Exhibit 1.1
Execution Version
BNC Bancorp
(a North Carolina corporation)
2,500,000 Shares of Common Stock
(No Par Value)
UNDERWRITING AGREEMENT
July 21, 2016
Xxxxxxxx Inc.
as Representative of the Underwriters
named in Schedule A hereto
000 Xxxxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
BNC Bancorp, a North Carolina
corporation (the “Company”), proposes, subject to the terms and conditions stated herein, to issue and sell to the
several underwriters named in Schedule A hereto (each, an “Underwriter” and, collectively, the “Underwriters”),
for which Xxxxxxxx Inc. is acting as representative (the “Representative”), an aggregate of 2,500,000 shares (the “Firm
Shares”) and, at the election of the Underwriters through the Representative, up to an additional 375,000 shares (the “Option
Shares”) of voting common stock, no par value per share (the “Common Stock”) of the Company (the Firm Shares
and the Option Shares are herein collectively called the “Shares”).
The Company understands
that the Underwriters propose to make a public offering of the Shares as soon as it deems advisable after this Agreement has been
executed and delivered.
On July 19, 2016, the Company
filed with the United States Securities and Exchange Commission (the “Commission”) an automatic shelf registration
statement, as defined in Rule 405 of the rules and regulations of the Commission under the Securities Act of 1933, as amended (the
“1933 Act,” and such rules and regulations thereunder being referred to as the “1933 Act Regulations”),
on Form S-3 (File No. 333-212581) for the registration of securities, which includes the form of prospectus covering the registration
of the Shares under the 1933 Act), and the offer and sale thereof from time to time in accordance with Rule 415 of the 1933 Act
Regulations. Promptly after execution and delivery of this Agreement, the Company will prepare and file a prospectus supplement
in accordance with the provisions of Rule 430A and/or Rule 430B of the 1933 Act Regulations and paragraph (b) of Rule 424 (“Rule
424(b)”) of the 1933 Act Regulations. The information included in such prospectus that was omitted from the automatic shelf
registration statement at the time it became effective but is deemed to be part of such registration statement at the time specified
in paragraph (b) of Rule 430A or Rule 430B of the 1933 Act Regulations is referred to as “Rule 430 Information.” Any
prospectus that omitted, as applicable, the Rule 430 Information, that was used after such automatic shelf registration statement
was filed and prior to the execution and delivery of this Agreement, is herein called a “preliminary prospectus.” Such
automatic shelf registration statement, including any amendments thereto, the exhibits and schedules thereto, if any, but excluding
Form T-1, and the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933 Act, at the time it
became effective, and any prospectus filed with the Commission pursuant to Rule 424(b) containing Rule 430 Information, as applicable,
is herein called the “Registration Statement.” The prospectus, in the form in which it appears in the Registration
Statement and including the documents incorporated by reference therein, is hereinafter called the “Base Prospectus”;
and each supplemented form of prospectus, in the form in which it will be filed with the Commission pursuant to Rule 424(b) and
including the documents incorporated by reference therein, is hereinafter called a “Prospectus Supplement,” and such
final Prospectus Supplement as filed, along with the Base Prospectus, is herein after called the “Prospectus.” For
purposes of this Agreement, all references to the Registration Statement, any preliminary prospectus, the Base Prospectus, any
Prospectus Supplement, or the Prospectus, or any amendment or supplement to any of the foregoing shall be deemed to include the
copy filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval system (“XXXXX”).
All references in this
Agreement to financial statements and schedules and other information which is “contained,” “included”
or “stated” in the Registration Statement, any preliminary prospectus, the Base Prospectus, any Prospectus Supplement,
or the Prospectus (or other references of like import) shall be deemed to mean and include all such financial statements and schedules
and other information that are incorporated therein by reference; and all references in this Agreement to the terms “amend,”
“amendment” or “supplement” with respect to the Registration Statement, the Base Prospectus, a Prospectus
Supplement or the Prospectus shall be deemed to mean and include the filing of a post-effective amendment, any document under the
Securities Exchange Act of 1934, as amended (the “1934 Act”), which is incorporated therein by reference, or form of
prospectus.
Section
1. Representations and Warranties and Agreements.
(a) Representations
and Warranties of the Company. The Company represents and warrants to, and agrees with, each of the Underwriters as of the
date hereof, as of the Closing Time referred to in Section 2(c) hereof, and as of each Date of Delivery (if any) referred to in
Section 2(b) hereof, as follows:
(i) Compliance
with Registration Requirements. (A) At the time of filing the Registration Statement and any post-effective amendments thereto,
(B) at the earliest time thereafter that the Company or another offering participant made a bona fide offer (within the meaning
of Rule 164(h)(2) of the 1933 Act Regulations) of the Shares, and (C) at the date hereof, the Company (i) was a “well-known
seasoned issuer” as defined in Rule 405 of the 1933 Act Regulations (“Rule 405”) and (ii) was not an “ineligible
issuer” as defined in Rule 405. At the time the Registration Statement was filed with the Commission and at the time hereof
the Company met the requirements for use of Form S-3 under the 1933 Act as set forth in such form. The Registration Statement became
effective automatically upon the filing thereof with the Commission under the 1933 Act on July 19, 2016. No stop order suspending
the effectiveness of the Registration Statement or any respective post-effective amendment thereto has been issued and no proceedings
for that purpose have been instituted or are pending or, to the knowledge of the Company, are contemplated by the Commission, and
any request on the part of the Commission for additional information has been complied with. The Registration Statement meets the
requirements set forth in Rule 415 of the 1933 Act Regulations.
At the respective times
the Registration Statement and any post-effective amendments thereto became effective and at the Closing Time (and, if any Option
Shares are purchased, at the Date of Delivery), the Registration Statement and any amendments and supplements thereto complied
and will comply in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations and did not and will
not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading. Neither the Prospectus nor any amendments or supplements thereto, at the time the
Prospectus or any such amendment or supplement was issued and at the Closing Time (and, if any Option Shares are purchased, at
each Date of Delivery), included or will include an untrue statement of a material fact or omitted or will omit to state a material
fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
Each preliminary prospectus,
the Base Prospectus, any Prospectus Supplement, and the Prospectus complied when so filed in all material respects with the 1933
Act and the 1933 Act Regulations and each preliminary prospectus, the Base Prospectus, any Prospectus Supplement, and the Prospectus
delivered to the Underwriters for use in connection with this offering was identical to the electronically transmitted copies thereof
filed with the Commission pursuant to XXXXX, except to the extent permitted by Regulation S-T.
As of the Applicable Time,
neither (x) the Issuer-Represented General Free Writing Prospectus(es) issued at or prior to the Applicable Time and the Statutory
Prospectus, all considered together (collectively, the “General Disclosure Package”), nor (y) any individual Issuer-Represented
Limited Use Free Writing Prospectus, when considered together with the General Disclosure Package, included any untrue statement
of a material fact or omitted to state any material fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
The Registration Statement
relating to the Shares initially became effective within three years of the date hereof. If, immediately prior to the third anniversary
of the initial effective date of the Registration Statement relating to the Shares, any of the Shares remain unsold by any of the
Underwriters, the Company will prior to that third anniversary file, if it has not already done so, a new shelf registration statement
relating to the Shares, in a form satisfactory to the Representative, will use its best efforts to cause such registration statement
to be declared effective within 180 days after that third anniversary, and will take all other action necessary or appropriate
to permit the public offering and sale of the Shares to continue as contemplated in the expired registration statement relating
to the Shares. References herein to the Registration Statement relating to the Shares shall include such new shelf registration
statement.
As used in this subsection
and elsewhere in this Agreement:
“Applicable Time”
means 8:15 a.m. (Eastern time) on the date of this Agreement or such other time as agreed by the Company and the Representative.
“Statutory Prospectus”
as of any time means the prospectus relating to the Shares that is included in the Registration Statement immediately prior to
that time, including any document incorporated by reference therein and any prospectus supplement deemed to be a part thereof.
For purposes of this definition, information contained in a form of prospectus that is deemed retroactively to be a part of the
Registration Statement pursuant to Rule 430A or Rule 430B shall be considered to be included in the Statutory Prospectus as of
the actual time that form of prospectus is filed with the Commission pursuant to Rule 424(b).
“Issuer-Represented
Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433 of the 1933 Act Regulations
(“Rule 433”), relating to the Shares that (A) is required to be filed with the Commission by the Company or (B) is
exempt from filing pursuant to Rule 433(d)(5)(i) because it contains a description of the Shares or of the offering that does not
reflect the final terms, in each case in the form filed or required to be filed with the Commission or, if not required to be filed,
in the form retained in the Company’s records pursuant to Rule 433(g).
“Issuer-Represented
General Free Writing Prospectus” means any Issuer-Represented Free Writing Prospectus that is intended for general distribution
to investors, as evidenced by its being specified in Schedule B hereto.
“Issuer-Represented
Limited Use Free Writing Prospectus” means any Issuer-Represented Free Writing Prospectus that is not an Issuer-Represented
General Free Writing Prospectus.
Each Issuer-Represented
Free Writing Prospectus, as of its issue date and at all subsequent times through the completion of the public offering and sale
of the Shares or until any earlier date that the Company notified or notifies the Representative did not, does not and will not
include any information that conflicted, conflicts or will conflict with the information contained in the Registration Statement
or the Prospectus, including any document incorporated by reference therein and any preliminary or other prospectus deemed to be
a part thereof that has not been superseded or modified, including any document incorporated by reference therein and any Prospectus
Supplement deemed to be a part thereof that has not been superseded or modified.
The representations and
warranties in this subsection shall not apply to statements in or omissions from the Registration Statement, any preliminary prospectus,
the Base Prospectus, any Prospectus Supplement, or the Prospectus or any Issuer-Represented Free Writing Prospectus made in reliance
upon and in conformity with written information furnished to the Company by an Underwriter through the Representative expressly
for use therein, which the parties acknowledge and agree consists only of the information contained under the captions “Underwriting
– Stabilization Transactions” and “Underwriting – Passive Market Making” (the “Underwriter
Information”).
(ii) Incorporated
Documents. The documents incorporated or deemed to be incorporated by reference in the Registration Statement and the Prospectus,
at the time they were or hereafter are filed with the Commission, complied and will comply in all material respects with the requirements
of the 1934 Act and the rules and regulations of the Commission thereunder (the “1934 Act Regulations”), and, when
read together with the other information in the General Disclosure Package, in the Prospectus, at the time the Registration Statement
became effective or when such incorporated documents were filed with the Commission, as the case may be, did not and will not contain
an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the
statements therein not misleading.
