THE SOUTH FINANCIAL GROUP, INC.
5,500,000 Shares of Common Stock
Underwriting Agreement
November 5, 2003
▇.▇. ▇▇▇▇▇▇ Securities Inc. Sandler ▇'▇▇▇▇▇ & Partners, L.P.
UBS Securities LLC
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.
▇▇▇▇▇▇ International Limited
SunTrust Capital Markets, Inc.
As Representatives of the
several Underwriters listed
in Schedule 1 hereto
c/o ▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
The South Financial Group, Inc., a South Carolina corporation (the
"Company"), proposes to issue and sell to the several Underwriters listed in
Schedule 1 hereto (the "Underwriters"), for whom you are acting as
representatives (the "Representatives"), an aggregate of 5,500,000 shares of
Common Stock, par value $1.00 per share (the "Common Stock"), of the Company
(the "Underwritten Shares") and, at the option of the Underwriters, up to an
additional 825,000 shares of Common Stock of the Company (the "Option Shares").
The Underwritten Shares and the Option Shares are herein referred to as the
"Shares". The shares of Common Stock of the Company to be outstanding after
giving effect to the sale of the Shares are herein referred to as the "Stock".
The Company hereby confirms its agreement with the several Underwriters
concerning the purchase and sale of the Shares, as follows:
1. Registration Statement. The Company has prepared and filed with the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Securities Act"), a registration statement (File No.
333-106578) including a prospectus, relating to the Shares. Such registration
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statement, as amended at the time it became effective, including the
information, if any, deemed pursuant to Rule 430A under the Securities Act to be
part of the registration statement at the time of its effectiveness ("Rule 430
Information"), is referred to herein as the "Registration Statement"; and as
used herein, the term "Preliminary Prospectus" means each prospectus included in
such registration statement (and any amendments thereto) before it becomes
effective, any prospectus filed with the Commission pursuant to Rule 424(a)
under the Securities Act and the prospectus included in the Registration
Statement at the time of its effectiveness that omits Rule 430A Information, and
the term "Prospectus" means the prospectus in the form first used to confirm
sales of the Shares. If the Company has filed an abbreviated registration
statement pursuant to Rule 462(b) under the Securities Act (the "Rule 462
Registration Statement"), then any reference herein to the term "Registration
Statement" shall be deemed to include such Rule 462 Registration Statement. Any
reference in this Agreement 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
under the Securities Act, as of the effective date of the Registration Statement
or the date of such Preliminary Prospectus or the Prospectus, as the case may
0be, and any reference to "amend", "amendment" or "supplement" with respect to
the Registration Statement, any Preliminary Prospectus or the Prospectus shall
be deemed to refer to and include any documents filed after such date under the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the Commission thereunder (collectively, the "Exchange Act") that are deemed to
be incorporated by reference therein. Capitalized terms used but not defined
herein shall have the meanings given to such terms in the Registration Statement
and the Prospectus.
2. Purchase of the Shares by the Underwriters. (a) The Company agrees to
issue and sell the Shares to the several Underwriters as provided in this
Agreement, and each Underwriter, on the basis of the representations, warranties
and agreements set forth herein and subject to the conditions set forth herein,
agrees, severally and not jointly, to purchase from the Company the respective
number of Underwritten Shares set forth opposite such Underwriter's name in
Schedule 1 hereto at a price per share (the "Purchase Price") of $25.515.
In addition, the Company agrees to issue and sell the Option Shares to the
several Underwriters as provided in this Agreement, and the Underwriters, on the
basis of the representations, warranties and agreements set forth herein and
subject to the conditions set forth herein, shall have the option to purchase,
severally and not jointly, from the Company the Option Shares at the Purchase
Price.
If any Option Shares are to be purchased, the number of Option Shares to be
purchased by each Underwriter shall be the number of Option Shares which bears
the same ratio to the aggregate number of Option Shares being purchased as the
number of Underwritten Shares set forth opposite the name of such Underwriter in
Schedule 1 hereto (or such number increased as set forth in Section 9 hereof)
bears to the aggregate number of Underwritten Shares being purchased from the
Company by the several Underwriters, subject, however, to such adjustments to
eliminate any fractional Shares as the Representatives in their sole discretion
shall make.
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The Underwriters may exercise the option to purchase the Option Shares at
any time in whole, or from time to time in part, on or before the thirtieth day
following the date of this Agreement, by written notice from the Representatives
to the Company. Such notice shall set forth the aggregate number of Option
Shares as to which the option is being exercised and the date and time when the
Option Shares are to be delivered and paid for, which may be the same date and
time as the Closing Date (as hereinafter defined) but shall not be earlier than
the Closing Date nor later than the tenth full business day (as hereinafter
defined) after the date of such notice (unless such time and date are postponed
in accordance with the provisions of Section 9 hereof). Any such notice shall be
given at least two business days prior to the date and time of delivery
specified therein.
(b) The Company understands that the Underwriters intend to make a public
offering of the Shares as soon after the effectiveness of this Agreement as in
the judgment of the Representatives is advisable, and initially to offer the
Shares on the terms set forth in the Prospectus. The Company acknowledges and
agrees that the Underwriters may offer and sell Shares to or through any
affiliate of an Underwriter and that any such affiliate may offer and sell
Shares purchased by it to or through any Underwriter.
(c) Payment for the Shares shall be made by wire transfer in immediately
available funds to the account specified by the Company to the Representatives
in the case of the Underwritten Shares, at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇ LLP at 10:00 A.M., New York City time on November 12, 2003, or at such
other time or place on the same or such other date, not later than the fifth
business day thereafter, as the Representatives and the Company may agree upon
in writing or, in the case of the Option Shares, on the date and at the time and
place specified by the Representatives in the written notice of the
Underwriters' election to purchase such Option Shares. The time and date of such
payment for the Underwritten Shares is referred to herein as the "Closing Date"
and the time and date for such payment for the Option Shares, if other than the
Closing Date, is referred to herein as the "Additional Closing Date."
Payment for the Shares to be purchased on the Closing Date or the
Additional Closing Date, as the case may be, shall be made against delivery to
the Representatives for the respective accounts of the several Underwriters of
the Shares to be purchased on such date in definitive form registered in such
names and in such denominations as the Representatives shall request in writing
not later than two full business days prior to the Closing Date or the
Additional Closing Date, as the case may be, with any transfer taxes payable in
connection with the sale of the Shares duly paid by the Company. The
certificates for the Shares will be made available for inspection and packaging
by the Representatives at the office of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP set forth
above not later than 1:00 P.M., New York City time, on the business day prior to
the Closing Date or the Additional Closing Date, as the case may be.
3. Representations and Warranties of the Company. The Company represents
and warrants to each Underwriter that:
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(a) Preliminary Prospectus. No order preventing or suspending the use
of any Preliminary Prospectus has been issued by the Commission, and each
Preliminary Prospectus, at the time of filing thereof, complied in all
material respects with the Securities Act and did not contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
provided that the Company makes no representation and warranty with respect
to any statements or omissions made in reliance upon and in conformity with
the Underwriter Information (as defined in Section 6(b) hereof).
(b) Registration Statement and Prospectus. The Registration Statement
has been declared effective by the Commission. No order suspending the
effectiveness of the Registration Statement has been issued by the
Commission and no proceeding for that purpose has been initiated or
threatened by the Commission; as of the applicable effective date of the
Registration Statement and any amendment thereto, the Registration
Statement complied and will comply in all material respects with the
Securities Act, and did not and will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein not
misleading; and as of the applicable filing date of the Prospectus and any
amendment or supplement thereto and as of the Closing Date and as of the
Additional Closing Date, as the case may be, the Prospectus will not
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that the Company makes no representation and
warranty with respect to any statements or omissions made in reliance upon
and in conformity with the Underwriter Information (as defined in Section
6(b) hereof).
(c) Incorporated Documents. The documents incorporated by reference in
the Prospectus, when they were filed with the Commission, conformed in all
material respects to the requirements of the Securities Act or the Exchange
Act and none of such documents contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and any further documents so
filed and incorporated by reference in the Prospectus, when such documents
are filed with the Commission, will conform in all material respects to the
requirements of the Exchange Act and will not contain any 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.
(d) Financial Statements. The financial statements and the related
notes thereto of the Company and its consolidated subsidiaries included or
incorporated by reference in the Registration Statement and the Prospectus
comply in all material respects with the applicable requirements of the
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Securities Act and the Exchange Act, as applicable, and present fairly the
financial position of the Company and its subsidiaries as of the dates
indicated and the results of their operations and the changes in their cash
flows for the periods specified; such financial statements have been
prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods covered thereby, and
the supporting schedules included or incorporated by reference in the
Registration Statement present fairly the information required to be stated
therein; and the other financial information included or incorporated by
reference in the Registration Statement and the Prospectus has been derived
from the accounting records of the Company and its subsidiaries and
presents fairly the information shown thereby. All non-GAAP financial
information included or incorporated by reference in the Registration
Statement and the Prospectus complies in all material respects with the
requirements of Regulation G and Item 10 of Regulation S-K under the
Securities Act.
