EXHIBIT 1.1
1,400,000 SHARES
COLORADO BUSINESS BANKSHARES, INC.
COMMON STOCK
PAR VALUE $0.01 PER SHARE
UNDERWRITING AGREEMENT
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[Date of agreement]
Xxxx Xxxxxxxx Xxxxxxx
As Representative of the several Underwriters
Xxxx Xxxxxxxx Plaza
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
Colorado Business Bankshares, Inc., a Colorado corporation (the
"Company"), proposes, subject to the terms and conditions stated herein, to
issue and sell to the several Underwriters named in Schedule A hereto (the
"Underwriters"), for which you are acting as representative (the
"Representative"), an aggregate of 1,400,000 shares (the "Firm Shares") of
Common Stock, par value $0.01 per share, of the Company (the "Common Stock"),
and, at the election of the Underwriters, up to 210,000 additional shares of
Common Stock (the "Option Shares"). The Firm Shares and the Option Shares are
herein collectively called the "Shares." The Company also proposes to issue and
sell to the Representative on the "Closing Date" (as hereinafter defined), for
$100, warrants to purchase up to 100,000 shares of Common Stock as described in
Section 2 hereof (the "Warrants").
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form SB-2 (File No. 333-50037) and a
related preliminary prospectus for the registration of the Shares under the
Securities Act of 1933, as amended (the "Act"). The registration statement, as
amended at the time it was declared effective, including the information (if
any) deemed to be part thereof pursuant to Rule 430A under the Act, is herein
referred to as the "Registration Statement." The form of prospectus first filed
by the Company with the Commission pursuant to Rules 424(b) and 430A under the
Act is referred to herein as the "Prospectus." Each preliminary prospectus
included in the registration statement prior to the time it becomes effective or
filed with the Commission pursuant to Rule 424(a) under the Act is referred to
herein as a "Preliminary Prospectus." Copies of the Registration Statement,
including all exhibits and schedules thereto, any amendments thereto and all
Preliminary Prospectuses have been delivered to you.
The Company hereby confirms its agreements with respect to the
purchase of the Shares by the Underwriters as follows:
1. Representations and Warranties of the Company.
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(a) The Company represents and warrants to, and agrees with, each of
the Underwriters that:
(i) The Registration Statement has been declared effective under the
Act, and no post-effective amendment to the Registration Statement has
been filed as of the date of this Agreement. No stop order suspending
the effectiveness of the Registration Statement has been issued, and
no proceeding for that purpose has been instituted or threatened by
the Commission.
(ii) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, conformed, in all material
respects, to the requirements of the Act and the rules and regulations
of the Commission promulgated thereunder (collectively, the
"Regulations"), and did 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, in light of the
circumstances under which they were made, not misleading; provided,
however, the Company makes no representation or warranty as to
information contained in or omitted in reliance upon, and in
conformity with, written information furnished to the Company by or on
behalf of any Underwriter through the Representative expressly for use
in the preparation thereof.
(iii)The Registration Statement conforms, and the Prospectus and any
amendments or supplements thereto will conform, in all material
respects to the requirements of the Act and the Regulations. Neither
the Registration Statement nor any amendment thereto, and neither the
Prospectus nor any amendment or supplement thereto, contains or will
contain, as the case may be, any untrue statement of a material fact
or omits or will omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided,
however, that the Company makes no representation or warranty as to
information contained in or omitted from the Registration Statement or
the Prospectus, or any such amendment or supplement, in reliance upon,
and in conformity with, written information furnished to the Company
by or on behalf of any Underwriter through the Representative,
expressly for use in the preparation thereof.
(iv) The Company has been duly organized, is validly existing as a
corporation in good standing under the laws of Colorado, has the
corporate power and authority to own or lease its properties and
conduct its business as described in the Prospectus
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and is duly qualified to transact business in all jurisdictions in
which the failure so to qualify would have a material adverse effect
on the business or condition, financial or otherwise, of the Company
and its subsidiaries, taken as a whole.
(v) The Company does not directly or indirectly own any stock or other
equity interest in any corporation, partnership, joint venture,
unincorporated association or other entity other than Colorado
Business Bank, N.A. (the "Subsidiary Bank") and Colorado Business
Leasing, Inc. (the Subsidiary Bank and such other entity being
collectively referred to herein as, the "subsidiaries"). Each
subsidiary of the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and
authority to own or lease its properties and conduct its business as
described in the Prospectus, and is duly qualified to transact
business in all jurisdictions in which the failure so to qualify would
have a material adverse effect on the business or condition, financial
or otherwise, of the Company and its subsidiaries, taken as a whole.
All outstanding shares of capital stock of each of the subsidiaries of
the Company have been duly authorized and validly issued, are fully
paid and non-assessable, and are owned, directly or indirectly, by the
Company free and clear of all liens, encumbrances and security
interests, except as disclosed in the Prospectus. No options,
warrants or other rights to purchase, agreements or other obligations
to issue, or other rights to convert any obligations into, shares of
capital stock or ownership interests in any of the subsidiaries of the
Company are outstanding.
(vi)The Company and each of its subsidiaries holds and is operating in
material compliance with all licenses, approvals, certificates and
permits from governmental and regulatory authorities, foreign and
domestic, which are necessary to the conduct of its business as
described in the Prospectus and the failure to comply with which would
have a material adverse effect on the business or condition, financial
or otherwise, of the Company and its subsidiaries, taken as a whole.
Without limiting the generality of the foregoing, the Company has all
necessary approvals of the Board of Governors of the Federal Reserve
System to own the stock of its subsidiaries. Neither the Company nor
any subsidiary has received notice of or has actual knowledge of any
basis for any proceeding or action relating specifically to the
Company or its subsidiaries for the revocation or suspension of any
such approval, license, certificate or permit or any other action or
proposed action by any regulatory authority having jurisdiction over
the Company or its subsidiaries that would, if determined adversely to
the Company, have a material adverse effect on the Company or any
subsidiary.
(vii)The Company is registered as a bank holding company under the
Bank Holding Company Act of 1956, as amended. The Subsidiary Bank is a
national banking association duly organized, validly existing and in
good standing under the laws of the United States and has the
requisite corporate power to carry on its business as
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now conducted. The Subsidiary Bank is a member of the Bank Insurance
Fund of the Federal Deposit Insurance Corporation (the "FDIC"), and
its deposit accounts are insured by the FDIC to the fullest extent
provided by law. No proceeding for the termination of such insurance
is pending or, to the Company's knowledge, is threatened. Except as
disclosed in the Prospectus, neither the Company nor the Subsidiary
Bank is subject to any cease and desist order, written agreement or
memorandum of understanding with, or is a party to any commitment
letter or similar undertaking to, or is subject to any order or
directive (other than orders or directives applicable to the banking
industry as a whole) by, or is a recipient of any extraordinary
supervisory agreement letter from, or has adopted any board
resolutions (other than board resolutions required by law or
regulation and applicable to the banking industry as a whole) at the
request of, federal or state governmental authorities charged with the
supervision or regulation of national banking associations, savings
banks, banks, savings and loan companies or associations, bank holding
companies or savings and loan holding companies or engaged in the
insurance of bank deposits (collectively, the "Bank Regulators"),
neither the Company nor the Subsidiary Bank has been advised by any
Bank Regulator that it is contemplating issuing or requesting (or is
considering the appropriateness of issuing or requesting) any such
order, directive or extraordinary supervisory letter, and neither the
Company nor the Subsidiary Bank is contemplating (A) becoming a party
to any such written agreement, memorandum of understanding, commitment
letter or similar undertaking with any Bank Regulator or (B) adopting
any such board resolutions at the request of any Bank Regulator.