(iii) Independent
Accountants. Each of (A) Cherry Bekaert, LLP, the accounting firm that certified the financial statements of the Company included
in the Registration Statement, the General Disclosure Package and the Prospectus and (B) Xxxxxxx Xxxxx Xxxxxxxx, LLC, the accounting
firm that certified the financial statements of Valley Financial Corporation (“Valley”) included in the Registration
Statement, the General Disclosure Package and the Prospectus is an independent registered public accounting firm as required by
the 1933 Act and the 1933 Act Regulations. With respect to the Company, neither Cherry Bekaert LLP nor Xxxxxxx Xxxxx Xxxxxxxx,
LLC is and has been in violation of the auditor independence requirements of the Xxxxxxxx-Xxxxx Act of 2002 (“Xxxxxxxx-Xxxxx
Act”) and the related rules and regulations of the Commission.
(iv) Financial
Statements. The financial statements incorporated by reference in the Registration Statement, the General Disclosure Package
and the Prospectus present, with respect to the financial statements, fairly the financial position of (1) the Company and its
consolidated subsidiaries and (2) Valley and its consolidated subsidiaries, at the dates indicated and the statement of operations,
stockholders’ equity and cash flows of (x) the Company and its consolidated subsidiaries and (y) Valley and its consolidated
subsidiaries for the periods specified; said financial statements have been prepared in conformity with accounting principles generally
accepted in the United States of America (“GAAP”) applied on a consistent basis throughout the periods involved. The
pro forma financial statements incorporated by reference in, and the pro forma information included in, the Registration Statement,
the General Disclosure Package and the Prospectus, together with the notes related thereto (A) present fairly the financial position
and results of operations of (1) the Company and its consolidated subsidiaries and (2) Valley and its consolidated subsidiaries
at the dates and for the periods specified on a combined pro forma basis, and (B) present fairly the financial position of (1)
the Company and its consolidated subsidiaries, (2) High Point Bank Corporation (“High Point”) and its consolidated
subsidiaries, and (3) the sale of the Shares at the dates indicated on a combined pro forma basis; said pro forma financial statements
and pro forma information referred to in (A) and (B) have been prepared in conformity with the requirements of Article 11 of Regulation
S-X and GAAP, applied on a consistent basis throughout the periods involved, and give effect to assumptions and adjustments made
in good faith and on a reasonable basis as set forth therein. The supporting schedules, if any, included in the Registration Statement,
the General Disclosure Package and the Prospectus present fairly in accordance with GAAP the information required to be stated
therein. The selected financial data and the summary financial information included in the Registration Statement, the General
Disclosure Package and the Prospectus present fairly the information shown therein and have been compiled on a basis consistent
with that of the audited financial statements incorporated by reference in the Registration Statement and the books and records
of the Company. No other financial statements or schedules are required to be included in the Registration Statement. To the extent
applicable, all disclosures contained in the Registration Statement, the General Disclosure Package or the Prospectus regarding
“non-GAAP financial measures” (as such term is defined by the rules and regulations of the Commission) comply with
Regulation G of the 1934 Act, the 1934 Act Regulations and Item 10(e) of Regulation S-K under the 1933 Act, as applicable.
(v) No
Material Adverse Change in Business. Since the respective dates as of which information is given in the Registration Statement,
the General Disclosure Package and the Prospectus, except as otherwise stated therein, (A) there has been no Material Adverse Effect;
(B) there have been no transactions entered into by the Company or any of its subsidiaries or High Point or any of its subsidiaries,
other than those in the ordinary course of business, which are material with respect to the Company and its subsidiaries or High
Point and its subsidiaries, each considered as a separate consolidated enterprise, and (C) except for regular dividends on the
Common Stock in amounts per share that are consistent with past practice, there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital stock and, to the Company’s knowledge, there has not been
any dividend or distribution of any kind declared, paid or made by High Point on any class of their respective capital stock. For
purposes of this Agreement, “Material Adverse Effect” means any fact, change, occurrence, event or circumstance that,
individually or together with any other facts, changes, occurrences, events or circumstances, has or would reasonably be expected
to have a material adverse effect on the business, business prospects, management, financial position, shareholders’ equity
or results of operations of the Company and its subsidiaries, considered as one enterprise, or would prevent or impair the consummation
of the transactions contemplated by this Agreement.
(vi) Good
Standing of the Company. The Company has been duly organized and is validly existing as a corporation in good standing under
the laws of the State of North Carolina and has corporate power and authority to own, lease and operate its properties and to conduct
its business as described in the General Disclosure Package and the Prospectus and to enter into and perform its obligations under
this Agreement; and the Company is duly qualified as a foreign corporation to transact business and is in good standing in each
other jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct
of business, except where the failure so to qualify or to be in good standing would not reasonably be expected to result in a Material
Adverse Effect.
(vii) Good
Standing of Subsidiaries. Each significant subsidiary (as defined in Rule 1-02 of Regulation S-X) of the Company (“Significant
Subsidiary”) has been duly organized and is validly existing as a corporation, business trust, partnership or limited liability
company in good standing under the laws of the jurisdiction of its incorporation, formation or organization, has the requisite
power and authority to own, lease and operate its properties and to conduct its business as described in the General Disclosure
Package and the Prospectus and is duly qualified as a foreign corporation or other business entity to transact business and is
in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or to be in good standing would not reasonably be expected
result in a Material Adverse Effect. Except as otherwise disclosed in the Registration Statement, all of the issued and outstanding
capital stock of each such Significant Subsidiary has been duly authorized and validly issued, is fully paid and non-assessable
and is owned by the Company, directly or through subsidiaries, free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity; none of the outstanding shares of capital stock of any subsidiary was issued in violation of the
preemptive or similar rights of any securityholder of such subsidiary. The Bank is the only Significant Subsidiary of the Company.
A list of all subsidiaries of the Company is contained on Schedule D-1 hereto.
(viii) Capitalization.
The authorized, issued and outstanding capital stock of the Company is as set forth in the General Disclosure Package and the Prospectus
in the column entitled “Actual” under the caption “Capitalization” (except for subsequent issuances, if
any, pursuant to this Agreement, pursuant to reservations, agreements or employee benefit plans referred to in the Prospectus or
pursuant to the exercise of convertible securities or options referred to in the Prospectus). The shares of the Company’s
issued and outstanding capital stock have been duly authorized and validly issued and are fully paid and non-assessable; none of
the outstanding shares of capital stock was issued in violation of the preemptive or other similar rights of any securityholder
of the Company.
(ix) Authorization
of Agreement. This Agreement has been duly authorized, executed and delivered by the Company.
(x) Authorization
and Description of Shares. The Shares to be purchased by the Underwriters from the Company have been duly authorized for issuance
and sale to the Underwriters pursuant to this Agreement and, when issued and delivered by the Company pursuant to this Agreement
against payment of the consideration set forth herein, will be validly issued and fully paid and non-assessable; the Common Stock
conforms to all statements relating thereto contained in the Prospectus and such description conforms to the rights set forth in
the instruments defining the same; no holder of the Shares will be subject to personal liability for the debts of the Company by
reason of being such a holder; and the issuance of the Shares is not subject to the preemptive or other similar rights of any securityholder
of the Company other than those rights which have been validly waived by the securityholder entitled to such rights prior to the
date of this Agreement.
(xi) Absence
of Defaults and Conflicts. Neither the Company nor any of its subsidiaries is in violation of its charter or by-laws or in
default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, lease or other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which it or any of them may be bound, or to which any of the property or assets of the Company
or any subsidiary is subject (collectively, “Agreements and Instruments”) except for such defaults that would not reasonably
be expected to result in a Material Adverse Effect; and the execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated herein and in the Registration Statement (including the issuance and sale of the Shares and the
use of the proceeds from the sale of the Shares as described in the Prospectus under the caption “Use of Proceeds”)
and compliance by the Company with its obligations hereunder have been duly authorized by all necessary corporate action and do
not and will not, whether with or without the giving of notice or passage of time or both, conflict with or constitute a breach
of, or default or Repayment Event (as defined below) under, or result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any subsidiary pursuant to, the Agreements and Instruments (except for such conflicts,
breaches or defaults or liens, charges or encumbrances that would not reasonably be expected to result in a Material Adverse Effect),
nor will such action result in any violation of the provisions of the charter or bylaws of the Company or any subsidiary or any
applicable law, statute, rule, regulation, judgment, order, writ or decree of any government, government instrumentality or court,
domestic or foreign, having jurisdiction over the Company or any subsidiary or any of their assets, properties or operations. As
used herein, a “Repayment Event” means any event or condition which gives the holder of any note, debenture or other
evidence of indebtedness (or any person acting on such holder’s behalf) the right to require the repurchase, redemption or
repayment of all or any portion of such indebtedness by the Company or any subsidiary.
(xii) Nasdaq
Compliance. The Company is in compliance in all material respects with the requirements of The Nasdaq Capital Market (“Nasdaq”)
for continued listing of its Common Stock thereon. The Company has taken no action designed to, or likely to have the effect of,
terminating the registration of the Common Stock under the 1934 Act or the listing of its Common Stock on Nasdaq, nor has the Company
received any notification that the SEC or Nasdaq is contemplating terminating such registration or listing. The transactions contemplated
by this Agreement will not contravene the rules and regulations of Nasdaq.
(xiii) Absence
of Labor Dispute. No labor dispute with the employees of the Company or any subsidiary exists or, to the knowledge of the Company,
is imminent, which would reasonably be expected to result in a Material Adverse Effect.
(xiv) Absence
of Proceedings. There is no action, suit, proceeding, inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of the Company, threatened, against or affecting the Company
or any subsidiary, which is required to be disclosed in the Registration Statement (other than as disclosed therein), or which
would reasonably be expected to result in a Material Adverse Effect; the aggregate of all pending legal or governmental proceedings
to which the Company or any subsidiary is a party or of which any of their respective property or assets is the subject which are
not described in the Registration Statement, including ordinary routine litigation incidental to the business, could not reasonably
be expected to result in a Material Adverse Effect.
(xv) Bank
Holding Company Act. The Company has been duly registered as a bank holding company and has not elected to be treated as a
financial holding company under the applicable provisions of the Bank Holding Company Act of 1956, as amended. Each of the Company
and the Bank is in compliance in all material respects with all applicable laws administered by and regulations of the Board of
Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation (the “FDIC”), and the North Carolina
Office of the Commissioner of Banks, as applicable (collectively, the “Bank Regulatory Authorities”), to the extent
such laws or regulations apply to the Company or the Bank, as applicable, other than where such failures to comply would not reasonably
be expected to have a Material Adverse Effect. Except as disclosed in the Registration Statement, the General Disclosure Package,
and the Prospectus, or except as would not otherwise reasonably be expected to result in a Material Adverse Effect, neither the
Company nor the Bank is a party to any written agreement or memorandum of understanding with, or a party to, any commitment letter
or similar undertaking to, or is subject to any order or directive by, or is a recipient of an extraordinary supervisory letter
from, or has adopted any board resolutions at the request of, any Bank Regulatory Authority which restricts materially the conduct
of its business, or in any manner relates to its capital adequacy, its credit policies or its management, nor have either of them
been advised by any Bank Regulatory Authority that it is contemplating issuing or requesting (or is considering the appropriateness
of issuing or requesting) any such order, decree, agreement, memorandum of understanding, extraordinary supervisory letter, commitment
letter or similar submission, or any such board resolutions.
