COMMUNITY CAPITAL CORPORATION
1,465,000 Shares of Common Stock
UNDERWRITING AGREEMENT
______________, 1997
▇.▇. ▇▇▇▇▇▇▇▇ & CO.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ & CO., INC.
As Representatives of the several Underwriters
c/o ▇.▇. ▇▇▇▇▇▇▇▇ & Co.
▇.▇. ▇▇▇▇▇▇▇▇ Financial Center
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Community Capital Corporation, a South Carolina corporation (the
"Company"), proposes to sell to the several underwriters named in the Schedule I
hereto (collectively, the "Underwriters") for whom ▇.▇. ▇▇▇▇▇▇▇▇ & Co. and ▇▇▇▇▇
▇. ▇▇▇▇▇▇ & Co., Inc. are acting as representatives (collectively, the
"Representatives") with respect to the sale by the Company of an aggregate of
1,465,000 shares (the "Firm Shares") of the Company's common stock, par value
$1.00 per share (the "Common Stock"). The Company has also agreed to grant to
you an option (the "Option") to purchase up to an additional 219,750 shares of
Common Stock (the "Option Shares") on the terms and for the purposes set forth
in Section 1(b) hereof. The Firm Shares and the Option Shares are hereinafter
collectively referred to as the "Shares".
The Company confirms as follows its agreements with you.
1. AGREEMENT TO SELL AND PURCHASE; PUBLIC OFFERING.
(a) On the basis of the representations, warranties and
covenants herein contained, and subject to all the terms and conditions of this
Agreement, the Company agrees to sell to the Underwriters, and each of the
Underwriters, severally and not jointly, agrees to purchase from the Company at
the purchase price of $______ per share, the respective number of Firm Shares
set forth opposite such Underwriter's name in Schedule I hereto.
(b) Subject to all the terms and conditions of this Agreement,
the Company also grants the Underwriters an Option to purchase, severally and
not jointly, up to 219,750 Option Shares from the Company, each at the same
price per share as you shall pay for the Firm Shares. The Option may be
exercised only to cover
over-allotments in the sale of the Firm Shares and may be exercised in whole or
in part at any time (but not more than once) on or before the 30th day after the
date of the Prospectus (as defined below) upon written or telegraphic notice
(the "Option Shares Notice") by you to the Company no later than 12:00 noon,
Nashville, Tennessee time at least two and no more than ten business days before
the date specified for closing in the Option Shares Notice (the "Option Closing
Date") setting forth the aggregate number of Option Shares to be purchased and
the date for such purchase. On the Option Closing Date, the Company will issue
and sell to the Underwriters the number of Option Shares set forth in the Option
Shares Notice, and each of the Underwriters will purchase such percentage of the
Option Shares as is equal to the percentage of Firm Shares that such Underwriter
is purchasing.
(c) After the Registration Statement becomes effective, upon the
authorization by you of the release of the Shares, the Underwriters propose to
offer the Firm Shares and the Option Shares purchased by the Underwriters for
sale at the price per share set forth in the Prospectus (the initial offering
price) and upon the terms set forth therein.
2. DELIVERY AND PAYMENT.
Delivery of the Firm Shares shall be made to you by or on
behalf of the Company against payment of the purchase price by certified or
official bank check payable in next day funds (or, at your option, by wire
transfer) to the order of the Company at the offices of ▇.▇. ▇▇▇▇▇▇▇▇ & Co., ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other place as may be
agreed upon by the Representatives and the Company at 10:00 a.m., Nashville
time, on the third full business day following the date of this Agreement, or at
such time on such other date or at such other place as may be agreed upon by the
Representatives and the Company (such date is hereinafter referred to as the
"Closing Date").
To the extent the Option is exercised, delivery of the Option
Shares against payment therefor (in the manner specified above) will take place
at the offices specified above for the Closing Date at the time and date (which
may be the Closing Date) specified in the Option Shares Notice.
Certificates evidencing the Shares shall be in definitive form
and shall be registered in such names and in such denominations as you shall
request not less than 48 hours prior to the Closing Date or the Option Closing
Date, as the case may be, by written notice to the Company. For the purpose of
expediting the checking and packaging of certificates for the Shares, the
Company agrees to make such certificates available for inspection at least 24
hours prior to the Closing Date or the Option Closing Date, as the case may be,
at a location to be designated by you, which may be in New York, New York, or
elsewhere.
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The cost of original issue tax stamps, if any, in connection
with the issuance and delivery of the Firm Shares and Option Shares by the
Company to the Underwriters shall be borne by the Company. The Company will pay
and save each of the Underwriters and any subsequent holder of the Shares
harmless from any and all liabilities with respect to or resulting from any
failure or delay in paying federal and state stamp and other transfer taxes, if
any, which may be payable or determined to be payable in connection with the
original issuance or sale to such Underwriter of the Firm Shares and Option
Shares.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents, warrants and covenants to each of the
Underwriter that:
(a) The Company meets all requirements for use of Form S-2 and
the Company has prepared and filed with the Securities and Exchange Commission
(the "Commission") a registration statement (Registration No. 333-18457) on Form
S-2 relating to the Shares, including a preliminary prospectus and such
amendments to such registration statement as may have been required to the date
of this Agreement, under the provisions of the Securities Act of 1933 (the
"Act"), and the rules and regulations of the Commission thereunder (collectively
referred to as the "Rules and Regulations"). The term "preliminary prospectus"
as used herein means a preliminary prospectus as contemplated by Rule 430 or
Rule 430A of the Rules and Regulations included at any time as part of the
registration statement. Copies of such registration statement and amendments and
of each related preliminary prospectus have been delivered to you. If such
registration statement has not become effective, a further amendment to such
registration statement, including a form of final prospectus, necessary to
permit such registration statement to become effective, will be filed promptly
by the Company with the Commission. If such registration statement has become
effective, a final prospectus containing information permitted to be omitted at
the time of effectiveness by Rule 430A of the Rules and Regulations will be
filed promptly by the Company with the Commission in accordance with Rule 424(b)
of the Rules and Regulations. The term "Registration Statement" means the
registration statement as amended at the time it becomes or became effective
(the "Effective Date"), including financial statements and all exhibits and any
information deemed to be included by Rule 430A. The term "Prospectus" means the
prospectus as first filed with the Commission pursuant to Rule 424(b) of the
Rules and Regulations or, if no such filing is required, the form of final
prospectus included in the Registration Statement at the Effective Date. Any
reference herein to the Registration Statement, any preliminary prospectus or
the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-2 that were
filed under the Securities Exchange Act of 1934 (the "Exchange Act"), on or
before the Effective Date or the date of such preliminary prospectus or the
Prospectus, as the case may be.
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(b) On the Effective Date, the date the Prospectus is first
filed with the Commission pursuant to Rule 424(b) (if required), at all times
subsequent to and including the Closing Date and, if later, the Option Closing
Date and when any post-effective amendment to the Registration Statement becomes
effective or any amendment or supplement to the Prospectus is filed with the
Commission, the Registration Statement and the Prospectus (as amended or as
supplemented if the Company shall have filed with the Commission any amendment
or supplement thereto), including the financial statements included or
incorporated by reference in the Prospectus, did or will comply with all
applicable provisions of the Act, the Exchange Act, the rules and regulations of
the Commission thereunder (the "Exchange Act Rules and Regulations") and the
Rules and Regulations and did or will contain all statements required to be
stated therein in accordance with the Act, the Exchange Act, the Exchange Act
Rules and Regulation and the Rules and Regulations. On the Effective Date and
when any post-effective amendment to the Registration Statement becomes
effective, no part of the Registration Statement, the Prospectus or any such
amendment or supplement did or will contain 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 not misleading. At the Effective Date,
the date the Prospectus or any amendment or supplement to the Prospectus is
filed with the Commission, the Closing Date and, if later, the Option Closing
Date, the Prospectus did not or will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The foregoing representations and warranties in this Section 3(b) do
not apply to any statements or omissions made in reliance on and in conformity
with information relating to the Underwriters furnished in writing to the
Company by the Representatives specifically for inclusion in the Registration
Statement or Prospectus or any amendment or supplement thereto. The Company
acknowledges that the statements set forth under the heading "Underwriting" in
the Prospectus constitute the only information relating to the Underwriters
furnished in writing to the Company by the Representatives specifically for
inclusion in the Registration Statement.
