ECB BANCORP, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
November ____, 0000
XXXXXXXXXX/XXXXXXX XXXX CORPORATION
IJL Financial Center
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Dear Sirs:
ECB Bancorp, Inc., a North Carolina corporation (the "Company") proposes,
subject to the terms and conditions stated herein, to issue and sell to
Interstate Xxxxxxx/Xxxx Corporation, as underwriter (the "Underwriter"), an
aggregate of 300,000 shares of common stock, par value $3.50 per share (the
"Common Stock"), of the Company (the "Firm Shares"), and, at the election of the
Underwriter, subject to the terms and conditions stated herein, to sell to the
Underwriter up to 45,000 additional shares of Common Stock (the "Optional
Shares") solely to cover overallotments, if any (the Firm Shares and the
Optional Shares that the Underwriter elects to purchase pursuant to Section 2
hereof are collectively called the "Shares").
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to, and agrees with the Underwriter that:
(a) A registration statement on Form SB-2 (File No. 333-61839) (the
"Registration Statement") with respect to the Shares, has been filed by
the Company with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended (the "Act"); the Registration
Statement and any post-effective amendment thereto, each in the form
heretofore delivered to you, and, excluding exhibits thereto but including
all documents, if any, incorporated by reference in the prospectus
contained therein, delivered to you, have been declared effective by the
Commission in such form; other than a registration statement increasing
the size of the offering, filed pursuant to Rule 462(b) under the Act
which became effective upon filing (the "Rule 462(b) Registration
Statement"), no other document with respect to the Registration Statement,
any post-effective amendment thereto or the Rule 462(b) Registration
Statement has heretofore been filed with the Commission; and no stop order
suspending
the effectiveness of the Registration Statement has been issued and no
proceeding for that purpose has been instituted or threatened by the
Commission (any preliminary prospectus included in the Registration
Statement or filed with the Commission pursuant to Rule 424 of the Rules
and Regulations of the Commission under the Act, being hereinafter called
a "Preliminary Prospectus", the various parts of such Registration
Statement and the Rule 462(b) Registration Statement, including all
exhibits thereto, and including (i) the information contained in the form
of final prospectus included in the Registration Statement or filed with
the Commission pursuant to Rule 424(b) under the Act in accordance with
Section 5(a) of this Agreement and deemed by virtue of Rule 430(A) under
the Act to be part of the Registration Statement at the time it was
declared effective, and (ii) the documents, if any, incorporated by
reference in the Prospectus contained in the Registration Statement at the
time such part of the Registration Statement became effective or such part
of the Rule 462(b) Registration Statement became or hereinafter becomes
effective, each as amended at the time such part became effective, being
herein called collectively the "Registration Statement", and the final
prospectus, in the form first filed as part of the Registration Statement
or pursuant to Rule 424(b), being hereinafter called the "Prospectus").
(b) No order preventing or suspending the use of any Prospectus has
been issued and no proceeding for that purpose has been instituted or
threatened by the Commission or the securities authority of any state or
other jurisdiction. No stop order suspending the effectiveness of the
Registration Statement or any part thereof has been issued and no
proceeding for that purpose has been instituted or threatened or, to the
best knowledge of the Company, contemplated by the Commission or the
securities authority of any state or other jurisdiction.
(c) Each Prospectus filed as part of the Registration Statement as
originally filed or as part of any amendment thereto complied when so
filed in all material respects with the requirements applicable to it
under the Act and the rules and regulations promulgated thereunder and
none of such documents contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and any further
documents so filed and incorporated by reference in the Prospectus or any
further amendment or supplement thereto, when such documents become
effective or are filed with the Commission, as the case may be, will
conform in all material respects to the requirements of the Act or the
Securities Exchange Act of 1934, as applicable, and the rules and
regulations of the Commission thereunder and will not contain an untrue
statement of material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not apply
to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by the Underwriter
expressly for use therein. When the Registration Statement or any
amendment thereto was declared effective, and at each Time of Delivery (as
hereinafter defined), it (i) contained all statements required to be
stated therein in accordance with, and complied or will comply
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in all material respects with the requirements of the Act and the rules
and regulations of the Commission thereunder and (ii) did not include any
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading. When the
Prospectus or any amendment or supplement thereto is filed with the
Commission pursuant to Rule 424(b) or otherwise (or, if the Prospectus or
such amendment or supplement is not require to be so filed, when the
Registration Statement or the amendment thereto containing such amendment
or supplement to the Prospectus was or is declared effective) and at each
Time of Delivery, the Prospectus, as amended or supplemented at any such
time (i) contained or will contain all statements required to be stated
therein in accordance with, and complied or will comply in all material
respects with the requirements of, the Act and the rules and regulations
of the Commission thereunder and (ii) did not or will not include any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The foregoing
provisions of this paragraph (c) do not apply to statements or omissions
made in any Preliminary Prospectus, the Registration Statement or any
amendment thereto or the Prospectus or any amendment or supplement thereto
in reliance upon and in conformity with written information furnished to
the Company by the Underwriter.
(d) The descriptions in the Registration Statement and the
Prospectus of statutes, legal and governmental proceedings or contracts
and other documents that are required to be so described are accurate and
fairly present the information required to be shown; and there are no
statutes or legal or governmental proceedings required to be described in
the Registration Statement or the Prospectus that are not described as
required and no contracts or documents of a character that are required to
be described in the Registration Statement or the Prospectus or to be
filed as exhibits to the Registration Statement that are not described and
filed as required.