(xvi) Accuracy
of Exhibits. There are no contracts or documents which are required to be described in the Registration Statement, the General
Disclosure Package, the Prospectus or the documents incorporated by reference therein or to be filed as exhibits thereto which
have not been so properly described and filed as required.
(xvii) Possession
of Intellectual Property. The Company and its subsidiaries own or possess, or can acquire on reasonable terms, adequate patents,
patent rights, licenses, inventions, copyrights, know-how (including trade secrets and other unpatented and/or unpatentable proprietary
or confidential information, systems or procedures and excluding generally commercially available “off the shelf” software
programs licensed pursuant to shrink wrap or “click and accept” licenses), trademarks, service marks, trade names or
other intellectual property (collectively, “Intellectual Property”) necessary to carry on the business now operated
by them, and, except for claims disclosed to the Underwriters with respect to the names “BNC” and “BNC Bancorp”
filed by BNC National Bank, Bismarck, North Dakota, neither the Company nor any of its subsidiaries has received any notice or
has knowledge of any infringement of or conflict with asserted rights of others with respect to any Intellectual Property or of
any facts or circumstances which would render any Intellectual Property invalid or inadequate to protect the interest of the Company
or any of its subsidiaries therein, and which infringement or conflict (if the subject of any unfavorable decision, ruling or finding)
or invalidity or inadequacy, singly or in the aggregate, would reasonably be expected to result in a Material Adverse Effect.
(xviii) Absence
of Further Requirements. No filing with, or authorization, approval, consent, license, order, registration, qualification or
decree of, any court or governmental authority or agency is necessary or required for the performance by the Company of its obligations
hereunder, in connection with the offering, issuance or sale of the Shares hereunder or the consummation of the transactions contemplated
by this Agreement, except such as have been already obtained or as may be required under the 1933 Act or the 1933 Act Regulations,
the rules of Nasdaq, the securities laws of any state or non-U.S. jurisdiction or the rules of the Financial Industry Regulatory
Authority (“FINRA”).
(xix) Possession
of Licenses and Permits. The Company and its subsidiaries possess such permits, licenses, approvals, consents and other authorizations
(collectively, “Governmental Licenses”) issued by the appropriate federal, state, local or foreign regulatory agencies
or bodies necessary to conduct the business now operated by them, except where the failure to so possess would not, singly or in
the aggregate, reasonably be expected to have a Material Adverse Effect; the Company and its subsidiaries are in compliance with
the terms and conditions of all such Governmental Licenses, except where the failure so to comply would not, singly or in the aggregate,
reasonably be expected to have a Material Adverse Effect; all of the Governmental Licenses are valid and in full force and effect,
except where the invalidity of such Governmental Licenses or the failure of such Governmental Licenses to be in full force and
effect would not reasonably be expected to have a Material Adverse Effect; and neither the Company nor any of its subsidiaries
has received any notice of proceedings relating to the revocation or modification of any such Governmental Licenses which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would reasonably be expected to result in a
Material Adverse Effect. Neither the Company nor any of its subsidiaries has failed to file with applicable regulatory authorities
any statement, report, information or form required by any applicable law, regulation or order, except where the failure to be
so in compliance would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, all such
filings were in material compliance with applicable laws when filed and no material deficiencies have been asserted by any regulatory
commission, agency or authority with respect to any such filings or submissions.
(xx) Title
to Property. The Company and its subsidiaries have good and marketable title to all real property owned by the Company and
its subsidiaries and good title to all other properties owned by them, in each case, free and clear of all mortgages, pledges,
liens, security interests, claims, restrictions or encumbrances of any kind except (A) such as are described in the General Disclosure
Package and the Prospectus, (B) such as do not, singly or in the aggregate, materially affect the value of such property and do
not interfere with the use made and proposed to be made of such property by the Company or any of its subsidiaries, and (C) the
pledge of loans and securities in the ordinary course of business to secure borrowings from the Federal Home Loan Bank of Atlanta
and the discount window at the Federal Reserve Bank of Richmond, repurchase agreements and government municipal deposits; and all
of the leases and subleases material to the business of the Company and its subsidiaries, considered as one enterprise, and under
which the Company or any of its subsidiaries holds properties described in the General Disclosure Package and the Prospectus, are
in full force and effect, and neither the Company nor any subsidiary has any notice of any material claim of any sort that has
been asserted by anyone adverse to the rights of the Company or any subsidiary under any of the leases or subleases mentioned above,
or affecting or questioning the rights of the Company or such subsidiary to the continued possession of the leased or subleased
premises under any such lease or sublease.
(xxi) Investment
Company Act. The Company is not, and upon the issuance and sale of the Shares as herein contemplated and the application of
the net proceeds therefrom as described in the General Disclosure Package and the Prospectus will not be, an “investment
company” or an entity “controlled” by an “investment company” as such terms are defined in the Investment
Company Act of 1940, as amended.
(xxii) Environmental
Laws. Except as described in the Registration Statement and except as would not, singly or in the aggregate, reasonably be
expected to result in a Material Adverse Effect, (A) neither the Company nor any of its subsidiaries is in violation of any federal,
state, local or foreign statute, law, rule, regulation, ordinance, code, policy or rule of common law or any judicial or administrative
interpretation thereof, including any judicial or administrative order, consent, decree or judgment, relating to pollution or protection
of human health, the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface
strata) or wildlife, including, without limitation, laws and regulations relating to the release or threatened release of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous substances, petroleum or petroleum products, asbestos-containing
materials or mold (collectively, “Hazardous Materials”) or to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Materials (collectively, “Environmental Laws”), (B) the Company
and its subsidiaries have all permits, authorizations and approvals required under any applicable Environmental Laws and are each
in compliance with their requirements, and (C) there are no pending or, to the knowledge of the Company, threatened administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violation, investigation
or proceedings relating to any Environmental Law against the Company or any of its subsidiaries there are no events or circumstances
that might reasonably be expected to form the basis of an order for clean-up or remediation, or an action, suit or proceeding by
any private party or governmental body or agency, against or affecting the Company or any of its subsidiaries relating to Hazardous
Materials or any Environmental Laws.
(xxiii) Taxes.
The Company and each of the subsidiaries has (A) timely filed all material foreign, federal, state and local tax returns, information
returns, and similar reports that are required to be filed (taking into account valid extensions), and all tax returns are true,
correct and complete, (B) paid in full all taxes required to be paid by it and any other assessment, fine or penalty levied against
it, except for any such tax assessment, fine or penalty that is currently being contested in good faith or as would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect, and (C) established on the Company’s most
recent consolidated balance sheet reserves that are adequate for the payment of all taxes not yet due and payable.
(xxiv) Insurance.
The Company and its subsidiaries carry, or are covered by, insurance in such amounts and covering such risks as the Company reasonably
believes are adequate for the conduct of the business of the Company and its subsidiaries and the value of their properties and
as are customary in the business in which the Company and its subsidiaries are engaged; neither the Company nor any of its subsidiaries
has been refused any insurance coverage sought or applied for; and the Company has no reason to believe that they will not be able
to renew their existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business at a cost that would not reasonably be expected to have a Material Adverse Effect.
(xxv) Statistical
and Market Data. The statistical and market related data contained in the Prospectus and Registration Statement are based on
or derived from sources which the Company believes are reliable and accurate.
(xxvi) Relationship.
No relationship, direct or indirect, exists between or among the Company or any of its subsidiaries, on the one hand, and the directors,
officers, shareholders, customers or suppliers of the Company or any of its subsidiaries, on the other, that is required by the
1933 Act or by the 1933 Act Regulations to be described in the Registration Statement and/or the Prospectus and that is not so
described.
(xxvii) Internal
Control Over Financial Reporting. The Company and its subsidiaries maintain a system of internal control over financial reporting
(as defined in Rule 13a-15(f) under the 0000 Xxx) sufficient to provide reasonable assurance that (A) transactions are executed
in accordance with management’s general or specific authorizations; (B) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain asset accountability; (C) access to assets is permitted
only in accordance with management’s general or specific authorization; and (D) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Except
as described in the Registration Statement, General Disclosure Package and Prospectus, since the end of the Company’s most
recent audited fiscal year, there has been (I) no material weakness in the Company’s internal control over financial reporting
(whether or not remediated) and (II) no change in the Company’s internal control over financial reporting that has materially
affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
(xxviii) Disclosure
Controls and Procedures. The Company and its subsidiaries maintain a system of disclosure controls and procedures (as such
term is defined in Rule 13a-15(e) under the 1934 Act), which (A) are designed to ensure that information required to be disclosed
by the Company in the reports that it files or submits under the 1934 Act is recorded, processed, summarized and reported within
the time periods specified in the Commission’s rules and forms and that material information relating to the Company and
its subsidiaries is made known to the Company’s principal executive officer and principal financial officer by others within
the Company and its subsidiaries to allow timely decisions regarding disclosure, and (B) are effective in all material respects
to perform the functions for which they were established. Based on the evaluation of the Company’s and its subsidiaries disclosure
controls and procedures described above, the Company is not aware of (1) any significant deficiency in the design or operation
of internal controls which could adversely affect the Company’s ability to record, process, summarize and report financial
data or any material weaknesses in internal controls or (2) any fraud, whether or not material, that involves management or other
employees who have a significant role in the Company’s internal controls. Since the most recent evaluation of the Company’s
disclosure controls and procedures described above, there have been no significant changes in internal controls or in other factors
that could significantly affect internal controls.
(xxix) Compliance
with the Xxxxxxxx-Xxxxx 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 Xxxxxxxx-Xxxxx Act and the
rules and regulations promulgated in connection therewith, including Section 402 related to loans and Sections 302 and 906 related
to certifications.
(xxx) Pending
Procedures and Examinations. The Registration Statement is not the subject of a pending proceeding or examination under Section
8(d) or 8(e) of the 1933 Act, and the Company is not the subject of a pending proceeding under Section 8A of the 1933 Act in connection
with the offering of the Shares.
(xxxi) Unlawful
Payments. Neither the Company nor any of its subsidiaries nor, to the 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 (A) used any corporate
funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (B) made any
direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (C) violated
or is in violation of any provision of the Foreign Corrupt Practices Act of 1977; or (D) made any bribe, rebate, payoff, influence
payment, kickback or other payment in violation of any applicable law, rule or regulation.
(xxxii) Anti-Money
Laundering Laws. Neither the Company nor any of its subsidiaries has violated or is in violation of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, the money laundering statutes of any jurisdiction, the rules and regulations thereunder
and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively,
the “Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority
or body or any arbitrator involving the Company or any of its subsidiaries with respect to the Money Laundering Laws is pending
or, to the best knowledge of the Company, threatened.
(xxxiii) OFAC.
