GATEWAY FINANCIAL HOLDINGS, INC. (A North Carolina Corporation) 2,000,000 Shares of Common Stock (No Par Value Per Share) UNDERWRITING AGREEMENT
Exhibit 1.1
GATEWAY FINANCIAL HOLDINGS, INC.
(A North Carolina Corporation)
(A North Carolina Corporation)
2,000,000 Shares of Common Stock
(No Par Value Per Share)
(No Par Value Per Share)
November , 2005
XXXXX, XXXXXXXX & XXXXX, INC.
000 Xxxxxxx Xxxxxx, Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
000 Xxxxxxx Xxxxxx, Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Gateway Financial Holdings, Inc., a North Carolina corporation (the “Company”) confirms its
agreement with Xxxxx, Xxxxxxxx & Xxxxx, Inc. (the “Underwriter”), with respect to (i) the sale by
the Company and the purchase by the Underwriter of the respective numbers of shares of common
stock, no par value per share, of the Company (“Common Stock”) set forth in Schedules A and B
hereto and (ii) the grant by the Company to the Underwriter of the option described in Section 2(b)
hereof to purchase all or any part of 300,000 additional shares of Common Stock to cover
over-allotments, if any. The aforesaid 2,000,000 shares of Common Stock (the “Initial Securities”)
to be purchased by the Underwriter and all or any part of the 300,000 shares of Common Stock
subject to the option described in Section 2(b) hereof (the “Option Securities”) are hereinafter
called, collectively, the “Securities.”
The Company understands that the Underwriter proposes to make a public offering of the
Securities as soon as the Underwriter deems advisable after this Agreement has been executed and
delivered.
The Company has filed with the Securities and Exchange Commission (the “Commission”) a
registration statement on Form S-3 (No. ) covering the registration of the Securities
under the Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively, the “1933 Act”), including the related preliminary prospectus or prospectuses and
such amendments or supplements to such registration statement as may have been required prior to
the date of this Agreement. Promptly after execution and delivery of this Agreement, the Company
will prepare and file a prospectus in accordance with the provisions of Rule 430A (“Rule 430A”) of
the 1933 Act and paragraph (b) of Rule 424 (“Rule 424(b)”) of the 1933 Act. The information
included in such prospectus that was omitted from such registration statement at the time it became
effective, but that is deemed to be part of such registration statement at the time it became
effective pursuant to paragraph (b) of Rule 430A, is referred to as “Rule 430A Information.” Each
prospectus used before such registration statement became effective, and any prospectus that
omitted the Rule 430A Information that was used after such effectiveness and prior to the execution
and delivery of this Agreement, is herein called a “preliminary prospectus.” Such registration
statement, including the exhibits thereto, schedules thereto, if any, at the time it became
effective and including the Rule 430A Information, is herein called the “Registration Statement.”
Any registration statement filed pursuant to Rule 462(b) of the 1933 Act is herein referred to as
the “Rule 462(b) Registration Statement,” and after such filing the term “Registration Statement”
shall include the Rule 462(b) Registration Statement. The final prospectus in the form first
furnished to the Underwriter for use in connection with the offering of the Securities is herein
called the “Prospectus.” For purposes of this Agreement, all references to the Registration
Statement, any preliminary prospectus,
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,” “described,” “referred to” or “stated” in the Registration
Statement, any preliminary prospectus 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
which is incorporated by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be.
SECTION 1. REPRESENTATIONS AND WARRANTIES.
(a) Representations and Warranties by the Company. The Company represents and warrants to the
Underwriter 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, and agrees with the
Underwriter, as follows:
(i) Compliance with Registration Requirements. The Company meets the
requirements for use of Form S-3 under the 1933 Act. Each of the Registration Statement and
any Rule 462(b) Registration Statement has become effective under the 1933 Act and no stop
order suspending the effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no proceedings for that
purpose have been instituted or are pending or, to the knowledge of the Company, are
contemplated or threatened by the Commission, and any request on the part of the Commission
for additional information has been complied with.
At the respective times the Registration Statement, any Rule 462(b) Registration
Statement and any post-effective amendments thereto became effective and at the Closing Time
(and, if any Option Securities are purchased, at the Date of Delivery), the Registration
Statement, the Rule 462(b) 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 Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder
(collectively, the “1934 Act”) 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 Securities are purchased, at the 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; and any statutes,
regulations, contracts or other documents that are required to be described in the
Registration Statement, and any post-effective amendments thereto, or to be filed as
exhibits thereto or in the Prospectus have been so described or filed. The representations
and warranties in this subsection shall not apply to statements in or omissions from the
Registration Statement or Prospectus made in reliance upon and in conformity with
information furnished to the Company in writing by the Underwriter expressly for use in the
Registration Statement or Prospectus; provided however, that such information shall be
limited to the information described in the final proviso contained in Section 6(a).
Each preliminary prospectus and the prospectus filed as part of the Registration
Statement as originally filed or as part of any amendment thereto, or filed pursuant to Rule
424
- 2 -
under the 1933 Act, complied when so filed in all material respects with the 1933 Act
and each preliminary prospectus and the Prospectus delivered to the Underwriter 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.
(ii) Documents Incorporated by Reference. The documents which are incorporated
by reference in the Registration Statement or the Prospectus, or any amendment or supplement
thereto, or from which information is so incorporated by reference, when they become
effective or were filed with the Commission, as the case may be, complied in all material
respects with the requirements of the 1933 Act or the 1934 Act, as applicable, 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 or omitted 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 and
any further documents so filed and incorporated by reference shall, when they became or
become effective under the 1933 Act or the 1934 Act or when they were or are filed with the
Commission, conform in all material respects with the requirements of the 1933 Act or the
1934 Act, as applicable.
(iii) Independent Registered Public Accounting Firm. Xxxxx Xxxxxx PLLC, the
accounting firm that certified the financial statements and supporting schedules of the
Company included in the Registration Statement and the Prospectus, is an independent
registered public accounting firm as required by the 1933 Act. The statements included in
the Registration Statement with respect to Xxxxx Xxxxxx PLLC pursuant to Item 509 of
Regulation S-K under the 1933 Act are true and correct in all material respects. With
respect to the Company, Xxxxx Xxxxxx PLLC is not and has not been in violation of the
auditor independence requirements of the Xxxxxxxx-Xxxxx Act of 2002 and the related rules
and regulations thereunder (“Xxxxxxxx-Xxxxx Act”) of the Commission.
(iv) Financial Statements. The financial statements included or incorporated
by reference in the Registration Statement and the Prospectus, together with the related
schedules and notes, present the consolidated financial condition of the Company and its
subsidiaries at the dates indicated and the balance sheet, statement of income and
comprehensive income, statement of changes in shareholders’ equity and statement of cash
flows of the Company and its consolidated subsidiaries for the periods specified; said
financial statements have been prepared in conformity with generally accepted accounting
principles (“GAAP”) applied on a consistent basis throughout the periods involved. The
supporting schedules, if any, included in the Registration Statement present in accordance
with GAAP the information required to be stated therein. The selected financial data and
the summary financial information included in the Prospectus present the information shown
therein and have been compiled on a basis consistent with that of the audited financial
statements included in the Registration Statement. No other financial statements or
supporting schedules are required to be included in the Registration Statement or the
Prospectus. All disclosures contained in the Registration Statement 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 and Item 10 of
Regulation S-K under the 1933 Act, to the extent applicable.