(e) Each of the Company and The East Carolina Bank (the "Bank") has
been duly incorporated, is validly existing as a corporation under the
laws of its jurisdiction of incorporation and has full power and authority
to own or lease its properties and conduct its business as described in
the Prospectus. The Company has full power and authority to enter into
this Agreement and to perform its obligations hereunder. Each of the
Company and the Bank is duly qualified to transact business as a foreign
corporation 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, except where the failure to
so qualify would not have a material adverse effect on the financial
position, results of operations or business of the Company and the Bank.
(f) The Company's authorized, issued and outstanding capital stock
is as disclosed in the Prospectus. All of the issued shares of capital
stock of the Company have been duly authorized and validly issued, are
fully paid and nonassessable and conform to the description of the Common
Stock contained in the Prospectus. None of the issued shares of capital
stock of the Company or the Bank has been issued or is owned or held
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in violation of any preemptive rights of shareholders, and no person or
entity (including any holder of outstanding shares of capital stock of the
Company or the Bank) has any preemptive or other rights to subscribe for
any of the Shares.
(g) All of the issued shares of capital stock of the Bank have been
duly authorized and validly issued, are fully paid and nonassessable, and
are owned beneficially by the Company free and clear of all liens,
security interests, pledges, charges, encumbrances, defects, shareholders'
agreements, voting trusts, equities or claims of any nature whatsoever.
Other than the Bank, the Company does not own, directly or indirectly, any
capital stock or other equity securities of any other corporation or any
ownership interest in any partnership, joint venture or other association.
(h) Except as disclosed in the Prospectus, there are no outstanding
(i) securities or obligations of the Company or the Bank convertible into
or exchangeable for any capital stock of the Company or the Bank, (ii)
warrants, rights or options to subscribe for or purchase from the Company
or the Bank any such capital stock or any such convertible or exchangeable
securities or obligations, or (iii) obligations of the Company or the Bank
to issue any shares of capital stock, any such convertible or exchangeable
securities or obligations, or any such warrants, rights or options.
(i) Since the date of the most recent audited financial statements
included in the Prospectus, neither the Company nor the Bank has sustained
any material loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any
labor dispute or court or governmental action, order or decree, otherwise
than as disclosed in or contemplated by the Prospectus.
(j) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, (i) neither the Company nor
the Bank has incurred any liabilities or obligations, direct or
contingent, or entered into any transactions, not in the ordinary course
of business, that are material to the Company and the Bank, (ii) the
Company has not purchased any of its outstanding capital stock or
declared, paid or otherwise made any dividend or distribution of any kind
on its capital stock, (iii) there has not been any change in the capital
stock, long-term debt or short-term debt of the Company or the Bank, and
(iv) there has not been any material adverse change, or any development
involving a prospective material adverse change, in or affecting the
financial position, results of operations or business of the Company and
the Bank, in each case other than as disclosed in or contemplated by the
Prospectus.
(k) The Shares have been duly authorized and, when issued and
delivered against payment therefor as provided therein, will be validly
issued and fully paid and nonassessable and will conform to the
description of the Common Stock contained in the Prospectus; and the
certificates evidencing the Shares will comply with all applicable
requirements of North Carolina law.
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(l) There are no contracts, agreements or understandings between the
Company and any person granting such person the right to require the
Company to file a registration statement under the Act with respect to any
securities of the Company owned or to be owned by such person or to
require the Company to include such securities in the securities
registered pursuant to the Registration Statement (or any such right has
been effectively waived) or any securities being registered pursuant to
any other registration statement filed by the Company under the Act.
(m) Neither the Company nor the Bank is, or (with or without the
giving of notice or passage of time or both), would be in violation of its
Articles of Incorporation or Bylaws or in default under any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which the Company or the Bank is a party or to which any of
their respective properties or assets are subject that is material to the
Company and the Bank, when taken as a whole.
(n) The issue and sale of the Shares and the performance of this
Agreement and the consummation of the transactions herein contemplated
will not conflict with, or (with or without the giving of notice or the
passage of time or both) result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which the Company or the Bank is a party or to which any of
their respective properties or assets is subject, nor will such action
conflict with or violate any provision of the Articles of Incorporation or
Bylaws of the Company or the Bank or any statute, rule or regulation or
any order, judgment or decree of any court or governmental agency or body
having jurisdiction over the Company or the Bank or any of their
respective properties or assets.
(o) The Company and the Bank have good and marketable title in fee
simple to all real property, if any, and good title to all personal
property owned by them, in each case free and clear of all liens, security
interests, pledges, charges, encumbrances, mortgages and defects, except
such as are disclosed in the Prospectus or such as do not materially and
adversely interfere with the operations of the Company and the Bank; and
any real property and buildings held under lease by the Company or the
Bank are held under valid, subsisting and enforceable leases, with such
exceptions as are disclosed in the Prospectus or are not material and do
not interfere with the operations of the Company or the Bank.
(p) No consent, approval, authorization, order or declaration of or
from, or registration, qualification or filing with, any court or
governmental agency or body is required for the issue and sale of the
Shares or the consummation of the transactions contemplated by this
Agreement, except the registration of the Shares under the Act and such as
may be required under state securities or blue sky laws in connection with
the offer, sale and distribution of the Shares by the Underwriter.