(c) The documents that are incorporated by reference in any
preliminary prospectus and the Prospectus or from which information is so
incorporated by reference, when they became effective or were filed with the
Commission, as the case may be, complied in all material respects with the
requirements of the Act, the Exchange Act, the Exchange Act Rules and
Regulations and the Rules and Regulations, as applicable.
(d) The Company is, and at the Closing Date and Option Closing
Date will be, a corporation duly organized, validly existing and in good
standing under the laws of South Carolina, and duly registered as a bank holding
company under the Bank Holding Company Act of 1956, as amended (the "BHC Act").
The only active
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subsidiaries (as defined in the Rules and Regulations) of the Company are as
provided in Exhibit 21.1 of the Registration Statement (individually, a
"Subsidiary" and collectively, the "Subsidiaries"). Each Subsidiary (other than
Community Financial Services, Inc.) is, and at the Closing Date and Option
Closing Date will be, a bank duly organized, validly existing and in good
standing under the laws of the State of South Carolina. The Company and each of
its active Subsidiaries has, and at the Closing Date and Option Closing Date
will have, full power and authority to conduct all the activities conducted by
it, to own or lease all the assets owned or leased by it and to conduct its
business as described in the Registration Statement and the Prospectus. The
Company and each active Subsidiary is, and at the Closing Date and Option
Closing Date will be, duly licensed or qualified to do business and in good
standing as a foreign corporation in all jurisdictions in which the nature of
the activities conducted by it or the character of the assets owned or leased by
it makes such licensing or qualification necessary. Except for the stock of the
Subsidiaries and as disclosed in the Registration Statement, the Company does
not own, and at the Closing Date will not own, directly or indirectly, any
shares or stock or any other equity or long-term debt securities of any
corporation or have any equity interest in any firm, partnership, joint venture,
association or other entity, except that the Company owns approximately 1.2% of
the outstanding common stock of The Bank of Abbeville and approximately 4.9% of
the outstanding common stock of Commercial Bankshares, Inc., which for purposes
herein shall not be deemed to be "Subsidiaries." Complete and correct copies of
the Articles of Incorporation and the Bylaws of the Company and each Subsidiary
and all amendments thereto have been delivered to you, and no changes therein
will be made subsequent to the date hereof and prior to the Closing Date or, if
later, the Option Closing Date, except, in the case of the Subsidiaries which
have not yet received all necessary federal and state governmental approvals,
such changes to such Subsidiaries' Articles of Incorporation and Bylaws as may
be required by federal and state authorities to approve such Subsidiaries.
(e) The outstanding shares of the Company's Common Stock have
been, and the Shares to be issued and sold by the Company upon such issuance
will be, duly authorized, validly issued, fully paid and nonassessable and will
not be subject to any preemptive or similar right. The description of the Common
Stock in the Registration Statement and the Prospectus is, and at the Closing
Date or, if later, the Option Closing Date will be, complete and accurate in all
respects. Except as set forth in the Prospectus, the Company does not have
outstanding, and at the Closing Date will not have outstanding, any options to
purchase, or any rights or warrants to subscribe for, or any securities or
obligations convertible into, or any contracts or commitments to issue or sell
any shares of Common Stock, any shares of capital stock of any Subsidiary or any
such warrants, convertible securities or obligations.
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(f) The financial statements and schedules included or
incorporated by reference in the Registration Statement or the Prospectus
present fairly the consolidated financial condition of the Company as of the
respective dates thereof and the consolidated results of operations and cash
flows of the Company for the respective periods covered thereby, all in
conformity with generally accepted accounting principles applied on a consistent
basis throughout the entire period involved, except as otherwise disclosed in
the Prospectus. The financial and statistical data set forth in the Prospectus
under the captions "Prospectus Summary," "Risk Factors," "The Company,"
"Acquisition of the Carolina First Branches," "Use of Proceeds," "Market For
Common Stock," "Dilution," "Capitalization," "Selected Consolidated Financial
Information," Management's Discussion and Analysis of Financial Condition and
Results of Operations," "Business," "Government Supervision and Regulation,"
"Management," and "Description of Securities" fairly presents the information
set forth therein on the basis stated in the Prospectus. No other financial
statements or schedules of the Company are required by the Act, the Exchange
Act, the Exchange Act Rules and Regulations, or the Rules and Regulations to be
included or incorporated by reference in the Registration Statement or the
Prospectus. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ (the "Accountants"), who have
reported on such financial statements and schedules, are independent accountants
with respect to the Company as required by the Act and the Rules and
Regulations.
(g) The Company's system of internal accounting controls taken
as a whole is sufficient to meet the broad objectives of internal accounting
control insofar as those objectives pertain to the prevention or detection of
errors or irregularities in amounts that would be material in relation to the
Company's financial statements; and, except as disclosed in the Prospectus,
neither the Company nor any of its Subsidiaries nor any employee or agent of the
Company or any Subsidiary has made any payment of funds of the Company or any
Subsidiary or received or retained any funds in violation of any law, rule or
regulation.
(h) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus and prior to the
Closing Date, or, if later the Option Closing Date, except as set forth in or
contemplated by the Registration Statement and the Prospectus, (i) there has not
been and will not have been any change in the capitalization of the Company,
other than pursuant to the exercise of employee stock options, or any material
adverse change in the business, properties, business prospects, condition
(financial or otherwise), or results of operations of the Company and its
Subsidiaries, arising for any reason whatsoever, (ii) neither the Company nor
its Subsidiaries has incurred nor will incur any material liabilities or
obligations, direct or contingent, except in the ordinary course of the banking
business of the Subsidiaries, nor has it entered into nor will it enter into any
material transactions other than pursuant to this Agreement and the transactions
referred to herein,
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and (iii) the Company has not and will not have paid or declared any dividends
or other distributions of any kind on any class of its capital stock.
(i) The Company is not an "investment company" or an
"affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment Company Act of
1940.
(j) Except as set forth in the Registration Statement and the
Prospectus, there are no actions, suits or proceedings pending or threatened
against or affecting the Company or any Subsidiary or any of their respective
officers in their capacity as such, before or by any federal or state court,
commission, regulatory body, administrative agency or other governmental body,
domestic or foreign, wherein an unfavorable ruling, decision or finding might
materially and adversely affect the Company or its Subsidiaries or its business,
properties, business prospects, condition (financial or otherwise) or results of
operations or prevent or materially hinder the consummation of this Agreement.
(k) The Company and each Subsidiary has, and at the Closing
Date will have, (i) all governmental licenses, permits, consents, orders,
approvals and other authorizations necessary to carry on its business as
contemplated in the Prospectus, (ii) complied in all material respects with all
laws, regulations and orders applicable to it or its business, and (iii)
performed all its material obligations required to be performed by it, and is
not, and at the Closing Date and, if later, the Option Closing Date, will not
be, in default, under any contract or other instrument material to it to which
it is a party or by which its property is bound or affected. To the best
knowledge of the Company and each Subsidiary, no other party under any contract
or other instrument to which it is a party is in default in any respect
thereunder. Neither the Company nor any Subsidiary is, nor at the Closing Date,
and, if later, the Option Closing Date, will any of them be, in violation of any
provision of its Articles of Incorporation or Bylaws.