(v) No Material Adverse Change in Business. Since the respective dates as of
which information is given in the Registration Statement and the Prospectus, except as
otherwise stated therein, (A) there has not been any change in the capitalization of the
Company or its subsidiaries or any material adverse change in the condition, financial or
otherwise, or in the earnings, business, properties, results of operations or business
prospects of the Company and its
- 3 -
subsidiaries considered as one enterprise, whether or not arising in the ordinary
course of business (a “Material Adverse Effect”), (B) the Company and its subsidiaries have
not incurred any material liabilities, obligations, direct or contingent, and there have
been no transactions entered into by the Company 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 considered as one enterprise, and (C) except for regular quarterly
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.
(vi) Good Standing of the Company. The Company is a financial holding company
registered under the Bank Holding Company Act of 1956, as amended (“BHCA”), 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 the corporate power and authority to conduct all the
activities conducted by it, to own, lease and operate its properties and to conduct its
business as described in 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 result
in a Material Adverse Effect.
(vii) Good Standing of Subsidiaries. Each direct or indirect subsidiary of the
Company has been duly organized and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has corporate power and authority
to conduct all the activities conducted by it, to own, lease and operate its properties and
to conduct its business as described in the Prospectus and is duly qualified as a foreign
corporation 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 result in a Material Adverse Effect. Gateway Capital Statutory Trust I has been duly
formed, is validly existing as a statutory trust and is in good standing under the laws of
the State of Connecticut, and Gateway Capital Statutory Trust II has been duly formed, is
validly existing as a statutory trust and is in good standing under the laws of the State of
Delaware. All of the issued and outstanding capital stock of each such 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 only subsidiaries of the Company are the
subsidiaries listed on Schedule D hereto.
(viii) Subsidiary Operations. Except as disclosed in the Prospectus, the
Company and its subsidiaries conduct their respective businesses in compliance in all
material respects with all federal, state, local and foreign statutes, laws, rules,
regulations, decisions, directives and orders applicable to them (including, without
limitation, all regulations and orders of, or agreements with, the Board of Governors of the
Federal Reserve System, the Federal Deposit Insurance Corporation (“FDIC”), the North
Carolina Commissioner of Banks, and the Equal Credit Opportunity Act, the Fair Housing Act,
the Community Reinvestment Act, the Home Mortgage Disclosure Act, all other applicable fair
lending laws or other laws relating to discrimination and the Bank Secrecy Act and Title III
of the USA Patriot Act). Neither the Company nor its subsidiaries has received any
communication from any governmental entity asserting that the Company or any subsidiary is
not in compliance with any statute, law, rule, regulation, decision, directive or order.
- 4 -
(ix) Capitalization. As of the date of this Agreement, the authorized, issued
and outstanding capital stock of the Company is as set forth in 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 issued and outstanding capital stock
have been duly authorized and validly issued, are fully paid and non-assessable, have been
issued in compliance with all federal and state securities laws and were not issued in
violation of the preemptive or other similar rights of any securityholder of the Company.
The Securities to be purchased by the Underwriter from the Company have been duly authorized
for issuance and sale to the Underwriter and, when issued and delivered by the Company
pursuant to this Agreement against payment of the consideration set forth herein, will be
validly issued, fully paid and non-assessable, are not subject to any preemptive or other
similar rights of any securityholder of the Company, and no holder of the Securities will be
subject to personal liability by reason of being such a holder. The description of the
Common Stock of the Company incorporated by reference in the Prospectus is complete and
accurate in all material respects. Except as set forth in the Prospectus, there are no
options to purchase, or any rights or warrants to subscribe for, or any securities or
obligations convertible or exchangeable into, or any contracts, commitments, plans or
arrangements to issue or sell, any shares of capital stock of the Company or any shares of
capital stock of its subsidiaries or any such warrants, convertible or exchangeable
securities or obligations. The descriptions of the Company’s stock option and other stock
plans or arrangements, and the options or other rights granted and exercised thereunder, set
forth in the Prospectus accurately present the information required to be shown with respect
to such plans, arrangements, options and rights.
(x) Authorization of Agreement. This Agreement has been duly authorized,
executed and delivered by the Company and, when duly executed by the Underwriter, will
constitute the valid and binding agreement of the Company enforceable against the Company in
accordance with its terms, except as may be limited or otherwise affected by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar
statutes, rules, regulations or other laws affecting the enforcement of creditors’ rights
and remedies generally, and the unavailability of, or limitation on the availability of, a
particular right or remedy (whether in a proceeding in equity or at law) because of
equitable principles.
(xi) Authorization and Description of Securities. The Securities to be
purchased by the Underwriter from the Company have been duly authorized for issuance and
sale to the Underwriter 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 or incorporated by reference in the Prospectus and
such description conforms to the rights set forth in the instruments defining the same; no
holder of the Securities will be subject to personal liability by reason of being such a
holder; and the issuance of the Securities is not subject to the preemptive or other similar
rights of any securityholder of the Company.
(xii) Absence of Defaults and Conflicts. Neither the Company nor any of its
subsidiaries is in violation of its charter or bylaws 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
- 5 -
(collectively, “Agreements and Instruments”) except for such defaults that would not
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 Securities and the use of the
proceeds from the sale of the Securities 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 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 a portion of such indebtedness by the Company or any
subsidiary.
(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 or
threatened, and the Company is not aware of any existing, imminent or threatened labor
disturbance by the employees of any of its or any subsidiary’s principal suppliers,
manufacturers, customers or contractors, which, in either case, may 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, commission, regulatory body, administrative
agency or other 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 or
any of their respective officers in their capacity as such that is required to be disclosed
in the Registration Statement (other than as disclosed therein) or described in the
Prospectus, or which might reasonably be expected to result in a Material Adverse Effect, or
which might reasonably be expected to materially and adversely affect the properties or
assets thereof or the consummation of the transactions contemplated in this Agreement or the
performance by the Company of its obligations hereunder. 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) Contracts. There are no contracts or documents which are required to be
described in the Registration Statement, the Prospectus or to be filed as exhibits thereto
which have not been so described and filed as required. All such contracts to which the
Company or any of its subsidiaries is a party have been duly authorized, executed and
delivered by the Company or such subsidiary, constitute valid and binding agreements of the
Company or such subsidiary and are enforceable against the Company or such subsidiary in
accordance with the terms thereof and except as the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors’ rights generally and by equitable principles restricting the
availability of equitable remedies.
- 6 -
(xvi) 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),
trademarks, service marks, trade names or other intellectual property (collectively,
“Intellectual Property”) necessary to carry on the business now operated by them, and
neither the Company nor any of its subsidiaries has received any notice or is otherwise
aware 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
result in a Material Adverse Effect.
(xvii) Absence of Further Requirements. No filing with, or authorization,
approval, consent, license, order, registration, qualification or decree of, any court or
national, state or local 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 Securities 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 0000 Xxx, xxxxx securities laws, including Blue Sky laws, or the bylaws
and rules of the National Association of Securities Dealers, Inc. (the “NASD”).