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(q) Other than as disclosed in the Prospectus, there is no
litigation, arbitration, claim, proceeding (formal or informal) or
investigation pending or threatened (or any basis therefor) in which the
Company or the Bank is a party or of which any of their respective
properties or assets are the subject which, if determined adversely to the
Company or the Bank, would individually or in the aggregate have a
material adverse effect on the financial position, results of operations
or business of the Company and the Bank.
(r) This Agreement has been duly authorized, executed and delivered
by the Company and constitutes the valid and binding agreement of the
Company enforceable against the Company in accordance with its terms
subject, as to enforcement, to applicable bankruptcy, insolvency,
reorganization and moratorium laws and other laws relating to or affecting
the enforcement of creditors' rights generally and to general equitable
principles, and except as the enforceability of rights to indemnity and
contribution under this Agreement may be limited under applicable
securities laws or the public policy underlying such laws.
(s) Neither the Company nor any of its officers, directors or
affiliates has (i) taken, directly or indirectly, any action designed to
cause or result in, or that has constituted or might reasonably be
expected to constitute, the stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the Shares
or (ii) since the filing of the Registration Statement (A) sold, bid for,
purchased or paid anyone any compensation for soliciting purchases of, the
Shares or (B) paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Company.
(t) The Company has obtained for the benefit of the Company and the
Underwriter from each of its directors, executive officers and holders of
5% or more of the outstanding Common Stock a written agreement that for a
period of 90 days from the First Time of Delivery (as defined in Section 4
herein), such person will not, without your prior written consent, offer,
pledge, sell, contract to sell, grant any option for the sale of, or
otherwise dispose of (or announce any offer, pledge, sale, grant of an
option to purchase or other disposition), directly or indirectly, any
shares of Common Stock or securities convertible into, or exercisable or
exchangeable for, shares of Common Stock.
(u) The Bank is not currently prohibited, directly or indirectly,
from paying any dividends to the Company, from making any other
distributions on its capital stock, from repaying to the Company any loans
or advances to the Bank or from transferring its property or assets to the
Company, except as disclosed in the Prospectus.
(v) The Company and the Bank have filed all material foreign,
federal, state and local tax returns that are required to be filed by them
and have paid all taxes shown as due on such returns as well as all other
taxes, assessments and governmental charges
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that are due and payable; and no deficiency with respect to any such
return has been assessed or proposed in any material respects.
(w) The Company is not, nor will it become as a result of
transactions contemplated hereby, and does not intend to conduct its
business in a manner that would cause it to become, an "investment
company" or a company "controlled" by an "investment company" within the
meaning of the Investment Company Act of 1940.
[(x) The Company has applied for and obtained admission for
quotation of its Common Stock on the SmallCap Market of the NASDAQ Stock
Market.]
2. PURCHASE AND SALE OF SHARES. Subject to the terms and conditions herein
set forth, (a) the Company agrees to issue and sell to the Underwriter, and the
Underwriter agrees to purchase from the Company, at a purchase price of $14.25
per share, 300,000 Firm Shares, and (b) in the event and to the extent that the
Underwriter shall exercise the election to purchase Optional Shares as provided
below, the Company agrees to issue and to sell to the Underwriter, and the
Underwriter agrees to purchase from the Company, at the purchase price per share
set forth in clause (a) of this Section 2, the number of Optional Shares as to
which such election shall have been exercised.
The Company hereby grants to the Underwriter the right to purchase at its
election in whole or in part from time to time up to 45,000 Optional Shares, at
the purchase price per share set forth in clause (a) in the paragraph above for
the sole purpose of covering over-allotments in the sale of Firm Shares. Any
such election to purchase Optional Shares may be exercised by written notice
from you to the Company, given from time to time within a period of 30 calendar
days after the date of this Agreement and setting forth the aggregate number of
Optional Shares to be purchased and the date on which such Optional Shares are
to be delivered, as determined by you but in no event earlier than the First
Time of Delivery (as hereinafter defined) or, unless you and the Company
otherwise agree in writing, earlier than two or later than ten business days
after the date of such notice. In the event you elect to purchase all or a
portion of the Optional Shares, the Company agrees to furnish or cause to be
furnished to you the certificates, letters and opinions, and to satisfy all
conditions set forth in Section 7 hereof at each Subsequent Time of Delivery (as
hereinafter defined).
3. OFFERING BY THE UNDERWRITER. Upon the authorization by you of the
release of the Shares, the Underwriter proposes to offer the Shares for sale
upon the terms and conditions disclosed in the Prospectus.
4. DELIVERY OF SHARES; CLOSING. Certificates in definitive form for the
Shares to be purchased by the Underwriter hereunder, and in such denominations
and registered in such names as the Underwriter may request upon at least 48
hours prior notice to the Company shall be delivered by or on behalf of the
Company to you for your account against payment by you of the purchase price
therefor by official bank check or checks (payable in next day funds unless
closing is on a Friday in which case it shall be payable in same day funds)
drawn on a Charlotte,
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North Carolina bank, payable to the order of the Company. The closing of the
sale and purchase of the Shares shall be held at a location to be agreed upon by
the Company and the Underwriter. The time and date of such delivery and payment
shall be, with respect to the Firm Shares, at 10:00 a.m., Charlotte time, on the
fourth full business day after the execution of this Agreement or at such other
time and date as you and the Company may agree upon in writing, and, with
respect to the Optional Shares, at 10:00 a.m., Charlotte time, on the date
specified by you in the written notice given by you of the your election to
purchase all or part of such Optional Shares, or at such other time and date as
you and the Company may agree upon in writing. Such time and date for delivery
of the Firm Shares is herein called the "First Time of Delivery," such time and
date for delivery of the Optional Shares, if not the First Time of Delivery, is
herein called a "Subsequent Time of Delivery," and each such time and date for
delivery is herein called a "Time of Delivery." The Company will make such
certificates available for checking and packaging at least 24 hours prior to
each Time of Delivery at your office at the address set forth above or such
other location designated by you to the Company.
