defending any such loss,
claim, damage, liability or action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, including
governmental proceedings, such indemnified party will, if a claim in
respect thereof is to be made against the indemnifying party under this
Section 8 notify the indemnifying party of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party
hereunder except to the extent the indemnifying party hereunder has
been materially prejudiced thereby and in any event shall not relieve
it from liability otherwise than under this Section 8. In case any such
action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party
will be entitled to participate therein, and to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel satisfactory to such
indemnified party; and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under
this Section 8 for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof other
than reasonable costs of investigation except that the indemnified
party shall have the right to employ separate counsel if, in the
indemnified party's reasonable judgment, it is advisable for the
indemnified party to be represented by separate counsel, and in that
event the fees and expenses of separate counsel shall be paid by the
indemnifying party.
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(d) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in the
preceding part of this Section 8 is for any reason held to be
unavailable to the Underwriters or the Company or is insufficient to
hold harmless an indemnified party, then the Company shall contribute
to the damages paid by the Underwriters, and the Underwriters shall
contribute to the damages paid by the Company; provided, however, that
no person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent
misrepresentation.
The amount of such contribution shall (i) be in such
proportion as shall be appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriters on the
other from the offering of the Shares or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, be in
such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and the Underwriters on the other with
respect to the statements or omissions which resulted in such loss,
claim, damage or liability, or action in respect thereof, as well as
any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters on the
other with respect to such offering shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Shares
purchased under this Agreement (before deducting expenses) received by
the Company, in the case of the Company, and the total underwriting
discounts and commissions received by the Underwriters with respect to
the Shares purchased under this Agreement, in the case of the
Underwriters, bear to the total gross proceeds from the offering of the
Shares under this Agreement, in each case as set forth in the
Prospectus. The relative fault shall be determined by reference to
whether the untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to
information supplied by the Company or the Underwriters, the intent of
the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission. The
Company and the Underwriters agree that it would not be equitable if
the amount of such contribution were determined by pro rata or per
capita allocation (even if the Underwriters were treated as one entity
for such purpose). Notwithstanding the foregoing, neither the Company,
nor any Underwriter or person controlling such Underwriter shall be
obligated to make contribution hereunder which in the aggregate exceeds
the underwriting discount applicable to the Shares purchased by such
party Underwriter under this Agreement, less the aggregate amount of
any damages which such Underwriter and its controlling persons have
otherwise been required to pay in respect of the same or any similar
claim. The Underwriters' obligations to contribute hereunder are
several in proportion to
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their respective obligations and not joint. For purposes of this
Section, each person, if any, who controls an Underwriter within the
meaning of Section 15 of the Securities Act shall have the same rights
to contribution as such Underwriter, and each director of the Company,
each officer of the Company who signed the Registration Statement, and
each person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act, shall have the same rights to
contribution as the Company.
(e) No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending
or threatened action, suit or proceeding in respect of which any
indemnified party is a party or is (or would be, if a claim were to be
made against such indemnified party) entitled to indemnity hereunder,
unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject
matter of such action, suit or proceeding.
9. [INTENTIONALLY OMITTED]
10. Survival Clause. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Company, its
officers and the Underwriters set forth in this Agreement or made by or on
behalf of them, respectively, pursuant to this Agreement shall remain in full
force and effect, regardless of (a) any investigation made by or on behalf of
the Company, any of its officers or directors, any Underwriter or any
controlling person, (b) any termination of this Agreement and (c) delivery of
and payment for the Shares.
11. Effective Date. This Agreement shall become effective at
whichever of the following times shall first occur: (i) at 11:30 A.M.,
Washington, D.C. time, on the next full business day following the date on which
the Registration Statement becomes effective or (ii) at such time after the
Registration Statement has become effective as the Representative shall release
the Firm Shares for sale to the public; provided, however, that the provisions
of Sections 5, 8, 10 and 11 hereof shall at all times be effective. For purposes
of this Section 11, the Firm Shares shall be deemed to have been so released
upon the release by the Representative for publication, at any time after the
Registration Statement has become effective, of any newspaper advertisement
relating to the Firm Shares or upon the release by the Representative of
telegrams offering the Firm Shares for sale to securities dealers, whichever may
occur first.