(xviii) 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, banking or foreign
regulatory agencies or bodies necessary to conduct the business now operated by them; the
Company and its subsidiaries have made all government or regulatory filings as are necessary
to carry on their respective businesses; 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, have a Material Adverse Effect; all of the
Governmental Licenses are valid and in full force and effect, except when the invalidity of
such Governmental Licenses or the failure of such Governmental Licenses to be in full force
and effect would not 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 result in a Material Adverse
Effect.
(xix) 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 and assets owned by them, in each case, free and clear of all
mortgages, pledges, liens, security interests, claims, restrictions or encumbrances of any
kind except such as (A) are described in the Prospectus or (B) 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
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 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
- 7 -
Company or such subsidiary to the continued possession of the leased or subleased
premises under any such lease or sublease.
(xx) Investment Company Act. The Company and its subsidiaries are not, and
upon the issuance and sale of the Securities as herein contemplated and the application of
the net proceeds therefrom as described in the Prospectus will not be, an “investment
company,” an entity “controlled” by an “investment company” or an “affiliated person” or
“promoter” or “principal underwriter” for, an “investment company,” as such terms are
defined in the Investment Company Act of 1940, as amended (the “1940 Act”).
(xxi) Environmental Laws. Except as described in the Registration Statement
and except as would not, singly or in the aggregate, 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 (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, (C) there are no pending or 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 and (D) 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.
(xxii) Taxes. The Company and each of the subsidiaries has (A) timely filed
all foreign, United States 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
assessment, fine or penalty that is currently being contested in good faith or as would not
have, individually or in the aggregate, a Material Adverse Effect, and (C) established on
the most recent balance sheet reserves that are adequate for the payment of all taxes not
yet due and payable.
(xxiii) Regulatory Agreements. Neither the Company nor any of its subsidiaries
is a party to or subject to any order, decree, agreement, memorandum or understanding or
similar agreement with, or a commitment letter, supervisory letter or similar submission to,
any governmental entity charged with the supervision or regulation of depository
institutions or engaged in the insurance of deposits (including the FDIC) or the supervision
or regulation of it or any of its subsidiaries, except as would not, singly or in the
aggregate, result in a Material Adverse Effect, and neither the Company nor any of its
subsidiaries has been advised by any such governmental entity that such governmental entity
is contemplating issuing or requesting (or is considering the appropriateness of issuing or
requesting) any such order, decree, agreement,
- 8 -
memorandum or understanding, commitment letter, supervisory letter or similar
submission, except as would not, singly or in the aggregate, result in a Material Adverse
Effect.
(xxiv) 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.
(xxv) 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 rules and regulations of the Commission
thereunder to be described in or incorporated by reference in the Registration Statement
and/or the Prospectus and that is not so described or incorporated by reference.
(xxvi) Internal Control Over Financial Reporting. The Company and its
subsidiaries maintain a system of internal accounting controls sufficient to provide
reasonable assurances 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 accountability
for assets, (C) access to assets is permitted only in accordance with management’s general
or specific authorization and (D) the recorded accounting for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with respect to any
differences.
(xxvii) 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 unlawful payment.
(xxviii) Deposit Insurance. The deposit accounts of the Company’s banking
subsidiaries are insured by the Federal Deposit Insurance Corporation to the legal maximum,
and such financial institutions have paid all premiums and assessments required by the
Federal Deposit Insurance Corporation and the regulations thereunder and no proceeding for
the termination or revocation of such insurance is pending or threatened. Each such
financial institution is a member in good standing of the Federal Home Loan Bank of Atlanta.
(xxix) No Registration Rights. No person has the right, contractual or
otherwise, to cause or require the Company or any of its subsidiaries to issue to him, her
or it, or to register pursuant to the 1933 Act, any securities of the Company or its
subsidiaries by reason of the filing of the Registration Statement with the Commission or
the issuance and sale of the Securities to be sold by the Company hereunder, nor does any
person have preemptive rights, co-sale rights, rights of first refusal or other rights to
purchase any of the Securities other than those that have been expressly waived prior to the
date hereof.
(xxx) No Stabilization or Manipulation. Neither the Company nor any of its
directors, officers or controlling persons have taken, directly or indirectly, any action
intended, designed to or that could reasonably be expected to cause or result in any
stabilization or manipulation of the price of the Securities.
- 9 -
(xxxi) No Unauthorized Use of Prospectus. The Company has not distributed and,
prior to the later to occur of (i) the Closing Time and (ii) completion of the distribution
of the Securities, will not distribute any prospectus (as such term is defined in the 0000
Xxx) in connection with the offering and sale of the Securities other than the Registration
Statement, any preliminary prospectus, the Prospectus or other materials, if any, permitted
by the 1933 Act and approved by the Underwriter.
(xxxii) 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.
(xxxiii) Xxxxxxxx-Xxxxx Act. The Company, it subsidiaries and the Company’s
directors and executive officers are in compliance with the applicable provisions of the
Xxxxxxxx-Xxxxx Act and the corporate governance and other rules and requirements of Nasdaq.
Each of the principal executive officer and the principal financial officer of the Company
(or each former principal executive officer of the Company and each former principal
financial officer of the Company as applicable) has made all certifications required by
Sections 302 and 906 of the Xxxxxxxx-Xxxxx Act and the rules and regulations of the
Commission promulgated thereunder with respect to all reports, schedules, forms, statements
and other documents required to be filed by it or furnished by it to the Commission. For
purposes of the preceding sentence, “principal executive officer” and “principal financial
officer” shall have the meanings given to such terms in the Xxxxxxxx-Xxxxx Act.
(xxxiv) Lock-up Agreements. Each of the Company’s executive officers and
directors, in each case as listed on Schedule E hereto, has executed and delivered lock-up
agreements as contemplated by Section 5(i) hereof.
(xxxv) 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.
(xxxvi) 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 (“ERISA”); there has not
been any violation of any provision of ERISA concerning the employees of the Company or any
of its subsidiaries; 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 (A) Title IV of ERISA with respect to termination of, or withdrawal from,
any “employee benefit plan” or (B) 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
- 10 -
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.
(xxxvii) The Nasdaq National Market. The Securities are duly authorized for
listing, subject to official notice of issuance, on the Nasdaq National Market.
(xxxviii) Insurance. The Company and its subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and in such amounts as
are prudent and customary in the business in which they engage as described in the
Prospectus; 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 it or any of
its subsidiaries will not be able to renew their respective existing insurance coverage as
and when such coverage expires or to obtain similar coverage from similar insurers as may be
necessary to continue their respective proposed businesses at a cost that would not result
in a Material Adverse Effect.