5. COVENANTS OF THE COMPANY. The Company covenants and agrees with the
Underwriter:
(a) The Company will file the Prospectus with the Commission as part
of the Registration Statement or pursuant to and in accordance with
subparagraph (1) (or, if applicable and if consented to by you,
subparagraph (4)) of Rule 424(b) not later than the earlier of (i) the
second business day following the execution and delivery of this Agreement
or (ii) the 15th business day after the date on which the Registration
Statement is declared effective. The Company will advise you promptly of
any such filing pursuant to Rule 424(b).
(b) The Company will not file with the Commission the Prospectus or
the amendment referred to in the second sentence of Section l(a) hereof,
any amendment or supplement to the Prospectus or any amendment to the
Registration Statement unless you have received a reasonable period of
time to review any such proposed amendment or supplement and consented to
the filing thereof and will use its best efforts to cause any such
amendment to the Registration Statement to be declared effective as
promptly as possible. Upon your request or the request of your counsel,
the Company will promptly prepare and file with the Commission, in
accordance with the rules and regulations of the Commission, any
amendments to the Registration Statement or amendments or supplements to
the Prospectus that may be necessary or advisable in connection with the
distribution of the Shares by the Underwriter and will use its best
efforts to cause any such amendment to the Registration Statement to be
declared effective as promptly as possible. If required, the Company will
file any amendment or supplement to the Prospectus with the Commission in
the manner and, if applicable, within the time period required by Rule
424(b) under the Act. The Company will advise the Underwriter, promptly
after receiving notice thereof, of the time when the Registration
Statement or any amendment thereto has been filed or declared effective or
the Prospectus or any
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amendment or supplement thereto has been filed and will provide evidence
to the Underwriter of each such filing or effectiveness.
(c) The Company will advise you promptly after receiving notice or
obtaining knowledge of (i) the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or any
part thereof or any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or any amendment or supplement
thereto, (ii) the suspension of the qualification of the Shares for offer
or sale in any jurisdiction or of the initiation or threatening of any
proceeding for any such purpose, or (iii) any request made by the
Commission or any securities authority of any other jurisdiction for
amending the Registration Statement, for amending or supplementing the
Prospectus or for additional information. The Company will use its best
efforts to prevent the issuance of any such stop order and, if any such
stop order is issued, to obtain the withdrawal thereof as promptly as
possible.
(d) If the delivery of a Prospectus relating to the Shares is
required under the Act at any time prior to the expiration of nine months
after the date of the Prospectus, and if at such time any events have
occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, or if for any reason it is necessary during such same period
to amend or supplement the Prospectus to comply with the Act or the rules
and regulations thereunder, the Company will promptly notify you and upon
your request (but at the Company's expense) prepare and file with the
Commission an amendment or supplement to the Prospectus that corrects such
statement or omission or effects such compliance and will furnish without
charge to the Underwriter and to any dealer in securities, as many copies
of such amended or supplemented Prospectus as you may from time to time
reasonably request. If the delivery of a Prospectus relating to the Shares
is required under the Act at any time nine months or more after the date
of the Prospectus, upon your request but at the expense of the
Underwriter, the Company will prepare and deliver to the Underwriter as
many copies as you may request of an amended or supplemented Prospectus
complying with Section 10(a)(3) of the Act. Neither your consent to, nor
your delivery of, any such amendment or supplement shall constitute a
waiver of any of the conditions set forth in Section 7.
(e) The Company promptly from time to time will take such action as
you may reasonably request to qualify the Shares for offering and sale
under the securities or blue sky laws of such jurisdictions as you may
request and will continue such qualifications in effect for as long as may
be necessary to complete the distribution of the Shares, provided that in
connection therewith the Company shall not be required to qualify as a
foreign corporation or to file a general consent to service of process in
any jurisdiction.
(f) The Company will promptly provide you, without charge, (i) one
manually executed copy of the Registration Statement as originally filed
with the Commission and
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of each amendment thereto, (ii) one conformed copy of the Registration
Statement as originally filed and of each amendment thereto, without
Exhibits, and (iii) so long as a prospectus relating to the Shares is
required to be delivered under the Act, as many copies of each Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto as you
may reasonably request.
(g) As soon as practicable, but in any event not later than the last
day of the thirteenth month after the effective date of the Registration
Statement, the Company will make generally available to its security
holders an earnings statement of the Company and the Bank, if any,
covering a period of at least 12 months beginning after the effective date
of the Registration Statement (which need not be audited) complying with
Section 11(a) of the Act and the rules and regulations thereunder.
(h) During the period beginning from the date hereof and continuing
to and including the date 90 days from the First Time of Delivery, the
Company will not, without your prior written consent, offer, pledge,
issue, sell, contract to sell, grant any option for the sale of, or
otherwise dispose of (or announce any offer, pledge, sale, grant of an
option to purchase or other disposition), directly or indirectly, any
shares of Common Stock or securities convertible into, exercisable or
exchangeable for, shares of Common Stock, except as provided in Section 2
and except for the issuance of Common Stock upon the exercise of stock
options or warrants outstanding on the date of this Agreement.