(e) No Material Adverse Change. Since the date of the most recent
financial statements of the Company included or incorporated by reference
in the Registration Statement and the Prospectus, (i) except for the
redemption of outstanding rights attached to the Company's outstanding
Common Stock, there has not been any change in the capital stock or
long-term debt of the Company or any of its subsidiaries, or any dividend
or distribution of any kind declared, set aside for payment, paid or made
by the Company on any class of capital stock, or any material adverse
change, or any development involving a prospective material adverse change,
in or affecting the business, properties, management, financial position,
stockholders' equity, results of operations or prospects of the Company and
its subsidiaries taken as a whole; (ii) neither the Company nor any of its
subsidiaries has entered into any transaction or agreement that is material
to the Company and its subsidiaries taken as a whole or incurred any
liability or obligation, direct or contingent, that is material to the
Company and its subsidiaries taken as a whole; and (iii) neither the
Company nor any of its subsidiaries has sustained any loss or interference,
in either case material to the Company and its subsidiaries taken as a
whole, with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor disturbance or
dispute or any action, order or decree of any court or arbitrator or
governmental or regulatory authority, except in each case as otherwise
disclosed in the Registration Statement and the Prospectus.
(f) Organization and Good Standing. The Company and each of its
subsidiaries have been duly organized and are validly existing and in good
standing under the laws of their respective jurisdictions of organization,
are duly qualified to do business and are in good standing in each
jurisdiction in which their respective ownership or lease of property or
the conduct of their respective businesses requires such qualification, and
have all power and authority necessary to own or hold their respective
properties and to conduct the businesses in which they are engaged, except
where the failure to be so qualified or have such power or authority would
not, individually or in the aggregate, have a material adverse effect on
the business, properties, management, financial position, stockholders'
equity, results of operations or prospects of the Company and its
subsidiaries taken as a whole (a "Material Adverse Effect"). Other than
certain former direct or indirect subsidiaries of MountainBank Financial
Corporation and Allied Assurance, Inc., the Company does
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not own or control, directly or indirectly, any corporation, association or
other entity other than the subsidiaries listed in Exhibit 21.1 to the
Company's Annual Report on Form 10-K incorporated by reference in the
Registration Statement.
(g) Bank Holding Company Act. The Company is duly registered as a bank
holding company under the Bank Holding Company Act of 1956, as amended (the
"BHC Act"). Each of the Company's banking subsidiaries holds the requisite
authority from its respective banking authority to do business as a
national banking association under the laws of the United States or as a
state-chartered banking corporation under the laws of such subsidiary's
jurisdiction of incorporation, as the case may be. The Company and each of
its banking subsidiaries are in compliance in all material respects with
all laws administered by the Board of Governors of the Federal Reserve
System (the "Federal Reserve Board"), the Federal Deposit Insurance
Corporation (the "FDIC") and any other federal or state bank regulatory
authorities (together with the Federal Reserve Board and the FDIC, the
"Bank Regulatory Authorities") with jurisdiction over the Company and its
subsidiaries, except for failures to be so in compliance that would not,
individually or in the aggregate, have a Material Adverse Effect.
(h) Capitalization. The Company has an authorized capitalization as
set forth in the Prospectus under the heading "Capitalization"; all the
outstanding shares of capital stock of the Company have been duly and
validly authorized and issued and are fully paid and nonassessable and are
not subject to any preemptive or similar rights; except as described in or
expressly contemplated by the Prospectus and except for (i) approximately
$2.5 million of Common Stock issuable in connection with "earnouts" and
(ii) approximately $90.0 million of Series 2000B Preferred Shares of
Carolina First Mortgage Loan Trust convertible into Series 2000B Cumulative
Floating Rate Preferred Stock of Carolina First Bank, there are no
outstanding rights (including, without limitation, preemptive rights),
warrants or options to acquire, or instruments convertible into or
exchangeable for, any shares of capital stock or other equity interest in
the Company or any of its subsidiaries, or any contract, commitment,
agreement, understanding or arrangement of any kind relating to the
issuance of any capital stock of the Company or any such subsidiary, any
such convertible or exchangeable securities or any such rights, warrants or
options; the capital stock of the Company conforms in all material respects
to the description thereof contained in the Registration Statement and the
Prospectus; and all the outstanding shares of capital stock or other equity
interests of each subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and nonassessable (except, in the
case of any foreign subsidiary, for directors' qualifying shares, except,
in the case of any banking subsidiaries, as provided in 12 U.S.C. Section
55 or 12 U.S.C. Section 1831o or under applicable state banking laws and
regulations and except as otherwise described in the
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Prospectus) and are owned directly or indirectly by the Company, free and
clear of any lien, charge, encumbrance, security interest, restriction on
voting or transfer or any other claim of any third party.
(i) Due Authorization. The Company has full right, power and authority
to execute and deliver this Agreement and to perform its obligations
hereunder; and all action required to be taken for the due and proper
authorization, execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby has been duly and
validly taken.
(j) Underwriting Agreement. This Agreement has been duly authorized,
executed and delivered by the Company.
(k) The Shares. The Shares to be issued and sold by the Company
hereunder have been duly authorized by the Company and, when issued and
delivered and paid for as provided herein, will be duly and validly issued
and will be fully paid and nonassessable and will conform to the
description thereof in the Prospectus; and the issuance of the Shares is
not subject to any preemptive or similar rights.
(l) No Violation or Default. Neither the Company nor any of its
subsidiaries is (i) in violation of its charter or by-laws or similar
organizational documents; (ii) in default, and no event has occurred that,
with notice or lapse of time or both, would constitute such a default, in
the due performance or observance of any term, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries
is bound or to which any of the property or assets of the Company or any of
its subsidiaries is subject; or (iii) in violation of any law or statute or
any judgment, order, rule or regulation of any court or arbitrator or
governmental or regulatory authority, except, in the case of clauses (ii)
and (iii) above, for any such default or violation that would not,
individually or in the aggregate, have a Material Adverse Effect.
(m) No Conflicts. The execution, delivery and performance by the
Company of each of this Agreement, the issuance and sale of the Shares and
the consummation of the transactions contemplated by this Agreement will
not (i) conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Company or any of its subsidiaries pursuant to, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to
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which any of the property or assets of the Company or any of its
subsidiaries is subject, (ii) result in any violation of the provisions of
the charter or by-laws or similar organizational documents of the Company
or any of its subsidiaries or (iii) result in the violation of any law or
statute or any judgment, order, rule or regulation of any court or
arbitrator or governmental or regulatory authority, except, in the case of
clauses (i) and (iii) above, for any such conflict, breach or violation
that would not, individually or in the aggregate, have a Material Adverse
Effect.
(n) No Consents Required. No consent, approval, authorization, order,
registration or qualification of or with any court or arbitrator or
governmental or regulatory authority is required for the execution,
delivery and performance by the Company of this Agreement, the issuance and
sale of the Shares and the consummation of the transactions contemplated by
this Agreement, except for the registration of the Shares under the
Securities Act and such consents, approvals, authorizations, orders and
registrations or qualifications as may be required under applicable state
securities laws in connection with the purchase and distribution of the
Shares by the Underwriters, and except for the listing of the Shares on the
Nasdaq National Market.
(o) Legal Proceedings. Except as described in the Prospectus, there
are no legal, governmental or regulatory investigations, actions, suits or
proceedings pending to which the Company or any of its subsidiaries is or
may be a party or of which any property of the Company or any of its
subsidiaries is or may be the subject that, individually or in the
aggregate, if determined adversely to the Company or any of its
subsidiaries, could reasonably be expected to have a Material Adverse
Effect or materially and adversely affect the ability of the Company to
perform its obligations under this Agreement; to the knowledge of the
Company, no such investigations, actions, suits or proceedings are
threatened or contemplated by any governmental or regulatory authority or
threatened by others; and (i) to the knowledge of the Company, there are no
current or pending legal, governmental or regulatory actions, suits or
proceedings that are required under the Securities Act to be described in
the Prospectus that are not so described and (ii) there are no statutes,
regulations or contracts or other documents that are required under the
Securities Act to be filed as exhibits to the Registration Statement or
described in the Registration Statement or the Prospectus that are not so
filed or described.
(p) Independent Accountants. KPMG LLP, who have certified certain
financial statements of the Company and its subsidiaries, are independent
public accountants with respect to the Company and its subsidiaries as
required by the Securities Act.
(q) Title to Real and Personal Property. The Company and its
subsidiaries have good and marketable title to, or have valid rights to
lease or otherwise use, all items of real and personal property that are
material to the respective businesses of the Company and its subsidiaries,
in each case free and clear of all liens, encumbrances, claims and defects
and imperfections of title except those that (i) do not materially
interfere with the use made and proposed to be made of such property by the
Company and its subsidiaries or (ii) could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect.
(r) Title to Intellectual Property. To the knowledge of the Company,
the Company and its subsidiaries own or possess adequate rights to use all
material patents, patent applications, trademarks, service marks, trade
names, trademark
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registrations, service ▇▇▇▇ registrations, copyrights, licenses and
know-how (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures) necessary
for the conduct of their respective businesses; and to the knowledge of the
Company, the conduct of their respective businesses will not conflict in
any material respect with any such rights of others, and the Company and
its subsidiaries have not received any notice of any claim of infringement
or conflict with any such rights of others.