None of the Company, any subsidiary of the Company or, to the knowledge of the Company, any director, officer, agent, employee,
affiliate or other person acting on behalf of the Company or any of its subsidiaries is (A) engaged in any services (including
financial services), transfers of goods, software, or technology, or any other business activity related to (1) Cuba, Iran, North
Korea, Sudan, Syria or the Crimea region of Ukraine claimed by Russia (“Sanctioned Countries”), (2) the government
of any Sanctioned Country, (3) any person, entity or organization located in, resident in, formed under the laws of, or owned or
controlled by the government of, any Sanctioned Country, or (4) any person, entity or organization made subject of any sanctions
administered or enforced by the United States Government, including, without limitation, the list of Specially Designated Nationals
(“SDN List”) of the United States Department of the Treasury’s Office of Foreign Assets Control (“OFAC”),
or by the United Nations Security Council, the European Union, Her Majesty’s Treasury, or other relevant sanctions authority
(collectively, “Sanctions”), (B) engaged in any transfers of goods, technologies or services (including financial services)
that may assist the governments of Sanctioned Countries or facilitate money laundering or other activities proscribed by United
States Law, or (C) is a person, entity or organization currently the subject of any Sanctions or (D) located, organized or resident
in any Sanctioned Country;
(xxxiv) 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 1933 Act by reason of the filing of the Registration Statement with the Commission or the issuance and sale of the
Shares to be sold by the Company hereunder.
(xxxv) No
Stabilization or Manipulation. Neither the Company nor any of its subsidiaries, nor any affiliates of the Company or its subsidiaries,
has 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.
(xxxvi) No
Unauthorized Use of Prospectus. The Company has not distributed and, prior to the later to occur of (A) the Closing Time and
(B) completion of the distribution of the Shares, will not distribute any prospectus (as such term is defined in the 1933 Act and
the 1933 Act Regulations) in connection with the offering and sale of the Shares other than the Statutory Prospectus, the Prospectus
or any Issuer-Represented General Free Writing Prospectus, or other materials, if any, permitted by the 1933 Act or by the 1933
Act Regulations and approved by the Representative.
(xxxvii) Forward-Looking
Statements. No forward-looking statement (within the meaning of Section 27A of the 1933 Act and Section 21E of the 0000 Xxx)
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.
(xxxviii) Lock-up
Agreements. Each of the Company’s officers, as defined by Rule 16a-1(f) of the 1934 Act Regulations, directors and certain
shareholders, in each case as listed on Schedule E hereto, has executed and delivered lock-up agreements as contemplated by Section
5(i) hereof.
(xxxix) Fees.
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 any other fee, commission or payment as a result of the transactions contemplated
by this Agreement.
(xl) ERISA.
The Company and each of the subsidiaries or their “ERISA Affiliates” (as defined below) are in compliance in all material
respects with all presently applicable provisions of the Employee Retirement Income Security Act of 1974, as amended, including
the regulations and published interpretations thereunder (collectively, “ERISA”); no “reportable event”
(as defined in ERISA) has occurred with respect to any “employee benefit plan” (as defined in ERISA) for which the
Company or any of the subsidiaries or ERISA Affiliates would have any liability; the Company and each of the subsidiaries or their
ERISA Affiliates have not incurred and do not expect to incur liability under (i) Title IV of ERISA with respect to termination
of, or withdrawal from, any “employee benefit plan” or (ii) Sections 412, 4971, 4975 or 4980B of the United States
Internal Revenue Code of 1986, as amended, and the regulations and published interpretations thereunder (collectively the “Code”);
and each “employee benefit plan” for which the Company and each of its subsidiaries or any of their ERISA Affiliates
would have any liability that is intended to be qualified under Section 401(a) of the Code is so qualified in all material respects
and nothing as occurred, whether by action or by failure to act, which would cause the loss of such qualification. “ERISA
Affiliate” means, with respect to the Company or a subsidiary, any member of any group of organizations described in Sections
414(b), (c), (m) or (o) of the Code or Section 400(b) of ERISA of which the Company or such subsidiary is a member.
(xli) Derivative
Instruments. Any and all material swaps, caps, floors, futures, forward contracts, option agreements (other than stock options
issued to the Company’s employees, directors, agents or consultants) and other derivative financial instruments, contracts
or arrangements, whether entered into for the account of the Company or one of its subsidiaries or for the account of a customer
of the Company or one of its subsidiaries, were entered into in the ordinary course of business and in accordance, in all material
respects, with applicable laws, rules, regulations and policies of all applicable regulatory agencies and with counterparties believed
by the Company to be financially responsible at the time. The Company and each of its subsidiaries have duly performed in all material
respects all of their obligations thereunder to the extent that such obligations to perform have accrued, and there are no breaches,
violations or defaults or allegations or assertions of such by any party thereunder which would, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect.
(xlii) Off-Balance
Sheet Transactions. There is no transaction, arrangement or other relationship between the Company or any of its subsidiaries
and an unconsolidated or other off-balance sheet entity that is required to be disclosed by the Company in its 1934 Act filings
and is not so disclosed or that otherwise would be reasonably expected to have a Material Adverse Effect.
(b) Representations
and Warranties Related to the Bank. The Company represents and warrants to, and agrees with, each of the Underwriters as of
the date hereof, as of the Closing Time referred to in Section 2(c) hereof, and as of each Date of Delivery (if any) referred to
in Section 2(b) hereof, as follows:
(i) Good
Standing of the Bank. The Bank is duly chartered and is validly existing as a North Carolina state-chartered bank and is in
good standing under the laws of the State of North Carolina and has been duly qualified as a foreign bank for the transaction of
business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification or is subject to no material liability or disability by reason of the failure to be
so qualified, except where such failure would not reasonably be expected to have a material adverse effect on the business, business
prospects, management, financial position, shareholders’ equity or results of operations of the Bank. As used in this Agreement,
the “Bank” means the Bank of North Carolina. The Bank is the only “significant subsidiary” of the Company
(as such term is defined in Rule 1-02 of Regulation S-X) and does not itself have any subsidiaries other than those contained in
Schedule D-2.
(ii) Absence
of Defaults and Conflicts. The Bank nor any of its subsidiaries is not (A) in violation of its articles of incorporation or
bylaws (or other organization documents), (B) in violation of any law, ordinance, administrative or governmental rule or regulation
applicable to the Bank, or (C) in default in the performance of any obligation, agreement or condition contained in any bond, debenture,
note or any other evidence of indebtedness or in any agreement, indenture, lease or other instrument to which the Bank or its subsidiaries
is a party or by which any of them or any of their respective properties may be bound, except where any such default, individually
or in the aggregate, would not reasonably be expected to have a material adverse effect on the business, business prospects, management,
financial position, shareholders’ equity or results of operations of the Bank.
(iii) Authority.
The Bank has the corporate power and authority to own, lease and operate its properties and to conduct its business as described
in the General Disclosure Package and the Prospectus and to enter into and perform its obligations under this Agreement. The Bank
is the only depository institution subsidiary of the Company and the activities of the Bank and its subsidiaries are permitted
under the laws and regulations of the State of North Carolina and the FDIC and the deposit accounts in the Bank are insured up
to the applicable limits by the FDIC and no proceeding for the termination or revocation of such insurance is pending or, to the
knowledge of the Company, threatened against the Bank.
(c) Officer’s
Certificates. Any certificate signed by any officer of the Company or any of its subsidiaries delivered to the Underwriters
or to counsel for the Underwriters shall be deemed a representation and warranty by the Company to the Underwriters as to the matters
covered thereby.
Section
2. Sale and Delivery to Underwriters; Closing.
(a) Firm
Shares. On the basis of the representations and warranties herein contained and subject to the terms and conditions set forth
herein, the Company agrees to sell to each of the Underwriters and the Underwriters agree, severally and not jointly, to purchase
from the Company, at the price per share set forth in Schedule C, the respective number of Firm Shares set forth in Schedule A
opposite its name.
(b) Option
Shares. In addition, on the basis of the representations and warranties herein contained and subject to the terms and conditions
set forth herein, the Company hereby grant(s) an option to the Underwriters to purchase, severally and not jointly, up to an additional
375,000 shares of Common Stock, at the price per share set forth in Schedule C. The option hereby granted may be exercised in whole
or in part from time to time through the 30th day after the date of this Agreement, upon notice by the Representative to the Company
setting forth the number of Option Shares as to which the several Underwriters are then exercising the option and the time and
date of payment and delivery for such Option Shares. Any such time and date of delivery (each, a “Date of Delivery”)
shall be determined by the Representative, but shall not be later than seven full business days after the exercise of said option,
nor in any event prior to the Closing Time, as hereinafter defined. If the option is exercised as to all or any portion of the
Option Shares, each of the Underwriters, acting severally and not jointly, will purchase that proportion of the total number of
Option Shares then being purchased which the number of Firm Shares set forth in Schedule A opposite the name of such Underwriter
bears to the total number of Firm Shares, subject, in each case, to such adjustments as the Representative in its sole discretion
shall make to eliminate any sales or purchases of fractional shares.
(c) Payment.
Payment of the purchase price for, and delivery of certificates for, the Firm Shares shall be made at the offices of Xxxxxxxxx
& Xxxxxxx LLP, One CityCenter, 000 Xxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000, or at such other place as shall be agreed upon
by the Representative and the Company, at 10:00 a.m. (Eastern time) on the third (fourth, if the pricing occurs after 4:30 p.m.
(Eastern time) on any given day) business day after the date hereof, or such other time not later than ten business days after
such date as shall be agreed upon by the Representative and the Company (such time and date of payment and delivery being herein
called “Closing Time”).
In addition, in the event
that any or all of the Option Shares are purchased by the Underwriters, payment of the purchase price for, and delivery of certificates
for, such Option Shares shall be made at the above-mentioned offices, or at such other place as shall be agreed upon by the Representative
and the Company, on each Date of Delivery as specified in the notice from the Representative to the Company.
Payment shall be made to
the Company by wire transfer of immediately available funds to a bank account designated by the Company against delivery of the
Shares to the Representative through the facilities of the Depository Trust Company (“DTC”) for the respective accounts
of the Underwriters.
(d) Denominations;
Registration. Certificates for the Firm Shares and the Option Shares, if any, shall be in such denominations and registered
in such names as the Representative may request in writing at least one full business day before the Closing Time or the relevant
Date of Delivery, as the case may be. The certificates for the Firm Shares and the Option Shares, if any, will be made available
for examination and packaging by the Representative in the District of Columbia not later than 10:00 a.m. (Eastern time) on the
business day prior to the Closing Time or the relevant Date of Delivery, as the case may be.