(i) Neither the Company nor any of its officers, directors or
affiliates will (i) take, directly or indirectly, prior to the closing of
the purchase and sale of the Shares, any action designed to cause or to
result in, or that might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of any of the Shares, (ii) sell, bid for,
purchase or pay anyone any compensation for soliciting purchases of, the
Shares or (iii) pay or agree to pay to any person any compensation for
soliciting another to purchase any other securities of the Company.
(j) The Company will apply the net proceeds from the offering in the
manner set forth under "Use of Proceeds" in the Prospectus.
[(k) The Company will cause the Shares to be listed on the Small Cap
Market of the NASDAQ Stock Market at each Time of Delivery and for at
least one year from the date hereof.]
6. EXPENSES. The Company will pay all costs and expenses incident to the
performance of its obligations under this Agreement, whether or not the
transactions contemplated hereby are consummated or this Agreement is terminated
pursuant to Section 10 hereof, including without limitation all costs and
expenses incident to (i) the fees, disbursements and expenses of the Company's
counsel and accountants in connection with the registration of the Shares under
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the Act and all other expenses in connection with the preparation, printing and
filing of the Registration Statement (including all amendments thereto), any
Preliminary Prospectus, the Prospectus and any amendments and supplements
thereto, this Agreement and any blue sky memoranda; (ii) the delivery of copies
of the foregoing documents to the Underwriter; (iii) the filing fees of the
Commission and the National Association of Securities Dealers, Inc. relating to
the Shares; (iv) the preparation, issuance and delivery to the Underwriter of
any certificates evidencing the Shares, including transfer agent's and
registrar's fees; (v) the qualification of the Shares for offering and sale
under state securities and blue sky laws, including filing fees and fees and
disbursements of counsel for the Underwriter relating thereto; (vi) any NASDAQ
Small Cap Market of the NASDAQ Stock Market fees or expenses; and (vii) any
expenses for travel, lodging and meals incurred by the Company and any of its
officers, directors and employees in connection with any meetings with
prospective investors in the Shares. It is understood, however, that, except as
provided in this Section, Section 8 and Section 10 hereof, the Underwriter will
pay all of its own costs and expenses, including the fees of its counsel, stock
transfer taxes on resale of any of the Shares by it, and any advertising
expenses relating to the offer and sale of the Shares.
7. CONDITIONS OF THE UNDERWRITER'S OBLIGATIONS. The obligations of the
Underwriter hereunder to purchase and pay for the Shares to be delivered at each
Time of Delivery shall be subject, in its discretion, to the accuracy of the
representations and warranties of the Company contained herein as of the date
hereof and as of such Time of Delivery, to the accuracy of the statements of
Company officers made pursuant to the provisions hereof, to the performance by
the Company of its covenants and agreements hereunder, and to the following
additional conditions precedent:
(a) If the Registration Statement as amended to date has not become
effective prior to the execution of this Agreement, such registration
statement shall have been declared effective not later than 11:00 a.m.,
Charlotte time, on the date of this Agreement or such later date and/or
time as shall have been consented to by you in writing. The Prospectus and
any amendment or supplement thereto shall have been filed with the
Commission within the applicable time period prescribed for such filing
and in accordance with Section 5(a) of this Agreement; no stop order
suspending the effectiveness of the Registration Statement or any part
thereof shall have been issued and no proceedings for that purpose shall
have been instituted, threatened or, to the knowledge of the Company and
the Underwriter, contemplated by the Commission; and all requests for
additional information on the part of the Commission shall have been
complied with to your reasonable satisfaction.
(b) Parker, Poe, Xxxxx & Xxxxxxxxx, L.L.P., counsel for the
Underwriter, shall have furnished to you such opinion or opinions, dated
such Time of Delivery, with respect to the validity of the Shares being
delivered at such Time of Delivery, the Registration Statement, the
Prospectus, and other related matters as you may reasonably request and
which are customary, and the Company shall have furnished to such counsel
such documents as they request for the purpose of enabling them to pass
upon such matters.
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(c) You shall have received an opinion, dated such Time of Delivery,
of Xxxx and Xxxxx, P.A., counsel for the Company in form and substance
reasonably satisfactory to you and your counsel, to the effect that:
(i) The Company is a corporation and bank holding company duly
incorporated, validly existing and in good standing under the laws
of North Carolina and has the corporate power and authority to own
or lease its properties and conduct its business as described in the
Registration Statement and the Prospectus and to enter into this
Agreement and perform its obligations hereunder. The Company is duly
qualified to transact business as a foreign corporation and is in
good standing in each other jurisdiction in which it owns or leases
properties, or conducts any business, so as to require such
qualification, except where failure to be so qualified would not
have a material adverse effect on the condition, financial or
otherwise, results of operations, affairs or business prospects of
the Company. The Reorganization (as defined and described in the
Prospectus) has become effective and remains in full force and
effect as so described.
(ii) The Bank is an FDIC-insured, state-chartered bank duly
incorporated, validly existing and in good standing under the laws
of the State of North Carolina and has the corporate power and
authority to own or lease its properties and conduct its business as
described in the Registration Statement and the Prospectus. The Bank
is duly qualified to transact business as a foreign corporation and
is in good standing under the laws of each other jurisdiction in
which it owns or leases property, or conducts any business, so as to
require such qualification, except where the failure to be so
qualified would not have a material adverse effect on the condition,
financial or otherwise, results of operations, affairs or business
prospects of the Company and the Bank.