(viii) The outstanding shares of capital stock of the Company have
been duly authorized and validly issued and are fully paid and
nonassessable. All offers and sales by the Company of outstanding
shares of capital stock and other securities of the Company, prior, to
the date hereof, were made in material compliance with the Act and all
applicable state securities or blue sky laws. The Shares to be issued
and sold by the Company to the Underwriters pursuant to this Agreement
have been duly authorized and, when issued and paid for as
contemplated herein, will be validly issued, fully paid and
nonassessable. The shares of Common Stock to be issued upon exercise
of the Warrants, as described in Section 2 hereof, have been reserved
for issuance and duly authorized and, when issued and paid for
pursuant to the terms of the Warrants, will be validly issued, fully
paid and nonassessable. There are no preemptive rights or, except as
described in the Prospectus, other rights to subscribe for or to
purchase, or any restriction upon the voting or transfer of, any
shares of capital stock of the Company pursuant to the Company's
Articles of Incorporation, Bylaws or any agreement or other instrument
to which the Company is a party or by which the Company is bound.
Neither the filing of the Registration Statement nor the offering or
the sale of the Shares as contemplated by this Agreement gives rise to
any rights for, or relating to, the registration of any shares of
capital stock or other securities of the Company, except such rights
which have been validly waived or satisfied. Except as described in
the Prospectus, there are no outstanding options,
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warrants, agreements, contracts or other rights to purchase or acquire
from the Company shares of its capital stock. The Company has the
authorized and outstanding capital stock as set forth under the
heading "Capitalization" in the Prospectus. The outstanding capital
stock of the Company, including the Shares, conforms, and the Shares
to be issued by the Company to the Underwriters will conform, to the
description thereof contained in the Prospectus.
(ix) The financial statements, together with the related notes and
schedules as set forth in the Registration Statement, present fairly
the consolidated financial position, results of operations and changes
in financial position of the Company and its subsidiaries on the basis
stated in the Registration Statement at the indicated dates and for
the indicated periods. Such financial statements have been prepared
in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, and all
adjustments necessary for a fair presentation of results for such
periods have been made, except as otherwise stated therein and except
that the unaudited financial statements included therein have been
prepared in accordance with generally accepted accounting principles
applicable to unaudited interim financial statements. The summary and
selected financial and statistical data included in the Registration
Statement present fairly the information shown therein on the basis
stated in the Registration Statement and have been compiled on a basis
consistent with the financial statements presented therein. No other
financial statements or schedules are required to be included in the
Registration Statement or Prospectus. The allowance for loan losses
of the Bank is adequate based on management's assessment of various
factors affecting the loan portfolio, including a review of problem
loans, business conditions, historical loss experience, evaluation of
the quality of the underlying collateral and holding and disposal
costs.
(x) There is no action or proceeding pending or, to the knowledge of
the Company, threatened or contemplated against the Company or any of
its subsidiaries before any court or administrative or regulatory
agency which, if determined adversely to the Company or any of its
subsidiaries, would, individually or in the aggregate, result in a
material adverse change in the business or condition (financial or
otherwise) or prospects of the Company and its subsidiaries, taken as
a whole, except as set forth in the Registration Statement.
(xi) The Company has good and marketable title to all properties and
assets reflected as owned in the financial statements hereinabove
described (or described as owned in the Prospectus), in each case free
and clear of all liens, encumbrances and defects, except such as are
described in the Prospectus or do not materially affect the value of
such properties and assets and do not materially interfere with the
use made and proposed to be made of such properties and assets by the
Company and its subsidiaries. Any real property and buildings held
under lease by the Company and its subsidiaries are held by them under
valid, subsisting and enforceable leases with such exceptions as are
not material and do not interfere with the use made and
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proposed to be made of such property and buildings by the Company and
its subsidiaries.
(xii) Since the respective dates as of which information is given in
the Registration Statement, (A) there has not been any material
adverse change, or any development involving a prospective material
adverse change, in or affecting the condition, financial or otherwise,
of the Company and its subsidiaries, taken as a whole, or the business
affairs, management, financial position, shareholders' equity or
results of operations of the Company and its subsidiaries, taken as a
whole, whether or not occurring in the ordinary course of business,
including, without limitation, any increase in the amount of non-
performing assets of the Bank, to a level above 0.90% of the Bank's
total assets, any decrease in net interest margin for any month to a
level below 5.0%, or any material decrease in the volume of loan
originations, the amount of deposits or the amount of loans, (B) there
has not been any transaction not in the ordinary course of business
entered into by the Company or any of its subsidiaries which is
material to the Company and its subsidiaries, taken as a whole, other
than transactions described or contemplated in the Registration
Statement, (C) the Company and its subsidiaries have not incurred any
material liabilities or obligations, which are not in the ordinary
course of business or which could result in a material reduction in
the future earnings of the Company and its subsidiaries, (D) the
Company and its subsidiaries have not sustained any material loss or
interference with their respective businesses or properties from fire,
flood, windstorm, accident or other calamity, whether or not covered
by insurance, (E) there has not been any change in the capital stock
of the Company (other than upon the exercise of options and warrants
described in the Registration Statement), or any material increase in
the total borrowings of the Company (as calculated under the heading
"Capitalization" in the Prospectus), (F) there has not been any
declaration or payment of any dividends or any distributions of any
kind with respect to the capital stock of the Company, other than any
dividends or distributions described or contemplated in the
Registration Statement, or (G) there has not been any issuance of
warrants, options, convertible securities or other rights to purchase
or acquire capital stock of the Company.
(xiii) Neither the Company nor any of its subsidiaries is in violation
of, or in default under, its Articles of Incorporation or Bylaws, or
any statute, or any rule, regulation, order, judgment, decree or
authorization of any court or governmental or administrative agency or
body having jurisdiction over the Company or any of its subsidiaries
or any of their properties, or any indenture, mortgage, deed of trust,
loan agreement, lease, franchise, license 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 are bound or to which any property or
assets of the Company or any of its subsidiaries is subject, which
violation or default would have a material adverse effect on the
business, condition (financial or otherwise) or prospects of the
Company and its subsidiaries, taken as a whole.
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(xiv) The issuance and sale of the Shares by the Company and the
compliance by the Company with all of the provisions of this Agreement
and the consummation of the transactions contemplated herein will not
violate any provision of the Articles of Incorporation or Bylaws of
the Company or any of its subsidiaries or any statute or any order,
judgment, decree, rule, regulation or authorization of any court or
governmental or administrative agency or body having jurisdiction over
the Company or any of its subsidiaries or any of their properties, and
will not conflict with, result in a breach or violation of, or
constitute, either by itself or upon notice or passage of time or
both, a default under any indenture, mortgage, deed of trust, loan
agreement, lease, franchise, license or other agreement or instrument
to which the Company or any of its subsidiaries is a party or by which
the Company or any of its subsidiaries is bound or to which any
property or assets of the Company or any of its subsidiaries is
subject. No approval, consent, order, authorization, designation,
declaration or filing by or with any court or governmental agency or
body is required for the execution and delivery by the Company of this
Agreement and the consummation of the transactions herein
contemplated, except as may be required under the Act or any state
securities or blue sky laws.
(xv) The Company has the power and authority to enter into this
Agreement and the Warrants and to authorize, issue and sell the Shares
it will sell hereunder as contemplated hereby and the shares of Common
Stock to be issued upon exercise of the Warrants. This Agreement and
the Warrants have been duly and validly authorized, executed and
delivered by the Company.