Section
3. Covenants of the Company. The Company covenants and
agrees with each of the Underwriters as follows:
(a) Compliance
with Securities Regulations and Commission Requests. The Company, subject to Section 3(b), will comply with the requirements
of Rule 430A or Rule 430B, as applicable, and will notify the Representative immediately, and confirm the notice in writing, (i)
when any post-effective amendment to the Registration Statement shall become effective, or any Prospectus Supplement or any amended
Prospectus shall have been filed, (ii) of the receipt of any comments from the Commission, (iii) of any request by the Commission
for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or for additional information,
(iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of any order
preventing or suspending the use of any preliminary prospectus, the Base Prospectus, any Prospectus Supplement, or the Prospectus,
or of the suspension of the qualification of the Shares for offering or sale in any jurisdiction, or of the initiation or threatening
of any proceedings for any of such purposes or of any examination pursuant to Section 8(e) of the 1933 Act concerning the Registration
Statement and (v) if the Company becomes the subject of a proceeding under Section 8A of the 1933 Act in connection with the offering
of the Shares. The Company will promptly effect the filings necessary pursuant to Rule 424(b) in the manner and within the time
period required by Rule 424(b) (without reliance on Rule 424(b)(8)) and will take such steps as it deems necessary to ascertain
promptly whether the form of prospectus transmitted for filing under Rule 424(b) was received for filing by the Commission and,
in the event that it was not, it will promptly file such prospectus. The Company will make every reasonable effort to prevent the
issuance of any stop order and, if any stop order is issued, to obtain the lifting thereof at the earliest possible moment.
(b) Filing
of Amendments. The Company will give the Representative notice of its intention to file or prepare any amendment or supplement
to the Registration Statement, any preliminary prospectus, the Base Prospectus, any Prospectus Supplement, or the Prospectus, whether
pursuant to the 1933 Act, the 1934 Act or otherwise, will furnish the Representative with copies of any such documents a reasonable
amount of time prior to such proposed filing or use, as the case may be, and will not file or use any such document to which the
Representative or counsel for the Underwriters shall object.
(c) Delivery
of Registration Statement. The Company has furnished or will deliver to the Representative and counsel for the Underwriters,
without charge, signed copies of the Registration Statement as originally filed and of each amendment thereto (including exhibits
filed therewith or incorporated by reference therein and documents incorporated or deemed to be incorporated by reference therein)
and signed copies of all consents and certificates of experts, and will also deliver to the Representative, without charge, a conformed
copy of the Registration Statement as originally filed and of each amendment thereto (without exhibits) for each of the Underwriters.
The copies of the Registration Statement and each amendment thereto furnished to each Underwriter will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to XXXXX, except to the extent permitted by Regulation S-T.
(d) Delivery
of Prospectuses. The Company has delivered to each Underwriter, without charge, as many copies of the Base Prospectus and any
Prospectus Supplement as such Underwriter reasonably requested, and the Company hereby consents to the use of such copies for purposes
permitted by the 1933 Act. The Company will furnish to each Underwriter, without charge, during the period when the Prospectus
is required to be delivered under the 1933 Act or the 1934 Act, such number of copies of the Prospectus (as amended or supplemented)
as such Underwriter may reasonably request. The Prospectus and any amendments or supplements thereto furnished to each Underwriter
will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to XXXXX, except to the extent
permitted by Regulation S-T.
(e) Continued
Compliance with Securities Laws. The Company will comply with the 1933 Act and the 1933 Act Regulations and the 1934 Act and
the 1934 Act Regulations so as to permit the completion of the distribution of the Shares as contemplated in this Agreement and
in the Registration Statement, the General Disclosure Package and the Prospectus. If at any time when a prospectus is (or, but
for the exception afforded by Rule 172 of the 1933 Act Regulations, would be) required by the 1933 Act to be delivered in connection
with sales of the Shares ending no later than nine months from the date hereto (the “Delivery Period”), any event shall
occur or condition shall exist as a result of which it is necessary, in the opinion of counsel for the Underwriters or for the
Company, to (i) amend the Registration Statement in order that the Registration Statement will not include an untrue statement
of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not
misleading, (ii) amend or supplement the Prospectus in order that the Prospectus will not include any untrue statements of a material
fact or omit to state a material fact necessary in order to make the statements therein not misleading in the light of the circumstances
existing at the time it is delivered to a purchaser, or (iii) if it shall be necessary, in the opinion of such counsel, at any
such time to amend the Registration Statement or amend or supplement the Prospectus in order to comply with the requirements of
the 1933 Act or the 1933 Act Regulations, the Company will promptly (A) give the Representative written notice of such event or
condition, (B) prepare and file with the Commission, subject to Section 3(b) of this Agreement, such amendment or supplement as
may be necessary to correct such statement or omission or to make the Registration Statement or the Prospectus comply with such
requirements and use its best efforts to have any amendment to the Registration Statement declared effective by the Commission
as soon as possible if the Company is no longer eligible to file an automatic shelf registration statement, and (C) the Company
will furnish to each Underwriter such number of copies of such amendment or supplement as such Underwriter may reasonably request.
If at any time following issuance of an Issuer-Represented Free Writing Prospectus there occurred or occurs an event or development
as a result of which such Issuer-Represented Free Writing Prospectus conflicted or would conflict with the information contained
in the Registration Statement or included or would include an untrue statement of a material fact or omitted or would omit to state
a material fact necessary in order to make the statements therein, in the light of the circumstances prevailing at that subsequent
time, not misleading, the Company has promptly notified or will promptly notify the Representative and has promptly amended or
will promptly amend or supplement, at its own expense, such Issuer-Represented Free Writing Prospectus to eliminate or correct
such conflict, untrue statement or omission.
(f) Blue
Sky Qualifications. The Company will use its best efforts, in cooperation with the Underwriters, to qualify the Shares for
offering and sale under the applicable securities laws of such states and other jurisdictions (domestic or foreign) as the Representative
may designate and to maintain such qualifications in effect for the Delivery Period; provided, however, that the Company shall
not be obligated to file any general consent to service of process or to qualify as a foreign corporation or as a dealer in securities
in any jurisdiction in which it is not so qualified or to subject itself to taxation in respect of doing business in any jurisdiction
in which it is not otherwise so subject. In each jurisdiction in which the Shares have been so qualified, the Company will file
such statements and reports as may be required by the laws of such jurisdiction to continue such qualification in effect for the
Delivery Period. The Company will also supply the Underwriters with such information as is necessary for the determination of the
legality of the Shares for investment under the laws of such jurisdiction as such Underwriter may request.
(g) Rule
158. The Company will timely file such reports pursuant to the 1934 Act as are necessary in order to make generally available
to its securityholders as soon as practicable an earnings statement for the purposes of, and to provide the benefits contemplated
by, the last paragraph of Section 11(a) of the 1933 Act.
(h) Use
of Proceeds. The Company will use the net proceeds received by it from the sale of the Shares in the manner specified in the
Prospectus under “Use of Proceeds.”
(i) Listing.
The Company will use its best efforts to maintain listing of the Shares on Nasdaq and will file with Nasdaq all documents and notices
required by Nasdaq.
(j) Restriction
on Sale of Shares. During a period of 90 days from the date of the Prospectus (the “Lock-Up Period”), the Company
will not, without the prior written consent of the Representative, directly or indirectly, (i) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant for
the sale of, hypothecate, establish an open “put equivalent position” within the meaning of Rule 16a-1(h) of the 1934
Act Regulations, or otherwise dispose of or transfer any shares of the Company’s Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock, or file any registration statement under the 1933 Act with respect to any
of the foregoing or (ii) enter into any swap, hedge or any other agreement or any transaction that transfers, in whole or in part,
directly or indirectly, the economic consequence of ownership of the Common Stock, whether any such swap, hedge or transaction
described in clause (i) or (ii) above is to be settled by delivery of shares of Common Stock or other securities, in cash or otherwise.
The foregoing sentence shall not apply to (A) the Shares to be sold hereunder, (B) any shares of Common Stock issued by the Company
upon the exercise of an option or warrant or the conversion of a security outstanding on the date hereof and referred to in the
Prospectus, or (C) any shares of Common Stock issued or options to purchase Common Stock granted pursuant to existing employee
benefit plans of the Company referred to in the Prospectus provided that such options shall not be vested and exercisable within
the 90-day period referred to above. The Company also agrees that during the Lock-Up Period, other than for the sale of Common
Stock hereunder, the Company will not file any registration statement, preliminary prospectus or prospectus, or any amendment or
supplement thereto, under the Securities Act for any such transaction or which registers, or offers for sale, Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock, except for a registration statement on Form S-8 relating
to employee benefit plans. In the event that either (i) during the period that begins on the date that is 15 calendar days plus
three business days before the last day of the 90-day restricted period and ends on the last day of the 90-day restricted period,
the Company issues an earnings release or material news or a material event relating to the Company occurs, or (ii) prior to the
expiration of the 90-day restricted period, the Company announces that it will release earnings results during the 16-day period
beginning on the last day of the 90-day restricted period, the restrictions set forth herein will continue to apply until the expiration
of the date that is 15 calendar days plus three business days after the date on which the earnings release is issued or the material
news or event related to the Company occurs. The Company shall promptly notify the Representative of any earnings releases, news
or events that may give rise to an extension of the initial restricted period. Notwithstanding the foregoing, the Lock-Up Period
shall not be extended pursuant to the preceding sentence if (i) the shares of Common Stock are “actively traded securities”
as defined in Regulation M of the 1934 Act, (ii) the Company meets the applicable requirements of paragraph (a)(1) of Rule 139
of the 1933 Act Regulations, in the manner contemplated by FINRA Conduct Rule 2711(f)(4) and (iii) the provisions of FINRA Conduct
Rule 2711(f)(4) are not applicable to any research reports relating to the Company published or distributed by any of the Underwriters
during the 15 days before or after the last day of the Lock-Up Period (before giving effect to such extension).
(k) Reporting
Requirements. The Company, during the period when the Prospectus is required to be delivered under the 1933 Act or the 1934
Act, will file all documents required to be filed with the Commission pursuant to the 1934 Act within the time periods required
by the 1934 Act and the 1934 Act Regulations.
(l) Lock-up
Agreements. The Company agrees to enforce its rights under any of its existing registration rights agreements and/or shareholders’
agreement to restrict the transfer of securities within the 90-day period following the Closing Date.
(m) Issuer
Free Writing Prospectus. The Company represents and agrees that, unless it obtains the prior consent of the Representative,
it has not made and will not make any offer relating to the Shares that would constitute an “issuer free writing prospectus,”
as defined in Rule 433, or that would otherwise constitute a “free writing prospectus,” as defined in Rule 405, required
to be filed with the Commission. Any such free writing prospectus consented to by the Representative is hereinafter referred to
as a “Permitted Issuer Free Writing Prospectus.” The Company represents that it has treated or agrees that it will
treat each Permitted Issuer Free Writing Prospectus as an “issuer free writing prospectus,” as defined in Rule 433,
and has complied and will comply with the requirements of Rule 433 applicable to any Permitted Issuer Free Writing Prospectus,
including timely filing with the Commission where required, legending and record keeping.
(n) DTC.
The Company will cooperate with the Representative and use its best efforts to permit the Shares to be eligible for clearance,
settlement and trading through the facilities of DTC, if required.