(l) No consent, approval, authorization or order of, or any
filing or declaration with, any court or governmental agency or body is required
for the consummation by the Company of the transactions on its part herein
contemplated, except such as have been obtained under the Act or the Rules and
Regulations and such as may be required under state securities or Blue Sky laws
or the rules of the National Association of Securities Dealers, Inc. (the
"NASD")(in particular, the Rules of Conduct) in connection with the purchase and
distribution by the Underwriters of the Shares.
(m) The Company has full corporate power and authority
to enter into this Agreement. This Agreement has been duly
authorized, executed and delivered by the Company and constitutes
a valid and binding agreement of the Company and is enforceable
against the Company in accordance with the terms hereof. The
7
performance of this Agreement and the consummation of the transactions
contemplated hereby will not result in the creation or imposition of any
material lien, charge or encumbrance upon any of the assets of the Company or
any Subsidiary pursuant to the terms or provisions of, or result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
or give any other party a right to terminate any of its obligations under, or
result in the acceleration of any obligation under, the respective Articles of
Incorporation or Bylaws of the Company or its Subsidiaries, any indenture,
mortgage, deed of trust, voting trust agreement, loan agreement, bond,
debenture, note agreement or other evidence of indebtedness, lease, contract or
other agreement or instrument to which the Company or any Subsidiary is a party
or by which the Company or any Subsidiary or any of its or their properties are
bound or affected, or violate or conflict with any judgment, ruling, decree,
order, statute, rule or regulation of any court or other governmental agency or
body applicable to the business or properties of the Company or any Subsidiary.
(n) The Company and each Subsidiary has good and marketable
title to all properties and assets described in the Prospectus as owned by it,
free and clear of all liens, charges, encumbrances or restrictions, except such
as are described in the Prospectus or are not material to the business of the
Company or its Subsidiaries. The Company and each Subsidiary has valid,
subsisting and enforceable leases for the properties described in the Prospectus
as leased by it, with such exceptions as are not material and do not materially
interfere with the use made and proposed to be made of such properties by the
Company and such Subsidiaries. The Company and each of its Subsidiaries owns or
leases all such properties as are necessary to its respective operations as now
conducted.
(o) There is no document or contract of a character required
to be described in the Registration Statement or the Prospectus or to be filed
as an exhibit to the Registration Statement or incorporated by reference therein
that is not described, incorporated by reference, or filed as required. All such
contracts to which the Company or any Subsidiary is a party have been duly
authorized, executed and delivered by the Company or such Subsidiary, constitute
valid and binding agreements of the Company or such Subsidiary, and are
enforceable against the Company or such Subsidiary in accordance with the terms
thereof.
(p) No statement, representation, warranty or covenant made by
the Company in this Agreement or made in any certificate or document required by
this Agreement to be delivered to you was or will be, when made, inaccurate,
untrue or incorrect.
(q) Neither the Company, nor any Subsidiary, nor, to the best
knowledge of the Company and its Subsidiaries, any of their directors, officers
or controlling persons has taken, directly or indirectly, any action designed,
or which might reasonably be expected, to cause or result, under the Act or
otherwise, in, or
8
which has constituted, stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares or the
Common Stock.
(r) No holder of securities of the Company has rights to
the registration of any securities of the Company because of the
filing of the Registration Statement.
(s) The Company has taken such action as necessary to have the
Shares authorized for listing on the American Stock Exchange ("AMEX") upon
official notice of issuance.
(t) As described in the Registration Statement or the
Prospectus, the Company's allowance for possible loan losses at December 31,
1996 was, as of such date, adequate in all material respects to provide for all
anticipated losses, net of recoveries related to loans previously charged-off,
on loans outstanding as of such date, and there has not been any material
adverse change in the collectability of the loan portfolio of the Company and
its Subsidiaries since December 31, 1996, except as otherwise disclosed in the
Registration Statement and the Prospectus, and the provision for possible loan
losses maintained by the Company and its Subsidiaries is adequate in all
material respects in light of anticipated loan charge-offs.
(u) Other than as contemplated by this Agreement, there is no
broker, finder or other party that is entitled to receive from the Company or
any Subsidiary any brokerage or finder's fee or other fee or commission as a
result of any of the transactions contemplated by this Agreement.
(v) The Company and its Subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and in such
amounts as management believes is appropriate to the business of the Company and
its Subsidiaries and all such policies of insurance insuring the Company, its
Subsidiaries or their businesses, assets, employees, officers and directors are
in full force and effect.
(w) The Company has timely filed all required forms, reports
and other documents with the Commission all of which complied, when filed, in
all material respects, with all applicable requirements of the Act, the Exchange
Act, the Exchange Act Rules and Regulations, and the Rules and Regulations. As
of their respective dates, such reports, forms and other documents (including
all exhibits and schedules thereto) and documents incorporated by reference
therein (the "Reports"), did not contain any untrue statement of a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. The
financial statements of the Company included or incorporated by reference in
such Reports were prepared in accordance with generally accepted accounting
principles applied on a consistent basis during the periods involved (except as
may otherwise be
9
indicated in the notes thereto), and fairly present the financial position of
the Company as of the date thereof and the results of its operations and changes
in financial position for the periods then ended (subject, in the case of any
unaudited interim financial statements, to year-end adjustments).
4. COVENANTS OF THE COMPANY.
The Company covenants and agrees with each of the Underwriters as
follows:
(a) The Company will not, either prior to the Effective Date
or thereafter during such period as the Prospectus is required by law to be
delivered in connection with sales of the Shares by an underwriter or dealer,
file any amendment or supplement to the Registration Statement or the
Prospectus, unless a copy thereof shall first have been submitted to you within
a reasonable period of time prior to the filing thereof and you shall not have
objected thereto in good faith.
(b) The Company will use its best efforts to cause the
Registration Statement to become effective, and will notify you promptly, and
will confirm such advice in writing, (1) when the Registration Statement has
become effective and when any post-effective amendment thereto becomes
effective, (2) of any request by the Commission for amendments or supplements to
the Registration Statement or the Prospectus or for additional information, (3)
of the issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or the initiation of any proceedings for that
purpose or the threat thereof, (4) of the happening of any event during the
period mentioned in the second sentence of Section 4(e) that in the judgment of
the Company makes any statement made in the Registration Statement or the
Prospectus untrue or that requires the making of any changes in the Registration
Statement or the Prospectus in order to make the statements therein, in light of
the circumstances in which they are made, not misleading, and (5) of receipt by
the Company or any representatives or attorney of the Company of any other
communication from the Commission relating to the Company, the Registration
Statement, any preliminary prospectus or the Prospectus. If at any time the
Commission shall issue any order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to obtain
the withdrawal of such order at the earliest possible moment. If the Company has
omitted any information from the Registration Statement pursuant to Rule 430A of
the Rules and Regulations, the Company will use its best efforts to comply with
the provisions of and make all requisite filings with the Commission pursuant to
said Rule 430A and to notify the Representatives promptly of all such filings.
(c) The Company will furnish to you, without charge, three
signed copies of the Registration Statement and of any post-effective amendment
thereto, including financial statements and schedules, and all exhibits thereto
(including any document filed
10
under the Exchange Act and deemed to be incorporated by reference
into the Prospectus).