(s) No Undisclosed Relationships. No relationship, direct or indirect,
exists between or among the Company or any of its subsidiaries, on the one
hand, and the directors, officers, stockholders, customers or suppliers of
the Company or any of its subsidiaries, on the other, that is required by
the Securities Act to be described in the Registration Statement and the
Prospectus and that is not so described.
(t) Investment Company Act. The Company is not and, after giving
effect to the offering and sale of the Shares and the application of the
proceeds thereof as described in the Prospectus, will not be required to
register as an "investment company" or an entity "controlled" by an
"investment company" within the meaning of the Investment Company Act of
1940, as amended, and the rules and regulations of the Commission
thereunder (collectively, the "Investment Company Act").
(u) Taxes. The Company and its subsidiaries have filed all material
federal, state, local and foreign tax returns required to be filed through
the date hereof and have paid all taxes shown thereon and all assessments
received by them to the extent that such taxes have become due and are not
being contested in good faith; and to the knowledge of the Company, except
as otherwise disclosed in the Prospectus, there is no tax deficiency that
has been, or could reasonably be expected to be, asserted against the
Company or any of its subsidiaries or any of their respective properties or
assets.
(v) Licenses and Permits. The Company and its subsidiaries possess all
licenses, certificates, permits and other authorizations issued by, and
have made all declarations and filings with, the appropriate federal,
state, local or foreign governmental or regulatory authorities that are
necessary for the ownership or lease of their respective properties or the
conduct of their respective businesses as described in the Registration
Statement and the Prospectus, except where the failure to possess or make
the same would not, individually or in the aggregate, have a Material
Adverse Effect; and except as described in the Prospectus, neither the
Company nor any of its subsidiaries has received notice of any revocation
or modification of any such license, certificate, permit or authorization
or has any reason to believe that any such license, certificate, permit or
authorization will not be renewed in the ordinary course.
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(w) No Labor Disputes. No labor disturbance by or dispute with
employees of the Company or any of its subsidiaries exists or, to the
knowledge of the Company, is contemplated or threatened.
(x) Compliance with Environmental Laws. The Company and its
subsidiaries (i) are in compliance with any and all applicable federal,
state, local and foreign laws, rules, regulations, decisions and orders
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
(collectively, "Environmental Laws"); (ii) have received and are in
compliance with all permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct their respective businesses;
and (iii) have not received notice of any actual or potential liability for
the investigation or remediation of any disposal or release of hazardous or
toxic substances or wastes, pollutants or contaminants, except in any such
case for any such failure to comply, or failure to receive required
permits, licenses or approvals, or liability as would not, individually or
in the aggregate, have a Material Adverse Effect.
(y) Compliance with ERISA. Except for such items as could not
reasonably be expected to have a Material Adverse Effect, 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 the Company or any of its affiliates for
employees or former employees of the Company and its affiliates has been
maintained in compliance with its 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, transactions with respect to which the applicable
statutes of limitations have expired and transactions that have been fully
cured in accordance with ERISA and the Code; and 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) exceeds the present value of all benefits accrued
under such plan determined using reasonable actuarial assumptions.
(z) Accounting Controls. The Company and its subsidiaries maintain
systems of internal accounting controls 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 preparation of financial statements in
conformity with generally accepted accounting principles 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
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respect to any differences. The Company and each of its subsidiaries
maintain disclosure controls and procedures (as such term is defined in
Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to
ensure that information required to be disclosed by the Company in the
reports that it files or submits under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in
the rules and forms of the Commission, including, without limitation,
controls and procedures designed to ensure that information required to be
disclosed by the Company in the reports that it files or submits under the
Exchange Act is accumulated and communicated to the Company's management,
including its principal executive officer or officers and its principal
financial officer or officers, as appropriate to allow timely decisions
regarding required disclosure.
(aa) Insurance. The Company and its subsidiaries have insurance
covering their respective properties, operations, personnel and businesses,
including business interruption insurance, which insurance is in amounts
and insures against such losses and risks as would customarily be obtained
by other companies similarly situated and in a similar business; and
neither the Company nor any of its subsidiaries has (i) received notice
from any insurer or agent of such insurer that material capital
improvements or other material expenditures are required or necessary to be
made in order to continue such insurance or (ii) any reason to believe that
it will not be able to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage at reasonable cost from
similar insurers as may be necessary to continue its business.
(bb) Deposit Accounts. The deposit accounts of each of the banking
subsidiaries of the Company are insured up to the maximum amount provided
by the FDIC and no proceedings for the modification, termination or
revocation of any such insurance are pending or threatened.
(cc) No Unlawful Payments. Neither the Company nor any of its
subsidiaries nor, to the best knowledge of the Company, any director,
officer, agent, employee or other person associated with or acting on
behalf of the Company or any of its subsidiaries has (i) used any corporate
funds for any unlawful contribution, gift, entertainment or other unlawful
expense relating to political activity; (ii) made any direct or indirect
unlawful payment to any foreign or domestic government official or employee
from corporate funds; (iii) violated or is in violation of any provision of
the Foreign Corrupt Practices Act of 1977; or (iv) made any bribe, rebate,
payoff, influence payment, kickback or other unlawful payment.
(dd) No Restrictions on Subsidiaries. No subsidiary of the Company is
currently prohibited, directly or indirectly, under any order of the
Federal Reserve Board (other than orders applicable to bank holding
companies and their subsidiaries generally), any agreement or other
instrument to which it is a party or is subject, from paying any dividends
to the Company, from making any other distribution on such subsidiary's
capital stock, from repaying to the
-12-
Company any loans or advances to such subsidiary from the Company or from
transferring any of such subsidiary's properties or assets to the Company
or any other subsidiary of the Company.
(ee) No Broker's Fees. Neither the Company nor any of its subsidiaries
is a party to any contract, agreement or understanding with any person
(other than this Agreement) that would give rise to a valid claim against
the Company or any of its subsidiaries or any Underwriter for a brokerage
commission, finder's fee or like payment in connection with the offering
and sale of the Shares.
(ff) No Registration Rights. No person has the right to require the
Company or any of its subsidiaries to register any securities for sale
under the Securities Act by reason of the filing of the Registration
Statement with the Commission or the issuance and sale of the Shares.
(gg) No Stabilization. The Company has not taken, directly or
indirectly, any action designed to or that could reasonably be expected to
cause or result in any stabilization or manipulation of the price of the
Shares.
(hh) Business with Cuba. The Company has complied with all provisions
of Section 517.075, Florida Statutes (Chapter 92-198, Laws of Florida),
relating to doing business with the Government of Cuba or with any person
or affiliate located in Cuba.
(ii) Margin Rules. Neither the issuance, sale and delivery of the
Shares nor the application of the proceeds thereof by the Company as
described in the Registration Statement and the Prospectus will violate
Regulation T, U or X of the Board of Governors of the Federal Reserve
System or any other regulation of such Board of Governors.
(jj) Forward-Looking Statements. No forward-looking statement (within
the meaning of Section 27A of the Securities Act and Section 21E of the
Exchange Act) contained in the Registration Statement and the Prospectus
has been made or reaffirmed without a reasonable basis or has been
disclosed other than in good faith.
(kk) Statistical and Market Data. Nothing has come to the attention of
the Company that has caused the Company to believe that the statistical and
market-related data included in the Registration Statement and the
Prospectus is not based on or derived from sources that are reliable and
accurate in all material respects.
(ll) ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act. There is and has been no failure on the part
of the Company or any of the Company's directors or officers, in their
capacities as such, to comply in all material respects with any provision
of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules and regulations promulgated
in connection therewith (the "▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act"), including Section 402
related to loans and Sections 302 and 906 related to certifications.
-13-
(mm) Fiduciary Accounts. To the best knowledge of the Company, each of
the Company and its subsidiaries has properly administered all accounts for
which any of them acts as a fiduciary, including, but not limited to,
accounts for which any of them serves as a trustee, agent, custodian,
personal representative, guardian, conservator or investment advisor, in
accordance with the terms of the governing documents and applicable federal
and state laws and regulations, except where the failure to have so
administered or to be in compliance would not, individually or in the
aggregate, have a Material Adverse Effect. None of the Company, its
subsidiaries or any of their respective directors, officers or employees
has committed any material breach of trust with respect to any such
fiduciary account, except where such commission would not, individually or
in the aggregate, have a Material Adverse Effect, and the accountings for
each such fiduciary account are true and correct in all material respects
and accurately reflect the assets of such fiduciary account in all material
respects.
4. Further Agreements of the Company. The Company covenants and agrees with
each Underwriter that:
(a) Effectiveness of the Registration Statement. The Company will file
the final Prospectus with the Commission within the time periods specified
by Rule 424(b) and Rule 430A under the Securities Act and will file
promptly all reports and any definitive proxy or information statements
required to be filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of the
Prospectus and for so long as the delivery of a prospectus is required in
connection with the offering or sale of the Shares; and the Company will
furnish copies of the Prospectus to the Underwriters in New York City prior
to 10:00 A.M., New York City time, on the second business day succeeding
the date of this Agreement in such quantities as the Representatives may
reasonably request.