(xxxix) Insider Loans. The Company has provided a true, correct and complete
list of any extension of credit in the form of a personal loan made, directly or
indirectly, by the Company or any of its subsidiaries to any director or executive officer
of the Company or any of its subsidiaries, or to any family member or affiliate of any
director or executive officer of the Company or any of its subsidiaries; and on or after
July 30, 2002, the Company has not, except as permitted in its bank subsidiary’s capacity as
a lending institution, directly or indirectly, including through any of its subsidiaries:
(A) extended credit, arranged to extend credit, or renewed any extension of credit, in the
form of a personal loan, to or for any director or executive officer of the Company or any
of its subsidiaries, or to or for any family member or affiliate of any director or
executive officer of the Company or any of its subsidiaries; or (B) made any material
modification, including any renewal thereof, to any term of any personal loan to any
director or executive officer of the Company or any of its subsidiaries, or any family
member or affiliate of any director or executive officer, which loan was outstanding on July
30, 2002.
(xl) Off Balance Sheet Transactions. There are no transactions, arrangements
and other relationships between and/or among the Company, and/or, to the knowledge of the
Company, any of its subsidiaries, affiliates and any unconsolidated entity, including, but
not limited to, any structural finance, special purpose or limited purpose entity (each, an
“Off Balance Sheet Transaction”) that could reasonably be expected to affect materially the
Company’s liquidity or the availability of or requirements for its capital resources,
including those Off Balance Sheet Transactions described in the Commission’s Statement about
Management’s Discussion and Analysis of Financial Conditions and Results of Operations
(Release Nos. 33-8056; 34-45321; FR-61), required to be described in the Prospectus which
have not been described as required.
(xli) Losses. Neither the Company nor any of its subsidiaries has sustained
since the date of the financial statements in, or incorporated by reference in, the
Registration Statement and the Prospectus any loss or interference with their respective
businesses 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.
(b) Officer’s Certificates. Any certificate signed by any officer of the Company or any of
its subsidiaries delivered to the Underwriter or to counsel for the Underwriter shall be deemed a
representation and warranty by the Company to the Underwriter as to the matters covered thereby.
- 11 -
SECTION 2. SALE AND DELIVERY TO UNDERWRITER; CLOSING.
(a) Initial Securities. On the basis of the representations and warranties herein contained
and subject to the terms and conditions herein set forth, the Company agrees to sell to the
Underwriter, and the Underwriter agrees to purchase from the Company, at the price per share set
forth in Schedule C, that number of Initial Securities set forth in Schedule A opposite the name of
the Underwriter.
(b) Option Securities. In addition, on the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company hereby grants an
option to the Underwriter to purchase up to an additional 300,000 shares of Common Stock, as set
forth in Schedule B, at the price per share set forth in Schedule C, less an amount per share equal
to any dividends or distributions declared by the Company and payable on the Initial Securities but
not payable on the Option Securities. The option hereby granted will expire 30 days after the date
hereof and may be exercised in whole or in part from time to time only for the purpose of covering
over-allotments which may be made in connection with the offering and distribution of the Initial
Securities upon notice by the Underwriter to the Company setting forth the number of Option
Securities as to which the Underwriter is then exercising the option and the time and date of
payment and delivery for such Option Securities. Any such time and date of delivery (a “Date of
Delivery”) shall be determined by the Underwriter, 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 Securities, the
Underwriter will purchase that total number of Option Securities then being purchased.
(c) Payment. Payment of the purchase price for, and delivery of certificates for, the Initial
Securities shall be made at the offices of Xxxxxx Xxxxxxx Xxxxx & Xxxxxxxxxxx LLP, 000 Xxxxxxxxxxxx
Xxxxxx, X.X., Xxxxx 000, Xxxxxxxxxx, X.X. 00000, or at such other place as shall be agreed upon by
the Underwriter 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
Underwriter 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 Securities are purchased by the
Underwriter, payment of the purchase price for, and delivery of certificates for, such Option
Securities shall be made at the above-mentioned offices, or at such other place as shall be agreed
upon by the Underwriter and the Company, on each Date of Delivery as specified in the notice from
the Underwriter 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 to the Underwriter for the respective account of
the Underwriter of certificates for the Securities to be purchased by them.
(d) Denominations; Registration. Certificates for the Initial Securities and the Option
Securities, if any, shall be in such denominations and registered in such names as the Underwriter
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 Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the Underwriter(s) in
New York City 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.
- 12 -
SECTION 3. COVENANTS OF THE COMPANY.
The Company covenants with the Underwriter 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 434, as applicable, and will
notify the Underwriter immediately, and confirm the notice in writing, (i) when any post-effective
amendment to the Registration Statement shall become effective, or any supplement to the Prospectus
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, and (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, or of the
suspension of the qualification of the Securities for offering or sale in any jurisdiction, or of
the initiation or threatening of any proceedings for any of such purposes. The Company will
promptly effect the filings necessary pursuant to Rule 424(b) 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 Underwriter notice of its intention to
file or prepare any amendment to the Registration Statement (including any filing under Rule
462(b)) or any amendment, supplement or revision to either the prospectus included in the
Registration Statement at the time it became effective or to the Prospectus, whether pursuant to
the 1933 Act, the 1934 Act or otherwise, will furnish the Underwriter 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 Underwriter or counsel for the Underwriter
shall object.
(c) Delivery of Registration Statements. The Company has furnished or will deliver to the
Underwriter and counsel for the Underwriter, 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 signed copies of all consents and certificates of experts,
and will also deliver to the Underwriter, without charge, a conformed copy of the Registration
Statement as originally filed and of each amendment thereto (without exhibits) for the Underwriter.
The copies of the Registration Statement and each amendment thereto furnished to the 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 the Underwriter, without charge,
as many copies of each preliminary prospectus as the 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 the 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 the Underwriter may reasonably request. The Prospectus
and any amendments or supplements thereto furnished to the 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 1934 Act so as to permit the completion of the distribution of the Securities as contemplated
- 13 -
in this Agreement and in the Prospectus. If at any time when a prospectus is required by the
1933 Act to be delivered in connection with sales of the Securities, any event shall occur or
condition shall exist as a result of which it is necessary, in the opinion of counsel for the
Underwriter or for the Company, to amend the Registration Statement or 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 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, the Company will promptly prepare and file with the Commission, subject to Section 3(b),
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 the Company will
furnish to the Underwriter such number of copies of such amendment or supplement as the Underwriter
may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best efforts, in cooperation with the
Underwriter, to qualify the Securities for offering and sale under the applicable securities laws
of such states and other jurisdictions (domestic or foreign) as the Underwriter may designate and
to maintain such qualifications in effect for a period of not less than one year from the later of
the effective date of the Registration Statement and any Rule 462(b) Registration Statement;
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
Securities 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 a period of
not less than one year from the effective date of the Registration Statement and any Rule 462(b)
Registration Statement.
(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 Securities in the manner specified in the Prospectus under “Use of Proceeds.”
(i) Listing. The Company will use its best efforts to obtain, effect and maintain the
quotation of the Securities on The Nasdaq National Market and will file with The Nasdaq National
Market all documents and notices required by The Nasdaq National Market of companies that have
securities that are traded in the over-the-counter market and quotations for which are reported by
The Nasdaq National Market.