(d) The Company will comply with all the provisions of any
undertakings contained in the Registration Statement. The Company will, from
time to time, after the Effective Date of the Registration Statement file with
the Commission such reports as are required by the Act, the Exchange Act, the
Exchange Act Rules and Regulations, and the Rules and Regulations, and shall
also file with state securities commissions in states where the Shares have been
sold by you (as you shall have advised us in writing) such reports as are
required to be filed by the securities acts and the regulations of those states.
(e) On the Effective Date, and thereafter from time to time
until expiration of the period mentioned in the next sentence, the Company will
deliver to each of you, without charge, as many copies of the Prospectus or any
amendment or supplement thereto as you may reasonably request. The Company
consents to the use of the Prospectus or any amendment or supplement thereto by
you and by all dealers to whom the Shares may be sold, both in connection with
the offering or sale of the Shares and for any period of time thereafter during
which the Prospectus is required by law to be delivered in connection therewith.
If during such period of time any event shall occur which in the judgment of the
Company or your counsel should be set forth in the Prospectus in order to make
any statement therein, in the light of the circumstances under which it was
made, not misleading, or if it is necessary to supplement or amend the
Prospectus to comply with law, the Company will forthwith prepare and duly file
with the Commission an appropriate supplement or amendment thereto, and will
deliver to each of you, without charge, such number of copies thereof as you may
reasonably request.
(f) Prior to any public offering of the Shares by you, the
Company will cooperate with you and your counsel in connection with the
registration or qualification of the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you may request; provided,
that in no event shall the Company be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action which would
subject it to general service of process in any jurisdiction where it is not now
so subject, unless required by the laws of such jurisdiction in connection with
the registration or qualification of the Shares for offer and sale under the
securities or Blue Sky laws thereof.
(g) During the period of five years commencing on the
Effective Date, the Company will furnish to the Representatives copies of such
financial statements and other periodic and special reports as the Company may
from time to time distribute generally to the holders of any class of its
capital stock, and will furnish to you a copy of each annual or other report it
shall be required to file with the Commission. During such period, the Company
will promptly notify you in writing if it appears to the Company that it
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is likely that the Company will not in a timely manner furnish to its
shareholders an annual report containing audited financial statements or a
quarterly report for one of the first three quarters of the fiscal year
containing unaudited financial information.
(h) The Company will make generally available to holders of
its securities as soon as may be practicable but in no event later than the last
day of the fifteenth full calendar month following the calendar quarter in which
the Effective Date falls, an earning statement (which need not be audited but
shall be in reasonable detail) for a period of at least 12 months commencing
after the Effective Date and satisfying the provisions of Section 11(a) of the
Act (including Rule 158 of the Rules and Regulations). For purposes hereof, the
delivery by the Company of the periodic reports required by Section 12 of the
Securities Exchange Act of 1934 shall be deemed sufficient to satisfy the
conditions of this paragraph.
(i) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the Company will pay,
or reimburse if paid by the Underwriters, all costs and expenses (other than the
fees of your counsel and your out-of-pocket cost and expenses, except as
provided below) incident to the performance of the obligations of the Company
under this Agreement, including but not limited to costs and expenses of or
relating to (1) the preparation, printing, and filing of the Registration
Statement and exhibits to it, each preliminary prospectus, the Prospectus and
any amendment or supplement to the Registration Statement or the Prospectus, (2)
the preparation and delivery of certificates representing the Shares, (3) the
printing of this Agreement and other underwriting documents, including but not
limited to Underwriter's Questionnaires, Underwriter's Powers of Attorney, Blue
Sky Memorandum, Master Agreement Among Underwriters, and Master Selected Dealer
Agreements, (4) furnishing (including costs of shipping and mailing) such copies
of the Registration Statement, the Prospectus and any preliminary prospectus,
and all amendments and supplements thereto, as may be requested for use in
connection with the offering and sale of the Shares by the Underwriters or by
dealers to whom Shares may be sold, (5) the listing of the Shares on the AMEX,
(6) any filings required to be made by you with the NASD, and the fees (not to
exceed $3,000), disbursements and other charges of your counsel in connection
therewith, (7) the registration or qualification of the Shares for offer and
sale under the securities or Blue Sky laws of such jurisdictions designated
pursuant to Section 4(f), including the fees, disbursements and other charges of
your counsel in connection therewith (not to exceed $10,000), and the
preparation and printing of preliminary, supplemental and final Blue Sky
memoranda, (8) counsel to the Company, and (9) the transfer agent for the
Shares.
(j) If this Agreement shall be terminated by the Company
pursuant to any of the provisions hereof or if for any reason the
12
Company shall be unable to perform its obligations hereunder, the Company will
reimburse you for all out-of-pocket expenses (including the fees, disbursements
and other charges of your counsel) reasonably incurred by you in connection
herewith (up to a maximum of $65,000 if such termination occurs prior to
commencement of the "roadshow" for the offering and $85,000 if such termination
occurs after such event).
(k) The Company will not at any time, directly or indirectly,
take any action designed, or which might reasonably be expected, to cause or
result in, or which will constitute, stabilization of the price of the shares of
Common Stock or Common Stock to facilitate the sale or resale of any of the
Shares.
(l) The Company will apply the net proceeds from the offering
and sale of the Shares to be sold by the Company in the manner set forth in the
Prospectus under "Use of Proceeds" and will timely file all reports and forms
required under the Act, the Exchange Act, the Exchange Act Rules and
Regulations, and the Rules and Regulations in connection therewith.
(m) During the period of 180 days commencing at the Closing
Date, the Company will not, without your prior written consent, grant options to
purchase shares of Common Stock at a price less than the initial public offering
price or the Common Stock's fair market value.
(n) The Company will not, and will cause each of its executive
officers, directors and each beneficial owner of more than 1.5% of the
outstanding shares of Common Stock (if any) to enter into agreements with you to
the effect that they will not, for a period of 180 days after the commencement
of the public offering of the Shares, without your prior written consent, sell,
contract to sell or otherwise dispose of any shares of Common Stock or rights to
acquire such shares (other than pursuant to stock option plans for employees or
directors or in connection with other employee incentive compensation
arrangements and other than as otherwise set forth in such agreements).
(o) If at any time during the 25 day period after the
Registration Statement is declared effective, any rumor, publication or event
relating to or affecting the Company shall occur as a result of which, in your
opinion, the market price for the Shares has been or is likely to be materially
affected (regardless of whether such rumor, publication or event necessitates a
supplement to or amendment of the Prospectus), the Company will, after written
notice from you advising it as to the effect set forth above, prepare, consult
with you concerning the substance of and disseminate a press release or other
public statement, reasonably satisfactory to you, responding to or commenting on
such rumor, publication or event.
13
5. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITER.
The obligations of the Underwriters to purchase and pay for the Shares
shall be subject, in their discretion, to the accuracy of the representations
and warranties of the Company herein as of the date hereof and as of the Closing
Date and Option Closing Date as if made on and as of the Closing Date and Option
Closing Date, to the accuracy of the statements of the Company's officers made
pursuant to the provisions hereof, to the performance by the Company of all of
their covenants and agreements hereunder and to the following additional
conditions:
(a) Notification that the Registration Statement has become
effective shall be received by you not later than 5:00 p.m., Nashville,
Tennessee time, on the date of this Agreement or at such later date and time as
shall be consented to in writing by you and all filings required by Rule 424 and
Rule 430A of the Rules and Regulations shall have been made.