(xvi) Deloitte & Touche LLP, Xxxxx, Xxxxx & Xxxxxx and McGladrey &
Xxxxxx, LLP, which each have certified certain of the financial
statements filed with the Commission as part of the Registration
Statement, are independent public accountants as required by the Act
and the Regulations.
(xvii) In July 1996, Xxxxx, Xxxxx & Xxxxxx acquired the office of
McGladrey & Xxxxxx, LLP, that had previously acted as the Company's
independent public accountants and thereby replaced McGladrey &
Xxxxxx, LLP, as the Company's independent public accountants. Xxxxx,
Xxxxx & Xxxxxx was replaced as the Company's auditors by action of the
Board of Directors in July 1997. The accountants' reports on the
financial statements of the Company for each of the past two fiscal
years did not contain in adverse opinion or a disclaimer of opinion,
and was not qualified as to uncertainty, audit scope, or accounting
principles. During the two most recent fiscal years, there were no
disagreements between the Company and either McGladrey & Xxxxxx, LLP
or Xxxxx, Xxxxx & Xxxxxx on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or
procedure.
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(xviii) The Company has not taken and will not take, directly or
indirectly, any action designed to, or which has constituted, or which
might reasonably be expected to cause or result in, stabilization or
manipulation of the price of the Common Stock.
(xix) The Company's registration statement pursuant to Section 12(g)
of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), has been declared effective by the Commission; and the Shares
have been approved for designation upon notice of issuance on the
Nasdaq National Market under the symbol "COBZ."
(xx) The Company has obtained and delivered to the Representative
written agreements, in form and substance satisfactory to the
Representative, of each of its directors and executive officers, each
person or entity who owns or has the right to acquire shares
representing one percent (1%) or more, on a fully diluted basis, of
the Company's outstanding shares of Common Stock, and each Selected
Purchaser, as referred in Section 3 hereof that no offer, sale,
assignment, transfer, encumbrance, contract to sell, grant of an
option to purchase or other disposition of any Common Stock or other
capital stock of the Company will be made for a period of 180 days
after the date of the Prospectus, directly or indirectly, by such
holder otherwise than hereunder or with the prior written consent of
the Representative.
(xxi) The Company has not distributed and will not distribute any
prospectus or other offering material in connection with the offering
and sale of the Shares other than any Preliminary Prospectus or the
Prospectus or other materials permitted by the Act to be distributed
by the Company.
(xxii) The Company is in compliance with all provisions of Florida
Statutes Section 517.075 (Chapter 92-198, laws of Florida). The
Company does not do any business, directly or indirectly, with the
government of Cuba or with any person or entity located in Cuba.
(xxiii) The Company and its subsidiaries have filed all federal,
state, local and foreign tax returns or reports required to be filed,
and have paid in full all taxes indicated by said returns or reports
and all assessments received by it or any of them to the extent that
such taxes have become due and payable, except where the Company and
its subsidiaries are contesting in good faith such taxes and
assessments. The Company and the Subsidiary Bank have also filed all
required applications, reports, returns and other documents and
information with all Bank Regulators, and no such application, report,
return or other document or information contained, as of the date it
was filed, an untrue statement of a material fact required to be
stated therein or necessary to make the statements therein not
misleading when made or failed to comply with the applicable
requirements of the Bank Regulator with which such application,
report, return, document or information was filed.
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(xxiv) The Company and each of its subsidiaries owns or licenses all
patents, patent applications, trademarks, service marks, tradenames,
trademark registrations, service xxxx registrations, copyrights,
licenses, inventions, trade secrets and other similar rights necessary
for the conduct of its business as described in the Prospectus. The
Company has no knowledge of any infringement by it or its subsidiaries
of any patents, patent applications, trademarks, service marks,
tradenames, trademark registrations, service xxxx registrations,
copyrights, licenses, inventions, trade secrets or other similar
rights of others, and neither the Company nor any of its subsidiaries
has received any notice or claim of conflict with the asserted rights
of others with respect any of the foregoing.
(xxv) The Company is not, and upon completion of the sale of Shares
contemplated hereby will not be, required to register as an
"investment company" under the Investment Company Act of 1940, as
amended.
(xxvi) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (A) transactions are
executed in accordance with management's general or specific
authorization; (B) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and the rules of Bank Regulators, and
to maintain accountability for assets; (C) access to records is
permitted only in accordance with management's general or specific
authorization; and (D) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(xxvii) Other than as contemplated by this Agreement, the Company has
not incurred any liability for any finder's or broker's fee or agent's
commission in connection with the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby.
(xxviii) The minute books and stock record books of the Company and
the subsidiaries are complete and correct and accurately reflect all
material actions taken at meetings of the shareholders and directors
of the Company and the subsidiaries, and of all committees thereof,
including, without limitation, the loan committees and the audit
committees of the Subsidiary Bank, since September 1, 1994, and all
issuances and transfers of any shares of the capital stock of the
Company and the subsidiaries since September 1, 1994.
(xxix) No material labor dispute with the employees of the Company or
any of its subsidiaries exists or, to the Company's knowledge, is
imminent.
(xxx) The Company and its subsidiaries maintain insurance of the types
and in the amounts generally deemed adequate in their respective
businesses and consistent
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with insurance coverage maintained by similar companies and
businesses, and as required by the rules and regulations of all
governmental agencies having jurisdiction over the Company or the
Subsidiary Bank, all of which insurance is in full force and effect.
(xxxi) Neither the Company nor its subsidiaries have, directly or
indirectly, at any time during the past five years (A) made any
unlawful contribution to any candidate for public office, or failed to
disclose fully any contribution in violation of law, or (B) made any
payment to any federal or state governmental officer or official, or
other person charged with similar public or quasi-public duties, other
than payments required or permitted by the laws of the United States
or any jurisdiction thereof.
(b) Any certificate signed by any officer of the Company and delivered
to the Representative or counsel to the Underwriters shall be deemed to be
a representation and warranty of the Company to each Underwriter as to the
matters covered thereby.
2. Purchase, Sale and Delivery of Shares. On the basis of the
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representations, warranties and covenants contained herein, and subject to the
terms and conditions herein set forth, the Company agrees to sell to each
Underwriter and each Underwriter agrees, severally and not jointly, to purchase
from the Company, at a price of $ per share ($___ per share for Firm Shares
sold to "Selected Purchasers" as provided in Section 3), the number of Firm
Shares set forth opposite the name of each Underwriter in Schedule A hereto,
subject to adjustments in accordance with Section 8 hereof.
In addition, on the basis of the representations, warranties and
covenants herein contained and subject to the terms and conditions herein set
forth, the Company hereby grants to the several Underwriters an option to
purchase, at their election, up to 210,000 Option Shares at a price of $_____
per share, for the sole purpose of covering overallotments in the sale of the
Firm Shares. The option granted hereby may be exercised in whole or in part, but
only once, and at any time upon written notice given within 30 days after the
date of this Agreement, by you, as Representative of the several Underwriters,
to the Company setting forth the number of Option Shares as to which the several
Underwriters are exercising the option and the time and date at which
certificates are to be delivered. If any Option Shares are purchased, each
Underwriter agrees, severally and not jointly, to purchase that portion of the
number of Option Shares as to which such election shall have been exercised
(subject to adjustment to eliminate fractional shares) determined by multiplying
such number of Option Shares by a fraction the numerator of which is the maximum
number of Option Shares which such Underwriter is entitled to purchase as set
forth opposite the name of such Underwriter in Schedule A hereto and the
denominator of which is the maximum number of Option Shares which all of the
Underwriters are entitled to purchase hereunder. The time and date at which
certificates for Option Shares are to be delivered shall be determined by the
Representative but shall not be earlier than two or later than ten full business
days after the exercise of such option, and shall not in any event be prior to
the Closing Date. If the date of exercise of the option is three or more
10
full days before the Closing Date, the notice of exercise shall set the Closing
Date as the Option Closing Date.