(b) Delivery of Copies. The Company will deliver, without charge, (i)
to the Representatives, eight signed copies of the Registration Statement
as originally filed and each amendment thereto, in each case including all
exhibits and consents filed therewith and documents incorporated by
reference therein; and (ii) to each Underwriter (A) a conformed copy of the
Registration Statement as originally filed and each amendment thereto
(without exhibits) and (B) during the Prospectus Delivery Period, as many
copies of the Prospectus (including all amendments and supplements thereto
and documents incorporated by reference therein as the Representatives may
reasonably request. As used herein, the term "Prospectus Delivery Period"
means such period of time after the first date of the public offering of
the Shares as in the opinion of counsel for the Underwriters a prospectus
relating to the Shares is required by law to be delivered in connection
with sales of the Shares by any Underwriter or dealer.
-14-
(c) Amendments or Supplements. Before filing any amendment or
supplement to the Registration Statement or the Prospectus, the Company
will furnish to the Representatives and counsel for the Underwriters a copy
of the proposed amendment or supplement for review and will not file any
such proposed amendment or supplement to which the Representatives
reasonably object.
(d) Notice to the Representatives. The Company will advise the
Representatives promptly (i) when the Registration Statement has become
effective; (ii) when any amendment to the Registration Statement has been
filed or becomes effective; (iii) when any supplement to the Prospectus or
any amendment to the Prospectus has been filed; (iv) of any request by the
Commission for any amendment to the Registration Statement or any amendment
or supplement to the Prospectus or the receipt of any comments from the
Commission relating to the Registration Statement or any other request by
the Commission for any additional information; (v) of the issuance by the
Commission of any order suspending the effectiveness of the Registration
Statement or preventing or suspending the use of any Preliminary Prospectus
or the Prospectus or the initiation or threatening of any proceeding for
that purpose; (vi) of the occurrence of any event within the Prospectus
Delivery Period as a result of which the Prospectus as then amended or
supplemented would include any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein,
in the light of the circumstances existing when the Prospectus is delivered
to a purchaser, not misleading; and (vii) of the receipt by the Company of
any notice with respect to any suspension of the qualification of the
Shares for offer and sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and the Company will use
its best efforts to prevent the issuance of any such order suspending the
effectiveness of the Registration Statement, preventing or suspending the
use of any Preliminary Prospectus or the Prospectus or suspending any such
qualification of the Shares and, if any such order is issued, to use its
best efforts to obtain as soon as possible the withdrawal thereof.
(e) Ongoing Compliance of the Prospectus. If during the Prospectus
Delivery Period (i) any event shall occur or condition shall exist as a
result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances existing when the
Prospectus is delivered to a purchaser, not misleading or (ii) it is
necessary to amend or supplement the Prospectus to comply with law, the
Company will immediately notify the Underwriters thereof and forthwith
prepare and, subject to paragraph (c) above, file with the Commission and
furnish to the Underwriters and to such dealers as the Representatives may
designate such amendments or supplements to the Prospectus as may be
necessary so that the statements in the Prospectus as so amended or
supplemented will not, in the light of the circumstances existing when the
Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus will comply with law.
-15-
(f) Blue Sky Compliance. The Company will cooperate with the
Representatives and counsel to the Representatives in connection with the
qualification of the Shares for offer and sale under the securities or Blue
Sky laws of such jurisdictions as the Representatives shall reasonably
request and will continue such qualifications in effect so long as required
for distribution of the Shares; provided that the Company shall not be
required to (i) qualify as a foreign corporation or other entity or as a
dealer in securities in any such jurisdiction where it would not otherwise
be required to so qualify, (ii) file any general consent to service of
process in any such jurisdiction or (iii) subject itself to taxation in any
such jurisdiction if it is not otherwise so subject.
(g) Earning Statement. The Company will make generally available to
its security holders and the Representatives as soon as practicable an
earning statement that satisfies the provisions of Section 11(a) of the
Securities Act and Rule 158 of the Commission promulgated thereunder
covering a period of at least twelve months beginning with the first fiscal
quarter of the Company occurring after the "effective date" (as defined in
Rule 158) of the Registration Statement.
(h) Clear Market. For a period of 90 days after the date of the final
Prospectus, the Company will not (i) offer, pledge, announce the intention
to sell, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant
to purchase or otherwise transfer or dispose of, directly or indirectly,
any shares of Stock or any securities convertible into or exercisable or
exchangeable for Stock or (ii) enter into any swap or other agreement that
transfers, in whole or in part, any of the economic consequences of
ownership of the Stock, whether any such transaction described in clause
(i) or (ii) above is to be settled by delivery of Stock or such other
securities, in cash or otherwise, without the prior written consent of ▇.▇.
▇▇▇▇▇▇ Securities Inc., other than (x) the Shares to be sold hereunder, (y)
any shares of Stock of the Company issued pursuant to existing employee
benefit plans, stock option plans or other director, employee or consultant
compensation plans (including, but not limited to, the Company's restricted
stock grant plan, employee stock purchase plan or dividend reinvestment
plan (including optional cash purchases thereunder)) or pursuant to
options, warrants or rights outstanding on the date of the Prospectus or
the grant of options pursuant to such plans, and (z) a number of shares of
Stock equal to two percent (2%) of the number of shares of Stock
outstanding immediately following the purchase of the Shares, issued in
connection with the acquisition of a business or businesses by the Company;
provided, however, that, in the case of this clause (z), the recipient of
such Stock shall execute a "lock-up" agreement substantially in the form of
Exhibit A hereto.
(i) Use of Proceeds. The Company will apply the net proceeds from the
sale of the Shares as described in the Prospectus under the heading "Use of
proceeds".
-16-
(j) No Stabilization. The Company will not take, directly or
indirectly, any action designed to or that could reasonably be expected to
cause or result in any stabilization or manipulation of the price of the
Shares.
(k) Exchange Listing. The Company will use its best efforts to list
for quotation the Shares on the National Association of Securities Dealers
Automated Quotations National Market (the "Nasdaq National Market").
(l) Reports. During a period of three years commencing with the date
hereof, to the extent not otherwise available on ▇▇▇▇▇ (as defined in
Regulation S-T), the Company will furnish to the Representatives, as soon
as they are available, copies of all reports or other communications
(financial or other) furnished to holders of the Shares, and copies of any
reports and financial statements furnished to or filed with the Commission
or any national securities exchange or automatic quotation system.
5. Conditions of Underwriters' Obligations. The obligation of each
Underwriter to purchase the Underwritten Shares on the Closing Date or the
Option Shares on the Additional Closing Date, as the case may be, as provided
herein is subject to the performance by the Company of its covenants and other
obligations hereunder and to the following additional conditions:
(a) Registration Compliance; No Stop Order. The Registration Statement
(or if a post-effective amendment thereto is required to be filed under the
Securities Act, such post-effective amendment) shall have become effective,
and the Representatives shall have received notice thereof, not later than
5:00 P.M., New York City time, on the date hereof; no order suspending the
effectiveness of the Registration Statement shall be in effect, and no
proceeding for such purpose shall be pending before or threatened by the
Commission; the Prospectus shall have been timely filed with the Commission
under the Securities Act and in accordance with Section 4(a) hereof; and
all requests by the Commission for additional information shall have been
complied with to the reasonable satisfaction of the Representatives.
(b) Representations and Warranties. The representations and warranties
of the Company contained herein shall be true and correct on the date
hereof and on and as of the Closing Date or the Additional Closing Date, as
the case may be; and the statements of the Company and its officers made in
any certificates delivered pursuant to this Agreement shall be true and
correct on and as of the Closing Date or the Additional Closing Date, as
the case may be.
(c) No Downgrade. Subsequent to the execution and delivery of this
Agreement, (i) no downgrading shall have occurred in the rating accorded
any securities or preferred stock of or guaranteed by the Company or any of
its subsidiaries by any "nationally recognized statistical rating
organization", as such term is defined by the Commission for purposes of
Rule 436(g)(2) under the Securities Act, and (ii) no such organization
shall have publicly announced that it has under surveillance or review, or
has changed its outlook with respect to, its rating of any securities or
-17-
preferred stock of or guaranteed by the Company or any of its subsidiaries
(other than an announcement with positive implications of a possible
upgrading).
(d) No Material Adverse Change. Subsequent to the execution and
delivery of this Agreement, no event or condition of a type described in
Section 3(e) hereof shall have occurred or shall exist, which event or
condition is not described in the Prospectus (excluding any amendment or
supplement thereto) and the effect of which in the judgment of the
Representatives makes it impracticable or inadvisable to proceed with the
offering, sale or delivery of the Shares on the Closing Date or the
Additional Closing Date, as the case may be, on the terms and in the manner
contemplated by this Agreement and the Prospectus.
(e) Officer's Certificate. The Representatives shall have received on
and as of the Closing Date or the Additional Closing Date, as the case may
be, a certificate of the chief financial officer or chief accounting
officer of the Company and one additional senior executive officer of the
Company who is satisfactory to the Representatives (i) confirming that, to
the knowledge of such officers, the representations and warranties of the
Company in this Agreement are true and correct and that the Company has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied hereunder at or prior to such Closing Date and (ii)
to the effect set forth in paragraphs (a), (c) and (d) above.