(b) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall be pending or threatened by the Commission, (ii) no order
suspending the effectiveness of the Registration Statement or the qualification
or registration of the Shares under the securities or Blue Sky laws of any
jurisdiction shall be in effect and no proceeding for such purpose shall be
pending before or threatened or contemplated by the Commission or the
authorities of any such jurisdiction, (iii) any request for additional
information on the part of the staff of the Commission or any such authorities
shall have been complied with to the satisfaction of the staff of the Commission
or such authorities and to the satisfaction of the Representatives, (iv) after
the date hereof no amendment or supplement to the Registration Statement or the
Prospectus shall have been filed unless a copy thereof was first submitted to
you and you did not object thereto in good faith, (v) the NASD, upon review of
the terms of the public offering of the Shares, shall not have objected to such
offering, such terms or the Underwriter' participation in the same, and (vi) and
you shall have received certificates, dated the Closing Date and the Option
Closing Date and signed by the Chief Executive Officer or the Chairman of the
Board of Directors of the Company and the Chief Financial Officer or the
Assistant Secretary of the Company (who may, as to proceedings threatened, rely
upon the best of their information and belief), to the effect of clauses (i),
(ii) and (iii).
(c) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, (i) there shall not have
been a material adverse change, or any development involving a prospective
material adverse change, in the general affairs, business, business prospects,
properties, management, key personnel, condition (financial or otherwise) or
results of operations of the Company and its Subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary
14
course of business, in each case other than as set forth in or contemplated by
the Registration Statement and the Prospectus and (ii) neither the Company nor
any of its Subsidiaries shall have sustained any material loss or interference
with its business or properties from fire, explosion, flood, hurricane or other
casualty or calamity, whether or not covered by insurance, or from any labor
dispute or any court or legislative or other governmental action, order or
decree, which is not set forth in the Registration Statement and the Prospectus,
if in your reasonable judgment any such development makes it impracticable or
inadvisable to consummate the sale and delivery of the Shares by you at the
public offering price.
(d) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there shall have been no
litigation or other proceeding instituted against the Company or any Subsidiary
or any of their respective officers or directors in their capacities as such,
before or by any federal, state, or local court, commission, regulatory body,
administrative agency or other governmental body, domestic or foreign, in which
litigation or proceeding an unfavorable ruling, decision or finding would
materially and adversely affect the business, properties, business prospects,
condition (financial or otherwise) or results of operations.
(e) Each of the representations and warranties of the Company
contained herein shall be true and correct in all material respects at the
Closing Date and, with respect to the Option Shares, at the Option Closing Date,
as if made at the Closing Date and, with respect to the Option Shares, at the
Option Closing Date, and all covenants and agreements herein contained to be
performed on the part of the Company and all conditions herein contained to be
fulfilled or complied with by the Company at or prior to the Closing Date and,
with respect to the Option Shares, at or prior to the Option Closing Date, shall
have been duly performed, fulfilled or complied with.
(f) The Underwriter shall have received an opinion, dated the
Closing Date and, with respect to the Option Shares, the Option Closing Date,
and satisfactory in form and substance to your counsel, from ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
& ▇▇▇▇▇▇▇, LLP, counsel to the Company, to the effect that:
(i) The Company has been duly incorporated and is an
existing corporation in good standing under the laws of the
State of South Carolina, with corporate power and authority to
own its properties and conduct its business as described in
the Prospectus; the Company is duly registered as a bank
holding company under the BHC Act; and the Company is
qualified to do business as a foreign corporation in good
standing in all other jurisdictions except where the failure
to so qualify would not have a material adverse effect upon
the Company;
15
(ii) Each Subsidiary is a bank (except Community
Financial Services, Inc., which is a corporation) duly
organized, validly existing and in good standing under the
laws of the state of incorporation or organization, as the
case may be; each Subsidiary has the corporate power and
authority to own its properties and conduct its business as
described in the Prospectus; and each Subsidiary is qualified
to do business as a foreign corporation or bank in good
standing in all other jurisdictions except where the failure
to so qualify would not have a material adverse effect upon
the Company and its Subsidiaries taken as a whole;
(iii) As of the dates specified therein, the Company
had authorized and issued capital stock as set forth under the
caption "Capitalization" in the Prospectus. All the
outstanding shares of capital stock of each Subsidiary have
been duly and validly authorized and issued and are fully paid
and nonassessable, and, except as otherwise set forth in the
Prospectus, all outstanding shares of capital stock of the
Subsidiaries are owned by the Company free and clear of any
perfected security interest and, to the knowledge of such
counsel, after due inquiry, any other security interests,
claims, liens or encumbrances;
(iv) The Shares delivered on such Closing Date and
the Option Closing Date have been duly authorized, validly
issued and are fully paid and nonassessable, and conform to
the description thereof contained in the Prospectus;
(v) The outstanding shares of Common Stock have been
duly authorized and validly issued, are fully paid and
nonassessable and conform to the description thereof contained
in the Prospectus; and the shareholders of the Company have no
preemptive or similar rights with respect to the Shares or the
Common Stock. All offers and sales of the Company's securities
during the past three years were at all relevant times duly
registered or exempt from the registration requirements of the
Act and were duly registered or the subject of an exemption
from the registration requirements of applicable state
securities or Blue Sky laws;
(vi) There are no contacts, agreements or
understandings known to such counsel between the Company and
any person granting such person the right to require the
Company to file a registration statement under the Act with
respect to any securities of the Company owned or to be owned
by such person or to require the Company to include such
securities in the securities registered pursuant to the
Registration Statement or in any securities being registered
pursuant to any other
16
registration statement filed by the Company under the
Act;
(vii) No consent, approval, authorization or order
of, or filing with, any governmental agency or body or any
court is required for the issuance or sale of the Shares or
the consummation of the other transactions contemplated by
this Agreement, except such as have been obtained and made
under the Act, the Exchange Act and such as may be required
under state securities or Blue Sky laws;
(viii) The execution, delivery and performance of
this Agreement and the consummation of the transactions herein
contemplated, including the issuance and sale of the Shares
and compliance with the provisions thereof, will not result in
a breach or violation of any of the terms or provisions if, or
constitute a default under, (A) any statute, rule, regulation
or, to the knowledge of such counsel after reasonable
investigation, order of any governmental agency or body or any
court having jurisdiction over the Company or Subsidiaries of
the Company or any of their properties, or (B) any material
obligation, agreement, covenant or condition contained in any
agreement or instrument to the knowledge of such counsel after
reasonable investigation to which the Company or the
Subsidiaries is a party or by which the Company or the
Subsidiaries is bound or to which any of the properties of the
Company or the Subsidiaries is subject, or (C) the Articles of
Incorporation or the Bylaws of the Company or any of the
Subsidiaries; and the Company has full power and authority to
authorize, issue and sell the Shares as contemplated by this
Agreement;
(ix) The Registration Statement was declared
effective under the Act as of the date and time specified in
such opinion, the Prospectus either was filed with the
Commission pursuant to the subparagraph of rule 424(b)
specified in such opinion on the date specified therein or was
included in the Registration Statement (as the case may be),
and, to the best of the knowledge of such counsel, no stop
order suspending the effectiveness of the Registration
Statement or any part thereof has been issued and no
proceedings for that purpose have been instituted or are
pending or contemplated under the Act; the Registration
Statement and the Prospectus, and each amendment or supplement
thereto, as of their respective effective or issue dates,
complied as to form in all material respects with the
requirements of the Act, the Exchange Act, the Rules and
Regulations, and the Exchange Act Rules and Regulations; such
counsel have no reason to believe that the Registration
Statement, or any amendment thereto, as of its effective date,
contained any untrue statement of a material fact or omitted
to state any
17
material fact required to be stated therein or necessary to
make the statements therein not misleading, or that the
Prospectus, or any supplement thereto, as of its issue date,
included any untrue statement of a material fact or omitted to
state any material fact necessary in order to make the
statements, in light of the circumstances under which they
were made, not misleading; the descriptions in the
Registration Statement and Prospectus of statutes, legal and
governmental proceedings and contracts and other documents are
accurate in all material respects and fairly present the
information required to be shown; and such counsel does not
know of any pending or threatened legal or governmental
proceedings, statutes or regulations required to be described
in the Prospectus which are not described as required nor of
any contracts or documents of a character required to be
described in the Registration Statement or the Prospectus or
to be filed as exhibits to the Registration Statement which
are not described and filed as required; it being understood
that such counsel need express no opinion as to the financial
statements or other financial data contained in the
Registration Statement or the Prospectus or as to the section
of the Prospectus entitled "Underwriting"; and
(x) This Agreement has been duly authorized, executed
and delivered by the Company and constitutes a valid and
legally binding obligation of the Company enforceable in
accordance with its terms, except (A) as such enforceability
may be limited by bankruptcy, insolvency, reorganization,
fraudulent conveyance or similar laws now or hereafter in
effect relating to creditors' rights or debtors' obligations
generally; (B) that the remedies of specific performance and
injunctive and other forms of relief are subject to general
equitable principles, whether enforcement is sought at law or
in equity, and that such enforcement may be subject to the
discretion of the court before which any proceedings therefor
may be brought; and (C) as rights to indemnity and
contribution may be limited by state or federal laws relating
to securities or the policies underlying such laws.