(j) Restriction on Sale of Securities. During a period of 90 days from the date of the
Prospectus (the “Restricted Period”), the Company will not, without the prior written consent of
the Underwriter, 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 to purchase or otherwise transfer or dispose of any share of 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 Common Stock or such other
securities, in cash or otherwise. The
- 14 -
foregoing sentence shall not apply to (A) the Securities to be sold hereunder, (B) any shares
of Common Stock issued by the Company upon the exercise of an option or warrant outstanding on the
date hereof and referred to in the Prospectus, (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, or (D) any transfer, sale or other disposition with the prior written consent
of the Underwriter. The Underwriter agrees, for the benefit of the other Underwriter, if
applicable, not to provide such consent without providing notice to each Underwriter to permit
compliance with applicable provisions of NASD Conduct Rule 2711(f) restricting publication and
distribution of research and public appearances by research analysts before and after the
expiration, waiver or termination of a lock-up agreement and agrees only to provide consent in
circumstances that will permit such compliance by the Underwriter. Notwithstanding the foregoing,
in the event that either (i) during the period that begins on the date that is 15 calendar days
plus 3 business days before the last day of the Restricted Period and ends on the last day of the
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 Restricted Period, the
Company announces that it will release earnings results during the 16-day period beginning on the
last day of the Restricted Period, the restrictions set forth herein will continue to apply until
the expiration of the date that is 15 calendar days plus 3 business days after the date on which
the earnings release is issued or the material news or event related to the Company occurs.
(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.
(l) Compliance with the Xxxxxxxx-Xxxxx Act. During the time when a prospectus is required to
be delivered under the 1933 Act, the Company shall at all times comply, in all material respects,
with all applicable provisions of the Xxxxxxxx-Xxxxx Act of 2002, including the related rules and
regulations promulgated thereunder by the Commission and The Nasdaq Stock Market, Inc., in effect
from time to time.
(m) Notice of Issuance. The Company will timely file a “Notification Form: Change in the
Number of Shares Outstanding” with the Nasdaq Stock Market, Inc.
SECTION 4. PAYMENT OF EXPENSES.
(a) Expenses. The Company will pay or cause to be paid all expenses incident to the
performance of their 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 Underwriter
of this Agreement, and such other documents as may be required in connection with the offering,
purchase, sale, issuance or delivery of the Securities, (iii) the preparation, issuance and
delivery of the certificates for the Securities to the Underwriter, including any stock or other
transfer taxes and any stamp or other duties payable upon the sale, issuance or delivery of the
Securities to the Underwriter, (iv) the fees and disbursements of the Company’s counsel,
accountants and other advisors, (v) the qualification of the Securities 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 Underwriter in connection therewith and in connection
with the preparation of the Blue Sky Survey and any supplement thereto, (vi) the printing and
delivery to the Underwriter of copies of each preliminary prospectus, and of the Prospectus and any
amendments or supplements thereto, (vii) the fees and expenses of any transfer agent or registrar
for the Securities and (viii) the filing fees incident to the review by the NASD of the terms of
the sale of the Securities and (ix) the fees and expenses incurred in connection with the inclusion
of the Securities in the Nasdaq National
- 15 -
Market. The Underwriter shall be responsible for the payment of the fees and disbursements of
its counsel in connection with this Agreement and the transactions contemplated thereby.
(b) Termination of Agreement. If this Agreement is terminated by the Underwriter in
accordance with the provisions of Section 5, Section 9(a) or Section 11 hereof, the Company shall
reimburse the Underwriter for all of their out-of-pocket expenses, but specifically excluding any
and all fees and disbursements of counsel for the Underwriter.
SECTION 5. CONDITIONS OF UNDERWRITER’S OBLIGATIONS.
The obligations of the Underwriter hereunder are subject to the accuracy of the
representations and warranties of the Company contained in Section 1 hereof or 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, including any Rule
462(b) Registration Statement, has 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 Underwriter. A prospectus containing the Rule 430A Information shall have been
filed with the Commission in accordance with Rule 424(b) (or a post-effective amendment providing
such information shall have been filed and declared effective in accordance with the requirements
of Rule 430A).
(b) Opinion of Counsel for Company. At Closing Time, the Underwriter shall have received the
favorable opinion, dated as of Closing Time, of Xxxxxx Xxxxxx, P.A., counsel for the Company, in
form and substance satisfactory to counsel for the Underwriter to the effect set forth in Exhibit A
hereto and to such further effect as counsel to the Underwriter may reasonably request.
(c) Opinion of Counsel for Underwriter. At Closing Time, the Underwriter shall have received
the favorable opinion, dated as of Closing Time, of Xxxxxx Xxxxxxx Xxxxx & Scarborough LLP, special
counsel for the Underwriter.
(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 Prospectus, any material
adverse change in the condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, and the Underwriter shall have received a certificate
of the chief executive officer 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 such
material adverse change, (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, (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 are contemplated by the Commission, and (v) such additional matters as
the Underwriter may reasonably request.
(e) Accountant’s Comfort Letter. At the time of the execution of this Agreement, the
Underwriter shall have received from Xxxxx Xxxxxx PLLC, a letter dated such date, in form and
- 16 -
substance satisfactory to the Underwriter, together with signed or reproduced copies of such
letter containing statements and information of the type ordinarily included in accountants’
“comfort letters” to Underwriter with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus.
(f) Bring-down Comfort Letter. At Closing Time, the Underwriter shall have received from
Xxxxx Xxxxxx PLLC a letter, dated as of Closing Time, to the effect that they reaffirm the
statements made in the letter furnished pursuant to subsection (e) of this Section, except that the
specified date referred to shall be a date not more than three business days prior to Closing Time.
(g) Approval of Listing. At Closing Time, the Company shall received approval from The Nasdaq
National Market for listing the Securities and the Securities shall have been approved for
inclusion in and listing on The Nasdaq National Market, subject only to official notice of
issuance.
(h) No Objection. The NASD has confirmed that it has not raised any objection with respect to
the fairness and reasonableness of the underwriting terms and arrangements.
(i) Lock-up Agreements. Prior to the distribution of the preliminary prospectus, the
Underwriter shall have received an agreement substantially in the form of Exhibit B hereto signed
by the persons listed on Schedule E hereto.
(j) Delivery of Prospectus. The Company shall have complied with the provisions hereof with
respect to the furnishing of prospectuses on the New York business day next succeeding the date of
this Agreement.
(k) 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).
(l) Conditions to Purchase of Option Securities. In the event that the Underwriter exercises
its option provided in Section 2(b) hereof to purchase all or any portion of the Option Securities,
the representations and warranties of the Company contained herein and the statements in any
certificates furnished by the Company and 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 Underwriter shall
have received:
(i) Officers’ Certificate. A certificate, dated such Date of Delivery, of the
chief executive officer 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(d) hereof remains true and correct as of such Date of Delivery.
(ii) Opinion of Counsel for Company. The favorable opinion of Xxxxxx Xxxxxx,
P.A., counsel for the Company, in form and substance satisfactory to counsel for the
Underwriter, dated such Date of Delivery, relating to the Option Securities 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 Underwriter. The favorable opinion of Xxxxxx
Xxxxxxx Xxxxx & Xxxxxxxxxxx LLP, counsel for the Underwriter, dated such Date of Delivery,
relating to the Option Securities 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 Xxxxx Xxxxxx PLLC in form and
substance satisfactory to the Underwriter and dated such Date of Delivery, substantially in
the
- 17 -
same form and substance as the letter furnished to the Underwriter 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) 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).