12. Termination.
(a) The Company's obligations under this Agreement may be
terminated by the Company by notice to the Representative (i) at any
time before it becomes effective in accordance with Section 11 hereof,
or (ii) in the event that the condition set forth in Section 7 shall
not have been satisfied at or prior to the First Closing Date.
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(b) This Agreement may be terminated by the Representative by
notice to the Company (i) at any time before it becomes effective in
accordance with Section 11 hereof; (ii) in the event that at or prior
to the First Closing Date the Company shall have failed, refused or
been unable to perform any agreement on the part of the Company to be
performed hereunder or any other condition to the obligations of the
Underwriters hereunder is not fulfilled; (iii) if at or prior to the
Closing Date trading in securities on the NYSE, the American Stock
Exchange or the over-the-counter market shall have been suspended or
materially limited or minimum or maximum prices shall have been
established on either of such exchanges or such market, or a banking
moratorium shall have been declared by Federal or state authorities;
(iv) if at or prior to the Closing Date trading in securities of the
Company shall have been suspended; or (v) if there shall have been such
a material adverse change in general economic, political or financial
conditions or if the effect of international conditions on the
financial markets in the United States shall be such as, in your
reasonable judgment, makes it inadvisable to commence or continue the
offering of the Shares at the offering price to the public set forth on
the cover page of the Prospectus or to proceed with the delivery of the
Shares.
(c) Termination of this Agreement pursuant to this Section 12
shall be without liability of any party to any other party other than
as provided in Sections 5 and 8 hereof.
13. Notices. All communications hereunder shall be in writing and,
if sent to any of the Underwriters, shall be mailed or delivered or telegraphed
and confirmed in writing to the Representative in care of ▇.▇. ▇▇▇▇▇▇▇▇ & Co.,
L.L.C., ▇.▇. ▇▇▇▇▇▇▇▇ Financial Center, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, or if sent to the Company shall be
mailed, delivered or telegraphed and confirmed in writing to the Company at ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇.▇. ▇▇▇▇▇▇, ▇▇.
14. Miscellaneous. This Agreement shall inure to the benefit of
and be binding upon the several Underwriters, the Company and their respective
successors and legal representatives. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person any legal
or equitable right, remedy or claim under or in respect of this Agreement. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the Company and the several Underwriters and for
the benefit of no other person except that (a) the representations and
warranties and indemnities of the Company contained in this Agreement shall also
be for the benefit of any person or persons who control any Underwriter within
the meaning of Section 15 of the Securities Act, and (b) the indemnities by the
Underwriters shall also be for the benefit of the directors of the Company,
officers of the Company who have signed the Registration Statement and any
person or persons who control the
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Company within the meaning of Section 15 of the Securities Act. No purchaser of
Shares from any Underwriter will be deemed a successor because of such purchase.
The validity and interpretation of this Agreement shall be governed by the laws
of the State of Tennessee. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. The Representative hereby
represents and warrants to the Company that it has authority to act hereunder on
behalf of the several Underwriters, and any action hereunder taken by the
Representative will be binding upon all the Underwriters.
If the foregoing is in accordance with your understanding of our
agreement, please indicate your acceptance thereof in the space provided below
for that purpose, whereupon this letter shall constitute a binding agreement
among the Company and each of the several Underwriters.
Very truly yours,
CNB HOLDINGS, INC.
By:
----------------------------
Title: President
-------------------------
Confirmed and accepted as of
the date first above written.
▇.▇. ▇▇▇▇▇▇▇▇ & CO., L.L.C.
For themselves and as
Representatives of the
Underwriters
By:
--------------------------
Partner
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SCHEDULE I
UNDERWRITERS
Number of
Firm Shares to
Underwriter Be Purchased
=========================
▇.▇. ▇▇▇▇▇▇▇▇ & Co,, L.L.C.
=========================
Total.......................................... 900,000
=========================
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