In rendering such opinion, such counsel may rely as to matters of fact
to the extent deemed proper, on certificates of responsible officers of the
Company and its Subsidiaries and public officials.
(g) You shall have received an opinion, dated the Closing Date
and the Option Closing Date, from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Scarborough, L.L.P. as
your counsel, with respect to the Registration Statement, the Prospectus and
this Agreement, which opinion shall be satisfactory in all respects to you, and
the Company shall have furnished to such counsel such documents as they request
for the purpose of enabling them to pass upon such matters.
18
(h) The Representatives shall have received from the
Accountants a letter dated the date hereof, and at the Closing Date and Option
Closing Date additional letters dated the Closing Date or Option Closing Dates,
in form and substance satisfactory to the Representatives, stating that they are
independent auditors with respect to the Company within the meaning of the Act
and the applicable Rules and Regulations, and to the effect that:
(i) In their opinion, the financial statements and
schedules examined by them and included or incorporated by
reference in the Registration Statement comply as to form in
all material respects with the applicable accounting
requirements of the Act and the Rules and Regulations and are
presented in accordance with generally accepted accounting
principles; and they have made a review in accordance with
standards established by the American Institute of Certified
Public Accountants of the interim financial statements,
selected financial and operating data, and/or condensed
financial statements derived from audited financial statements
of the Company.
(ii) The selected financial information included in
the Preliminary Prospectus and the Prospectus under the
captions "Prospectus Summary," "Summary Consolidated Financial
Data," "Management's Discussion and Analysis and Results of
Operators," and "Selected Consolidated Financial Information"
for each of the fiscal years ended December 31, 1992, 1993,
1994, 1995, and 1996 agrees with the corresponding amounts in
the audited financial statements included in the Prospectus or
previously reported on by them.
(iii) On the basis of a reading of the latest
available interim financial statements (unaudited) of the
Company, a reading of the minute books of the Company,
inquiries of officials of the Company responsible for
financial and accounting matters, and other specified
procedures, all of which have been agreed to by the
Representatives, nothing came to their attention that caused
them to believe that:
a. the unaudited financial statements
included or incorporated by reference in the
Registration Statement do not comply as to form in
all material respects with the accounting
requirements of the federal securities laws and the
related published rules and regulations thereunder or
are not in conformity with generally accepted
accounting principles applied on a basis consistent
with the basis for the audited financial statements
contained in the Registration Statement;
b. any other unaudited financial statement
data included or incorporated by reference in the
19
Prospectus do not agree with the corresponding items
in the unaudited consolidated financial statements
from which data was derived and any such unaudited
data were not determined on a basis consistent with
the basis for the corresponding amounts in the
audited financial statements included in the
Prospectus;
c. at a specified date not more than five
days prior to the date of delivery of such respective
letter, there was any change in the consolidated
capital stock, decline in shareholders' equity or
increase in long-term debt of the Company, or other
items specified by the Representatives, in each case
as compared with amounts shown in the latest balance
sheets included in the Prospectus, except in each
case for changes, decreases or increases which the
Prospectus discloses have occurred or may occur or
which are described in such letters; and
d. for the period from the closing date of
the latest statements of income included in the
Prospectus to a specified date not more than five
days prior to the date of delivery of such respective
letter, there were any decreases in net revenues or
net income of the Company, or other items appearing
on the face of the statement of operations specified
by the Representatives, or any increases in any items
appearing on the face of the statement of operations
specified by the Representatives, in each case as
compared with the corresponding period of the
preceding year, except in each case for decreases
which the Prospectus discloses have occurred or may
occur or which are described in such letter.
(iv) They have carried out certain specified
procedures, not constituting an audit, with respect to certain
amounts, percentages and financial information specified by
you which are derived from the general accounting records of
the Company, which appear in the Prospectus and have compared
and agreed such amounts, percentages and financial information
with the accounting records of the Company.
In the event that the letters to be delivered referred to
above set forth any such changes, decreases or increases, it shall be a further
condition to the obligations of the Underwriters that the Underwriters shall
have reasonably determined, after discussions with officers of the Company
responsible for financial and accounting matters and with the Accountants, that
such changes, decreases or increases as are set forth in such letters do not
reflect a material adverse change in the shareholders' equity or
20
long-term debt of the Company as compared with the amounts shown in the latest
balance sheet of the Company included in the Prospectus, or a material adverse
change in total net revenues or net income of the Company, in each case as
compared with the corresponding period of the prior year.
(i) Concurrently with the execution and delivery of this
Agreement and at the Closing Date and, as to the Option Shares, the Option
Closing Date, there shall be furnished to you a certificate, dated the date of
its delivery, signed by each of the Chief Executive Officer and Chief Financial
Officer (or Assistant Secretary) of the Company, in form and substance
satisfactory to you, to the effect that:
(i) Each signer of such certificate has carefully
examined the Registration Statement and the Prospectus
(including any documents filed under the Exchange Act and
deemed to be incorporated by reference into the Prospectus)
and (A) as of the date of such certificate, such documents are
true and correct in all material respects, do not include any
untrue statement of material fact, and do not omit a material
fact required to be stated therein or necessary in order to
make the statements therein not untrue or misleading and (B)
in the case of the certificate delivered at the Closing Date
and the Option Closing Date, since the Effective Date no event
has occurred as a result of which it is necessary to amend or
supplement the Prospectus in order to make the statements
therein not untrue or misleading in any material respect and
there has been no document required to be filed under the
Exchange Act and the Exchange Act Rules and Regulations that
upon such filing would be deemed to be incorporated by
reference into the Prospectus that has not been so filed;
(ii) Each of the representations and warranties of
the Company contained in this Agreement were, when originally
made, and are, at the time such certificate is delivered, true
and correct in all material respects; and
(iii) Each of the covenants required herein to be
performed by the Company on or prior to the delivery of such
certificate has been duly, timely and fully performed and each
condition herein required to be complied with by the Company
on or prior to the date of such certificate has been duly,
timely and fully complied with.
(j) On or prior to the Closing Date, you shall have
received the executed agreements referred to in Section 4(n).
(k) The Shares shall be qualified for sale in such
states as you may reasonably request, each such qualification shall
21
be in effect and not subject to any stop order or other proceeding on the
Closing Date and the Option Closing Date.