(iii) The Company's authorized, issued and outstanding capital
stock is as disclosed in the Prospectus.
(iv) Except as disclosed in the Prospectus, to the best
knowledge of such counsel, there are no (i) outstanding securities
or obligations of the Company or the Bank (or any subsidiary
thereof) convertible into or exchangeable for any capital stock of
the Company, (ii) warrants, rights or options to subscribe for or
purchase from the Company or the Bank (or any subsidiary) any such
capital stock or any such convertible or exchangeable securities or
obligations or (iii) obligations of the Company or the Bank (or any
subsidiary) to issue any such convertible or exchangeable securities
or obligations, or any such warrants, rights or options.
(v) The Shares have been duly authorized and, when issued and
delivered against payment therefor as provided herein, will be
validly issued and
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fully paid and nonassessable and will conform to the description of
the Common Stock contained in the Prospectus.
(vi) The issue and sale of the Shares being issued at such
Time of Delivery and the performance of this Agreement and the
consummation of the transactions herein contemplated will not
conflict with, or (with or without the giving of notice or the
passage of time or both) result in a breach or violation of any of
the terms or provisions of, or constitute a default under any of the
following which is filed as an exhibit to the Registration
Statement: any indenture, mortgage, deed of trust, loan agreement,
lease or other agreement or instrument to which the Company or the
Bank is a party or to which any of their respective properties or
assets is subject, nor will such action conflict with or violate any
provision of the Articles of Incorporation or Bylaws of the Company
or the Bank or any statute, rule or regulation which in such
counsel's experience is normally applicable to transactions of the
type contemplated by this Agreement or to the best of counsel's
knowledge any order, judgment or decree of any court or governmental
agency or body having jurisdiction over the Company or the Bank.
(vii) No consent, approval, authorization or order from, or
registration, qualification or filing with, any governmental agency
or body is required for the issue and sale of the Shares or the
consummation of the transactions contemplated by this Agreement,
except the registration of the Shares under the Act and such as may
be required under state securities or blue sky laws in connection
with the offer, sale and distribution of the Shares by the
Underwriter.
(viii) This Agreement has been duly authorized, executed and
delivered by the Company.
(ix) The Registration Statement and the Prospectus and each
amendment or supplement thereto (other than the financial statements
and schedules and other financial information included therein, as
to which such counsel need express no opinion), as of their
respective effective or issue dates, complied as to form in all
material respects with the requirements of the Act and the rules and
regulations thereunder. The descriptions in the Registration
Statement and the Prospectus of statutes are accurate and fairly
present the information required to be shown; and such counsel does
not know of any statutes or legal or governmental proceedings
required to be described in the Registration Statement or Prospectus
that are not described as required or of any contracts or documents
of a character required to be described in the Registration
Statement or Prospectus or to be filed as exhibits to the
Registration Statement which are not described and filed as
required.
(x) The Registration Statement is effective under the Act; any
required filing of the Prospectus pursuant to Rule 424(b) has been
(or will be) made in the manner and within the time period required
by Rule 424(b); and to such counsel's
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knowledge no stop order suspending the effectiveness of the
Registration Statement or any part thereof has been issued and, to
such counsel's knowledge, no proceedings for that purpose have been
instituted or threatened or are contemplated by the Commission.
(xi) The Company is not, and will not be as a result of the
consummation of the transactions contemplated by this Agreement, an
"investment company," or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940.
Such counsel shall also state that no facts have come to their
attention which lead them to believe that as of its effective date, the
Registration Statement or any further amendment thereto made by the
Company prior to the date hereof (other than the financial statements and
related schedules therein or other financial data derived from accounting
records, as to which they need express no opinion) contained an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading or that, as of its date, the Prospectus or any further
amendment or supplement thereto made by the Company prior to the date
hereof (other than the financial statements and related schedules therein
or other financial data derived from accounting records, as to which they
need express no opinion) contained an untrue statement of a material fact
or omitted to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading or that, as of the date hereof, either the Registration
Statement or the Prospectus or any further amendment or supplement thereto
made by the Company prior to the date hereof (other than the financial
statements and related schedules therein or other financial data derived
from accounting records, as to which they need express no opinion)
contains an untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
In rendering any such opinion, such counsel may rely, as to matters
of fact, to the extent such counsel deem proper, on certificates of
responsible officers of the Company and public officials.
(d) You shall have received from KPMG Peat Marwick LLP letters
dated, respectively, the date of this Agreement and the effective date of
the most recently filed post-effective amendment to the Registration
Statement and also at each Time of Delivery, in form and substance
satisfactory to you, 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 or incorporated by reference in the Registration Statement
and the Prospectus.
(e) Since the date of the latest audited financial statements
included in the Prospectus, neither the Company nor the Bank shall have
sustained (i) any loss or
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interference with their respective businesses from fire, explosion, flood,
hurricane or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree,
otherwise than as disclosed in or contemplated by the Prospectus, or (ii)
any change, or any development involving a prospective change (including
without limitation a change in management or control of the Company), in
or affecting the position (financial or otherwise), results of operations,
net worth or business prospects of the Company and the Bank, otherwise
than as disclosed in or contemplated by the Prospectus (including any
amendment), the effect of which, in either such case, is in your judgment
so material and adverse as to make it unpracticable or inadvisable to
proceed with the purchase, sale and delivery of the Shares being delivered
at such Delivery as contemplated by the Registration Statement, as amended
as of the date hereof.