(f) Comfort Letters. On the date of this Agreement and on the Closing
Date or the Additional Closing Date, as the case may be, KPMG LLP shall
have furnished to the Representatives, at the request of the Company,
letters, dated the respective dates of delivery thereof and addressed to
the Underwriters, in form and substance reasonably satisfactory to the
Representatives, containing statements and information of the type
customarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information
contained or incorporated by reference in the Registration Statement and
the Prospectus; provided that the letter delivered on the Closing Date or
the Additional Closing Date, as the case may be, shall use a "cut-off" date
no more than three business days prior to such Closing Date or such
Additional Closing Date, as the case may be.
(g) Opinion of Counsel for the Company. Wyche, Burgess, ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇, PA, counsel for the Company, and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇., General
Counsel of the Company, shall have furnished to the Representatives, at the
request of the Company, their written opinion, dated the Closing Date or
the Additional Closing Date, as the case may be, and addressed to the
Underwriters, in form and substance reasonably satisfactory to the
Representatives, to the effect set forth in Annex A and Annex B,
respectively, attached hereto.
-18-
(h) Opinion of Counsel for the Underwriters. The Representatives shall
have received on and as of the Closing Date or the Additional Closing Date,
as the case may be, an opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, counsel for
the Underwriters, with respect to such matters as the Representatives may
reasonably request, and such counsel shall have received such documents and
information as they may reasonably request to enable them to pass upon such
matters.
(i) No Legal Impediment to Issuance. No action shall have been taken
and no statute, rule, regulation or order shall have been enacted, adopted
or issued by any federal, state or foreign governmental or regulatory
authority that would, as of the Closing Date or the Additional Closing
Date, as the case may be, prevent the issuance or sale of the Shares; and
no injunction or order of any federal, state or foreign court shall have
been issued that would, as of the Closing Date or the Additional Closing
Date, as the case may be, prevent the issuance or sale of the Shares.
(j) Good Standing. The Representatives shall have received on and as
of the Closing Date or the Additional Closing Date, as the case may be,
satisfactory evidence of the good standing of the Company and each
"significant subsidiary" (as such term is defined in Rule 1-02 of
Regulation S-X under the Exchange Act) of the Company in their respective
jurisdictions of organization and their good standing as foreign entities
in such other jurisdictions as the Representatives may reasonably request,
in each case in writing or any standard form of telecommunication from the
appropriate governmental authorities of such jurisdictions.
(k) Exchange Listing. The Shares to be delivered on the Closing Date
or Additional Closing Date, as the case may be, shall have been approved
for listing on the Nasdaq National Market.
(l) Lock-up Agreements. The "lock-up" agreements, each substantially
in the form of Exhibit A hereto, between you and executive officers and
directors of the Company relating to sales and certain other dispositions
of shares of Stock or certain other securities, delivered to you on or
before the date hereof, shall be in full force and effect on the Closing
Date or Additional Closing Date, as the case may be.
(m) Additional Documents. On or prior to the Closing Date or the
Additional Closing Date, as the case may be, the Company shall have
furnished to the Representatives such further certificates and documents as
the Representatives may reasonably request.
All opinions, letters, certificates and evidence mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
-19-
6. Indemnification and Contribution.
(a) Indemnification of the Underwriters. The Company agrees to indemnify
and hold harmless each Underwriter, its affiliates, directors and officers and
each person, if any, who controls such Underwriter within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act, from and against any
and all losses, claims, damages and liabilities (including, without limitation,
legal fees and other expenses incurred in connection with any suit, action or
proceeding or any claim asserted, as such fees and expenses are incurred), joint
or several, that arise out of, or are based upon, any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or the Prospectus (or any amendment or supplement thereto) or any
Preliminary Prospectus, or caused by any omission or alleged omission to state
therein a 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, except insofar as such losses, claims, damages or
liabilities arise out of, or are based upon, any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with any information relating to any Underwriter furnished to the Company in
writing by such Underwriter through the Representatives expressly for use
therein, it being understood and agreed that the only such information furnished
by any Underwriter consists of the information described as such in subsection
(b) below; provided that with respect to any such untrue statement in or
omission from any Preliminary Prospectus, the indemnity agreement contained in
this paragraph (a) shall not inure to the benefit of any Underwriter to the
extent that the sale to the person asserting any such loss, claim, damage or
liability was an initial resale by such Underwriter and any such loss, claim,
damage or liability of or with respect to such Underwriter results from the fact
that both (i) to the extent required by applicable law, a copy of the Prospectus
was not sent or given to such person at or prior to the written confirmation of
the sale of such Shares to such person and (ii) the untrue statement in or
omission from such Preliminary Prospectus was corrected in the Prospectus
unless, in either case, such failure to deliver the Prospectus was a result of
non-compliance by the Company with the provisions of Section 4 hereof.
(b) Indemnification of the Company. Each Underwriter agrees, severally and
not jointly, to indemnify and hold harmless the Company, its directors, its
officers who signed the Registration Statement and each person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act to the same extent as the indemnity set forth in
paragraph (a) above, but only with respect to any losses, claims, damages or
liabilities that arise out of, or are based upon, any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with any information relating to such Underwriter furnished to the
Company in writing by such Underwriter through the Representatives expressly for
use in the Registration Statement and the Prospectus (or any amendment or
supplement thereto) or any Preliminary Prospectus, it being understood and
agreed upon that the only such information furnished by any Underwriter consists
of the following information in the Preliminary Prospectus or the Prospectus
furnished on behalf of each Underwriter: the third, sixth, seventh and eighth
paragraphs under the caption "Underwriting" (such information, collectively, the
"Underwriter Information").
-20-
(c) Notice and Procedures. If any suit, action, proceeding (including any
governmental or regulatory investigation), claim or demand shall be brought or
asserted against any person in respect of which indemnification may be sought
pursuant to either paragraph (a) or (b) above, such person (the "Indemnified
Person") shall promptly notify the person against whom such indemnification may
be sought (the "Indemnifying Person") in writing; provided that the failure to
notify the Indemnifying Person shall not relieve it from any liability that it
may have under this Section 6 except to the extent that it has been materially
prejudiced (through the forfeiture of substantive rights or defenses) by such
failure; and provided, further, that the failure to notify the Indemnifying
Person shall not relieve it from any liability that it may have to an
Indemnified Person otherwise than under this Section 6. If any such proceeding
shall be brought or asserted against an Indemnified Person and it shall have
notified the Indemnifying Person thereof, the Indemnifying Person shall retain
counsel reasonably satisfactory to the Indemnified Person to represent the
Indemnified Person and any others entitled to indemnification pursuant to this
Section 6 that the Indemnifying Person may designate in such proceeding and
shall pay the fees and expenses of such counsel related to such proceeding, as
incurred. In any such proceeding, any Indemnified Person shall have the right to
retain its own counsel, but the fees and expenses of such counsel shall be at
the expense of such Indemnified Person unless (i) the Indemnifying Person and
the Indemnified Person shall have mutually agreed to the contrary; (ii) the
Indemnifying Person has failed within a reasonable time to retain counsel
reasonably satisfactory to the Indemnified Person; (iii) the Indemnified Person
shall have reasonably concluded that there may be legal defenses available to it
that are different from or in addition to those available to the Indemnifying
Person; or (iv) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It is
understood and agreed that the Indemnifying Person shall not, in connection with
any proceeding or related proceeding in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Indemnified Persons, and that all such fees and expenses shall
be paid or reimbursed as they are incurred. Any such separate firm for any
Underwriter, its affiliates, directors and officers and any control persons of
such Underwriter shall be designated in writing by ▇.▇. ▇▇▇▇▇▇ Securities Inc.
and any such separate firm for the Company, its directors, its officers who
signed the Registration Statement and any control persons of the Company shall
be designated in writing by the Company. The Indemnifying Person shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the Indemnifying Person agrees to indemnify each Indemnified
Person from and against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified
Person shall have properly requested that an Indemnifying Person reimburse the
Indemnified Person for fees and expenses of counsel as contemplated by this
paragraph, the Indemnifying Person shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by the Indemnifying Person of such
request and (ii) the Indemnifying Person shall not have reimbursed the
Indemnified Person in accordance with such request prior to the date of such
settlement. No Indemnifying Person shall, without the written consent of the
-21-
Indemnified Person, effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Person is or could have been a
party and indemnification could have been sought hereunder by such Indemnified
Person, unless such settlement (x) includes an unconditional release of such
Indemnified Person, in form and substance reasonably satisfactory to such
Indemnified Person, from all liability on claims that are the subject matter of
such proceeding and (y) does not include any statement as to or any admission of
fault, culpability or a failure to act by or on behalf of any Indemnified
Person.