(l) Prior to the Closing Date, the Shares shall have been duly
authorized for listing on the AMEX upon official notice of issuance.
(m) No Underwriter shall have advised the Company that the
Registration Statement, any preliminary prospectus, the Prospectus, or any
amendment or any supplement thereto, contains an untrue statement of fact which,
in your judgment, is material, or omits to state a fact which, in your judgment,
is material and is required to be stated therein or necessary to make the
statements therein not misleading, and if such notice has been delivered to the
Company, the Company shall have cured such untrue statement of fact or stated a
statement of fact required to be stated therein.
(n) The Company shall have furnished to you such certificates,
in addition to those specifically mentioned herein, as you may have reasonably
requested as to the accuracy and completeness at the Closing Date and the Option
Closing Date of any statement in the Registration Statement or the Prospectus or
any documents filed under the Exchange Act and deemed to be incorporated by
reference into the Prospectus, as to the accuracy at the Closing Date and the
Option Closing Date of the representations and warranties of the Company herein,
as to the performance by the Company of its obligations hereunder, or as to the
fulfillment of the conditions concurrent and precedent to your obligations
hereunder.
(o) Neither the Company, nor any Subsidiary, nor any of their
directors, officers or controlling persons shall have taken, directly or
indirectly, any action designed, or which might reasonably be expected, to cause
or result, under the Act or otherwise, in, or which shall have constituted,
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares or the Common Stock.
6. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company will and hereby agrees to indemnify and hold
harmless each Underwriter, the directors, officers, employees and agents of each
Underwriter, and each person, if any, who controls each Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, from and
against any and all losses, claims (as defined in Section 101 of the United
States Bankruptcy Code), liabilities, expenses and damages (including any and
all investigative, legal and other expenses reasonably incurred in connection
with,and any amount paid in settlement of, any action, suit or proceeding or any
claim asserted), to which they, or any of them, may become subject under the
Act, the Exchange Act or other federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, liabilities, expenses
or damages arise out of or are based in whole or in part
22
upon (i) any inaccuracy in the representations and warranties of the Company
contained herein, (ii) any failure of the Company to perform its obligations
hereunder or under law, or (iii) any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement to the
Registration Statement or the Prospectus or in any documents filed under the
Exchange Act and deemed to be incorporated by reference into the Prospectus or
any Blue Sky application or filing, or the omission or alleged omission to state
in any such document a material fact required to be stated in it or necessary to
make the statements in it not misleading; provided, that the Company will not be
liable to the extent that such loss, claim, liability, expense or damage arises
from the sale of the Shares in the public offering to any person by an
Underwriter and is based on an untrue statement or omission or alleged untrue
statement or omission made in reliance on and in conformity with information
relating to an Underwriter furnished in writing to the Company by an Underwriter
expressly for inclusion in the Registration Statement, any preliminary
prospectus or the Prospectus; and provided further, that the foregoing indemnity
agreement is subject to the conditions that, insofar as it relates to any untrue
statement, alleged untrue statement, omission, or alleged omission made in any
preliminary prospectus but eliminated or remedied in the Prospectus, such
indemnity agreement shall not inure to the benefit of any Underwriter from whom
the person asserting any loss, claim, damage, or liability purchased any Offered
Securities that are the subject thereof (or to the benefit of any person who
controls such Underwriter), if a copy of the Prospectus was not sent or given to
such person within the time required by the Act and the Rules and Regulations
and the Prospectus would have cured the defect giving rise to such loss, claim,
damage, or liability. The Company acknowledges that the statements set forth
under the heading "Underwriting" in any preliminary prospectus and the
Prospectus constitute the only information relating to any Underwriter furnished
in writing to the Company by you expressly for inclusion in the Registration
Statement, any preliminary prospectus or the Prospectus. This indemnity
agreement will be in addition to any liability that the Company might otherwise
have.
(b) Each Underwriter will indemnify and hold harmless the
Company, each person, if any, who controls the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, each director of the
Company, and each officer of the Company who signs the Registration Statement to
the same extent as the foregoing indemnity from the Company to the Underwriters,
but only insofar as losses, claims, liabilities, expenses or damages arise out
of or are based on any untrue statement or omission or alleged untrue statement
or omission made in reliance on and in conformity with information relating to
you furnished in writing to the Company by you expressly for use in the
Registration Statement, any preliminary prospectus or the Prospectus. The
Company acknowledges that the statements set forth under the heading
"Underwriting" in any preliminary prospectus and the Prospectus constitute the
only
23
information relating to the Underwriters furnished in writing to the Company by
the Underwriter expressly for inclusion in the Registration Statement, any
preliminary prospectus or the Prospectus. This indemnity will be in addition to
any liability that the Underwriters might otherwise have.
(c) Any party that proposes to assert the right to be
indemnified under this Section 6 will, promptly after receipt of notice of
commencement of any action against such party in respect of which a claim is to
be made against an indemnifying party or parties under this Section 6, notify
each such indemnifying party of the commencement of such action, enclosing a
copy of all papers served, but the omission so to notify such indemnifying party
will not relieve it from any liability that it may have to any indemnified party
under the foregoing provisions of this Section 6 unless, and only to the extent
that, such omission results in the forfeiture of substantive rights or defenses
by the indemnifying party. If any such action is brought against any indemnified
party and it notifies the indemnifying party of its commencement, the
indemnifying party will be entitled to participate in and, to the extent that it
elects by delivering written notice to the indemnified party promptly after
receiving notice of the commencement of the action from the indemnified party,
jointly with any other indemnifying party similarly notified, to assume the
defense of the action, with counsel reasonably satisfactory to the indemnified
party, and after notice from the indemnifying party to the indemnified party of
its election to assume the defense, the indemnifying party will not be liable to
the indemnified party for any legal or other expenses except as provided below
and except for the reasonable costs of investigation subsequently incurred by
the indemnified party in connection with the defense. The indemnified party will
have the right to employ its own counsel in any such action, but the fees,
expenses and other charges of such counsel will be at the expense of such
indemnified party unless (1) the employment of counsel by the indemnified party
has been authorized in writing by the indemnifying party, (2) the indemnified
party has reasonably concluded (based on advice of counsel) that there may be
legal defenses available to it or other indemnified parties that are different
from or in addition to those available to the indemnifying party, (3) a conflict
or potential conflict exists (based on advice of counsel to the indemnified
party) between the indemnified party and the indemnifying party (in which case
the indemnifying party will not have the right to direct the defense of such
action on behalf of the indemnified party), or (4) the indemnifying party has
not in fact employed counsel to assume the defense of such action within a
reasonable time after receiving notice of the commencement of the action, in
each of which cases the reasonable fees, disbursements and other charges of
counsel will be at the expense of the indemnifying party or parties. It is
understood that the indemnifying party or parties shall not, in connection with
any proceeding or related proceedings in the same jurisdiction, be liable for
the reasonable fees, disbursements and other charges of more than one separate
firm admitted to practice in such jurisdiction at any one time for all such
indemnified party
24
or parties. All such fees, disbursements and other charges will be reimbursed by
the indemnifying party promptly as they are incurred. An indemnifying party will
not be liable for any settlement of any action or claim effected without its
written consent (which consent will not be unreasonably withheld).