(f) Subsequent to the date hereof there shall not have occurred any
of the following: (i) any suspension or limitation in trading in
securities generally on the New York Stock Exchange (other than normal
market breaks or cooling periods), or any setting of minimum prices for
trading on such exchange, or in the Common Stock by the Commission, the
NASDAQ Over-the-Counter Bulletin Board or the SmallCap Market of the
NASDAQ Stock Market; (ii) a moratorium on commercial banking activities in
New York declared by either federal or state authorities; (iii) any major
outbreak or major escalation of hostilities involving the United States,
declaration by the United States of a national emergency (other than with
respect to natural disasters) or war or any other national or
international calamity or emergency if the effect of any such event
specified in this clause (iii) in your judgment makes it impracticable or
inadvisable to proceed with the purchase, sale and delivery of the Shares
being delivered at such Time of Delivery as contemplated by the
Registration Statement, as amended as of the date hereof.
(g) The Company shall have furnished to you at such Time of Delivery
certificates of officers of the Company, satisfactory to you as to the
accuracy of the representations and warranties of the Company herein at
and as of such Time of Delivery, as to the performance by the Company of
all of its obligations hereunder to be performed at or prior to such Time
of Delivery, and as to such other matters as you may reasonably request,
and the Company shall have furnished or caused to be furnished
certificates as to the matters set forth in subsections (a) and (e) of
this Section 7, and as to such other matters as you may reasonably
request.
[(h) The Shares shall be included for listing on the NASDAQ Small
Cap Market of The NASDAQ Stock Market.]
8. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to indemnify
and hold harmless the Underwriter against any losses, claims, damages or
liabilities, joint or several, to which the Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon: (i)
any untrue statement or alleged untrue statement made by the Company in Section
1 of this Agreement; (ii) any untrue statement or alleged untrue statement of
any material fact contained
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in (A) the Registration Statement or any amendment thereto, any Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto, or (B) any
application or other document, or any amendment or supplement thereto, executed
by the Company or based upon written information furnished by or on behalf of
the Company filed in any jurisdiction in order to qualify the Shares under the
securities or blue sky laws thereof or filed with the Commission or any
securities association or securities exchange (each an "Application"); or (iii)
the omission or alleged omission to state in the Registration Statement or any
amendment thereto, any Preliminary Prospectus, the Prospectus or any amendment
or supplement thereto, or any Application, of any material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse the Underwriter for any legal or other expenses reasonably
incurred by the Underwriter in connection with investigating, defending against
or appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action; provided, however, that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage,
liability or action arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in the
Registration Statement or any amendment thereto, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto or any Application in reliance
upon and in conformity with written information furnished to the Company by the
Underwriter. The Company will not, without the prior written consent of the
Underwriter, settle or compromise or consent to the entry of any judgment in any
pending or threatened claim, action, suit or proceeding (or related cause of
action or portion thereof) in respect of which indemnification may be sought
hereunder (whether or not the Underwriter is a party to such claim, action, suit
or proceeding), unless such settlement, compromise or consent includes an
unconditional release of the Underwriter from all liability arising out of such
claim, action, suit or proceeding or related cause of action or portion thereof.
(b) The Underwriter agrees to indemnify and hold harmless the Company and
its officers, directors, agents, representatives and affiliates against any
losses, claims, damages or liabilities to which the Company or its officers,
directors, agents, representatives and affiliates may become subject under the
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in the Registration
Statement or any amendment thereto, any Preliminary Prospectus, the Prospectus
or any amendment or supplement thereto or any Application or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information furnished to the
Company by the Underwriter through you expressly for use therein; and will
reimburse the Company for any legal or other expenses reasonably incurred by
such Company in connection with investigating or defending any such loss, claim,
damage, liability or action.
(c) Promptly after receipt by an indemnified party under subsection (a)
and (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
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indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party); provided, however, that if the defendants in any such action included
the indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be one or more legal defenses available
to it or other indemnified parties which are different from or additional to
those available to the indemnifying party, the indemnifying party shall not have
the right to assume the defense of such action on behalf of such indemnified
party and such indemnified party shall have the right to select separate counsel
to defend such action on behalf of such indemnified party. After such notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof and approval by such indemnified party of counsel
appointed to defend such action, the indemnifying party will not be liable to
such indemnified party under this Section 8 for any legal or other expenses,
other than reasonable costs of investigation, subsequently incurred by such
indemnified party in connection with the defense thereof, unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood, however, that in
connection with such action the indemnifying party shall not be liable for the
expenses of more than one separate counsel (in addition to local counsel) in any
one action or separate but substantially similar actions in the same
jurisdiction arising out of the same general allegations or circumstances, which
separate counsel shall be designated by the Underwriter in the case of indemnity
arising under paragraph (a) of this Section 8) or (ii) the indemnifying party
has authorized the employment of counsel for the indemnified party at the
expense of the indemnifying party. Nothing in this Section 8(c) shall preclude
an indemnified party from participating at its own expense in the defense of any
such action so assumed by the indemnifying party.