(m) Additional Documents. At Closing Time and at each Date of Delivery counsel for the
Underwriter 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 Securities 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 Securities as herein contemplated shall be
satisfactory in form and substance to the Underwriter and counsel for the Underwriter.
(n) Termination of Agreement. If any condition specified in this Section 5 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 Securities on a Date of Delivery which is after the Closing
Time, the obligations of the Underwriter to purchase the relevant Option Securities, may be
terminated by the Underwriter 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 1, 6, 7 and 8
shall survive any such termination and remain in full force and effect.
SECTION 6. INDEMNIFICATION.
(a) Indemnification of Underwriter. The Company and its subsidiaries agree, jointly and
severally, to indemnify and hold harmless the Underwriter and each person, if any, who controls the
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 430A
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 or the Prospectus (or any amendment or supplement thereto), 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 Underwriter), reasonably incurred in investigating,
- 18 -
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 written information furnished to
the Company by the Underwriter expressly for use in the Registration Statement (or any amendment
thereto), including the Rule 430A Information, if applicable, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto); provided further that the parties acknowledge
and agree that the only information that any Underwriter has furnished to the Company specifically
for inclusion in the Registration Statement, preliminary prospectus and Prospectus (or any
amendment or supplement thereto) are the concession and reallowance figures appearing in the
Prospectus in the section entitled “Underwriting” and the information contained under the captions
“Underwriting — Stabilization” and “Underwriting — Passive Market Making.”
(b) Indemnification of Company and Directors and Officers. The Underwriter 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
430A Information, if applicable, or any preliminary prospectus 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 expressly for use in the Registration Statement (or any amendment
thereto) or such preliminary prospectus or the Prospectus (or any amendment or supplement thereto),
provided that the parties acknowledge and agree that the only written information that the
Underwriter has furnished to the Company specifically for inclusion in the Registration Statement,
preliminary prospectus and Prospectus (or any amendment or supplement thereto) are the concession
and reallowance figures appearing in the Prospectus in the section entitled “Underwriting” and the
information contained under the captions “Underwriting — Stabilization” and “Underwriting — Passive
Market Making.”
(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 Underwriter, 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, however, 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
- 19 -
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 Underwriter on the other hand from the
offering of the Securities 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 Underwriter 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 Underwriter on the other
hand in connection with the offering of the Securities pursuant to this Agreement shall be deemed
to be in the same respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by the Company and the
total underwriting discount received by the Underwriter, as set forth on the cover of the
Prospectus.
The relative fault of the Company on the one hand and the Underwriter 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 Underwriter 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 contribution
pursuant to this Section 7 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
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.
- 20 -
Notwithstanding the provisions of this Section 7, the Underwriter shall not be required to
contribute any amount in excess of the amount by which the total price at which the Securities
underwritten by it and distributed to the public were offered to the public exceeds the amount of
any damages which the Underwriter has otherwise been required to pay by reason of any 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
0000 Xxx) shall be entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.
For purposes of this Section 7, each person, if any, who controls the Underwriter 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 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 investigation made by or on behalf of the
Underwriter or controlling person, or by or on behalf of the Company, and shall survive delivery of
the Securities to the Underwriter.
SECTION 9. TERMINATION OF AGREEMENT.
(a) Termination; General. The Underwriter may terminate this Agreement, by notice to the
Company, at any time at or prior to Closing Time or Date of Delivery (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 Prospectus, any material adverse change in the condition, financial or otherwise, or
in the earnings, business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary course of business, or (ii) if
there has occurred any material adverse change in the financial markets in the United States, 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 Underwriter, impracticable or
inadvisable to market the Securities or to enforce contracts for the sale of the Securities, or
(iii) if trading in any securities of the Company has been suspended or materially limited by the
Commission or the Nasdaq National Market, or if trading generally on the American Stock Exchange or
the New York Stock Exchange or in the Nasdaq National Market 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 such system or by order of the Commission, the
National Association of Securities Dealers, Inc. or any other governmental authority, or (iv) if a
banking moratorium has been declared by either Federal or New York or North Carolina authorities or
a material disruption in commercial banking or securities settlement or clearance services in the
United States has occurred.
- 21 -
(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 1, 6, 7 and 8 shall survive such termination and remain in full
force and effect.
SECTION 10. RESERVED.
SECTION 11. DEFAULT BY THE COMPANY.
If the Company shall fail at Closing Time or at the Date of Delivery to sell the number of
Securities that it is obligated to sell hereunder, then this Agreement shall terminate without any
liability on the part of any nondefaulting party; provided, however, that the provisions of
Sections 1, 4, 6, 7 and 8 shall remain in full force and effect. No action taken pursuant to this
Section shall relieve the Company from liability, if any, in respect of such default.
SECTION 12. 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
Underwriter shall be directed to Xxxxx, Xxxxxxxx & Xxxxx, Inc., 000 Xxxxxxx Xxxxxx, 0xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, attention of General Counsel; notices to the Company shall be
directed to it at Gateway Financial Holdings, Inc., 0000 X. Xxxx Xxxxxx, Xxxxx X, Post Office Xxx
0000, Xxxxxxxxx Xxxx, Xxxxx Xxxxxxxx 00000, attention: D. Xxx Xxxxx, President.
SECTION 13. PARTIES.
This Agreement shall inure to the benefit of and be binding upon the Underwriter and the
Company 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 Underwriter
and the Company and their respective successors and the controlling persons and officers and
directors referred to in Sections 6 and 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 Underwriter and the Company 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 corporation. No purchaser of Securities from the
Underwriter shall be deemed to be a successor by reason merely of such purchase.
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. EXCEPT AS OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY
TIME.
- 22 -
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, with the same effect as if the
signatures thereto and hereto were upon the same instrument. 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 and the Table of Contents are for convenience
only and shall not affect the construction hereof.
[Signatures on Next Page]
- 23 -
If the foregoing is in accordance with your understanding of our agreement, please sign and
return to the Company, whereupon this instrument, along with all counterparts, will become a
binding agreement between the Underwriter and the Company in accordance with its terms.
| Very truly yours, | ||||
| GATEWAY FINANCIAL HOLDINGS, INC. | ||||
| By: | ||||
| Title: | ||||
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXX, XXXXXXXX & XXXXX, INC.
By: |
||||
- 24 -
SCHEDULE A
| Number of Initial | ||||
| Name of Underwriter | Securities to be Purchased | |||
Xxxxx, Xxxxxxxx & Xxxxx, Inc. |
2,000,000 | |||
Total |
2,000,000 | |||
Schedule A-1
SCHEDULE B
| Maximum Number of | ||||||||
| Number of Initial | Option | |||||||
| Securities to be Sold | Securities to be Sold | |||||||
Company |
2,000,000 | 300,000 | ||||||
Total |
2,000,000 | 300,000 | ||||||
Schedule B-1
SCHEDULE C
GATEWAY FINANCIAL HOLDINGS, INC.
Shares of Common Stock
(No Par Value Per Share)
Shares of Common Stock
(No Par Value Per Share)
1. The public offering price per share for the Securities, determined as provided in Section
2, shall be $ .