(d) Contribution. If the indemnification provided for in paragraphs (a) and
(b) above is unavailable to an Indemnified Person or insufficient in respect of
any losses, claims, damages or liabilities referred to therein, then each
Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other from the offering of the Shares or (ii) if the allocation provided by
clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
but also the relative fault of the Company on the one hand and the Underwriters
on the other in connection with the statements or omissions that resulted in
such losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Underwriters on the other shall be deemed to be in the same
respective proportions as the net proceeds (before deducting expenses) received
by the Company from the sale of the Shares and the total underwriting discounts
and commissions received by the Underwriters in connection therewith, in each
case as set forth in the table on the cover of the Prospectus, bear to the
aggregate offering price of the Shares. The relative fault of the Company on the
one hand and the Underwriters on the other 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 or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
(e) Limitation on Liability. The Company and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section 6 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 in paragraph (d) above. The
amount paid or payable by an Indemnified Person as a result of the losses,
claims, damages and liabilities referred to in paragraph (d) above shall be
deemed to include, subject to the limitations set forth above, any legal or
other expenses incurred by such Indemnified Person in connection with any such
action or claim. Notwithstanding the provisions of this Section 6, in no event
shall an Underwriter be required to contribute any amount in excess of the
amount by which the total underwriting discounts and commissions received by
such Underwriter with respect to the offering of the Shares exceed 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. No
-22-
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 Underwriters'
obligations to contribute pursuant to this Section 6 are several in proportion
to their respective purchase obligations hereunder and not joint.
(f) Non-Exclusive Remedies. The remedies provided for in this Section 6 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to any Indemnified Person at law or in equity.
7. Effectiveness of Agreement. This Agreement shall become effective upon
the later of (i) the execution and delivery hereof by the parties hereto and
(ii) receipt by the Company and the Representatives of notice of the
effectiveness of the Registration Statement (or, if applicable, any
post-effective amendment thereto).
8. Termination. This Agreement may be terminated in the absolute discretion
of the Representatives, by notice to the Company, if after the execution and
delivery of this Agreement and prior to the Closing Date or, in the case of the
Option Shares, prior to the Additional Closing Date (i) trading generally shall
have been suspended or materially limited on or by any of the New York Stock
Exchange, the American Stock Exchange, the National Association of Securities
Dealers, Inc., the Chicago Board Options Exchange, the Chicago Mercantile
Exchange or the Chicago Board of Trade; (ii) trading of any securities issued or
guaranteed by the Company shall have been suspended on any exchange or in any
over-the-counter market; (iii) a general moratorium on commercial banking
activities shall have been declared by federal or New York State authorities; or
(iv) there shall have occurred any outbreak or escalation of hostilities or any
change in financial markets or any calamity or crisis, either within or outside
the United States, that, in the judgment of the Representatives, is material and
adverse and makes it impracticable or inadvisable to proceed with the offering,
sale or delivery of the Shares on the Closing Date or the Additional Closing
Date, as the case may be, on the terms and in the manner contemplated by this
Agreement and the Prospectus.
9. Defaulting Underwriter. (a) If, on the Closing Date or the Additional
Closing Date, as the case may be, any Underwriter defaults on its obligation to
purchase the Shares that it has agreed to purchase hereunder on such date, the
non-defaulting Underwriters may in their discretion arrange for the purchase of
such Shares by other persons satisfactory to the Company on the terms contained
in this Agreement. If, within 36 hours after any such default by any
Underwriter, the non-defaulting Underwriters do not arrange for the purchase of
such Shares, then the Company shall be entitled to a further period of 36 hours
within which to procure other persons satisfactory to the non-defaulting
Underwriters to purchase such Shares on such terms. If other persons become
obligated or agree to purchase the Shares of a defaulting Underwriter, either
the non-defaulting Underwriters or the Company may postpone the Closing Date or
the Additional Closing Date, as the case may be, for up to five full business
days in order to effect any changes that in the opinion of counsel for the
Company or counsel for the Underwriters may be necessary in the Registration
Statement and the Prospectus or in any other document or arrangement, and the
Company agrees to promptly prepare any amendment or supplement to the
Registration Statement and the Prospectus that effects any such changes. As used
-23-
in this Agreement, the term "Underwriter" includes, for all purposes of this
Agreement unless the context otherwise requires, any person not listed in
Schedule 1 hereto that, pursuant to this Section 9, purchases Shares that a
defaulting Underwriter agreed but failed to purchase.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by the non-defaulting
Underwriters and the Company as provided in paragraph (a) above, the aggregate
number of Shares that remain unpurchased on the Closing Date or the Additional
Closing Date, as the case may be, does not exceed one-eleventh of the aggregate
number of Shares to be purchased on such date, then the Company shall have the
right to require each non-defaulting Underwriter to purchase the number of
Shares that such Underwriter agreed to purchase hereunder on such date plus such
Underwriter's pro rata share (based on the number of Shares that such
Underwriter agreed to purchase on such date) of the Shares of such defaulting
Underwriter or Underwriters for which such arrangements have not been made.
(c) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by the non-defaulting
Underwriters and the Company as provided in paragraph (a) above, the aggregate
number of Shares that remain unpurchased on the Closing Date or the Additional
Closing Date, as the case may be, exceeds one-eleventh of the aggregate number
of Shares to be purchased on such date, or if the Company shall not exercise the
right described in paragraph (b) above, then this Agreement or, with respect to
any Additional Closing Date, the obligation of the Underwriters to purchase
Shares on the Additional Closing Date, as the case may be, shall terminate
without liability on the part of the non-defaulting Underwriters. Any
termination of this Agreement pursuant to this Section 9 shall be without
liability on the part of the Company, except that the Company will continue to
be liable for the payment of expenses as set forth in Section 10 hereof and
except that the provisions of Section 6 hereof shall not terminate and shall
remain in effect.
(d) Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company or any non-defaulting Underwriter for
damages caused by its default.
10. Payment of Expenses. (a) Whether or not the transactions contemplated
by this Agreement are consummated or this Agreement is terminated, the Company
will pay or cause to be paid all costs and expenses incident to the performance
of its obligations hereunder, including without limitation, (i) the costs
incident to the authorization, issuance, sale, preparation and delivery of the
Shares and any taxes payable in that connection; (ii) the costs incident to the
preparation, printing and filing under the Securities Act of the Registration
Statement, the Preliminary Prospectus and the Prospectus (including all
exhibits, amendments and supplements thereto) and the distribution thereof to
the Underwriters and dealers; (iii) the fees and expenses of the Company's
counsel and independent accountants; (iv) the fees and expenses incurred in
-24-
connection with the registration or qualification of the Shares under the laws
of such jurisdictions as the Representatives may designate and the preparation,
printing and distribution of a Blue Sky Memorandum (including the related fees
and expenses of counsel for the Underwriters); (v) the cost of preparing stock
certificates; (vi) the costs and charges of any transfer agent and any
registrar; (vii) all expenses and application fees incurred in connection with
any filing with, and clearance of the offering by, the National Association of
Securities Dealers, Inc; (viii) all expenses incurred by the Company in
connection with any "road show" presentation to potential investors; and (ix)
all expenses and application fees related to the listing of the Shares on the
Nasdaq National Market.
(b) If (i) this Agreement is terminated pursuant to Section 8, (ii) the
Company for any reason fails to tender the Shares for delivery to the
Underwriters or (iii) the Underwriters decline to purchase the Shares for any
reason permitted under this Agreement, the Company agrees to reimburse the
Underwriters for all out-of-pocket costs and expenses (including the fees and
expenses of their counsel) reasonably incurred by the Underwriters in connection
with this Agreement and the offering contemplated hereby.
11. Persons Entitled to Benefit of Agreement. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
successors and the officers and directors and any controlling persons referred
to in Section 6 hereof. Nothing 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 or any provision contained herein. No
purchaser of Shares from any Underwriter shall be deemed to be a successor
merely by reason of such purchase.
12. Survival. The respective indemnities, rights of contribution,
representations, warranties and agreements of the Company and the Underwriters
contained in this Agreement or made by or on behalf of the Company or the
Underwriters pursuant to this Agreement or any certificate delivered pursuant
hereto shall survive the delivery of and payment for the Shares and shall remain
in full force and effect, regardless of any termination of this Agreement or any
investigation made by or on behalf of the Company or the Underwriters.
13. Certain Defined Terms. For purposes of this Agreement, (a) except where
otherwise expressly provided, the term "affiliate" has the meaning set forth in
Rule 405 under the Securities Act; (b) 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; and (c) the term "subsidiary" has the meaning set forth in Rule 405
under the Securities Act.
14. Miscellaneous.
(a) Authority of the Representatives. Any action by the Underwriters
hereunder may be taken by the Representatives on behalf of the Underwriters, and
any such action taken by the Representatives shall be binding upon the
Underwriters.
-25-
(b) Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted and
confirmed by any standard form of telecommunication. Notices to the Underwriters
shall be given to the Representatives c/o ▇.▇. ▇▇▇▇▇▇ Securities Inc., ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (fax: (▇▇▇) ▇▇▇-▇▇▇▇); Attention: ▇▇▇▇▇ ▇.
▇▇▇▇▇▇. Notices to the Company shall be given to it at The South Financial
Group, Inc., Poinsett Plaza, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ (fax: (▇▇▇) ▇▇▇-▇▇▇▇); Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇., General
Counsel.
(c) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
(d) Counterparts. This Agreement may be signed in counterparts (which may
include counterparts delivered by any standard form of telecommunication), each
of which shall be an original and all of which together shall constitute one and
the same instrument.
(e) Amendments or Waivers. No amendment or waiver of any provision of this
Agreement, nor any consent to or approval of any departure therefrom, shall in
any event be effective unless the same shall be in writing and signed by the
parties hereto.
(f) Headings. The headings herein are included for convenience of reference
only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
-26-
If the foregoing is in accordance with your understanding, please
indicate your acceptance of this Agreement by signing in the space provided
below.