Section
4. Payment of Expenses.
(a) Expenses.
The Company will pay or cause to be paid all expenses incident to the performance of its obligations under this Agreement, including
(i) the preparation, printing and filing of the Registration Statement (including financial statements and exhibits) as originally
filed and of each amendment thereto, (ii) the preparation, printing and delivery to the Underwriters of this Agreement and such
other documents as may be required in connection with the offering, purchase, sale, issuance or delivery of the Shares, (iii) the
preparation, issuance and delivery of the certificates for the Shares to the Underwriters, including any stock or other transfer
taxes and any stamp or other duties payable upon the sale, issuance or delivery of the Shares to the Underwriters, (iv) the fees
and disbursements of the Company’s counsel, accountants and other advisors, (v) the qualification of the Shares under securities
laws in accordance with the provisions of Section 3(f) hereof, including filing fees and the reasonable fees and disbursements
of counsel for the Underwriters in connection therewith and in connection with the preparation, printing and delivery to the Underwriters
of the Blue Sky Survey and any supplement thereto and the fees and expenses of making the Shares eligible for clearance, settlement
and trading through the facilities of DTC, if required, (vi) the printing and delivery to the Underwriters of copies of the Base
Prospectus, any Prospectus Supplement, any Permitted Issuer Free Writing Prospectus and the Prospectus, and any amendments or supplements
thereto (including any costs associated with electronic delivery of these materials), (vii) the fees and expenses of any transfer
agent or registrar for the Shares, (viii) the costs and expenses of the Company relating to investor presentations on any “road
show” undertaken in connection with the marketing of the Shares, including without limitation, expenses associated with the
production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations,
travel and lodging expenses of the representatives and officers of the Company and any such consultants, and the cost of aircraft
and other transportation chartered in connection with the road show, (ix) the filing fees incident to, and the reasonable fees
and disbursements of counsel to the Underwriters in connection with, the review by FINRA of the terms of the sale of the Shares,
and (x) the fees and expenses incurred in connection with the listing of the Shares on Nasdaq.
(b) Termination
of Agreement. If this Agreement is terminated by the Representative in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Company shall reimburse the Underwriters for all of their out-of-pocket expenses, including the reasonable
fees and disbursements of counsel for the Underwriters.
Section
5. Conditions of the Underwriters’ Obligations.
The obligations of the Underwriters hereunder are subject to the accuracy of the representations and warranties of the Company
and the Bank contained in Section 1 hereof and in certificates of any officer of the Company or any subsidiary of the Company delivered
pursuant to the provisions hereof, to the performance by the Company of its covenants and other obligations hereunder, and to the
following further conditions:
(a) Effectiveness
of Registration Statement. The Registration Statement shall have become effective and at Closing Time no stop order suspending
the effectiveness of the Registration Statement shall have been issued under the 1933 Act or proceedings therefor initiated or
threatened by the Commission, and any request on the part of the Commission for additional information shall have been complied
with to the reasonable satisfaction of counsel to the Underwriters, no notice of objection to the use of the Registration Statement
or any post-effective amendment thereto pursuant to Rule 401(g)(2) has been received by the Company, no order preventing or suspending
the use of any preliminary prospectus or the Prospectus or any amendment or supplement thereto has been issued and no proceedings
for any of those purposes have been instituted or are pending or, to the Company’s knowledge, contemplated. Each preliminary
prospectus, each Issuer Free Writing Prospectus and the Prospectus containing the Rule 430 Information shall have been filed with
the Commission in the manner required by Rule 424(b) (without reliance on Rule 424(b)(8)) and Rule 433, as applicable, within the
time period prescribed by, and in compliance with, the 1933 Act Regulations (or a post-effective amendment providing such information
shall have been filed and declared effective in accordance with the requirements of Rule 430A or Rule 430B).
(b) Opinion
of Counsel for Company. At the Closing Time, the Representative shall have received the favorable opinion, dated as of Closing
Time, of Xxxxxx Xxxxxxx Xxxxxxxxx & Xxxx, LLP, counsel for the Company, in form and substance satisfactory to counsel for the
Underwriters.
(c) Opinion
of Counsel for Underwriters. At Closing Time, the Representative shall have received the favorable opinion, dated as of Closing
Time, of Xxxxxxxxx & Xxxxxxx LLP, counsel for the Underwriters, in form and substance satisfactory to the Representative, together
with signed or reproduced copies of such letter.
(d) Officers’
Certificate. At Closing Time, there shall not have been, since the date hereof or since the respective dates as of which information
is given in the Base Prospectus, any Prospectus Supplement, the Prospectus, or the General Disclosure Package, as of the execution
of this Agreement or the Applicable Time, any Material Adverse Effect, and the Representative shall have received a certificate
of the President or a Vice President of the Company and of the chief financial or chief accounting officer of the Company, dated
as of Closing Time, to the effect that (i) there has been no Material Adverse Effect, (ii) the representations and warranties in
Section 1(a) hereof are true and correct with the same force and effect as though expressly made at and as of Closing Time, (iii)
the Company has complied with all agreements and satisfied all conditions on its part to be performed or satisfied at or prior
to Closing Time, and (iv) no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been instituted or are pending or, to their knowledge, are contemplated by the Commission.
(e) Accountants’
Comfort Letter. At the time of the execution of this Agreement, the Representative shall have received from each of (A) Cherry
Bekaert, LLP, with respect to the Company and (B) Xxxxxxx Xxxxx Xxxxxxxx, LLC, with respect to Valley, a letter dated such date,
in form and substance satisfactory to the Representative, together with signed or reproduced copies of such letter for each of
the other Underwriters containing statements and information of the type ordinarily included in accountants’ “comfort
letters” to underwriters with respect to the financial statements and certain financial information contained in the Registration
Statement and the Prospectus.
(f) Bring-down
Comfort Letter. At the Closing Time the Representative shall have received from each of (A) Cherry Bekaert, LLP, with respect
to the Company and (B) Xxxxxxx Xxxxx Xxxxxxxx, LLC, with respect to Valley, a letter, dated as of the Closing Time, to the effect
that they reaffirm the statements made in the letter furnished pursuant to Section 5(e) hereof, except that the specified date
referred to shall be a date not more than three business days prior to Closing Time.
(g) Certificate
of Chief Financial Officer. At the Closing Time, the Representative shall have received a certificate executed by the Chief
Financial Officer of the Company, in form and substance, reasonably satisfactory to the Representative.
(h) Approval
of Listing. The Common Stock (including the Shares) is registered pursuant to Section 12(b) of the Exchange Act and is listed
on Nasdaq, and the Company has taken no action designed to, or likely to have the effect of, terminating the registration of the
Common Stock under the Exchange Act or delisting the Common Stock from Nasdaq, nor has the Company received any notification that
the Commission or Nasdaq is contemplating terminating such registration or listing.
(i) No
Objection. FINRA shall have raised no objection with respect to the fairness and reasonableness of the underwriting terms and
arrangements.
(j) Lock-up
Agreements. At the date of this Agreement, the Representative shall have received an agreement substantially in the form of
Exhibit A hereto signed by the persons listed on Schedule E hereto.
(k) Delivery
of Prospectus. The Company shall have complied with the provisions hereof with respect to the furnishing of prospectuses, in
electronic or printed format, on the New York business day next succeeding the date of this Agreement.
(l) No
Termination Event. On or after the date hereof, there shall not have occurred any of the events, circumstances or occurrences
set forth in Section 9(a).
(m) Conditions
to Purchase of Option Shares. In the event that the Underwriters exercise their option provided in Section 2(b) hereof to purchase
all or any portion of the Option Shares, the representations and warranties of the Company contained herein and the statements
in any certificates furnished by the Company, any subsidiary of the Company hereunder shall be true and correct as of each Date
of Delivery and, at the relevant Date of Delivery, the Representative shall have received:
(i) Officers’
Certificate. A certificate, dated such Date of Delivery, of the President or a Vice President of the Company and of the chief
financial or chief accounting officer of the Company confirming that the certificate delivered at the Closing Time pursuant to
Section 5(e) hereof remains true and correct as of such Date of Delivery.
(ii) Opinion
of Counsel for Company. The favorable opinion of Xxxxxx Xxxxxxx Xxxxxxxxx & Xxxx, LLP, counsel for the Company, in form
and substance satisfactory to counsel for the Underwriters, dated such Date of Delivery, relating to the Option Shares to be purchased
on such Date of Delivery and otherwise to the same effect as the opinion required by Section 5(b) hereof.
(iii) Opinion
of Counsel for Underwriters. The favorable opinion of Xxxxxxxxx & Xxxxxxx LLP, counsel for the Underwriters, dated such
Date of Delivery, relating to the Option Shares to be purchased on such Date of Delivery and otherwise to the same effect as the
opinion required by Section 5(c) hereof.
(iv) Bring-down
Comfort Letter. A letter from each of (A) Cherry Bekaert, LLP, with respect to the Company, and (B) Xxxxxxx Xxxxx Xxxxxxxx,
LLC, with respect to Valley, in form and substance satisfactory to the Representative and dated such Date of Delivery, substantially
in the same form and substance as the letter furnished to the Representative pursuant to Section 5(f) hereof, except that the “specified
date” in the letter furnished pursuant to this paragraph shall be a date not more than five days prior to such Date of Delivery.
(v) Certificate
of Chief Financial Officer. A certificate executed by the Chief Financial Officer of the Company, dated as of such Date of
Delivery, in form and substance reasonably satisfactory to the Representative.
(vi) No
Termination Event. There shall not have occurred prior to the Date of Delivery any of the events, circumstances or occurrences
set forth in Section 9(a).
(n) Additional
Documents. At Closing Time and at each Date of Delivery counsel for the Underwriters shall have been furnished with such documents
and opinions as they may require for the purpose of enabling them to pass upon the issuance and sale of the Shares as herein contemplated,
or in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company in connection with the issuance and sale of the Shares as herein contemplated
shall be satisfactory in form and substance to the Representative and counsel for the Underwriters.
(o) Termination
of Agreement. If any condition specified in this Section shall not have been fulfilled when and as required to be fulfilled,
this Agreement, or, in the case of any condition to the purchase of Option Shares on a Date of Delivery which is after the Closing
Time, the obligations of the several Underwriters to purchase the relevant Option Shares, may be terminated by the Representative
by notice to the Company at any time at or prior to Closing Time or such Date of Delivery, as the case may be, and such termination
shall be without liability of any party to any other party except as provided in Section 4 and except that Sections Section 1,
Section 6, Section 7 and Section 8 shall survive any such termination and remain in full force and effect.