2. The purchase price per share for the Securities to be paid by the Underwriter shall be $
, being an amount equal to the public offering price set forth above less $ per
share; provided that the purchase price per share for any Option Securities purchased upon the
exercise of the over-allotment 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 Initial
Securities but not payable on the Option Securities.
Schedule C-1
SCHEDULE D
List of Subsidiaries
Gateway Bank & Trust Co.
Gateway Capital Statutory Trust I
Gateway Capital Statutory Trust II
Gateway Insurance Services, Inc.
Gateway Investment Services, Inc.
Schedule D-1
SCHEDULE E
List of Persons and Entities
Subject to Lock-up Agreements
Subject to Lock-up Agreements
H. Xxxxxxx Xxxxxx
D. Xxx Xxxxx
Xxxxxxx Xxxxxxx, III
Xxxxxx Xxxxx, Xx.
Xxxxx X. Xxxxxxx, Xx.
Xxxxxxx X. Xxxxxxxx, Xx.
Xxxxxx X. Xxxxx, Xx.
Xxxx X. Xxxxxxxx
X. Xxxxxx Xxxxxxx, Xx.
Xxxxxx Xxxxxxx Xxxxxx, III
Xxxxxxx Xxxxxxxxxx Xxxxxxx
X.X. “Xxxx” Xxxxx, Jr.
Xxxxx X. Xxxxxxxx
Xxxx X. Xxxxx
Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxx
Exhibit E-1
Exhibit A
FORM OF OPINION OF COMPANY’S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(i) The Company is a financial holding company registered under the Bank Holding Company
Act of 1956, as amended (“BHCA”), and has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of North Carolina. The activities of
each of the Company’s direct and indirect subsidiaries are permissible for subsidiaries of a
financial holding company.
(ii) The Company has corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus and to enter into and
perform its obligations under the Underwriting Agreement.
(iii) The Company is duly qualified as a foreign corporation 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 result in a Material Adverse Effect.
(iv) The authorized, issued and outstanding capital stock of the Company is as set forth
in the Prospectus in the column entitled “Actual” under the caption “Capitalization” (except
for subsequent issuances, if any, pursuant to the Underwriting Agreement or 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
issued and outstanding capital stock of the Company have been duly authorized and validly
issued and are fully paid and non-assessable; and none of the outstanding shares of capital
stock of the Company was issued in violation of the preemptive or other similar rights of any
securityholder of the Company.
(v) The Securities to be purchased by the Underwriter from the Company have been duly
authorized for issuance and sale to the Underwriter pursuant to the Underwriting Agreement and,
when issued and delivered by the Company pursuant to the Underwriting Agreement against payment
of the consideration set forth in the Underwriting Agreement, will be validly issued and fully
paid and non-assessable and no holder of the Securities is or will be subject to personal
liability by reason of being such a holder.
(vi) The issuance and sale of the Securities by the Company is not subject to the
preemptive or other similar rights of any securityholder of the Company.
(vii) Each direct and indirect subsidiary of the Company listed on Schedule D hereto has
been duly incorporated and is validly existing as a corporation in good standing under the laws
of the jurisdiction of its incorporation, has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the Prospectus and is duly
qualified as a foreign corporation 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 result in a Material Adverse Effect; all of the issued and
outstanding capital stock of each subsidiary has been
Exhibit A-1
duly authorized and validly issued, is fully paid and non-assessable and, to the best of
our knowledge, 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.
(viii) The Underwriting Agreement has been duly authorized, executed and delivered by the
Company and, when duly executed by the Underwriter, will constitute the valid and binding
agreement of the Company enforceable against the Company in accordance with its terms except in
each case as may be limited or otherwise affected by (A) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar statutes, rules, regulations
or other laws affecting the enforcement of creditors’ rights and remedies generally, and (B)
the unavailability of, or limitation on the availability of, a particular right or remedy
(whether in a proceeding in equity or at law) because of an equitable principle or a
requirement as to commercial reasonableness, conscionability or good faith.
(ix) The Registration Statement, including any Rule 462(b) Registration Statement, has
been declared effective under the 1933 Act; any required filing of the Prospectus pursuant to
Rule 424(b) has been made in the manner and within the time period required by Rule 424(b);
and, to the best of our knowledge, no stop order suspending the effectiveness of the
Registration Statement or any Rule 462(b) Registration Statement has been issued under the 1933
Act and no proceedings for that purpose have been instituted or are pending or threatened by
the Commission.
(x) The Registration Statement, including any Rule 462(b) Registration Statement and the
Rule 430A Information, as applicable, the Prospectus, and each amendment or supplement to the
Registration Statement and Prospectus, excluding the documents incorporated by reference
therein, as of their respective effective or issue dates (other than the financial statements
and supporting schedules included therein or omitted therefrom, as to which we need express no
opinion) complied as to form in all material respects with the requirements of the 1933 Act.
(xi) The documents incorporated by reference in the Prospectus (other than the financial
statements and supporting schedules included therein or omitted therefrom, as to which we need
express no opinion), when they became effective or were filed with the Commission, as the case
may be, complied as to form in all material respects with the requirements of the 1933 Act or
the 1934 Act, as applicable, and the rules and regulations of the Commission thereunder.
(xii) The form of certificate used to evidence the Common Stock complies in all material
respects with all applicable statutory requirements, with any applicable requirements of the
charter and bylaws of the Company and the requirements of The Nasdaq National Market.
(xiii) To the best of our knowledge, there is not pending or threatened any action, suit,
proceeding, inquiry or investigation, to which the Company or any subsidiary is a party, or to
which the property of the Company or any subsidiary is subject, before or brought by any court
or governmental agency or body, domestic or foreign, which might reasonably be expected to
result in a Material Adverse Effect, or which might reasonably be expected to materially and
adversely affect the properties or assets thereof or the consummation of the transactions
contemplated in the Underwriting Agreement or the performance by the Company of its obligations
thereunder.
(xiv) The information in the Prospectus under “Risk Factors,” “Description of Capital
Stock” and “Underwriting” and in the Registration Statement under Items 14 and 15, in each
instance to the extent that it constitutes legal conclusions, matters of law, or summaries of
legal matters, the
Exhibit A-2
Company’s charter and bylaws or legal proceedings, have been reviewed by us and are
accurate and complete.
(xv) To the best of our knowledge, there are no statutes or regulations that are required
to be described in the Prospectus that are not described as required.
(xvi) All descriptions in the Registration Statement of contracts and other documents to
which the Company or its subsidiaries are a party are accurate in all material respects; to the
best of our knowledge, there are no franchises, contracts, indentures, mortgages, loan
agreements, notes, leases or other instruments required to be described or referred to in the
Registration Statement or to be filed as exhibits thereto other than those described or
referred to therein or filed or incorporated by reference as exhibits thereto, and the
descriptions thereof or references thereto are correct in all material respects.
(xvii) Neither the Company nor any subsidiary is in violation of its charter or bylaws and
no default by the Company or any subsidiary exists in the due performance or observance of any
obligation, agreement, covenant or condition contained in any contract, indenture, mortgage,
loan agreement, note, lease or other agreement or instrument that is described or referred to
in the Registration Statement or the Prospectus or filed or incorporated by reference as an
exhibit to the Registration Statement.