Very truly yours,
THE SOUTH FINANCIAL GROUP, INC.
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
-------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Title:
Accepted: November 5, 2003
▇.▇. ▇▇▇▇▇▇ SECURITIES INC. Sandler ▇'▇▇▇▇▇ & Partners, L.P.
UBS Securities LLC
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.
▇▇▇▇▇▇ International Limited
Suntrust Capital Markets, Inc.
For themselves and on behalf of
the several Underwriters listed
in Schedule 1 hereto.
By: ▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------
Authorized Signatory
Schedule 1
Underwriter Number of Shares
----------- ----------------
▇.▇. ▇▇▇▇▇▇ Securities Inc. 2,282,500
Sandler ▇'▇▇▇▇▇ & Partners, L. P. 1,347,500
UBS Securities LLC 907,500
▇▇▇▇▇▇ International Limited 357,500
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc. 302,500
SunTrust Capital Markets, Inc. 302,500
---------
Total 5,500,000
=========
Annex A
[Form of Opinion of Counsel for the Company]
(a) The Registration Statement was declared effective under the Securities
Act as of the date and time specified in such opinion; the Prospectus was filed
with the Commission pursuant to the subparagraph of Rule 424(b) under the
Securities Act specified in such opinion on the date specified therein; and no
order suspending the effectiveness of the Registration Statement has been issued
and to the best knowledge of such counsel, no proceeding for that purpose is
pending or, threatened by the Commission.
(b) The Registration Statement (other than the financial statements and
related notes and schedules and other financial or statistical data contained or
incorporated by reference therein, as to which such counsel need express no
opinion) complied as of the effective date of the Registration Statement as to
form in all material respects with the requirements of the Securities Act. The
Registration Statement and the Prospectus (other than the financial statements
and related notes and schedules and other financial or statistical data
contained or incorporated by reference therein, as to which such counsel need
express no opinion) complied as of the date of the Underwriting Agreement and
comply as of the Closing Date as to form in all material respects with the
requirements of the Securities Act.
(c) The Company has the corporate right, power and authority to execute and
deliver the Underwriting Agreement and to perform its obligations thereunder;
and all corporate actions required to be taken for the due and proper
authorization, execution and delivery of the Underwriting Agreement and the
consummation of the transactions contemplated thereby have been duly and validly
taken.
(d) The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
(e) The Shares to be issued and sold by the Company hereunder have been
duly authorized and, when delivered to and paid for by the Underwriters in
accordance with the terms of the Underwriting Agreement, will be validly issued,
fully paid and nonassessable, and the issuance of the Shares is not subject to
any statutory or, to the best of such counsel's knowledge, any contractual,
preemptive or similar rights.
(f) The execution, delivery and performance by the Company of the
Underwriting Agreement, the issuance and sale of the Shares being delivered on
the Closing Date or the Additional Closing Date, as the case may be, and
compliance by the Company with the terms of, and the consummation of the
transactions contemplated by the Underwriting Agreement, will not (i) conflict
with or result in a breach or violation of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of any lien,
-2-
charge or encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries is bound or to
which any of the property or assets of the Company or any of its subsidiaries is
subject and that is filed as an exhibit to the documents incorporated by
reference in the Prospectus, (ii) result in any violation of the provisions of
the charter or by-laws or similar organizational documents of the Company or any
of its significant subsidiaries, as such term is defined in Rule 1-02 of
Regulation S-X ("Significant Subsidiaries") or (iii) result in the violation of
any law or statute or any judgment, order or regulation of any court or
arbitrator or governmental or regulatory authority to which the Company or its
Significant Subsidiaries are subject, except, in the case of clauses (i) and
(iii) above, for such conflict, breach, violation, lien, charge or encumbrance
that would not, individually or in the aggregate, have a Material Adverse
Effect.
(g) No consent, approval, authorization, order, registration or
qualification of or with any court or arbitrator or governmental or regulatory
authority is required for the execution, delivery and performance by the Company
of the Underwriting Agreement, the issuance and sale of the Shares being
delivered on the Closing Date or the Additional Closing Date, as the case may
be, and compliance by the Company with the terms thereof and the consummation of
the transactions contemplated by the Underwriting Agreement, except for the
registration of the Shares under the Securities Act, the listing of Shares on
the Nasdaq National Market and such consents, approvals, authorizations, orders
and registrations or qualifications as may be required under applicable state
securities laws or rules of the NASD in connection with the purchase and
distribution of the Shares by the Underwriters.
(h) The statements in the Prospectus under the headings "U.S. federal tax
considerations for non-U.S. holders", "Description of Common Stock" and
"Description of Preferred Stock", to the extent that they constitute summaries
of the terms of stock, matters of law or regulation or legal conclusions, fairly
summarize the matters described therein in all material respects. To the best
knowledge of such counsel, (A) there are no current or pending legal,
governmental or regulatory actions, suits or proceedings against the Company or
its subsidiaries that are required under the Securities Act to be described in
the Prospectus and that are not so described and (B) there are no statutes,
regulations or contracts and other documents that are required under the
Securities Act to be filed as exhibits to the Registration Statement or
described in the Prospectus and that have not been so filed or described.
Such counsel shall also state that they have participated in conferences
with representatives of the Company, representatives of the Underwriters, and
with representatives of the Company's independent accountants and counsel at
which conferences the contents of the Registration Statement and the Prospectus
and related matters were discussed, and although such counsel assume no
responsibility for the accuracy, completeness or fairness of the Registration
Statement or the Prospectus (except as expressly provided in paragraph (h)
above), nothing has come to the attention of such counsel to cause such counsel
to believe that the Registration Statement, at the time of its effective date,
-3-
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading (other than the financial statements and related notes and
schedules and other financial or statistical data contained or incorporated by
reference therein, as to which such counsel need express no belief), or that the
Prospectus as of its date and as of the Closing Date contained or contains any
untrue statement of a material fact or omitted or omits to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading (other than the financial statements
and related notes and schedules and other financial or statistical data
contained or incorporated by reference therein, as to which such counsel need
express no belief).
In rendering such opinion, such counsel may rely as to matters of fact on
certificates of responsible officers of the Company and public officials that
are furnished to the Underwriters. In rendering the opinion in paragraph (f),
(g) and (h) above, such counsel may rely on the opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ with
respect to any consent, approval, authorization, order, registration or
qualification required pursuant to any federal, state or local banking law or
regulation.
The opinion of Wyche, Burgess, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, PA, described above shall
be rendered to the Underwriters at the request of the Company and shall so state
therein.
-4-
Annex B
[Form of Opinion of General Counsel of the Company]
(a) The Company and each of its significant subsidiaries, as such term is
defined in Rule 1-02 of Regulation S-X (the "Significant Subsidiaries") have
been duly organized and are validly existing and in good standing under the laws
of their respective jurisdictions of organization, are duly qualified to do
business and are in good standing in each jurisdiction in which their respective
ownership or lease of property or the conduct of their respective businesses
requires such qualification, and have the corporate power and authority
necessary to own or hold their respective properties and to conduct the
businesses in which they are engaged, except where the failure to be so
qualified or have such power or authority would not, individually or in the
aggregate, have a Material Adverse Effect.
(b) The Company is duly registered as a bank holding company under the BHC
Act; each of the Company's Significant Subsidiaries holds the requisite
authority from its respective banking authority to do business as a national
banking association under the laws of the United States or as a state-chartered
banking corporation under the laws of such subsidiary's jurisdiction of
incorporation, as the case may be; and to the best knowledge of such counsel,
the Company and each of its Significant Subsidiaries are in compliance in all
material respects with all laws administered by the Bank Regulatory Authorities
with jurisdiction over the Company and its subsidiaries, except for failures to
be so in compliance that would not, individually or in the aggregate, have a
Material Adverse Effect.
(c) The deposit accounts of each of the Significant Subsidiaries of the
Company are insured up to the maximum amount provided by the FDIC and no
proceedings for the modification, termination or revocation of any such
insurance are pending or, to the best knowledge of such counsel, threatened.
(d) The Company has an authorized capital stock as set forth in the
Prospectus under the heading "Capitalization"; all the outstanding shares of
capital stock of the Company have been duly and validly authorized and issued
and are fully paid and nonassessable; and all the outstanding shares of capital
stock or other equity interests of each Significant Subsidiary of the Company
have been duly and validly authorized and issued, are fully paid and
nonassessable (except, in the case of any foreign subsidiary, for directors'
qualifying shares, except, in the case of any Significant Subsidiaries, as
provided in 12 U.S.C. Section 55 or 12 U.S.C. Section 1831o or under applicable
state banking laws and regulations and except as otherwise described in the
Prospectus).
(e) To the best of such counsel's knowledge, neither the Company nor any of
its Significant Subsidiaries is (i) in violation of its charter or by-laws or
similar organizational documents; (ii) in default, and no event has occurred
that, with notice or lapse of time or both, would constitute such a default, in
-5-
the due performance or observance of any term, covenant or condition contained
in any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which it is a party or by which it is bound or to which any of its
property or assets is subject; or (iii) in violation of any law or statute or
any judgment, order, rule or regulation of any court or arbitrator or
governmental or regulatory authority, except in the case of clauses (ii) and
(iii) for any such default or violation that would not, individually or in the
aggregate, have a Material Adverse Effect.