Section
6. Indemnification.
(a) Indemnification
of Underwriters. The Company agrees to indemnify and hold harmless each Underwriter, its affiliates (as such term is defined
in Rule 501(b) under the 0000 Xxx) (“Affiliates”), its selling agents, directors, officers and each person, if any,
who controls any Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act to the extent and in
the manner set forth in clauses (i), (ii) and (iii) below:
(i) against
any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), including the Rule 430
Information, if applicable, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary
to make the statements therein not misleading or arising out of any untrue statement or alleged untrue statement of a material
fact included in any preliminary prospectus, the Base Prospectus, any Prospectus Supplement, the Prospectus, the General Disclosure
Package or any Issuer-Represented Free Writing Prospectus or the omission or alleged omission therefrom of a material fact necessary
in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;
(ii) against
any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement
of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission; provided that (subject
to Section 6(d) below) any such settlement is effected with the written consent of the Company; and
(iii) against
any and all expense whatsoever, as incurred (including the fees and disbursements of counsel chosen by the Representative), reasonably
incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission to the extent that any such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement
shall not apply to any loss, liability, claim, damage or expense to the extent arising out of any untrue statement or omission
or alleged untrue statement or omission made in reliance upon and in conformity with the Underwriter Information.
(b) Indemnification
of Company, Directors and Officers. Each Underwriter severally, and not jointly, agrees to indemnify and hold harmless the
Company, its directors, each of its officers who signed the Registration Statement, and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, against any and all loss, liability, claim, damage
and expense described in the indemnity contained in subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the Registration Statement (or any amendment thereto),
including the Rule 430 Information, if applicable, or any preliminary prospectus, the Base Prospectus, any Prospectus Supplement,
the Prospectus, the General Disclosure Package or any Issuer-Represented Free Writing Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with the Underwriter Information.
(c) Actions
against Parties; Notification. Each indemnified party shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liability hereunder to the extent it is not materially prejudiced as a
result thereof and in any event shall not relieve it from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above, counsel to the indemnified parties shall be selected
by the Representative, and, in the case of parties indemnified pursuant to Section 6(b) above, counsel to the indemnified parties
shall be selected by the Company. An indemnifying party may participate at its own expense in the defense of any such action; provided,
that counsel to the indemnifying party shall not (except with the consent of the indemnified party) also be counsel to the indemnified
party. In no event shall the indemnifying parties be liable for fees and expenses of more than one counsel (in addition to any
local counsel) separate from their own counsel for all indemnified parties in connection with any one action or separate but similar
or related actions in the same jurisdiction arising out of the same general allegations or circumstances. No indemnifying party
shall, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment
with respect to any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened,
or any claim whatsoever in respect of which indemnification or contribution could be sought under this Section 6 or Section 7 hereof
(whether or not the indemnified parties are actual or potential parties thereto), unless such settlement, compromise or consent
(i) includes an unconditional release of each indemnified party from all liability arising out of such litigation, investigation,
proceeding or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or
on behalf of any indemnified party.
(d) Settlement
Without Consent if Failure to Reimburse. If at any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 6(a)(ii) effected without its written consent if (i) such settlement is entered
into more than 45 days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall have
received notice of the terms of such settlement at least 30 days prior to such settlement being entered into and (iii) such indemnifying
party shall not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement.
Section
7. Contribution. If the indemnification provided for in
Section 6 hereof is for any reason unavailable to or insufficient to hold harmless an indemnified party in respect of any losses,
liabilities, claims, damages or expenses referred to therein, then each indemnifying party shall contribute to the aggregate amount
of such losses, liabilities, claims, damages and expenses incurred by such indemnified party, as incurred, (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 hand
from the offering of the Shares pursuant to this Agreement 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) above
but also the relative fault of the Company on the one hand and of the Underwriters on the other hand in connection with the statements
or omissions which resulted in such losses, liabilities, claims, damages or expenses, 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 hand in connection with the offering of the Shares pursuant to
this Agreement shall be deemed to be in the same respective proportions as the total net proceeds from the offering of the Shares
pursuant to this Agreement (before deducting expenses) received by the Company, on the one hand, and the total underwriting discount
and commissions received by the Underwriters, on the other hand, in each case as set forth on the cover of the Prospectus, bear
to the aggregate public offering price of the Shares as set forth on the cover of the Prospectus.
The relative fault of the
Company, on the one hand, and the Underwriters, on the other hand, shall be determined by reference to, among other things, whether
any such 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 by the Underwriters and the parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Company and each Underwriter
agree that it would not be just and equitable if contribution pursuant to this Section 7 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 which does not take
account of the equitable considerations referred to above in this Section 7. The aggregate amount of losses, liabilities, claims,
damages and expenses incurred by an indemnified party and referred to above in this Section 7 shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon
any such untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions
of this Section 7, no Underwriter shall be required to contribute any amount in excess of the underwriting discount received by
such Underwriter in connection with the Shares underwritten by it and distributed to the public.
No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The Underwriters’ obligations in this Section 7 to contribute are several
in proportion to their respective underwriting obligations and not joint.
For purposes of this Section
7, each person, if any, who controls an Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934
Act and such Underwriter’s Affiliates and selling agents shall have the same rights to contribution as such Underwriter,
and each director of the Company, each officer of the Company who signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights
to contribution as the Company.
Section
8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement or in certificates of officers of the Company or any
of its subsidiaries submitted pursuant hereto, shall remain operative and in full force and effect, regardless of any (i) investigation
made by or on behalf of any Underwriter or its Affiliates or selling agents, any person controlling any Underwriter, its officers
or directors, or by or on behalf of the Company, and (ii) delivery of and payment for the Shares.
Section
9. Termination of Agreement.
(a) Termination;
General. The Representative may terminate this Agreement, by notice to the Company, at any time at or prior to Closing Time
(i) if there has been, since the time of execution of this Agreement or since the respective dates as of which information is given
in the Base Prospectus, any Prospectus Supplement, the General Disclosure Package or the Prospectus, any Material Adverse Effect;
(ii) if there has occurred any material adverse change in the financial markets in the United States or the international financial
markets, any outbreak of hostilities or escalation thereof or other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or economic conditions, including without limitation as a
result of terrorist activities, in each case the effect of which is such as to make it, in the judgment of the Representative,
impracticable or inadvisable to market the Shares or to enforce contracts for the sale of the Shares, (iii) if trading in any securities
of the Company has been suspended or materially limited by the Commission or Nasdaq, or if trading generally on the New York Stock
Exchange or Nasdaq has been suspended or materially limited, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices have been required, by any of said exchanges or by order of the Commission, FINRA or any other governmental authority,
(iv) a material disruption has occurred in commercial banking or securities settlement or clearance services in the United States
or with respect to Clearstream or Euroclear Systems in Europe, or (v) if a banking moratorium has been declared by either federal,
New York or North Carolina authorities.
(b) Liabilities.
If this Agreement is terminated pursuant to this Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections Section 1, Section 6, Section 7 and Section 8
shall survive such termination and remain in full force and effect.
Section
10. Default by One or More of the Underwriters. If one or more
of the Underwriters shall fail at the Closing Time or a Date of Delivery to purchase the Shares which it or they are obligated
to purchase under this Agreement (the “Defaulted Securities”), the Representatives shall have the right, within 24
hours thereafter, to make arrangements for one or more of the non-defaulting Underwriters, or any other underwriters, to purchase
all, but not less than all, of the Defaulted Securities in such amounts as may be agreed upon and upon the terms herein set forth;
if, however, the Representative shall not have completed such arrangements within such 24-hour period, then:
(a) if
the number of Defaulted Securities does not exceed 10% of the number of Shares to be purchased on such date, each of the non-defaulting
Underwriters shall be obligated, severally and not jointly, to purchase the full amount thereof in the proportions that their respective
underwriting obligations hereunder bear to the underwriting obligations of all non-defaulting Underwriters, or
(b) if
the number of Defaulted Securities exceeds 10% of the number of Shares to be purchased on such date, this Agreement or, with respect
to any Date of Delivery which occurs after the Closing Time, the obligation of the Underwriters to purchase, and the Company to
sell, the Option Shares to be purchased and sold on such Date of Delivery, shall terminate without liability on the part of any
non-defaulting Underwriter.
No action taken pursuant
to this Section shall relieve any defaulting Underwriter from liability in respect of its default.
In the event of any such
default which does not result in a termination of this Agreement or, in the case of a Date of Delivery which is after the Closing
Time, which does not result in a termination of the obligation of the Underwriters to purchase and the Company to sell the relevant
Option Shares, as the case may be, either the Representatives or the Company shall have the right to postpone the Closing Time
or the relevant Date of Delivery, as the case may be, for a period not exceeding seven days in order to effect any required changes
in the Registration Statement, the General Disclosure Package or the Prospectus or in any other documents or arrangements. As used
herein, the term “Underwriter” includes any person substituted for an Underwriter under this Section 10.
Section
11. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication.
Notices to the Underwriters shall be directed to the Representative at Xxxxxxxx Inc., 000 Xxxxxx Xxxxxx, Xxxxxx Xxxx, Xxxxxxxx
00000, Attention: Xxxx Xxxxxxx (fax no. 000.000.0000), with a copy (which shall not constitute notice) to Xxxxxxxxx & Xxxxxxx
LLP, One CityCenter, 000 Xxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000, Attention: Xxxxx X. Xxxxxx III (fax. no. 000.000.0000), Xxxxxxx
X. Xxxx (fax no. 000.000.0000) and Xxxxxxxxxxx XxXxxxxx (fax no. 000.000.0000). Notices to the Company shall be directed to it
at 0000 Xxxxxxx Xxxxx, Xxxxx 000, Xxxx Xxxxx, Xxxxx Xxxxxxxx 00000, Attention: Xxxxxxx X. Xxxxxxxxx XX (fax. no. 000.000.0000),
with a copy (which shall not constitute notice) to Xxxxxx Xxxxxxx Xxxxxxxxx & Xxxx, LLP, 000 Xxxxx Xxxx Xxxxxx, Xxxxx 000,
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000, Attention: Xxxxx X. Xxxxxx (fax. no. 000.000.0000) and Xxxx X. Xxxxxxx (fax no. 000.000.0000).
Section
12. Parties. This Agreement shall each inure to the benefit
of and be binding upon the Underwriters, the Company, the Banks and their respective successors. Nothing expressed or mentioned
in this Agreement is intended or shall be construed to give any person, firm or corporation, other than the Underwriters, the Company,
the Banks and their respective successors and the controlling persons and officers and directors referred to in Sections Section
6 and Section 7 and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of
this Agreement or any provision herein contained. This Agreement and all conditions and provisions hereof are intended to be for
the sole and exclusive benefit of the Underwriters, the Company, the Banks and their respective successors, and said controlling
persons and officers and directors and their heirs and legal representatives, and for the benefit of no other person, firm or entity.
No purchaser of Shares from any Underwriter shall be deemed to be a successor by reason merely of such purchase.