(d) If the indemnification provided for in this Section 8 is unavailable
to or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Underwriter on the other from the
offering of the Shares. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the indemnified
party failed to give the notice required under subsection (c) above, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company on the one hand and
the Underwriter on the other in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits
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received by the Company on the one hand and the Underwriter on the other shall
be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriter. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
on the one hand or the Underwriter on the other and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company and the Underwriter agree that it would
not be just and equitable if contributions pursuant to this subsection (d) were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to above in this
subsection (d). The amount paid or payable by an indemnified party as a result
of the losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), the Underwriter shall not be required to
contribute any amount in excess of the amount by which the total price at which
the Shares underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages which such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls the
Underwriter within the meaning of the Act; and the obligations of the
Underwriter under this Section 8 shall be in addition to any liability which the
Underwriter may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company and to each person, if
any, who controls the Company within the meaning of the Act.
9. DEFAULT OF UNDERWRITER. (a) If you default in your obligation to
purchase Shares at a Time of Delivery, the Company, in its discretion, shall be
entitled to a period of 36 hours within which to procure another party or other
parties to purchase such Shares on such terms. In the event that, within the
prescribed period, the Company notifies you that it has so arranged for the
purchase of such Shares, the Company shall have the right to postpone a Time of
Delivery for a period of not more than 7 days in order to effect whatever change
is made necessary thereby to be made in the Registration Statement or the
Prospectus, or in any other documents or arrangements. The cost of preparing,
printing and filing any such amendments shall be paid for by the Underwriter.
The term "Underwriter" as used in this Agreement shall include any person
substituted under this Section with effect as if such person had originally been
a party to this Agreement with respect to such Shares.
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(b) To the extent that, if, after giving effect to any arrangements made
for the purchase of the Shares by the Company as provided in subsection (a)
above, there remain unpurchased any Shares required to be purchased at such Time
of Delivery, then you shall not be relieved from liability for such default.
10. TERMINATION. (a) This Agreement may be terminated with respect to the
Shares or any Optional Shares in the sole discretion of the Underwriter by
notice to the Company given prior to the First Time of Delivery or any
Subsequent Time of Delivery, respectively, in the event that (i) any condition
to the obligations of the Underwriter set forth in Section 7 hereof has not been
satisfied, or (ii) the Company shall have failed, refused or been unable to
deliver the Shares or to perform all obligations and satisfy all conditions on
its part to be performed or satisfied hereunder at or prior to such Time of
Delivery, in either case other than by reason of a default by the Underwriter.
If this Agreement is terminated pursuant to this Section 10(a), the Company will
reimburse the Underwriter upon demand for all actual, accountable out-of-pocket
expenses (including counsel fees and disbursements) that shall have been
incurred by it in connection with the proposed purchase and sale of the Shares.
The Company shall not in any event be liable to the Underwriter for the loss of
anticipated profits from the transactions covered by this Agreement.
11. SURVIVAL. The respective indemnities, agreements, representations,
warranties and other statements of the Company, its officers and the
Underwriter, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of the Underwriter or any controlling person referred to in
Section 8(e) or the Company, or any officer or director or controlling person of
the Company referred to in Section 8(e), and shall survive delivery of and
payment for the Shares. The respective agreements, covenants, indemnities and
other statements set forth in Sections 6 and 8 hereof shall remain in full force
and effect, regardless of any termination or cancellation of this Agreement.
12. NOTICES. All communications hereunder shall be in writing and, if sent
to the Underwriter, shall be mailed, delivered or telegraphed and confirmed in
writing to Interstate/Xxxxxxx Xxxx Corporation, IJL Financial Center, 000 Xxxxx
Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, Attention: Corporate
Finance Department (with a copy to Xxxx X. Xxxx of Parker, Poe, Xxxxx &
Xxxxxxxxx, L.L.P., 0000 Xxxxxxxxx Xxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000), and
if sent to the Company, shall be mailed, delivered or telegraphed and confirmed
in writing to the Company at Xxxxxxx 000, Xxxx Xxxxxx Xxx 000, Xxxxxxxxx, Xxxxx
Xxxxxxxx 00000, Attention: President and Chief Executive Officer (with a copy to
Xxxxxxx X. Xxxxxx, Xx. of Xxxx and Xxxxx, P.A., 0000 Xxxxxxx Xxxxx, Xxx Xxxx,
Xxxxx Xxxxxxxx 00000).
13. BINDING EFFECT. This Agreement shall be binding upon, and inure solely
to the benefit of, the Underwriter and the Company and to the extent provided in
Sections 8 and 10 hereof, the officers and directors and controlling persons
referred to therein and their respective heirs, executors, administrators,
successors and assigns, and no other person shall acquire or have
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any right under or by virtue of this Agreement. No purchaser of any of the
Shares from the Underwriter shall be deemed a successor or assign by reason
merely of such purchase.
14. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of North Carolina without giving effect to
any provisions regarding conflicts of laws.
15. COUNTERPARTS. This Agreement may be executed by any one or more of the
parties hereto in any number of counterparts, each of which shall be deemed to
be an original, but all such counterparts shall together constitute one and the
same instrument.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us one of the counterparts hereof, and upon
the acceptance hereof by Interstate/Xxxxxxx Lane Corporation, this letter will
constitute a binding agreement between the Underwriter and the Company.
Very truly yours,
ECB BANCORP, INC.
By: _______________________________
Name: Xxxxxx X. Xxxxxx, III
Title: President & Chief Executive Officer
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The foregoing Agreement is hereby
confirmed and accepted as of the
date first written above
at Charlotte, North Carolina.
INTERSTATE/XXXXXXX LANE CORPORATION
By: ___________________________
Xxxxx X. Xxxx, Jr.
Managing Director
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