(xviii) No filing with, or authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency, domestic or foreign
(other than under the 1933 Act, which have been obtained, or as may be required under the
securities or blue sky laws of the various states, as to which we need express no opinion) is
necessary or required in connection with the due authorization, execution and delivery of the
Underwriting Agreement or for the offering, issuance, sale or delivery of the Securities.
(xix) The execution, delivery and performance of the Underwriting Agreement and the
consummation of the transactions contemplated in the Underwriting Agreement and in the
Registration Statement (including the issuance and sale of the Securities and the use of the
proceeds from the sale of the Securities as described in the Prospectus under the caption “Use
Of Proceeds”) and compliance by the Company with its obligations under the Underwriting
Agreement do not and will not, whether with or without the giving of notice or lapse of time or
both, conflict with or constitute a breach of, or default or Repayment Event (as defined in
Section 1(a)(xii) of the Underwriting Agreement) 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 any contract, indenture, mortgage, deed of trust, loan or credit agreement, note,
lease or any other agreement or instrument, known to us, to which the Company or any subsidiary
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 (except for such conflicts, breaches or
defaults or liens, charges or encumbrances that would not have 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, known to us, of any government, government instrumentality or court, domestic
or foreign, having jurisdiction over the Company or any subsidiary or any of their respective
properties, assets or operations.
(xx) The Company is not an “investment company” or an entity “controlled” by an
“investment company,” as such terms are defined in the 1940 Act.
Exhibit A-3
(xxi) To such counsel’s knowledge, without independent investigation, neither the Company
nor its subsidiaries is a party to or subject to any order, decree, agreement, memorandum of
understanding or similar arrangement with, or a commitment letter, supervisory letter or
similar submission to, any governmental entity charged with the supervision or regulation of
depository institutions or engaged in the insurance of deposits (including the FDIC) or the
supervision or regulation of the Company or any of its subsidiaries and neither the Company nor
its subsidiaries has been advised by any such governmental entity that such governmental entity
is contemplating issuing or requesting (or is considering the appropriateness of issuing or
requesting) any such order, decree, agreement, memorandum of understanding, commitment letter,
supervisory letter or similar submission.
(xxii) With respect to the Xxxxxxxx-Xxxxx Act of 2002:
(A) The Company has adopted a Code of Ethics and Code of Conduct for senior
financial officers meeting the requirements of 17 CFR Part 228.406 and an audit
committee charter meeting the requirements of Rule 4350(d)(1)(C) of the Nasdaq
Marketplace Rules;
(B) The Company’s Board of Directors has determined that a majority of its members
and all of the members of its compensation and audit committees are independent under
applicable Nasdaq Marketplace Rules, and based solely on our review of written
representations furnished by such directors, to our knowledge no independent director
of the Company has any relationship prohibited under Rule 4200(a)(15)(A) through (G) of
the Nasdaq Marketplace Rules and no audit committee member has any relationship
prohibited under Rule 4350(d)(2)(a)(1) of the Nasdaq Marketplace Rules;
(C) The Board of Directors has adopted a policy regarding the nominations process
pursuant to Rule 4350(b)(4)(B) of the Nasdaq Marketplace Rules that provides for the
nomination of directors in accordance with such rules; and
(D) The certifications pursuant to Sections 302 and 906 of the Xxxxxxxx-Xxxxx Act
of 2002 contained in the Company’s periodic reports filed with the Commission since
August 14, 2002 complied as to form in all material respects with the requirements of
such Act and the Commission’s regulations promulgated thereunder; provided, however,
that we do not give any opinion as to the accuracy of the content of such
certifications.
(xxiii) The Company and its subsidiaries conduct their respective businesses in compliance
in all material respects with all federal, state, local and foreign statutes, laws, rules,
regulations, decisions, directives and orders applicable to them (including, without
limitation, all regulations and orders of, or agreements with, the Board of Governors of the
Federal Reserve System, the FDIC, the North Carolina Commissioner of Banks, and the Equal
Credit Opportunity Act, the Fair Housing Act, the Community Reinvestment Act, the Home Mortgage
Disclosure Act, all other applicable fair lending laws or other laws relating to discrimination
and the Banks Secrecy Act and Title III of the USA Patriot Act), and neither the Company nor
its subsidiaries have received any communication from any governmental entity asserting that
the Company or any of its subsidiaries is not in compliance with any statute, law, rule,
regulation, decision, directive or order.
Nothing has come to our attention that would lead us to believe that the Registration
Statement or any amendment thereto, including the Rule 430A Information (if applicable),
(except for financial statements and schedules and other financial data included therein, as to
which we need make no statement), at the time such Registration Statement or any such amendment
became
Exhibit A-4
effective, 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 the Prospectus or any amendment or supplement thereto (except for financial statements
and schedules and other financial data included therein, as to which we need make no
statement), at the time the Prospectus was issued, at the time any such amended or supplemented
prospectus was issued or at the Closing Time, included or includes an untrue statement of a
material fact or omitted or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
In rendering such opinions, such counsel may rely as to matters of fact (but not as to
legal conclusions), to the extent they deem proper, on certificates of responsible officers of
the Company and public officials. Such opinion shall not state that it is to be governed or
qualified by, or that it is otherwise subject to, any treatise, written policy or other
document relating to legal opinions, including, without limitation, the Legal Opinion Accord of
the ABA Section of Business Law (1991).
Exhibit A-5
Exhibit B
November , 2005
XXXXX, XXXXXXXX & XXXXX, INC.
000 Xxxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
000 Xxxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Proposed Public Offering by Gateway Financial Holdings, Inc.
Dear Sirs:
The undersigned, a shareholder and an executive officer and/or director of Gateway Financial
Holdings, Inc., a North Carolina corporation (the “Company”), understands that Xxxxx,
Xxxxxxxx & Xxxxx, Inc. (the “Underwriter”) proposes to enter into an Underwriting Agreement
(the “Underwriting Agreement”) with the Company providing for the public offering of shares
(the “Securities”) of the Company’s common stock, no par value per share (the “Common
Stock”). In recognition of the benefit that such an offering will confer upon the undersigned
as a shareholder and an executive officer and/or director of the Company, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
undersigned agrees with the Underwriter that, commencing on the date hereof until 90 days from the
date of the Underwriting Agreement, the undersigned will not, without the prior written consent of
the Underwriter, 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, 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 any registration statement under the
Securities Act of 1933, as amended, with respect to any of the foregoing or (ii) enter into any
swap 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 or
transaction is to be settled by delivery 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 3 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 3 business
days after the date on which the earnings release is issued or the material news or event related
to the Company occurs.
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
outstanding as of the date hereof to a lender to the undersigned, as disclosed in writing to the
Underwriter (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
Exhibit B-1
Underwriting Agreement, where the Common Stock received upon any such exercise is 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 the Underwriter. 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 the 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 Common Stock to be sold
thereunder, the undersigned shall be released from all obligations under this Lock-up Agreement.
The undersigned also understands that, if the registration statement pursuant to which the Common
Stock is to be registered is not effective within 30 days hereof, 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.
| Very truly yours, | ||||
| Signature: | ||||
| Print Name: | ||||
Exhibit B-2