Section
13. No Fiduciaries. The Company acknowledges and agrees that
(a) the purchase and sale of the Shares pursuant to this Agreement, including the determination of the public offering price of
the Shares and any related discounts and commissions, is an arm’s-length commercial transaction between the Company, on the
one hand, and the Underwriters, on the other hand, (b) in connection with the offering contemplated hereby and the process leading
to such transaction each Underwriter is and has been acting solely as a principal and is not the agent or fiduciary of the Company
or its shareholders, creditors, employees or any other third party, (c) no Underwriter has assumed, and will not assume, an advisory
or fiduciary responsibility in favor of the Company with respect to the offering contemplated hereby or the process leading thereto
(irrespective of whether such Underwriter has advised or is currently advising the Company on other matters) and no Underwriter
has an obligation to the Company with respect to the offering contemplated hereby except the obligations expressly set forth in
this Agreement, (d) each Underwriter and its affiliates may be engaged in a broad range of transactions that involve interests
that differ from those of the Company, and (e) no Underwriter has provided any legal, accounting, regulatory or tax advice with
respect to the offering contemplated hereby and the Company has consulted its own legal, accounting, regulatory and tax advisors
to the extent it deemed appropriate.
Section
14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD FOR ITS CONFLICTS OF LAWS PRINCIPLES. EXCEPT
AS OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
Section
15. General Provisions. This Agreement constitutes the entire
agreement of the parties to this Agreement and supersedes all prior written or oral and all contemporaneous oral agreements, understandings
and negotiations with respect to the subject matter hereof. This Agreement may be executed in two or more counterparts, each one
of which shall be an original, but all of which together shall constitute one and the same instrument. The exchange of copies of
this Agreement and of signature pages by facsimile or other electronic means shall constitute effective execution and delivery
of this Agreement by the parties hereto and may be used in lieu of the original signature pages to this Agreement for all purposes.
This Agreement may not be amended or modified unless in writing by all of the parties hereto, and no condition herein (express
or implied) may be waived unless waived in writing by each party whom the condition is meant to benefit. The Article and Section
headings herein are for convenience only and shall not affect the construction hereof.
If the foregoing is in
accordance with your understanding of our agreement, please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement among the Underwriters and the Company in accordance with
its terms.
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Very truly yours, |
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BNC BANCORP |
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By: |
/s/ Xxxxxxx X. Xxxxxxxxx XX |
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Name: Xxxxxxx X. Xxxxxxxxx XX |
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Title: President and Chief Executive Officer |
CONFIRMED AND ACCEPTED, |
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as of the date first above written: |
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XXXXXXXX INC. |
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For itself and as Representative of the |
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other Underwriters named in Schedule A hereto |
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By: |
/s/ Xxxxx Xxxxxxxx |
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Name: Xxxxx Xxxxxxxx |
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Title: Managing Director |
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SCHEDULE A
| |
Number of Firm | |
Name of Underwriters | |
Shares | |
| |
| |
Xxxxxxxx Inc. | |
| 1,425,000 | |
Xxxxx, Xxxxxxxx & Xxxxx, Inc. | |
| 500,000 | |
Sandler X’Xxxxx & Partners, L.P. | |
| 500,000 | |
FIG Partners, LLC | |
| 75,000 | |
| |
| | |
Total | |
| 2,500,000 | |
SCHEDULE B
Issuer-Represented General Free Writing Prospectus
1. Investor Presentation filed with the Commission on July 20, 2016.
SCHEDULE C
BNC BANCORP
2,500,000 Shares of Common Stock
(No Par Value)
1. The
public offering price per share for the Shares, determined as provided in said Section 2, shall be $22.00.
2. The
purchase price per share for the Shares to be paid by each Underwriter shall be $20.90, being an amount equal to the public offering
price set forth above less $1.10 per share; provided that the purchase price per share for any Option Shares purchased upon the
exercise of the option described in Section 2(b) shall be reduced by an amount per share equal to any dividends or distributions
declared by the Company and payable on the Firm Shares but not payable on the Option Shares.
SCHEDULE D-1
Bank of North Carolina
BNC Bancorp Capital Trust I
BNC Bancorp Capital Trust II
BNC Bancorp Capital Trust III
BNC Bancorp Capital Trust IV
Southcoast Capital Trust III
Valley Financial (VA) Statutory Trust I
Valley Financial (VA) Statutory Trust II
Valley Financial (VA) Statutory Trust III
BFNM Building, LLC
SCHEDULE D-2
BNC Credit Corp.
BNC Credit Corp. - VA
Sterling Real Estate Development of North Carolina,
LLC
Sterling Real Estate Holdings, LLC
Ivy View, LLC
Valley Wealth Management Services, Inc.
VB Investments, LLC
VB Land, LLC
SCHEDULE E
The following persons and entities shall execute
and deliver lock-up agreements in the form of Exhibit A:
Executive Officers |
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Xxxxxxx X. Xxxxxxxxx XX |
President and Chief Executive Officer |
Xxxxx X. Xxxxxxx |
Senior Executive Vice President and Chief Financial Officer |
Xxxxxx X. Xxxxxxxxxx |
Executive Vice President and Chief Accounting Officer |
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Board of Directors |
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Xxxxx X. Xxxx, Xx. |
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Xxxxx X. Xxxxxx III |
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Xxxxxx X. Xxxxxxxx, Xx. |
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Xxxxxxx X. Xxxxx III |
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Xxxxxx X. Xxxxxx |
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X. Xxxxx Xxxxxxxxxx, Jr. |
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Xxxxx X. Xxxxxx, M.D. |
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Xxxx X. Xxxxxx, Xx. |
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Xxxxxx X. Xxxxx |
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Xxxxxx X. Xxxxx |
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Xxxxxx X. Team, Jr. |
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X. Xxxxxxx Xxxxxxxx |
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X. Xxxx Xxxxxxxxx |
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Xxxxxxx X. Xxxx |
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Shareholder |
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Aquiline BNC Holdings, LLC |
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EXHIBIT A
LOCK-UP AGREEMENT
BNC BANCORP
0000 Xxxxxxx Xxxxx, Xxxxx 000
Xxxx Xxxxx, Xxxxx Xxxxxxxx 00000
XXXXXXXX INC.
as Representative of the Underwriters
named in Schedule A of the Underwriting Agreement
000 Xxxxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
| Re: | Proposed Public Offering by BNC Bancorp |
Ladies and Gentlemen:
The undersigned, an executive
officer and/or director or a holder of 5.0% or greater of the Common Stock (as defined below) of BNC Bancorp, a North Carolina
corporation (the “Company”), understands that Xxxxxxxx Inc. (“Xxxxxxxx”), as representative
of the several Underwriters (each an “Underwriter,” collectively the “Underwriters”), proposes
to enter into an Underwriting Agreement (the “Underwriting Agreement”) with the Company providing for the public
offering of shares of the Company’s voting common stock, no par value per share (including any securities convertible into
or exercisable for such voting common stock, the “Common Stock”).
In recognition of the benefit
that such an offering will confer upon the undersigned as an executive officer and/or director of the Company, or as a holder of
5.0% or greater of the Company’s Common Stock, and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the undersigned agrees with each Underwriter to be named in the Underwriting Agreement that,
during a period of 90 days from the date of the Underwriting Agreement, the undersigned will not, without the prior written consent
of Xxxxxxxx, directly or indirectly, (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase
any option or contract to sell, grant any option, right or warrant for the sale of, hypothecate, establish an open “put equivalent
position” within the meaning of Rule 16a-1(h) under the Securities Exchange Act of 1934, or otherwise dispose of or transfer
any shares of the Company’s Common Stock or any securities convertible into or exchangeable or exercisable for Common Stock,
whether now owned or hereafter acquired by the undersigned or with respect to which the undersigned has or hereafter acquires the
power of disposition, or file or cause to be filed any registration statement under the Securities Act of 1933, as amended, with
respect to any of the foregoing or (ii) enter into any swap, hedge or any other agreement or any transaction that transfers, in
whole or in part, directly or indirectly, the economic consequence of ownership of the Common Stock, whether any such swap, hedge
or transaction is to be settled by delivery of shares of Common Stock or other securities, in cash or otherwise. In the event that
either (i) during the period that begins on the date that is 15 calendar days plus three business days before the last day of the
90-day restricted period and ends on the last day of the 90-day restricted period, the Company issues an earnings release or material
news or a material event relating to the Company occurs, or (ii) prior to the expiration of the 90-day restricted period, the Company
announces that it will release earnings results during the 16-day period beginning on the last day of the 90-day restricted period,
the restrictions set forth herein will continue to apply until the expiration of the date that is 15 calendar days plus three business
days after the date on which the earnings release is issued or the material news or event related to the Company occurs. The Company
shall promptly notify Xxxxxxxx of any earnings releases, news or events that may give rise to an extension of the initial restricted
period.
Notwithstanding the foregoing,
the undersigned may transfer the undersigned’s shares of Common Stock (i) as a bona fide gift or gifts, provided that the
donee or donees agree to be bound in writing by the restrictions set forth herein; (ii) to any trust or family limited partnership
for the direct or indirect benefit of the undersigned or the immediate family of the undersigned, provided that the trustee of
the trust or general partner of the family limited partnership, as the case may be, agrees to be bound by the restrictions set
forth herein, and provided further that any such transfer shall not involve a disposition for value; (iii) pledged in a bona fide
transaction which is outstanding prior to or as of the date hereof to a lender to the undersigned and as disclosed in writing to
Xxxxxxxx prior to the execution of this agreement; (iv) pursuant to the exercise by the undersigned of stock options that have
been granted by the Company prior to, and are outstanding as of, the date of the Underwriting Agreement, where the shares of Common
Stock received upon any such exercise are held by the undersigned, individually or as fiduciary, in accordance with the terms of
this Lock-Up Agreement; or (v) with the prior written consent of Xxxxxxxx. For purposes of this Lock-Up Agreement, “immediate
family” shall mean any relationship by blood, marriage or adoption, not more remote than first cousin.
The undersigned now has
and, except as contemplated by clauses (i) through (v) above, for the duration of this Lock-Up Agreement will have good and marketable
title to the undersigned’s shares of Common Stock, free and clear of all liens, encumbrances, and claims whatsoever, except
with respect to any liens, encumbrances and claims that were in existence on the date hereof. The undersigned also agrees and consents
to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of the undersigned’s
Common Stock, except in compliance with this Lock-Up Agreement. In furtherance of the foregoing, the Company and its transfer agent
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 represents
and warrants that the undersigned has full power and authority to enter into this Lock-Up Agreement. The undersigned agrees that
the provisions of this Lock-Up Agreement shall be binding also upon the successors, assigns, heirs and personal representatives
of the undersigned.
The undersigned understands
that, if the Underwriting Agreement does not become effective, 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 shares of Common Stock to
be sold thereunder, the undersigned shall be released from all obligations under 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.
[Signature page follows]
The undersigned understands
that the Company and the Underwriters are relying upon this Lock-Up Agreement in proceeding toward consummation of the offering.
The undersigned further understands that this Lock-Up Agreement is irrevocable and shall be binding upon the undersigned’s
heirs, legal representatives, successors, and assigns.
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Very truly yours, |
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Signature: |
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Name: |
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