On the Closing Date, the Company will issue and sell for nominal
consideration to the Representative or its designee, consistent with all
applicable state and federal securities laws and regulations and all applicable
regulations of the NASD, Warrants to purchase 100,000 shares of the Common
Stock. Such Warrants shall have a per share exercise price equal to 120% of the
initial public offering price per share, shall be exercisable over a four-year
period commencing one year from the Closing Date and shall be in substantially
the form attached hereto as Exhibit A. Such Warrants shall be dated, executed
and delivered as of the Closing Date.
Certificates in definitive form for the Shares to be purchased by each
Underwriter hereunder, and in such denominations and registered in such names as
Xxxx Xxxxxxxx Xxxxxxx may request upon at least 48 hours' prior notice to the
Company, shall be delivered by or on behalf of the Company to you for the
account of such Underwriter at such time and place as shall hereafter be
designated by the Representative, against payment by such Underwriter or on its
behalf of the purchase price therefor by certified or official bank check or
checks, payable to the order of the Company in next day funds. The time and
date of such delivery and payment shall be, with respect to the Firm Shares,
8:30 a.m. Denver time, at the offices of Xxxxxxx & Xxxxxx L.L.C., 000 00xx
Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000, on , 1998, or such other time
and date as you and the Company may agree upon in writing, such time and date
being herein referred to as the "Closing Date," and, with respect to the Option
Shares, at the time and on the date specified by you in the written notice given
by you of the Underwriters' election to purchase the Option Shares, or such
other time and date as you and the Company may agree upon in writing, such time
and date being referred to herein as the "Option Closing Date." Such
certificates will be made available for checking and packaging at least twenty-
four hours prior to the Closing Date or the Option Closing Date, as the case may
be, at a location as may be designated by you.
3. Offering by Underwriters. It is understood that the several
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Underwriters propose to make a public offering of the Firm Shares as soon as the
Representative deems it advisable to do so. The Firm Shares are to be initially
offered to the public at the initial public offering price of $______ per share.
To the extent, if at all, that any Option Shares are purchased pursuant to
Section 2 hereof, the Underwriters will offer such Option Shares to the public
on the foregoing terms.
It is understood that 90,000 Firm Shares will be reserved by the
Representative for offer and sale upon the terms and conditions set forth in the
Prospectus to directors, executive officers and key employees of the Company and
its subsidiaries (each, a "Selected Purchaser"). The price paid by the
Underwriters for Firm Shares under Section 2 shall be $______ per share with
respect to sales to Selected Purchasers. Any of such Firm Shares which are not
purchased by such Selected Purchasers will be offered by the Representative to
the public upon the terms and conditions set forth in the Prospectus and will be
sold to the Underwriters for a price of $_____ per share.
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4. Covenants of the Company. The Company covenants and agrees with
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the several Underwriters that:
(a) The Company will prepare and timely file with the Commission
under Rule 424(b) under the Act a Prospectus containing information
previously omitted at the time of effectiveness of the Registration
Statement in reliance on Rule 430A under the Act, and will not file
any amendment to the Registration Statement or supplement to the
Prospectus of which the Representative shall not previously have been
advised and furnished with a copy or as to which the Representative
shall have objected in writing promptly after reasonable notice
thereof or which is not in compliance with the Act or the Regulations.
(b) The Company will advise the Representative promptly of any
request of the Commission for amendment of the Registration Statement
or for any supplement to the Prospectus or for any additional
information, or of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the use
of the Prospectus, of the suspension of the qualification of the
Shares for offering or sale in any jurisdiction, or of the institution
or threatening of any proceedings for that purpose, and the Company
will use its best efforts to prevent the issuance of any such stop
order preventing or suspending the use of the Prospectus or suspending
such qualification and to obtain as soon as possible the lifting
thereof, if issued.
(c) To the extent required of issuers listed on the Nasdaq
National Market, the Company will endeavor to qualify the Shares for
sale under the securities laws of such jurisdictions as the
Representative may reasonably have designated in writing and will, or
will cause counsel to, make such applications, file such documents,
and furnish such information as may be reasonably requested by the
Representative, provided that the Company shall not be required to
qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction where it is not now so
qualified or required to file such a consent. The Company will, from
time to time, prepare and file such statements, reports and other
documents as are or may be required to continue such qualifications in
effect for so long a period as the Representative may reasonably
request for distribution of the Shares.
(d) The Company will furnish the Underwriters with as many copies
of any Preliminary Prospectus as the Representative may reasonably
request and, during the period when delivery of a prospectus is
required under the Act, the Company will furnish the Underwriters with
as many copies of the Prospectus in final form, or as thereafter
amended or supplemented, as the Representative may, from time to time,
reasonably request. The Company will deliver to the Representative,
at or before the Closing Date, two signed copies of the Registration
Statement and all amendments
12
thereto, including all exhibits filed therewith, and will deliver to
the Representative such number of copies of the Registration
Statement, without exhibits, and of all amendments thereto, as the
Representative may reasonably request.
(e) If, during the period in which a prospectus is required by
law to be delivered by an Underwriter or dealer, any event shall occur
as a result of which the Prospectus as then amended or supplemented
would include an untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements therein,
in light of the circumstances existing at the time the Prospectus is
delivered to a purchaser, not misleading, or if for any other reason
it shall be necessary at any time to amend or supplement the
Prospectus to comply with any law, the Company promptly will prepare
and file with the Commission an appropriate amendment to the
Registration Statement or supplement to the Prospectus so that the
Prospectus as so amended or supplemented will not include an untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein in light of the
circumstances existing when it is so delivered, not misleading, or so
that the Prospectus will comply with law. In case any Underwriter is
required to deliver a prospectus in connection with sales of any
Shares at any time nine months or more after the effective date of the
Registration Statement, upon the request of the Representative but at
the expense of such Underwriter, the Company will prepare and deliver
to such Underwriter as many copies as the Representative may request
of an amended or supplemented Prospectus complying with Section
10(a)(3) of the Act.
(f) The Company will make generally available to its security
holders, as soon as it is practicable to do so, but in any event not
later than 18 months after the effective date of the Registration
Statement, an earnings statement (which need not be audited) in
reasonable detail, covering a period of at least 12 consecutive months
beginning after the effective date of the Registration Statement,
which earnings statement shall satisfy the requirements of Section
11(a) of the Act and Rule 158 thereunder and will advise you in
writing when such statement has been so made available.
(g) The Company will, for a period of five years from the Closing
Date, deliver to the Representative copies of its annual report and
copies of all other documents, reports and information furnished by
the Company to its security holders or filed with any securities
exchange pursuant to the requirements of such exchange or with the
Commission pursuant to the Act or the Exchange Act.
(h) No offering, sale or other disposition of any Common Stock or
other capital stock of the Company, or warrants, options, convertible
securities or other rights to acquire such Common Stock or other
capital stock (other than pursuant to employee stock option plans,
outstanding options or on the conversion of convertible
13
securities outstanding on the date of this Agreement) will be made for
a period of 180 days after the date of this Agreement, directly or
indirectly, by the Company otherwise than hereunder or with the prior
written consent of the Representative.
(i) The Company will apply the net proceeds from the sale of the
Shares to be sold by it hereunder substantially in accordance with the
purposes set forth under "Use of Proceeds" in the Prospectus. The
Company will invest such proceeds pending their use in such a manner
that, upon completion of such investment, the Company will not be an
"investment company" as defined in the Investment Company Act of 1940,
as amended.
(j) The Company will use its best efforts to maintain the
designation of the Common Stock on the Nasdaq National Market.
(k) The Company will file with the Commission such information
with respect to the use of proceeds from the sale of the shares as may
be required pursuant to Rule 463 under the Act.
5. Costs and Expenses. Whether or not the transactions contemplated
------------------
by this Agreement are consummated, the Company will pay (directly or by
reimbursement) all costs, expenses and fees incident to the performance of the
obligations of the Company under this Agreement, including, without limiting the
generality of the foregoing, the following: accounting fees of the Company; the
fees and disbursements of counsel for the Company; the cost of preparing,
printing and filing of the Registration Statement, Preliminary Prospectuses and
the Prospectus and any amendments and supplements thereto and the printing,
mailing and delivery to the Underwriters and dealers of copies thereof and of
this Agreement, the Agreement Among Underwriters, any Selected Dealers
Agreement, the Underwriters' Selling Memorandum, the Invitation Letter, the
Power of Attorney, the Blue Sky Memorandum and any supplements or amendments
thereto (excluding, except as provided below, fees and expenses of counsel to
the Underwriters); the filing fees of the Commission; the filing fees and
expenses (including legal fees and disbursements of counsel for the
Underwriters) incident to securing any required review by the NASD of the terms
of the sale of the Shares; listing fees, if any, transfer taxes and the
expenses, including the fees and disbursements of counsel for the Underwriters
incurred in connection with the qualification of the Shares under state
securities or Blue Sky laws; the fees and expenses incurred in connection with
the designation of the Shares on the Nasdaq National Market; the costs of
preparing stock certificates; the costs and fees of any registrar or transfer
agent and all other costs and expenses incident to the performance of its
obligations hereunder which are not otherwise specifically provided for in this
Section 5. In addition, the Company will pay all travel and lodging expenses
incurred by management of the Company in connection with any informational "road
show" meetings held in connection with the offering and will also pay for the
preparation of all materials used in connection with such meetings. The Company
shall not, however, be required to pay for any of the Underwriters' expenses
(other than those related to qualification of the Shares under state securities
or Blue Sky laws and those incident to securing any required review by the NASD
of the
14
terms of the sale of the shares) except that, if this Agreement shall not
be consummated because the conditions in Section 6 hereof are not satisfied, or
because this Agreement is terminated by the Representative pursuant to Section
10(a) hereof, or by reason of any failure, refusal or inability on the part of
the Company to perform any undertaking or satisfy any condition of this
Agreement or to comply with any of the terms hereof on its part to be performed,
unless such failure to satisfy said condition or to comply with said terms shall
be due to the default or omission of any Underwriter, then the Company shall
promptly upon request by the Representative reimburse the several Underwriters
for all appropriately itemized out-of-pocket accountable expenses, including
fees and disbursements of counsel, incurred in connection with investigating,
marketing and proposing to market the Shares or in contemplation of performing
their obligations hereunder; but the Company shall not in any event be liable to
any of the several Underwriters for damages on account of loss of anticipated
profits from the sale by them of the Shares.
6. Conditions of Obligations of the Underwriters. The several
---------------------------------------------
obligations of the Underwriters to purchase the Firm Shares on the Closing Date
and the Option Shares, if any, on the Option Closing Date, are subject to the
condition that all representations and warranties of the Company contained
herein are true and correct, at and as of the Closing Date or the Option Closing
Date, as the case may be, the condition that the Company shall have performed
all of its covenants and obligations hereunder and to the following additional
conditions:
(a) The Prospectus shall have been filed with the Commission pursuant
to Rule 424(b) within the applicable time period prescribed for such filing
by the Regulations and in accordance with Section 4(a) hereof; no stop
order suspending the effectiveness of the Registration Statement, as
amended from time to time, or any part thereof shall have been issued, and
no proceedings for that purpose shall have been initiated or threatened, by
the Commission; and all requests for additional information on the part of
the Commission shall have been complied with to the reasonable satisfaction
of the Representative.
(b) The Representative shall have received on the Closing Date or the
Option Closing Date, as the case may be, the opinion of Xxxxxx & Whitney
LLP, counsel for the Company, dated the Closing Date or the Option Closing
Date, as the case may be, addressed to the Underwriters, to the effect
that:
(i) The Company has been duly organized and is validly existing
as a corporation in good standing under the laws of Colorado, with
corporate power and authority to own or lease its properties and
conduct its business as described in the Prospectus.
(ii) Based on such counsel's reasonable reliance upon the Company's
certification, the Company does not own any stock or other equity
interest in any corporation, partnership, joint venture,
unincorporated association or other entity other than the Subsidiary
Bank and Colorado Business Leasing, Inc. Each 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, with corporate power
15
and authority to own or lease its properties and conduct its business
as described in the Prospectus. The Company owns all of the issued and
outstanding capital stock of the Subsidiary Bank and 80% of all of the
issued and outstanding capital stock of Colorado Business Leasing,
Inc. The outstanding shares of capital stock of each such subsidiary
have been duly authorized and validly issued, are fully paid and
nonassessable and are owned, directly or indirectly, by the Company,
free and clear of all liens, encumbrances and security interests,
other than security interests specifically disclosed in the
Prospectus. To the knowledge of such counsel, no options, warrants or
other rights to purchase, agreements or other obligations to issue or
other rights to convert any obligations into any shares of capital
stock or ownership interests in each such subsidiary are outstanding.
(iii) The Company has authorized and outstanding capital stock as
described in the Prospectus. The outstanding shares of the Company's
capital stock have been duly authorized and validly issued and are
fully paid and nonassessable. The form of certificate for the Shares
is in due and proper form and complies with all applicable statutory
requirements. The Shares to be issued and sold by the Company
pursuant to this Agreement have been duly authorized and, when issued
and paid for as contemplated herein, will be validly issued, fully
paid and nonassessable. To the knowledge of such counsel, no
preemptive or other similar subscription rights of shareholders of the
Company, or of holders of warrants, options, convertible securities or
other rights to acquire shares of capital stock of the Company, exist
with respect to any of the Shares or the issue and sale thereof. To
the knowledge of such counsel, no rights to register outstanding
shares of the Company's capital stock, or shares issuable upon the
exercise of outstanding warrants, options, convertible securities or
other rights to acquire shares of such capital stock, exist which have
not been validly exercised or waived with respect to the Registration
Statement. The capital stock of the Company, including the Shares,
conforms in all material respects to the description thereof contained
in the Prospectus.
(iv) The Registration Statement has become effective under the Act
and, to the knowledge of such counsel, no stop order proceedings with
respect thereto have been instituted or are pending or threatened by
the Commission.
(v) The Registration Statement, the Prospectus, and each amendment or
supplement thereto comply as to form in all material respects with the
requirements of the Act and the Regulations (except that such counsel
need express no opinion as to the financial statements and related
schedules included therein).
(vi) The statements (A) in the Prospectus under the caption
"Description of Capital Stock" and (B) in the Registration Statement
in Item 24 insofar as such statements constitute a summary of matters
of law, are, in all material respects, accurate summaries and fairly
present the information called for with respect to such matters.
16
(vii) Such counsel does not know of any contracts, agreements,
documents or instruments required to be filed as exhibits to the
Registration Statement, incorporated by reference into the Prospectus,
or described in the Registration Statement or the Prospectus which are
not so filed, incorporated by reference or described as required; and
insofar as any statements in the Registration Statement or the
Prospectus constitute summaries of any contract, agreement, document
or instrument to which the Company is a party, such statements are, in
all material respects, accurate summaries and fairly present the
information called for with respect to such matters.
(viii) Such counsel knows of no legal or governmental proceeding,
pending or threatened, before any court or administrative body or
regulatory agency, to which the Company or any of its subsidiaries is
a party or to which any of the properties of the Company or any of its
subsidiaries is subject that are required to be described in the
Registration Statement or Prospectus and are not so described, or
statutes or regulations that are required to be described in the
Registration Statement or the Prospectus that are not so described.
(ix) The execution and delivery of this Agreement and the consummation
of the transactions herein contemplated do not and will not conflict
with or result in a violation of or default under the charter or
bylaws of the Company or any of its subsidiaries, or under any
statute, permit, judgment, decree, order, rule or regulation known to
such counsel of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of
their properties, or under any lease, contract, indenture, mortgage,
loan agreement or other agreement or other instrument or obligation
known to such counsel to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries is bound
or to which any property or assets of the Company or any of its
subsidiaries is subject, except such agreements, instruments or
obligations with respect to which valid consents or waivers have been
obtained by the Company or any of its subsidiaries.
(x) The Company has the corporate power and authority to enter into
this Agreement and to authorize, issue and sell the Shares as
contemplated hereby. This Agreement has been duly and validly
authorized, executed and delivered by the Company.
(xi) No approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or
other governmental body is necessary in connection with the execution
and delivery of this Agreement and the consummation of the
transactions herein contemplated (other than as may be required by
state securities and blue sky laws, as to which such counsel need
express no opinion) except such as have been obtained or made,
specifying the same.
17
(xii) The Company is not, and immediately upon completion of the
sale of Shares contemplated hereby will not be, required to register
as an "investment company" under the Investment Company Act of 1940,
as amended.
(xiii) Such counsel has no reason to believe that, as of its effective
date, the Registration Statement or any further amendment thereto made
by the Company prior to the Closing Date or the Option Closing Date,
as the case may be (other than the financial statements and related
schedules therein, as to which such counsel need express no opinion),
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading or that, as of its date, the
Prospectus or any further amendment or supplement thereto made by the
Company prior to the Closing Date or the Option Closing Date, as the
case may be (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion), contained
an untrue statement of a material fact or omitted to state a material
fact necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading or that, as of
the Closing Date or the Option Closing Date, as the case may be,
either the Registration Statement or the Prospectus or any further
amendment or supplement thereto made by the Company prior to the
Closing Date or the Option Closing Date, as the case may be (other
than the financial statements and related schedules therein, as to
which such counsel need express no opinion), contains an untrue
statement of a material fact or omits to state a material fact
necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading; and they do not
know of any amendment to the Registration Statement required to be
filed.
(xiv) The Subsidiary Bank is a national banking association duly
organized, validly existing, and in good standing under the laws of
the United States and has the requisite corporate power to carry on
its business as now conducted. The Company has all necessary power
and authority to own the Subsidiary Bank. The Company and the
Subsidiary Bank have all necessary consents and approvals under
applicable federal and state laws and regulations relating to banks
and bank holding companies to own their respective assets and carry on
their respective businesses as currently conducted.
(xv) The Company has the corporate power and authority to enter into
the Warrants and to authorize, issue and sell the shares of Common
Stock issuable upon exercise of the Warrants. The Warrants have been
duly authorized, executed and delivered by the Company and constitutes
the valid and binding obligation of the Company enforceable in
accordance with its terms, except as enforceability thereof may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws of general application affecting
creditors' rights generally, and by
18
general principles of equity. The shares of Common Stock issuable upon
exercise of the Warrants have been duly authorized and reserved for
issuance upon exercise of the Warrants, and, upon exercise of the
Warrants and receipt by the Company of the consideration for such
shares in accordance with the terms thereof, such shares will be
validly issued, fully paid and nonassessable.
(xvi) The Company is duly registered as a bank holding company under
the Bank Holding Company Act of 1956, as amended.
(xvii) The Company has all necessary approvals of the Board of
Governors to own the stock of its subsidiaries. Except as disclosed in
the Prospectus, based on such counsel's reasonable reliance on the
Company's certification, neither the Company nor the Subsidiary Bank
is subject to any cease and desist order, written agreement or
memorandum of understanding with, or are a party to any commitment
letter or similar undertaking to, or are subject to any order or
directive (other than orders or directives applicable to the banking
industry as a whole) by, or is a recipient of any extraordinary
supervisory agreement letter from, or has adopted any board
resolutions (other than board resolutions required by law or
regulation and applicable to the banking industry as a whole) at the
request of any of the Bank Regulators, and based on such counsel's
reasonable reliance at the Company's certification, neither the
Company nor the Subsidiary Bank has been advised by any of the Bank
Regulators that it is contemplating issuing or requesting (or is
considering the appropriateness of issuing or requesting) any such
order, directive, or extraordinary supervisory letter, and neither the
Company nor the Subsidiary Bank is contemplating (A) becoming a party
to any such written agreement, memorandum of understanding, commitment
letter or similar undertaking with any Bank Regulator or (B) adopting
any such board resolutions at the request of any Bank Regulator. Based
on such Counsel's reasonable reliance on the Company's certification,
neither the Company nor any subsidiary has received notice of or has
knowledge of any basis for any proceeding or action relating
specifically to the Company or its subsidiaries for the revocation or
suspension of any such consent, authorization, approval, order,
license, certificate or permit or any other action or proposed action
by any regulatory authority having jurisdiction over the Company or
its subsidiaries that would have a material effect on the Company or
any subsidiary.
(xviii) For purposes of the opinion of counsel described in this
Section 6(b), "based on such counsel's reasonable reliance upon the
Company's certification" means that such counsel has relied solely
upon a certification signed by a duly authorized officer of the
Company and to which such counsel has no actual knowledge to the
contrary.
(c) The Representative shall have received from Xxxxxxx & Xxxxxx, L.L.C.,
counsel for the Underwriters, an opinion dated the Closing Date or the
Option Closing Date, as the case may be, with respect to the incorporation
of the Company, the validity of the Shares, the
19
Registration Statement, the Prospectus, and other related matters as the
Representative may reasonably request, and such counsel shall have received
such papers and information as they may reasonably request to enable them
to pass upon such matters.
(d) The Representative shall have received on each of the date hereof, the
Closing Date and the Option Closing Date, as the case may be, a signed
letter, dated as of the date hereof, the Closing Date or the Option Closing
Date, as the case may be, in form and substance satisfactory to the
Representative, from Deloitte & Touche LLC, to the effect that they are
independent public accountants with respect to the Company and its
subsidiaries within the meaning of the Act and the Regulations and
containing statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in the
Registration Statement and the Prospectus.
(e) Subsequent to the execution and delivery of this Agreement and prior
to the Closing Date or the Option Closing Date, as the case may be, there
shall not have been any change or any development involving a prospective
change, in or affecting the general affairs, management, financial
position, shareholders' equity or results of operations of the Company and
its subsidiaries, otherwise than as set forth or contemplated in the
Prospectus, the effect of which, in your judgment, is material and adverse
to the Company and makes it impracticable or inadvisable to proceed with
the public offering or the delivery of the Shares being delivered at the
Closing Date or the Option Closing Date, as the case may be, on the terms
and in the manner contemplated in the Prospectus.
(f) The Representative shall have received on the Closing Date or the
Option Closing Date, as the case may be, a certificate or certificates of
the chief executive officer and the chief financial officer of the Company
to the effect that, as of the Closing Date or the Option Closing Date, as
the case may be, each of them severally represents as follows:
(i) The Prospectus was filed with the Commission pursuant to Rule
424(b) within the applicable period prescribed for such filing by the
Regulations and in accordance with Section 4 of this Agreement; no
stop order suspending the effectiveness of the Registration Statement
has been issued, and no proceedings for such purpose have been
initiated or are, to his knowledge, threatened by the Commission.
(ii) The representations and warranties of the Company set forth in
Section 1 of this Agreement are true and correct at and as of the
Closing Date or the Option Closing Date, as the case may be, and the
Company has performed all of its obligations under this Agreement to
be performed at or prior to the Closing Date or the Option Closing
Date, as the case may be.
(g) The Company shall have furnished to the Representative such further
certificates and documents as the Representative may reasonably have
requested.
20
The opinions and certificates mentioned in this Agreement shall be
deemed to be in compliance with the provisions hereof only if they are in all
material respects reasonably satisfactory to the Representative and to Xxxxxxx &
Xxxxxx L.L.C., counsel for the Underwriters.
If any of the conditions hereinabove provided for in this Section 6
shall not have been fulfilled when and as required by this Agreement to be
fulfilled, the obligations of the Underwriters hereunder may be terminated by
the Representative by notifying the Company of such termination in writing or by
telegram at or prior to the Closing Date or the Option Closing Date, as the case
may be. In such event, the Company and the Underwriters shall not be under any
obligation to each other (except to the extent provided in Sections 5 and 7
hereof).
7. Indemnification.
---------------
(a) The Company agrees to indemnify and hold harmless each
Underwriter, each officer and director thereof, and each person, if any,
who controls any Underwriter within the meaning of the Act, against any
losses, claims, damages or liabilities to which such Underwriter or such
persons may became subject under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement, any Preliminary Prospectus or the Prospectus, including any
amendments or supplements thereto, (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary
to make the statements therein not misleading in light of the circumstances
under which they were made, or (iii) any act or failure to act or any
alleged act or failure to act by any Underwriter in connection with or
relating in any manner to, the Common Stock or the offering contemplated
hereby, which is made in reliance upon any statement or omission of the
type referred to in clause (i) or (ii) above, and will reimburse each
Underwriter and each such controlling person for any legal or other
expenses reasonably incurred by such Underwriter or such controlling person
in connection with investigating or defending any such action or claim as
such expenses are incurred; provided, however, that the Company shall not
be liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or alleged
untrue statement, or omission or alleged omission, made in the Registration
Statement, any Preliminary Prospectus or the Prospectus, including any
amendments or supplements thereto, in reliance upon and in conformity with
written information furnished to the Company by any Underwriter through the
Representative specifically for use therein; and provided, further, that
the Company shall not be liable in the case of any matter covered by clause
(iii) above to the extent that it is determined in a final judgment by a
court of competent jurisdiction that such losses, claims, damages or
liabilities resulted directly from any such acts or failures to act
undertaken or omitted to be taken by such Underwriter through its gross
negligence or willful misconduct.
21
(b) Each Underwriter agrees to indemnify and hold harmless the
Company, each of its directors, each of its officers who have signed the
Registration Statement and each person, if any, who controls the Company
within the meaning of the Act, against any losses, claims, damages or
liabilities to which the Company or any such director, officer or
controlling person may become subject under the Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions or proceedings
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement, any Preliminary Prospectus, the Prospectus or any amendment or
supplement thereto, or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading in the
light of the circumstances under which they were made, and will reimburse
any legal or other expenses reasonably incurred by the Company or any such
director, officer or controlling person in connection with investigating or
defending any such action or claim as such expenses are incurred; provided,
however, that each Underwriter will be liable in each case to the extent,
but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission has been made in the Registration
Statement, any Preliminary Prospectus, the Prospectus or any such amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company by any Underwriter through the Representative
specifically for use therein.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity or
contribution may be sought pursuant to this Section 7, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing. No
indemnification provided for in Section 7(a) or (b) or contribution
provided for in Section 7(d) shall be available with respect to a
proceeding to any party who shall fail to give notice of such proceeding as
provided in this Section 7(c) if the party to whom notice was not given was
unaware of the proceeding to which such notice would have related and was
prejudiced by the failure to give such notice, but the failure to give such
notice shall not relieve the indemnifying party or parties from any
liability which it or they may have to the indemnified party otherwise than
on account of the provisions of Section 7(a), (b) or (d). In case any such
proceeding shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
shall wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party and shall pay as incurred the fees and disbursements of
such counsel related to such proceeding. In any such proceeding, any
indemnified party shall have the right to retain its own counsel at its own
expense. Notwithstanding the foregoing, the indemnifying party shall pay
promptly as incurred the reasonable fees and expenses of the counsel
retained by the indemnified party in the event (i) the indemnifying party
and the indemnified party shall have mutually agreed to the retention of
such counsel or (ii) the named parties to any such proceeding (including
any impleaded parties) include both the
22
indemnifying party and the indemnified party and the indemnified party
shall have reasonably concluded that there may be a conflict between the
positions of the indemnifying party and the indemnified party in conducting
the defense of any such action or that there may be legal defenses
available to it or other indemnified parties which are different from or
additional to those available to the indemnifying party. It is understood
that the indemnifying party shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm at any time for all such
indemnified parties. Such firm shall be designated in writing by the
Representative and shall be reasonably satisfactory to the Company in the
case of parties indemnified pursuant to Section 7(a) and shall be
designated in writing by the Company and shall be reasonably satisfactory
to the Representative in the case of parties indemnified pursuant to
Section 7(b). The indemnifying party shall not be liable for any settlement
of any proceeding effected without its written consent, but if settled with
such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and
against any loss or liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
Section 7(a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) in
such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Underwriters on the other from the
offering of the Shares. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law, then
each indemnifying party shall contribute to such amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect not
only such relative benefits but also the relative fault of the Company on
the one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by
the Company on the one hand and the Underwriters on the other shall be
deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company bears to the
total underwriting discounts and commissions received by the Underwriters,
in each case as set forth in the table on the cover page of the Prospectus.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or the Underwriters on
the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriters agree that it would not be just
and equitable if contributions pursuant to this Section 7(d) were
determined by pro rata allocation (even if the Underwriters were treated as
one entity for
23
such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to above in this Section
7(d). The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions or proceedings in
respect thereto) referred to above in this Section 7(d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this Section 7(d), no Underwriter
shall be required to contribute any amount in excess of the underwriting
discounts and commissions applicable to the Shares purchased by such
Underwriter; and no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.
The Underwriters' obligations in this Section 7(d) to contribute are
several in proportion to their respective underwriting obligations and not
joint.
(e) The obligations of the Company under this Section 7 shall be in
addition to any liability which the Company may otherwise have, and the
obligations of the Underwriters under this Section 7 shall be in addition
to any liability which the Underwriters may otherwise have.
8. Default by Underwriters. If on the Closing Date or the Option
-----------------------
Closing Date, as the case may be, any Underwriter shall fail to purchase and pay
for the portion of the Shares which such Underwriter has agreed to purchase and
pay for on such date (otherwise than by reason of any default on the part of the
Company), you, as Representative of the Underwriters, shall use your best
efforts to procure within 36 hours thereafter one or more of the other
Underwriters, or any others, to purchase from the Company such amounts as may be
agreed upon, and upon the terms set forth herein, of the Firm Shares or Option
Shares, as the case may be, which the defaulting Underwriter or Underwriters
failed to purchase. If during such 36 hours, you, as Representative, shall not
have procured such other Underwriters, or any others, to purchase the Firm
Shares or Option Shares, as the case may be, agreed to be purchased by the
defaulting Underwriter or Underwriters, then (a) if the aggregate number of
Shares with respect to which such default shall occur does not exceed 10% of the
Firm Shares or Option Shares, as the case may be, covered hereby, the other
Underwriters shall be obligated, severally, in proportion to the respective
numbers of Firm Shares or Option Shares, as the case may be, which they are
obligated to purchase hereunder, to purchase the Firm Shares or Option Shares,
as the case may be, which such defaulting Underwriter or Underwriters failed to
purchase, or (b) if the aggregate number of shares of Firm Shares or Option
Shares, as the case may be, with respect to which such default shall occur
exceeds 10% of the Firm Shares or Option Shares, as the case may be, covered
hereby, the Company or you as the Representative of the Underwriters will have
the right, by written notice given within the next 36-hour period to the parties
to this Agreement, to terminate this Agreement without liability on the part of
the non-defaulting Underwriters or of the Company except for expenses to be
borne by the Company and the Underwriters as provided in Section 5 hereof and
the indemnity and contribution agreements in Section 7 hereof. In the event of
a default by any Underwriter or Underwriters, as set forth in this Section 8,
the Closing Date or Option Closing Date, as the case may be, may be postponed
for such
24
period, not exceeding seven days, as you, as Representative, may determine in
order that the required changes in the Registration Statement or in the
Prospectus or in any other documents or arrangements may be effected. The term
"Underwriter" includes any person substituted for a defaulting Underwriter. Any
action taken under this Section 8 shall not relieve any defaulting Underwriter
from liability in respect of any default of such Underwriter under this
Agreement.
9. Notices. All communications hereunder shall be in writing and,
-------
except as otherwise provided herein, will be mailed, delivered or telegraphed
and confirmed as follows: if to the Underwriters, to Xxxx Xxxxxxxx Xxxxxxx, 00
Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxx, XX 00000, fax: (000) 000-0000, Attention: Xxxxx
Xxxxx, with a copy to Xxxxxxx & Xxxxxx L.L.C., 000 00xx Xxxxxx, Xxxxx 0000,
Xxxxxx, Xxxxxxxx 00000, fax: (000) 000-0000, Attention: Xxxxxx X. Xxxxx, Xx.;
and if to the Company, to Colorado Business Bankshares, Inc., 000 00xx Xxxxxx,
Xxxxxx, Xxxxxxxx 00000, fax: (000) 000-0000, Attention: Xxxxxx Xxxxxxx, with a
copy to Xxxxxx & Whitney LLP, 000 00xx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx
00000, fax: (000) 000-0000, Attention: Xxxxx X. Xxxxxx.
10. Termination. This Agreement may be terminated by you by notice
-----------
to the Company as follows:
(a) at any time prior to the Closing Date if any of the following has
occurred: (i) since the respective dates as of which information is given
in the Registration Statement and the Prospectus, any material adverse
change in or affecting the condition, financial or otherwise, of the
Company and its subsidiaries taken as a whole or the business affairs,
management, financial position, shareholders' equity or results of
operations of the Company and its subsidiaries taken as a whole, whether or
not arising in the ordinary course of business, (ii) any outbreak or
escalation of hostilities or declaration of war or national emergency after
the date hereof or other national or international calamity or crisis or
change in economic or political conditions if the effect of such outbreak,
escalation, declaration, emergency, calamity, crisis or change on the
financial markets of the United States would, in your judgment, make the
offering or delivery of the Shares impracticable or inadvisable, (iii)
suspension of trading in securities on the New York Stock Exchange or the
American Stock Exchange or limitation on prices (other than limitations on
hours or numbers of days of trading) for securities on either such
Exchange, or a halt or suspension of trading in securities generally which
are quoted on Nasdaq National Market System, or (iv) declaration of a
banking moratorium by either federal or New York State authorities; or
(b) as provided in Sections 6 and 8 of this Agreement.
This Agreement also may be terminated by you, by notice to the
Company, as to any obligation of the Underwriters to purchase the Option Shares,
upon the occurrence at any time prior to the Option Closing Date of any of the
events described in subparagraph (b) above or as provided in Sections 6 and 8 of
this Agreement.
25
11. Written Information. For all purposes under this Agreement
--------------------
(including, without limitation, Section 1, Section 2 and Section 7 hereof), the
Company understands and agrees with each of the Underwriters that the following
constitutes the only written information furnished to the Company by or through
the Representative specifically for use in preparation of the Registration
Statement, any Preliminary Prospectus, the Prospectus, or any amendment or
supplement thereto: (i) the per share "Price to Public" and per share
"Underwriting Discounts and Commissions" set forth on the cover page of the
Prospectus, (ii) the information relating to stabilization set forth in the last
paragraph on page two of the Preliminary Prospectus and the Prospectus, and
(iii) the information set forth under the caption "Underwriting" in the
Preliminary Prospectus and the Prospectus.
12. Successors. This Agreement has been and is made solely for the
----------
benefit of and shall be binding upon the Underwriters, the Company and their
respective successors, executors, administrators, heirs and assigns, and the
officers, directors and controlling persons referred to herein, and no other
person will have any right or obligation hereunder. The term "successors" shall
not include any purchaser of the Shares merely because of such purchase.
13. Miscellaneous. The reimbursement, indemnification and
-------------
contribution agreements contained in this Agreement and the representations,
warranties and covenants in this Agreement shall remain in full force and effect
regardless of (a) any termination of this Agreement, (b) any investigation made
by or on behalf of any Underwriter or controlling person thereof, or by or on
behalf of the Company or its directors and officers and (c) delivery of and
payment for the Shares under this Agreement.
Each provision of this Agreement shall be interpreted in such a manner
as to be effective and valid under applicable law, but if any provision of this
Agreement is held to be invalid, illegal or unenforceable under any applicable
law or rule in any jurisdiction, such provision will be ineffective only to the
extent of such invalidity, illegality or unenforceability in such jurisdiction
or any provision hereof in any other jurisdiction
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
This Agreement shall be governed by, and construed in accordance with,
the internal laws of the State of Minnesota, without regard to conflicts of law
principles.
If the foregoing letter is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Company and the several
Underwriters in accordance with its terms.
Very truly yours,
26
COLORADO BUSINESS BANKSHARES,
INC.
By:__________________________
[NAME]
[TITLE]
The foregoing Underwriting
Agreement is hereby confirmed
and accepted as of the date
first above written.
XXXX XXXXXXXX XXXXXXX, a division of
Xxxx Xxxxxxxx Incorporated
As Representative of the several
Underwriters
By:_________________________________
Its:
27
SCHEDULE A
SCHEDULE OF UNDERWRITERS
Number of Firm Maximum Number
Underwriter Shares to be Purchased of Option Shares
----------- ---------------------- ------------------
Xxxx Xxxxxxxx Xxxxxxx..............
[NAMES OF UNDERWRITERS BY GROUPING]
Total....................
28
EXHIBIT A
FORM OF WARRANT
29