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 6 is applicable in accordance with its terms but for
any reason is held to be unavailable from the Company or the Underwriters, the
Company and the Underwriters will contribute to the total losses, claims,
liabilities, expenses and damages (including any investigative, legal and other
expenses reasonably incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claim asserted, but after
deducting any contribution received by the Company from persons other than the
Underwriters, such as persons who control the Company within the meaning of the
Act, officers of the Company who signed the Registration Statement and directors
of the Company, who may be liable for contribution) to which the Company and the
Underwriter may be subject in such proportion as shall be appropriate to reflect
the relative benefits received by the Company on the one hand and the
Underwriter on the other. The relative benefits received by the Company on the
one hand and the Underwriter on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company bear to the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth in the table
on the cover page of the Prospectus. If, but only if, the allocation provided by
the foregoing sentence is not permitted by applicable law, the allocation of
contribution shall be made in such proportion as is appropriate to reflect not
only the relative benefits referred to in the foregoing sentence but also the
relative fault of the Company, on the one hand, and the Underwriters, on the
other, with respect to the statements or omissions which resulted in such loss,
claim, liability, expense or damage, or action in respect thereof, as well as
any other relevant equitable considerations with respect to such offering. Such
relative fault shall be determined by reference to whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company or the
Underwriters, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and equitable
if contributions pursuant to this Section 6(d) were to be determined by pro rata
allocation (even if the Underwriter were treated as one entity for such purpose)
or by any other method of allocation which does not take into account the
equitable considerations referred to herein. The amount paid or payable by an
indemnified party as a result of the loss, claim, liability, expense or damage,
or action in respect thereof, referred to above in this Section 6(d) shall be
deemed to include, for purpose of
25
this Section 6(d), any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 6(d), an Underwriter
shall not be required to contribute any amount in excess of the underwriting
discounts received by it, and no person found guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) will be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 6(d), any person who controls a
party to this Agreement within the meaning of the Act will have the same rights
to contribution as that party, and each officer of the Company who signed the
Registration Statement will have the same rights to contribution as the Company,
subject in each case to the provisions hereof. Any party entitled to
contribution, promptly after receipt of notice of commencement of any action
against such party in respect of which a claim for contribution maybe made under
this Section 6(d), will notify any such party or parties from whom contribution
may be sought, but the omission to notify will not relieve the party or parties
from whom contribution may be sought from any other obligation it or they may
have under this Section 6(d). No party will be liable for contribution with
respect to any action or claim settled without its written consent (which
consent will not be unreasonably withheld).
(e) The indemnity and contribution agreements contained in
this Section 6 and the representations, warranties and covenants of the Company
contained in this Agreement shall remain operative and in full force and effect
regardless of (i) any investigation made by the Underwriters or on their behalf,
(ii) acceptance of any of the Shares and payment therefor, or (iii) any
termination of this Agreement.
7. TERMINATION.
The Underwriters' obligations under this Agreement may be terminated at
any time on or prior to the Closing Date (or, with respect to the Option Shares,
on or prior to the Option Closing Date), by notice to the Company from the
Representatives without liability on the part of any of the Underwriters to the
Company, if, prior to delivery and payment for the Shares (or the Option Shares,
as the case may be), in your sole judgment, (i) trading in any of the equity
securities of the Company shall have been suspended by the Commission, the AMEX,
or by any other exchange that lists the Shares, (ii) trading in securities
generally on the New York Stock Exchange, the AMEX, or the over-the-counter
market shall have been suspended or limited or minimum or maximum prices shall
have been generally established on such exchange, or additional material
governmental restrictions, not in force on the date of this Agreement, shall
have been imposed upon trading in securities generally by such exchange or by
order of the Commission or any court of other governmental authority, (iii) a
general banking moratorium shall have been declared by either federal or state
authorities, or (iv) any material adverse change in the
26
financial or securities markets in the United States or in political, financial
or economic conditions in the United States or any outbreak or material
escalation of hostilities or declaration by the United States of a national
emergency or war or other calamity or crisis shall have occurred the effect of
any of which is such as to make it, in your sole judgment, impracticable or
inadvisable to market the Shares on the terms and in the manner contemplated by
the Prospectus.
8. SUBSTITUTION OF UNDERWRITER.
If any Underwriter shall fail or refuse to purchase any of the Firm
Shares which it has agreed to purchase hereunder, and the aggregate number of
Firm Shares which such defaulting Underwriter agreed but failed or refused to
purchase is not more than one-tenth of the aggregate number of Firm Shares, the
other Underwriters shall be obligated, severally, to purchase the Firm Shares
that such defaulting Underwriter agreed but failed or refused to purchase, in
the proportions which the number of Firm Shares which they have respectively
agreed to purchase pursuant to Section 1 bears to the aggregate number of Firm
Shares which all such non-defaulting Underwriters have so agreed to purchase, or
in such other proportions as you may specify; provided, that in no event shall
the maximum number of Firm Shares which an Underwriter has been obligated to
purchase pursuant to Section 1 be increased pursuant to this Section 8 by more
than one-ninth of such number of Firm Shares without the prior written consent
of such Underwriter. If an Underwriter shall fail or refuse to purchase any Firm
Shares and the aggregate number of Firm Shares which such defaulting Underwriter
agreed but failed or refused to purchase exceeds one-tenth of the aggregate
number of the Firm Shares and arrangements satisfactory to the non-defaulting
Underwriters or the Company for the purchase of such Firm Shares are not made
within 48 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Underwriters or the Company for the
purchase or sale of any Shares under this Agreement. In any such case, the
Underwriters or the Company shall have the right to postpone the Closing Date,
but in no event for longer than seven days, in order that the required changes,
if any, in the Registration Statement and in the Prospectus or in any other
documents or arrangements may be effected. Any action taken pursuant to this
Section 8 shall not relieve any defaulting Underwriter from liability in respect
to any default of such Underwriter under this Agreement.
9. MISCELLANEOUS.
Notice given pursuant to any of the provisions of this Agreement shall
be in writing and, unless otherwise specified, shall be mailed or delivered (a)
if to the Company, at the office of the Company, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, or (b) if to you, at the
offices of ▇.▇. ▇▇▇▇▇▇▇▇ & Co., ▇.▇. ▇▇▇▇▇▇▇▇ Financial Center, ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
27
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇. Any such notice shall be effective only upon receipt. Any
notice under Section 7 or 8 may be made by telecopier or telephone, but if so
made shall be subsequently promptly confirmed in writing.
This Agreement has been and is made solely for the Underwriters' and
the Company's benefits and of the controlling persons, directors and officers
referred to in Section 6, and their respective representatives, successors and
assigns, and no other person shall acquire or have any right under or by virtue
of this Agreement. The term "successors and assigns" as used in this Agreement
shall not include a purchaser, as such purchaser, of Shares from an Underwriter.
This Agreement shall be governed by and construed in accordance with
the laws of the State of Tennessee.
This Agreement may be signed in two or more counterparts with the same
effect as if the signatures thereto and hereto were upon the same instrument.
In case any provision in this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
The Company and you each hereby irrevocably waive any right they may
have to a trial by jury in respect of any claim based upon or arising out of
this Agreement or the transactions contemplated hereby.
You hereby represent and warrant to the Company that you have authority
to act hereunder on behalf of the Underwriters, and any action hereunder taken
by you will be binding upon the Underwriters.
Please confirm that the foregoing correctly sets forth the agreement
among the Company and you.
Very truly yours,
COMMUNITY CAPITAL CORPORATION
By:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President and Chief Executive Officer
28
Confirmed and accepted as of the date first above written.
▇. ▇. ▇▇▇▇▇▇▇▇ & CO.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ & CO., INC.
For themselves and as
Representatives of the Several
Underwriters
By: ▇.▇. ▇▇▇▇▇▇▇▇ & Co.
By:_________________________________
Name:
Title:
29
SCHEDULE I
Number of
Name Shares
▇.▇. ▇▇▇▇▇▇▇▇ & Co. . . . . . . . . . . . . . . . .
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ & Co., Inc. . . . . . . . . . . . .
TOTAL . . . . . . . .
30