(f) The execution, delivery and performance by the Company of the
Underwriting Agreement, the issuance and sale of the Shares being delivered on
the Closing Date or the Additional Closing Date, as the case may be, and
compliance by the Company with the terms of, and the consummation of the
transactions contemplated by the Underwriting Agreement, will not (i) conflict
with or result in a breach or violation of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries is bound or to
which any of the property or assets of the Company or any of its subsidiaries is
subject, (ii) result in any violation of the provisions of the charter or
by-laws or similar organizational documents of the Company or any of its
subsidiaries or (iii) result in the violation of any law or statute or any
judgment, order or regulation of any court or arbitrator or governmental or
regulatory authority to which the Company or its subsidiaries are subject,
except, in the case of clauses (i) and (iii) above, for such conflict, breach,
violation, lien, charge or encumbrance that would not, individually or in the
aggregate, have a Material Adverse Effect.
(g) No consent, approval, authorization, order, registration or
qualification of or with any court or arbitrator or governmental or regulatory
authority is required for the execution, delivery and performance by the Company
of the Underwriting Agreement, the issuance and sale of the Shares being
delivered on the Closing Date or the Additional Closing Date, as the case may
be, and compliance by the Company with the terms thereof and the consummation of
the transactions contemplated by the Underwriting Agreement, except for the
registration of the Shares under the Securities Act, the listing of Shares on
the Nasdaq National Market and such consents, approvals, authorizations, orders
and registrations or qualifications as may be required under applicable state
securities laws or rules of the NASD in connection with the purchase and
distribution of the Shares by the Underwriters.
(h) To the best knowledge of such counsel, except as described in the
Prospectus, there are no legal, governmental or regulatory investigations,
actions, suits or proceedings pending to which the Company or any of its
subsidiaries is or may be a party or of which any property of the Company or any
of its subsidiaries is or may be the subject which, individually or in the
aggregate, if determined adversely to the Company or any of its subsidiaries,
could reasonably be expected to have a Material Adverse Effect; and to the best
-6-
knowledge of such counsel, no such investigations, actions, suits or proceedings
are threatened or contemplated by any governmental or regulatory authority or
threatened by others.
(i) The statements: (i) in the Prospectus under the heading "Supervision
and Regulation"; (ii) in the Prospectus incorporated by reference from Item 1
under the heading "Business--Supervision and Regulation" and Item 3 of Part I of
the Company's Annual Report on Form 10-K for the year ended December 31, 2002;
(iii) and in the Registration Statement in Item 15, to the extent that they
constitute summaries of the terms of stock, matters of law or regulation or
legal conclusions, fairly summarize the matters described therein in all
material respects. To the best knowledge of such counsel, (A) there are no
current or pending legal, governmental or regulatory actions, suits or
proceedings against the Company or its subsidiaries that are required under the
Securities Act to be described in the Prospectus and that are not so described
and (B) there are no statutes, regulations or contracts and other documents that
are required under the Securities Act to be filed as exhibits to the
Registration Statement or described in the Prospectus and that have not been so
filed or described.
(j) The Company is not and, after giving effect to the offering and sale of
the Shares and the application of the proceeds thereof as described in the
Prospectus, will not be required to register as an "investment company" or an
entity "controlled" by an "investment company" within the meaning of the
Investment Company Act.
(k) The documents incorporated by reference in the Prospectus or any
further amendment or supplement thereto made by the Company prior to the Closing
Date or the Additional Closing Date, as the case may be, (other than the
financial statements and related notes and schedules and other financial or
statistical data contained or incorporated by reference therein, as to which
such counsel need express no opinion), when they were filed with the Commission,
complied as to form in all material respects with the requirements of the
Exchange Act and the rules and regulations of the Commission thereunder; and
nothing has come to the attention of such counsel to cause such counsel to
believe that any of such documents, when such documents were so filed, contained
any untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statement therein, in the light of the
circumstances under which they were made when such documents were so filed, not
misleading.
Such counsel shall also state that they have participated in conferences
with representatives of the Company, representatives of the Underwriters, and
with representatives of the Company's independent accountants and counsel at
which conferences the contents of the Registration Statement and the Prospectus
and related matters were discussed, and although such counsel assume no
responsibility for and have not verified the accuracy, completeness or fairness
of the Registration Statement or the Prospectus (except as expressly provided in
paragraph (i) above), nothing has come to the attention of such counsel to cause
such counsel to believe that the Registration Statement, at the time of its
effective date, contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
-7-
statements therein not misleading (other than the financial statements and
related notes and schedules and other financial or statistical data contained or
incorporated by reference therein, as to which such counsel need express no
belief), or that the Prospectus as of its date and as of the Closing Date
contained or contains any untrue statement of a material fact or omitted or
omits to state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading (other
than the financial statements and related notes and schedules and other
financial or statistical data contained or incorporated by reference therein, as
to which such counsel need express no belief).
In rendering such opinion, such counsel may rely as to matters of fact on
certificates of responsible officers of the Company and public officials that
are furnished to the Underwriters.
The opinion of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇., described above shall be rendered
to the Underwriters at the request of the Company and shall so state therein.
-8-
Exhibit A
FORM OF LOCK-UP AGREEMENT
_____________, 2003
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
As Co-Lead and Book Running Manager, on
behalf of the several Underwriters to be listed
in Schedule 1 to the Underwriting Agreement
referred to below
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: The South Financial Group, Inc. -- Public Offering
Ladies and Gentlemen:
The undersigned understands that the representatives of the several
Underwriters propose to enter into an Underwriting Agreement (the "Underwriting
Agreement") with The South Financial Group, Inc., a South Carolina corporation
(the "Company"), providing for the public offering (the "Public Offering") by
the several Underwriters to be named in Schedule 1 to the Underwriting Agreement
(the "Underwriters") of common stock, $1.00 per share par value, of the Company
(the "Common Stock").
In consideration of the Underwriters' agreement to purchase and make
the Public Offering of Common Stock, and for other good and valuable
consideration receipt of which is hereby acknowledged, the undersigned hereby
agrees that, without the prior written consent of ▇.▇. ▇▇▇▇▇▇ Securities Inc. on
behalf of the Underwriters, the undersigned will not, during the period ending
90 days after the date of the final prospectus supplement relating to the Public
Offering (the "Prospectus"), (1) offer, pledge, publicly announce the intention
to sell, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, or otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock (including without limitation, Common Stock which
may be deemed to be beneficially owned by the undersigned in accordance with the
rules and regulations of the Securities and Exchange Commission and securities
which may be issued upon exercise of a stock option or warrant) or (2) enter
into any swap or other agreement that transfers, in whole or in part, any of the
economic consequences of ownership of the Common Stock, whether any such
transaction described in clause (1) or (2) above is to be settled by delivery of
Common Stock or such other securities, in cash or otherwise. In addition, the
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undersigned agrees that, without the prior written consent of ▇.▇. ▇▇▇▇▇▇
Securities Inc. on behalf of the Underwriters, it will not, during the period
ending 90 days after the date of the Prospectus, make any demand for or exercise
any right with respect to the registration of any shares of Common Stock or any
security convertible into or exercisable or exchangeable for Common Stock.
The foregoing paragraph shall not apply to (a) bona fide gifts or
distributions without consideration to individuals or charitable institutions
who (i) concurrently deliver to you a letter substantially in the form of this
Lock-Up Agreement and (ii) as a result of such transfer or distribution, will
not be required to make, or shall not voluntarily make, a filing under Section
16(a) of the Securities Exchange Act of 1934, as amended (other than a filing on
Form 5 made after the expiration of the 90 day period referenced above), (b)
transfers of shares of Common Stock or options to purchase Common Stock made to
any trust for the direct or indirect benefit of the undersigned or the immediate
family of the undersigned, provided that the trustee of the trust agrees to be
bound by the restrictions set forth herein prior to such transfer, and provided
further that any such transfer shall not involve a disposition for value, or (c)
transfers which occur by operation of law, such as the rules of intestate
succession or statutes governing the effects of a merger, provided the
transferee shall be bound by the terms of this Lock-Up Agreement.
In furtherance of the foregoing, the Company, and any duly appointed
transfer agent for the registration of transfer of the securities described
herein, are hereby authorized to decline to make any transfer of securities if
such transfer would constitute a violation or breach of this Lock-Up Agreement.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Lock-Up Agreement. All authority
herein conferred or agreed to be conferred and any obligations of the
undersigned shall be binding upon the successors, assigns, heirs or personal
representatives of the undersigned.
The undersigned understands that, if the Underwriting Agreement does
not become effective on or prior to December 31, 2003, or if the Underwriting
Agreement (other than the provisions thereof which survive termination) shall
terminate or be terminated prior to payment for and delivery of the Common Stock
to be sold thereunder, the undersigned shall be released from all obligations
under this Lock-Up Agreement.
The undersigned understands that the Underwriters are entering into the
Underwriting Agreement and proceeding with the Public Offering in reliance upon
this Lock-Up Agreement.
THIS LOCK-UP AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAWS
PRINCIPLES THEREOF.
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Very truly yours,
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Name: