FIRST STATE BANCORPORATION
(a New Mexico corporation)
Convertible Subordinated Debentures due 2017
PURCHASE AGREEMENT
Dated: ., 1997
Table of Contents
PURCHASE AGREEMENT........................................................ 1
SECTION 1. Representations and Warranties.................... 3
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(a) Representations and Warranties by the Company.............. 3
(i) Compliance with Registration Requirement.......... 3
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(ii) Incorporated Documents............................ 4
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(iii) Independent Accountants........................... 4
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(iv) Financial Statements.............................. 4
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(v) No Material Adverse Change in Business............ 4
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(vi) Good Standing of the Company...................... 5
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(vii) Good Standing of Subsidiaries..................... 5
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(viii) Capitalization.................................... 5
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(ix) Authorization of Agreement........................ 6
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(x) Authorization of the Indenture.................... 6
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(xi) Authorization of the Securities................... 6
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(xii) Description of the Securities and the Indenture... 6
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(xiii) Authorization and Description of Common Stock..... 6
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(xiv) Absence of Defaults and Conflicts................. 7
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(xv) Absence of Labor Dispute.......................... 7
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(xvi) Absence of Proceedings............................ 7
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(xvii) Accuracy of Exhibits.............................. 8
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(xviii) Possession of Intellectual Property............... 8
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(xix) Absence of Further Requirements................... 8
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(xx) Possession of Licenses and Permits................ 8
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(xxi) Title to Property................................. 9
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(xxii) Compliance with Cuba Act.......................... 9
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(xxiii) Investment Company Act............................ 9
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(xxiv) Environmental Laws................................ 9
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(xxv) Taxes............................................. 10
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(xxvi) Accounting Controls............................... 10
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(xxvii) Insurance......................................... 10
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(xxviii) Registration Rights............................... 11
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(xxix) Stabilization..................................... 11
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(xxx) Certain Relationships............................. 11
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(xxxi) Certain Actions................................... 11
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(b) Officer's Certificates..................................... 11
SECTION 2. Sale and Delivery to Underwriters; Closing................. 11
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(a) Initial Securities......................................... 11
(b) Option Securities.......................................... 11
(c) Payment.................................................... 12
(d) Denominations; Registration................................ 12
SECTION 3. Covenants of the Company................................... 13
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i
(a) Compliance with Securities Regulations
and Commission Requests.................................... 13
(b) Filing of Amendments....................................... 13
(c) Delivery of Registration Statements........................ 13
(d) Delivery of Prospectuses................................... 14
(e) Continued Compliance with Securities Laws.................. 14
(f) Blue Sky Qualifications.................................... 14
(g) Rule 158................................................... 15
(h) Use of Proceeds............................................ 15
(i) Listing.................................................... 15
(j) Restriction on Sale of Securities ......................... 15
(k) Restriction on Sale of Common Stock........................ 15
(l) Reporting Requirements..................................... 16
(m) Compliance with Cuba Act................................... 16
SECTION 4. Payment of Expenses........................................ 16
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(a) Expenses................................................... 16
(b) Termination of Agreement................................... 17
SECTION 5. Conditions of Underwriters' Obligations.................... 17
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(a) Effectiveness of Registration Statement.................... 17
(b) Opinion of Counsel for Company............................. 17
(c) Opinion of Counsel for Underwriters........................ 17
(d) Officers' Certificate...................................... 18
(e) Accountant's Comfort Letter................................ 18
(f) Bring-down Comfort Letter.................................. 18
(g) Approval of Listing........................................ 19
(h) No Objection............................................... 19
(i) Lock-up Agreements......................................... 19
(j) Conditions to Purchase of Option Securities................ 19
(k) Additional Documents....................................... 20
(l) Termination of Agreement................................... 20
SECTION 6. Indemnification............................................ 20
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(a) Indemnification of Underwriters............................ 20
(b) Indemnification of Company, Directors and Officers......... 21
(c) Actions against Parties; Notification...................... 22
(d) Settlement without Consent if Failure to Reimburse......... 22
SECTION 7. Contribution............................................... 22
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SECTION 8. Representations, Warranties and Agreements to Survive
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Delivery................................................... 24
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SECTION 9. Termination of Agreement................................... 24
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(a) Termination; General....................................... 24
(b) Liabilities................................................ 24
SECTION 10. Default by One or More of the Underwriters................ 25
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SECTION 11. Notices................................................... 25
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SECTION 12. Parties................................................... 25
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SECTION 13. GOVERNING LAW AND TIME.................................... 25
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SECTION 14. Effect of Headings........................................ 26
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SCHEDULES
Schedule A - List of Underwriters................................... Sch A-1
Schedule B - Pricing Information.................................... Sch B-1
Schedule C - List of Subsidiaries................................... Sch C-1
Schedule D - List of persons and entities subject to lock-up........ Sch D-1
EXHIBITS
Exhibit A - Form of Opinion of Company's Counsel........................ A-1
Exhibit B - Form of Lock-up Letter...................................... B-1
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Draft of April 17, 1997
FIRST STATE BANCORPORATION
(a New Mexico corporation)
$__________
__% Convertible Subordinated Debentures due 2017
PURCHASE AGREEMENT
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., 1997
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, INC.
as Representative of the several Underwriters
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
First State Bancorporation, a New Mexico corporation (the "Company"),
confirms its agreement with ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc. ("KBW") and each of
the other Underwriters named in Schedule A hereto (collectively, the
"Underwriters", which term shall also include any underwriter substituted as
hereinafter provided in Section 10 hereof), for whom KBW is acting as
representative (in such capacity, the "Representative"), with respect to the
issue and sale by the Company and the purchase by the Underwriters, acting
severally and not jointly, of the respective principal amounts set forth in said
Schedule A of $__________ aggregate principal amount of the Company's __%
Convertible Subordinated Debentures due 2017 (the "Debentures"), and with
respect to the grant by the Company to the Underwriters, acting severally and
not jointly, of the option described in Section 2(b) hereof to purchase all or
any part of an additional $_________ principal amount of Debentures to cover
over-allotments, if any. The aforesaid $__________ principal amount of
Debentures (the "Initial Securities") to be purchased by the Underwriters and
all or any part of the $_________ principal amount of Debentures subject to the
option described in Section 2(b) hereof (the "Option Securities") are
hereinafter called, collectively, the "Securities". The Securities are to be
issued pursuant to an indenture dated as of . (the "Indenture") between the
Company and ., as trustee (the "Trustee").
The Securities are convertible into shares of common stock, no par value
per share, of the Company (the "Common Stock"), in accordance with the terms of
the Securities and the Indenture, at the initial conversion price specified in
Schedule B hereto. Each such share of Common Stock will be issued with the
rights (the "Rights") attached thereto issued pursuant to
1
the Shareholder Protection Rights Agreement, dated as of October 25, 1996,
between the Company and American Securities Transfer & Trust, Incorporated, as
Rights Agent.
The Company understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representative deems advisable after
this Agreement has been executed and delivered and the Indenture has been
qualified under the Trust Indenture Act of 1939, as amended (the "1939 Act").
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-2 (No. 333-24417) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will either
(i) prepare and file a prospectus in accordance with the provisions of Rule 430A
("Rule 430A") of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of
the 1933 Act Regulations or (ii) if the Company has elected to rely upon Rule
434 ("Rule 434") of the 1933 Act Regulations, prepare and file a term sheet (a
"Term Sheet") in accordance with the provisions of Rule 434 and Rule 424(b).
The information included in such prospectus or in such Term Sheet, as the case
may be, 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 (a) pursuant to paragraph (b) of Rule 430A is referred
to as "Rule 430A Information" or (b) pursuant to paragraph (d) of Rule 434 is
referred to as "Rule 434 Information." Each prospectus used before such
registration statement became effective, and any prospectus that omitted, as
applicable, the Rule 430A Information or the Rule 434 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, and the
documents incorporated by reference therein pursuant to Item 12 of Form S-2
under the 1933 Act, at the time it became effective and including the Rule 430A
Information and the Rule 434 Information, as applicable, is herein called the
"Registration Statement." Any registration statement filed pursuant to Rule
462(b) of the 1933 Act Regulations 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,
including the documents incorporated by reference therein pursuant to Item 12 of
Form S-2 under the 1933 Act, in the form first furnished to the Underwriters for
use in connection with the offering of the Securities is herein called the
"Prospectus." If Rule 434 is relied on, the term "Prospectus" shall refer to
the preliminary prospectus dated April 17, 1997, together with the Term Sheet,
and all references in this Agreement to the date of the Prospectus shall mean
the date of the Term Sheet. For purposes of this Agreement, all references to
the Registration Statement, any preliminary prospectus, the Prospectus or any
Term Sheet 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 ("▇▇▇▇▇").
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All references in this Agreement to financial statements and schedules and
other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus 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; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the filing of
any document under the Securities Exchange Act of 1934 (the "1934 Act") which is
incorporated by reference in the Registration Statement, such preliminary
prospectus or the Prospectus, as the case may be.
SECTION 1. Representations and Warranties.
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(a) Representations and Warranties by the Company. The Company represents
and warrants to each 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 each Underwriter, as
follows:
(i) Compliance with Registration Requirements. The Company meets
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the requirements for use of Form S-2 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
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 1933 Act Regulations and the 1939 Act and the rules and regulations of the
Commission under the 1939 Act (the "1939 Act Regulations"), and did not and will
not contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading. Neither the Prospectus nor any amendments or supplements
thereto, at the time the Prospectus or any such amendment or supplement was
issued and at the Closing Time (and, if any Option 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. If Rule 434 is used, the Company will
comply with the requirements of Rule 434 and the Prospectus shall not be
"materially different", as such term is used in Rule 434, from the prospectus
included in the Registration Statement at the time it became effective. The
representations and warranties in this subsection
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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 any Underwriter through KBW expressly for use in the
Registration Statement or Prospectus.
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 under the 1933 Act, complied when so filed in all
material respects with the 1933 Act Regulations and each preliminary prospectus
and the Prospectus delivered to the Underwriters for use in connection with this
offering was identical to the electronically transmitted copies thereof filed
with the Commission pursuant to ▇▇▇▇▇, except to the extent permitted by
Regulation S-T.
(ii) Incorporated Documents. The documents incorporated or deemed
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to be incorporated by reference in the Registration Statement and the
Prospectus, at the time they were or hereafter are filed with the Commission,
complied and will comply in all material respects with the requirements of the
1934 Act and the rules and regulations of the Commission thereunder (the "1934
Act Regulations"), and, when read together with the other information in the
Prospectus, at the time the Registration Statement became effective, at the time
the Prospectus was issued and at the Closing Time (and if any Option Securities
are purchased, at the Date of Delivery), did not and will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading.
(iii) Independent Accountants. The accountants who certified the
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financial statements and supporting schedules included in the Registration
Statement are independent public accountants as required by the 1933 Act and the
1933 Act Regulations.
(iv) Financial Statements. The financial statements included in
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the Registration Statement and the Prospectus, together with the related
schedules and notes, present fairly the financial position of the Company and
its consolidated subsidiaries at the dates indicated and the statement of
operations, stockholders' equity and 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
fairly 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 fairly the information shown therein and have been
compiled on a basis consistent with that of the audited financial statements
included in the Registration Statement.
(v) No Material Adverse Change in Business. Since the
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respective dates as of which information is given in the Registration Statement
and the Prospectus, except as otherwise stated therein, (A) there has been no
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
4
of business (a "Material Adverse Effect"), (B) 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 has been duly
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organized and is validly existing as a corporation in good standing under the
laws of the State of New Mexico and 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 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 or failures so to qualify or to be
in good standing would not, individually or in the aggregate, result in a
Material Adverse Effect; and the Company is duly registered as a bank holding
company under the Bank Holding Company Act of 1956, as amended.
(vii) Good Standing of Subsidiaries. First State Bank of Taos (the
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"Bank") has been duly organized and is validly existing as a state bank in good
standing under the laws of the State of New Mexico and has corporate power and
authority to own, lease and operate its properties and to conduct its business
as described in the Prospectus. Each other subsidiary of the Company (each of
the Bank and each such other subsidiary is referred to herein as a "Subsidiary"
and, collectively, as the "Subsidiaries") has been duly organized and is validly
existing as a corporation in good standing under the laws of the jurisdiction of
its incorporation, and has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus. Each Subsidiary 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 or failures so to
qualify or to be in good standing would not, individually or in the aggregate,
result in a Material Adverse Effect; except as otherwise disclosed in the
Registration Statement, all of the issued and outstanding capital stock of each
such 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 C hereto. Except for the shares of capital
stock of the Subsidiaries owned by the Company and such Subsidiaries, neither
the Company nor the Subsidiaries owns any shares of stock or any other equity
securities of any corporation or has any equity interest in any firm,
partnership, association or other entity, except as described in the Prospectus
and except for those interests which are not required to be described in the
Registration Statement.
5
(viii) Capitalization. The authorized, issued and outstanding capital
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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 of the Company have been duly authorized
and validly issued and are fully paid and non-assessable; 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.
(ix) Authorization of Agreement. This Agreement has been duly
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authorized, executed and delivered by the Company.
(x) Authorization of the Indenture. The Indenture has been duly
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authorized by the Company and duly qualified under the 1939 Act and, when duly
executed and delivered by the Company and the Trustee, will constitute a valid
and binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally and except as enforcement thereof is
subject to general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law).
(xi) Authorization of the Securities. The Securities have been duly
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authorized and, at the Closing Time, will have been duly executed by the Company
and, when authenticated, issued and delivered in the manner provided for in the
Indenture and delivered against payment of the purchase price therefor as
provided in this Agreement, will constitute valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms, except
as the enforcement thereof may be limited by bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of creditors' rights generally
and except as enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at
law), and will be in the form contemplated by, and entitled to the benefits of,
the Indenture.
(xii) Description of the Securities and the Indenture. The Securities
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and the Indenture will conform in all material respects to the respective
statements relating thereto contained in the Prospectus and will be in
substantially the respective forms filed or incorporated by reference, as the
case may be, as exhibits to the Registration Statement.
(xiii) Authorization and Description of Common Stock. Each of the
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Common Stock and the Rights conforms to all statements relating thereto
contained or incorporated by reference in the Prospectus and each such
description conforms to the rights set forth in the respective instruments
defining the same. Upon issuance and delivery of the Securities in accordance
with this Agreement and the Indenture, the Securities will be convertible at the
6
option of the holder thereof for shares of Common Stock and associated Rights,
if any, in accordance with the terms of the Securities and the Indenture; the
shares of Common Stock and the associated Rights, if any, issuable upon
conversion of the Securities have been duly authorized and reserved for issuance
upon such conversion by all necessary corporate action and such shares of Common
Stock, when issued upon such conversion, will be validly issued and will be
fully paid and non-assessable; no holder of such shares of Common Stock will be
subject to personal liability by reason of being such a holder; and the issuance
of such shares of Common Stock upon such conversion will not be subject to the
preemptive or other similar rights of any securityholder of the Company.
(xiv) Absence of Defaults and Conflicts. Neither the Company nor any of
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the Subsidiaries is in violation of its charter or by-laws or in default in the
performance or observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or other agreement or instrument to which the Company or
any of the Subsidiaries is a party or by which it or any of them may be bound,
or to which any of the property or assets of the Company or any Subsidiary is
subject (collectively, "Agreements and Instruments") except for such defaults
that would not, individually or in the aggregate, result in a Material Adverse
Effect; and the execution, delivery and performance of this Agreement, the
Indenture and the Securities and the consummation of the transactions
contemplated herein and in the Registration Statement (including (a) 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", (b) the issuance of the shares of Common Stock issuable upon
conversion of the Securities and (c) the consummation of the Company's
redemption (the "Redemption") of its outstanding 7% Subordinated Convertible
Debentures due 2003 (the "7% Debentures")) and compliance by the Company with
its obligations hereunder and under the Indenture and the Securities 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, give rise to any right of termination 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, individually or in the aggregate, result in a
Material Adverse Effect), nor will such action result in any violation of the
provisions of the charter or by-laws 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.
(xv) Absence of Labor Dispute. No labor dispute with the employees of
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the Company or any Subsidiary exists or, to the knowledge of the Company, is
imminent, and the
7
Company is not aware of any existing or imminent labor disturbance by the
employees of any of its or any Subsidiary's principal suppliers, customers or
contractors, which, in either case, may reasonably be expected to result in a
Material Adverse Effect.
(xvi) Absence of Proceedings. There is no action, suit, proceeding,
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inquiry or investigation before or brought by any court or governmental agency
or body, domestic or foreign, now pending, or, to the knowledge of the Company,
threatened, against or affecting the Company or any Subsidiary, which is
required to be disclosed in the Registration Statement (other than as disclosed
therein), or which 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 consummation of the Redemption 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.
(xvii) Accuracy of Exhibits. There are no contracts or documents which
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are required to be described in the Registration Statement, the Prospectus or
the documents incorporated by reference therein or to be filed as exhibits
thereto which have not been so described and filed as required.
(xviii) Possession of Intellectual Property. The Company and the
-----------------------------------
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 the 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 the Subsidiaries therein, and which
infringement or conflict (if the subject of any unfavorable decision, ruling or
finding) or invalidity or inadequacy, individually or in the aggregate, would
result in a Material Adverse Effect.
(xix) Absence of Further Requirements. No filing with, or
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authorization, approval, consent, license, order, registration, qualification or
decree of, any court or governmental authority or agency is necessary or
required for the performance by the Company of its obligations hereunder, in
connection with the offering, issuance or sale of the Securities hereunder, the
issuance of shares of Common Stock upon conversion of Securities or the
consummation of the transactions contemplated by this Agreement or for the due
execution, delivery or performance of the Indenture by the Company or for the
consummation of the Redemption, except such as have been already obtained or as
may be required under the 1933
8
Act or the 1933 Act Regulations or state securities laws and except for the
qualification of the Indenture under the 1939 Act.
(xx) Possession of Licenses and Permits. The Company and its
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Subsidiaries possess such certificates, authorities, permits, licenses,
approvals, consents and other authorizations (collectively, "Governmental
Licenses") issued by the appropriate federal, state, local or foreign regulatory
agencies or bodies necessary to conduct the business now operated by them; 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,
individually 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, individually or in the aggregate, if the subject of
an unfavorable decision, ruling or finding, would result in a Material Adverse
Effect.
(xxi) Title to Property. The Company and the Subsidiaries have good
-----------------
and marketable title to all real property owned by the Company and the
Subsidiaries and good title to all other properties owned by them, in each case,
free and clear of all mortgages, pledges, liens, security interests, claims,
restrictions or encumbrances of any kind except such as (a) are described in the
Prospectus or (b) do not, individually 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 the Subsidiaries; and all
of the leases and subleases material to the business of the Company and the
Subsidiaries, considered as one enterprise, and under which the Company or any
of the 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 Company or such
Subsidiary to the continued possession of the leased or subleased premises under
any such lease or sublease.
(xxii) Compliance with Cuba Act. The Company has complied with, and is
------------------------
and will be in compliance with, the provisions of that certain Florida act
relating to disclosure of doing business with Cuba, codified as Section 517.075
of the Florida statutes, and the rules and regulations thereunder (collectively,
the "Cuba Act") or is exempt therefrom.
(xxiii) Investment Company Act. The Company is 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" or an entity "controlled" by an "investment company" as
such terms are defined in the Investment Company Act of 1940, as amended (the
"1940 Act").
9
(xxiv) Environmental Laws. Except as described in the Registration
------------------
Statement and except as would not, individually or in the aggregate, result in a
Material Adverse Effect, (A) neither the Company nor any of the 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 the 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 the 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 the
Subsidiaries relating to Hazardous Materials or any Environmental Laws.
(xxv) Taxes. All United States federal income tax returns of the
-----
Company and the Subsidiaries required by law to be filed have been filed and all
taxes shown by such returns or otherwise assessed, which are due and payable,
have been paid, except assessments against which appeals have been or will be
promptly taken and as to which adequate reserves have been provided. The United
States federal income tax returns of the Company through the fiscal year ended
December 31, 1995 have been settled and no assessment in connection therewith
has been made against the Company. Each of the Company and the Subsidiaries has
filed all other tax returns that are required to have been filed by it pursuant
to applicable foreign, state, local or other law except insofar as the failure
to file such returns would not result in a Material Adverse Effect, and has paid
all taxes due pursuant to such returns or pursuant to any assessment received by
the Company or any Subsidiary, except for such taxes, if any, as are being
contested in good faith and as to which adequate reserves have been provided.
The charges, accruals and reserves on the books of the Company in respect of any
income and corporation tax liability for any years not finally determined are
adequate to meet any assessments or re-assessments for additional income tax for
any years not finally determined, except to the extent of any inadequacy that
would not result in a Material Adverse Effect.
(xxvi) Accounting Controls. The Company and the 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 authorization, (B) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets, (C)
10
access to assets is permitted only in accordance with management's general or
specific authorization and (D) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(xxvii) Insurance. The Company and the Subsidiaries carry or are
---------
entitled to the benefits of insurance, with financially sound and reputable
insurers, in such amounts and covering such risks as is generally maintained by
companies of established repute engaged in the same or similar business, and all
such insurance is in full force and effect.
(xxviii) Registration Rights. There are no persons with registration
-------------------
rights or other similar rights to have any securities registered pursuant to the
Registration Statement or otherwise registered by the Company under the 1933
Act.
(xxix) Stabilization. Neither Company nor any of its officers,
-------------
directors or controlling persons has taken, directly or indirectly, any action
designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Securities.
(xxx) Certain Relationships. No relationship, direct or indirect,
---------------------
exists between or among any of the Company or any affiliate of the Company, on
the one hand, and any director, officer, stockholder, customer or supplier of
any of them, on the other hand, which is required by the 1933 Act or by the 1933
Act Regulations to be described in the Registration Statement or the Prospectus
which is not so described or is not described as required.
(xxxi) Certain Actions. 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 offering material 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
Representative(s).
(b) Officer's Certificates. Any certificate signed by any officer of the
Company or any of its subsidiaries delivered to the Representative or to counsel
for the Underwriters shall be deemed a representation and warranty by the
Company to each Underwriter as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; 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 each Underwriter, severally and not
jointly, and each Underwriter, severally and not jointly, agrees to purchase
from the Company, at the price set forth in Schedule B, the aggregate principal
amount of Initial Securities set forth in Schedule A opposite the name of such
11
Underwriter, plus any additional principal amount of Initial Securities which
such Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof.
(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 Underwriters, severally
and not jointly, to purchase up to an additional $_________ principal amount of
Securities at the same price set forth in Schedule B for the Initial Securities,
plus accrued interest, if any, from the Closing Date to the date of Delivery (as
defined below). 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
Representative to the Company setting forth the number of Option Securities as
to which the several Underwriters are 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
Representative, but shall not be later than seven full business days after the
exercise of said option, nor in any event prior to the Closing Time, as
hereinafter defined. If the option is exercised as to all or any portion of the
Option Securities, each of the Underwriters, acting severally and not jointly,
will purchase that proportion of the total number of Option Securities then
being purchased which the number of Initial Securities set forth in Schedule A
opposite the name of such Underwriter bears to the total number of Initial
Securities.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of
[Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇], or at such other place as shall be agreed upon by the Representative and
the Company, at 9:00 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 (unless postponed in accordance with the provisions of Section 10),
or such other time not later than ten business days after such date as shall be
agreed upon by the Representative and the Company (such time and date of payment
and delivery being herein called "Closing Time").
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, 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 Representative
and the Company, on each Date of Delivery as specified in the notice from the
Representative to the Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
the Representative for the respective accounts of the Underwriters of
certificates for the Securities to be purchased by them. It is understood that
each Underwriter has authorized the Representative, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the
Initial Securities and the Option Securities, if any, which it has agreed to
purchase. KBW, individually and not as representative of the Underwriters, may
(but shall not be obligated to) make payment
12
of the purchase price for the Initial Securities or the Option Securities, if
any, to be purchased by any Underwriter whose funds have not been received by
the Closing Time or the relevant Date of Delivery, as the case may be, but such
payment shall not relieve such Underwriter from its obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial Securities
and the Option Securities, if any, shall be in such denominations ($1,000 or
integral multiples thereof) and registered in such names as the Representative
may request in writing at least one full business day before the Closing Time or
the relevant Date of Delivery, as the case may be. The certificates [,which may
be in temporary form,] for the Initial Securities and the Option Securities, if
any, will be made available for examination and packaging by the Representative
in The City of New York not later than 10:00 A.M. (Eastern time) on the business
day prior to the Closing Time or the relevant Date of Delivery, as the case may
be.
SECTION 3. Covenants of the Company. The Company covenants with each
------------------------
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 Representative 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 Representative
notice of its intention to file or prepare any amendment to the Registration
Statement (including any filing under Rule 462(b)), any Term Sheet 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
Representative with copies of any such documents a reasonable amount of time
prior to such proposed filing or use, as the case may be, and
13
will not file or use any such document to which the Representative or counsel
for the Underwriters shall object.
(c) Delivery of Registration Statements. The Company has furnished
or will deliver to the Representative and counsel for the Underwriters, without
charge, signed copies of the Registration Statement as originally filed and of
each amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be incorporated by
reference therein) and signed copies of all consents and certificates of
experts, and will also deliver to the Representative, without charge, a
conformed copy of the Registration Statement as originally filed and of each
amendment thereto (without exhibits) for each of the Underwriters. The copies of
the Registration Statement and each amendment thereto furnished to the
Underwriters will be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to ▇▇▇▇▇, except to the extent permitted by
Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus as
such Underwriter reasonably requested, and the Company hereby consents to the
use of such copies for purposes permitted by the 1933 Act. The Company will
furnish to each Underwriter, without charge, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, such
number of copies of the Prospectus (as amended or supplemented) as such
Underwriter may reasonably request. The Prospectus and any amendments or
supplements thereto furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
▇▇▇▇▇, except to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will
comply with the 1933 Act and the 1933 Act Regulations, the 1934 Act and the 1934
Act Regulations and the 1939 Act and the 1939 Act Regulations so as to permit
the completion of the distribution of the Securities as contemplated 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 Underwriters 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 or the 1933 Act Regulations, 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
14
with such requirements, and the Company will furnish to the Underwriters
such number of copies of such amendment or supplement as the Underwriters
may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best efforts,
in cooperation with the Underwriters, to qualify the Securities and the
shares of Common Stock issuable upon conversion of Securities for offering
and sale under the applicable securities laws of such states and other
jurisdictions (domestic or foreign) as the Representative may designate and
to maintain such qualifications in effect for 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. The Company will also supply the Underwriters with
such information as is necessary for the determination of the legality of
the Securities for investment under the laws of such jurisdictions as the
Underwriters may request.
(g) Rule 158. The Company will timely file such reports pursuant to
the 1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the
purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds received
by it from the sale of the Securities in the manner specified in the
Prospectus under "Use of Proceeds".
(i) Listing. The Company will use its best efforts to (a) effect and
maintain the quotation of the Common Stock issuable upon conversion 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 and (b) effect and maintain the quotation of the Securities on the
Nasdaq SmallCap Market and will file with the Nasdaq SmallCap Market all
documents and notices required by the Nasdaq SmallCap Market of companies
that have securities that are traded in the over-the-counter market and
quotations for which are reported by the Nasdaq SmallCap Market.
(j) Restriction on Sale of Securities. During a period of 180 days
from the date of the Prospectus, the Company will not, without the prior
written consent of KBW,
15
directly or indirectly, issue, sell, offer or contract to sell, grant any
option for the sale of, or otherwise transfer or dispose of, any debt
securities of the Company.
(k) Restriction on Sale of Common Stock. During a period of 180 days
from the date of the Prospectus, the Company will not, without the prior
written consent of KBW, (i) directly or indirectly, 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 or cause to be filed any registration statement under the 1933 Act
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 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 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 or the
conversion of a security 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 shares of Common
Stock issued pursuant to any non-employee director stock plan or dividend
reinvestment plan.
(l) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act,
will file all documents required to be filed with the Commission pursuant
to the 1934 Act within the time periods required by the 1934 Act and the
1934 Act Regulations.
(m) Compliance with Cuba Act. In accordance with the Cuba Act and
without limitation to the provisions of Sections 6 and 7 hereof, the
Company agrees to indemnify and hold harmless each Underwriter from and
against any and all loss, liability, claim, damage and expense whatsoever
(including fees and disbursements of counsel), as incurred, arising out of
any violation by the Company of the Cuba Act.
SECTION 4. Payment of Expenses. (a) Expenses. The Company will pay all
-------------------
expenses incident to the performance of its obligations under this Agreement,
including (i) the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits) as originally filed and of each
amendment thereto, (ii) the preparation, printing and delivery to the
Underwriters of this Agreement, any Agreement among Underwriters, the Indenture
and such other documents as may be required in connection with the offering,
purchase, sale, issuance or delivery of the Securities or the issuance or
delivery of the Common Stock issuable upon conversion thereof, (iii) the
preparation, issuance and delivery of the certificates for the Securities to the
Underwriters and the certificates for the Common Stock issuable upon conversion
thereof, (iv) the fees and disbursements of the Company's counsel, accountants
and
16
other advisors, (v) the qualification of the Securities and the Common Stock
under securities laws in accordance with the provisions of Section 3(f) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith and in connection with the preparation
of the Blue Sky Survey and any supplement thereto, (vi) the printing and
delivery to the Underwriters of copies of each preliminary prospectus, any Term
Sheets and of the Prospectus and any amendments or supplements thereto, (vii)
the preparation, printing and delivery to the Underwriters of copies of the Blue
Sky Survey and any supplement thereto, (viii) the fees and expenses of the
Trustee, including the fees and disbursements of counsel for the Trustee in
connection with the Indenture and the Securities, (ix) the fees and expenses of
any transfer agent or registrar for the Common Stock, (x) any fees payable in
connection with the rating of the Securities, (xi) the filing fees incident to,
and the reasonable fees and disbursements of counsel to the Underwriters in
connection with, the review by the National Association of Securities Dealers,
Inc. (the "NASD") of the terms of the sale of the Securities and (xii) the fees
and expenses incurred in connection with the inclusion of the Securities in the
Nasdaq SmallCap Market and the Common Stock issuable upon conversion thereof in
the Nasdaq National Market.
(b) Termination of Agreement. If this Agreement is terminated by the
Representative in accordance with the provisions of Section 5 or Section 9(a)(i)
hereof, the Company shall reimburse the Underwriters for all of their out-of-
pocket expenses, including the reasonable fees and disbursements of counsel for
the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of
---------------------------------------
the several Underwriters 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
Underwriters. 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) or, if
the Company has elected to rely upon Rule 434, a Term Sheet shall have been
filed with the Commission in accordance with Rule 424(b).
(b) Opinion of Counsel for Company. At Closing Time, the
Representative shall have received the favorable opinion, dated as of
Closing Time, of Hinkle, Cox,
17
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P., counsel for the Company, in form and
substance satisfactory to counsel for the Underwriters, together with
signed or reproduced copies of such letter for each of the other
Underwriters to the effect set forth in Exhibit A hereto and to such
further effect as counsel to the Underwriters may reasonably request.
(c) Opinion of Counsel for Underwriters. At Closing Time, the
Representative shall have received the favorable opinion, dated as of
Closing Time, of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the
Underwriters, in form and substance satisfactory to the Underwriters,
together with signed or reproduced copies of such letter for each of the
other Underwriters. In giving such opinion such counsel may rely, as to
all matters governed by the laws of jurisdictions other than the law of the
State of New York and the federal law of the United States, upon the
opinions of counsel satisfactory to the Representative. Such counsel may
also state that, insofar as such opinion involves factual matters, they
have relied, to the extent they deem proper, upon certificates of officers
of the Company and its subsidiaries and certificates of public officials.
(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 Representative shall have received a certificate of the President or a
Vice President of the Company and of the chief financial or chief
accounting officer of the Company, dated as of Closing Time, to the effect
that (i) there has been no 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, and (iv) no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceedings for that
purpose have been instituted or are pending or are contemplated by the
Commission.
(e) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Representative shall have received from KPMG Peat Marwick
LLP a letter dated such date, in form and substance satisfactory to the
Representative, together with signed or reproduced copies of such letter
for each of the other Underwriters containing statements and information of
the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus.
(f) Bring-down Comfort Letter. At Closing Time, the Representative
shall have received from KPMG Peat Marwick LLP a letter, dated as of
Closing Time, to the effect that they reaffirm the statements made in the
letter furnished pursuant to
18
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, (i) the Securities shall
have been approved for inclusion in the Nasdaq SmallCap Market, subject
only to official notice of issuance and (i) the Common Stock issuable on
conversion of the Securities shall have been approved for inclusion in 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. At the date of this Agreement, the
Representative shall have received an agreement substantially in the form
of Exhibit B hereto signed by the persons listed on Schedule D hereto.
(j) Conditions to Purchase of Option Securities. In the event that
the Underwriters exercise their 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 or any Subsidiary of the Company
hereunder shall be true and correct as of each Date of Delivery and, at the
relevant Date of Delivery, the Representative shall have received:
(i) Officers' Certificate. A certificate, dated such Date of
---------------------
Delivery, of the President or a Vice President of the Company and of
the chief financial or chief accounting officer of the Company
confirming that the certificate delivered at the Closing Time pursuant
to Section 5(d) hereof remains true and correct as of such Date of
Delivery.
(ii) Opinion of Counsel for Company. The favorable opinion of
------------------------------
Hinkle, Cox, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P., counsel for the
Company, in form and substance satisfactory to counsel for the
Underwriters, 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 Underwriters. The favorable
-----------------------------------
opinion of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the
Underwriters, 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.
19
(iv) Bring-down Comfort Letter. A letter from KPMG Peat Marwick
-------------------------
LLP, in form and substance satisfactory to the Representative and
dated such Date of Delivery, substantially in the same form and
substance as the letter furnished to the Representative pursuant to
Section 5(f) hereof, except that the "specified date" in the letter
furnished pursuant to this paragraph shall be a date not more than
five days prior to such Date of Delivery.
(k) Additional Documents. At Closing Time and at each Date of
Delivery, counsel for the Underwriters shall have been furnished with such
documents and opinions as they may require for the purpose of enabling them
to pass upon the issuance and sale of the 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 Representative and counsel for
the Underwriters.
(l) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled,
this Agreement, or, in the case of any condition to the purchase of Option
Securities, on a Date of Delivery which is after the Closing Time, the
obligations of the several Underwriters to purchase the relevant Option
Securities, may be terminated by the Representative by notice to the
Company at any time at or prior to Closing Time or such Date of Delivery,
as the case may be, and such termination shall be without liability of any
party to any other party except as provided in Section 4 and except that
Sections 1, 3(m), 6, 7 and 8 shall survive any such termination and remain
in full force and effect.
SECTION 6. Indemnification.
---------------
(a) Indemnification of Underwriters. The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act as follows:
(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 and the
Rule 434 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;
20
(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 KBW), reasonably incurred
in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced
or threatened, or any claim whatsoever based upon any such untrue statement
or omission, or any such alleged untrue statement or omission, to the
extent that any such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
-------- -------
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through KBW expressly for use in the Registration Statement (or any
amendment thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto).
(b) Indemnification of Company, Directors and Officers. Each Underwriter
severally 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 and the Rule 434
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 such Underwriter through KBW
expressly for use in the Registration Statement (or any amendment thereto) or
such preliminary prospectus or the Prospectus (or any amendment or supplement
thereto).
(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 KBW, and, in the case of
parties indemnified pursuant to Section 6(b)
21
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 whatsoever in
respect of which indemnification or contribution could be sought under this
Section 6 or Section 7 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
SECTION 7. Contribution. If the indemnification provided for in Section 6
------------
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters on the other hand from the offering of the 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 Underwriters on the
other hand in connection with the statements or omissions which resulted in such
losses, liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriters on the other hand in connection with the offering of the Securities
pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering
22
of the Securities pursuant to this Agreement (before deducting expenses)
received by the Company and the total underwriting discount received by the
Underwriters, in each case as set forth on the cover of the Prospectus, or, if
Rule 434 is used, the corresponding location on the Term Sheet, bear to the
aggregate initial public offering price of the Securities as set forth on such
cover.
The relative fault of the Company on the one hand and the Underwriters on
the other hand shall be determined by reference to, among other things, whether
any such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Company or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the 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 such
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 ▇▇▇▇ ▇▇▇) 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 an
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 such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the principal amount of Initial Securities set forth opposite
their respective names in Schedule A hereto and not joint.
23
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 any Underwriter or controlling
person, or by or on behalf of the Company, and shall survive delivery of the
Securities to the Underwriters.
SECTION 9. Termination of Agreement.
------------------------
(a) Termination; General. The Representative may terminate this Agreement,
by notice to the Company, at any time at or prior to Closing Time (i) if there
has been, since the time of execution of this Agreement or since the respective
dates as of which information is given in the 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 or the international financial markets, any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which is
such as to make it, in the judgment of the Representative, impracticable 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 the Nasdaq
SmallCap Market, or if trading generally on the American Stock Exchange or the
New York Stock Exchange or in the Nasdaq National Market or in the Nasdaq
SmallCap 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
Federal, New York or New Mexico authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further that Sections 1,
3(m), 6, 7 and 8 shall survive such termination and remain in full force and
effect.
SECTION 10. Default by One or More of the Underwriters. If one or more of
------------------------------------------
the Underwriters shall fail at Closing Time to purchase the Securities which it
or they are obligated to purchase under this Agreement (the "Defaulted
Securities"), the Representative shall have the right, but not the obligation,
within 24 hours thereafter, to make arrangements for one or more of the non-
defaulting Underwriters, or any other underwriters, to purchase all, but not
less than all, of the Defaulted Securities in such amounts as may be agreed upon
and upon the terms herein set forth; if, however, the Representative shall not
have completed such arrangements within such 24-hour period, then this Agreement
shall terminate without liability on the part of any non-defaulting Underwriter.
24
No action pursuant to this Section shall relieve any defaulting Underwriter
from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement, either the Representative or the Company shall have the right to
postpone the Closing Time for a period not exceeding seven days in order to
effect any required changes in the Registration Statement or Prospectus or in
any other documents or arrangement.
SECTION 11. Notices. All notices and other communications hereunder shall
-------
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representative at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, attention of ▇▇▇▇▇▇ ▇. ▇▇ ▇▇▇▇▇▇▇, ▇▇., Senior Vice
President; and notices to the Company shall be directed to it at ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, attention of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
President.
SECTION 12. Parties. This Agreement shall each inure to the benefit of
-------
and be binding upon the Underwriters 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
Underwriters 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 Underwriters 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 any Underwriter
shall be deemed to be a successor by reason merely of such purchase.
SECTION 13. 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.
SECTION 14. Effect of Headings. The Article and Section headings herein
------------------
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
25
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the Underwriters and the Company in accordance with its terms.
Very truly yours,
FIRST STATE BANCORPORATION
By ____________________________________
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, INC.
By ______________________________________
Authorized Signatory
For itself and as Representative of the other Underwriters named in Schedule A
hereto.
26
SCHEDULE A
Principal
Amount of
Name of Underwriter Securities
------------------- ----------
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc. ...........................
------------
Total.................................................... $
============
Sch A - 1
SCHEDULE B
FIRST STATE BANCORPORATION
$__________ Convertible Subordinated Debentures due 2017
1. The initial public offering price of the Securities shall be __% of
the principal amount thereof, plus accrued interest, if any, from the date of
issuance.
2. The purchase price to be paid by the Underwriters for the Initial
Securities shall be __% of the principal amount thereof.
3. The interest rate on the Securities shall be __% per annum.
4. The Securities shall be convertible into shares of common stock, no
par value per share, of the Company at an initial conversion price of $____ per
share (equivalent to a conversion rate of ____ shares per $1,000 principal
amount of Securities).
5. [Include the terms of any optional or mandatory redemption and other
price-related terms.]
Sch B - 1
SCHEDULE C
First State Bank of Taos
Sch C - 1
SCHEDULE D
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
H. ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇.
Sch D - 1
Exhibit A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of New Mexico.
(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 each of the
Purchase Agreement and the Indenture.
(iii) The Company is duly registered as a bank holding company under the
Bank Holding Company Act of 1956, as amended. The activities of each of the
Subsidiaries are permitted to subsidiaries of a bank holding company.
(iv) 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 or failures so to
qualify or to be in good standing would not, individually or in the aggregate,
result in a Material Adverse Effect.
(v) 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 Purchase 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.
(vi) Each Subsidiary 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 or failures so to qualify or to be in good standing
would not, individually or in the aggregate, result in a Material Adverse
Effect; except as otherwise disclosed in the Registration
A-1
Statement, all of the issued and outstanding capital stock of each Subsidiary
has been 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.
(vii) The Purchase Agreement has been duly authorized, executed and
delivered by the Company.
(viii) The Indenture has been duly authorized, executed and delivered by
the Company and (assuming the due authorization, execution and delivery thereof
by the Trustee) constitutes a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of creditors' rights generally
and except as enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at
law).
(ix) The Securities are in the form contemplated by the Indenture, have
been duly authorized by the Company and, assuming that the Securities have been
duly authenticated by the Trustee in the manner described in its certificate
delivered to you today (which fact such counsel need not determine by an
inspection of the Securities), the Securities have been duly executed, issued
and delivered by the Company and constitute valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms, except
as the enforcement thereof may be limited by bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of creditors' rights generally
and except as enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at
law), and will be entitled to the benefits of the Indenture.
(x) Upon issuance and delivery of the Securities in accordance with the
Purchase Agreement and the Indenture, the Securities shall be convertible at the
option of the holder thereof for shares of Common Stock in accordance with the
terms of the Securities and the Indenture; the shares of Common Stock and the
Rights issuable upon conversion of the Securities have been duly authorized and
reserved for issuance upon such conversion by all necessary corporate action;
such shares of Common Stock, when issued upon such conversion, will be validly
issued and will be fully paid and non-assessable and no holder of such Common
Stock is or will be subject to personal liability by reason of being such a
holder.
(xi) The issuance of the shares of Common Stock upon conversion of the
Securities is not subject to the preemptive or other similar rights of any
securityholder of the Company.
(xii) The Indenture has been duly qualified under the 1939 Act.
A-2
(xiii) The Securities and the Indenture conform as to legal matters in all
material respects to the descriptions thereof contained in the Prospectus.
(xiv) 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.
(xv) The Registration Statement, including any Rule 462(b) Registration
Statement, the Rule 430A Information and the Rule 434 Information, as
applicable, the Prospectus, excluding the documents incorporated by reference
therein, 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, and the
Trustee's Statement of Eligibility on Form T-1 (the "Form T-1"), as to which we
need express no opinion) complied as to form in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations.
(xvi) 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 were filed
with the Commission complied as to form in all material respects with the
requirements of the 1934 Act and the rules and regulations of the Commission
thereunder.
(xvii) If Rule 434 has been relied upon, the Prospectus was not
"materially different," as such term is used in Rule 434, from the prospectus
included in the Registration Statement at the time it became effective.
(xviii) 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 by-laws of the Company and the
requirements of the Nasdaq National Market.
(xix) 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 or assets 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 Purchase Agreement or the performance by the
Company of its obligations thereunder or the consummation of the Redemption or
that is required to be described in the Prospectus that is not described as
required; and to the best of our knowledge, all pending
A-3
legal or governmental proceedings to which the Company or any of its
subsidiaries is a party or that affect any of their respective properties or
assets that are not described in the Prospectus, including ordinary routine
litigation incidental to the business, would not reasonably be expected to
result in a Material Adverse Effect.
(xx) The information in the Prospectus under "Summary", "Risk Factors -
Sources of Payments to Holders of Debentures; Ability to Pay Dividends; Possible
Issuance of Additional Securities", "Risk Factors - Subordination", "Risk
Factors - Limited Covenants", "Risk Factors -Anti-takeover Provisions", "Risk
Factors - Regulatory Oversight", "Risk Factors - Regulation of Control",
"Regulation and Supervision", "Management - Executive Insurance", "Management -
Stock Option Agreement", "Management - Executive Income Protection Plan",
"Management - Compensation of Directors", "Management - Section 401(k) Plan",
"Management - Incentive Plans", "Management - Indemnification", "Description of
the Debentures" and "Description of Capital Stock" and in the Registration
Statement under Item 15, to the extent that it constitutes matters of law,
summaries of legal matters, the Company's charter and bylaws, documents or legal
proceedings, or legal conclusions, has been reviewed by us and is correct in all
material respects.
(xxi) 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.
(xxii) 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.
(xxiii) To the best of our knowledge, neither the Company nor any
subsidiary is in violation of its charter or by-laws and no default by the
Company or any subsidiary exists in the due performance or observance of any
material 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.
(xxiv) 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 and the
1933 Act Regulations, which have been obtained, or as may be required under the
securities or blue sky laws of the various states and except for the
qualification of the Indenture under the 1939 Act, as to which we need express
no opinion) is necessary or required in connection with the due authorization,
execution and delivery of the Purchase Agreement or the due execution, delivery
or performance of the Indenture by the
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Company or for the offering, issuance, sale or delivery of the Securities and
the issuance of shares of Common Stock upon conversion of Securities or the
consummation of the Redemption.
(xxv) The execution, delivery and performance of the Purchase Agreement,
the Indenture and the Securities and the consummation of the transactions
contemplated in the Purchase Agreement and in the Registration Statement
(including (a) 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", (b) the issuance of the shares of Common Stock
issuable upon conversion of the Securities and (c) the consummation of the
Redemption) and compliance by the Company with its obligations under the
Purchase Agreement, the Indenture and the Securities 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)(xiv) of the Purchase Agreement) under, give rise to any right of
termination 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, individually or in the aggregate, have a
Material Adverse Effect), nor will such action result in any violation of the
provisions of the charter or by-laws 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.
(xxvi) The Company is not, and upon the issuance and sale of the
Securities as contemplated in the Purchase Agreement and the application of the
net proceeds therefrom as described in the Prospectus will not be, an
"investment company" or an entity "controlled" by an "investment company," as
such terms are defined in the 1940 Act.
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 and Rule 434 Information (if applicable), (except for financial
statements and schedules and other financial data included or incorporated by
reference therein or omitted therefrom and the Form T-1, as to which we need
make no statement), at the time such Registration Statement or any such
amendment became 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 or incorporated by reference therein or
omitted therefrom and the Form T-1, 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
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
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In rendering such opinion, 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).
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[Form of lock-up pursuant to Section 5(j)]
Exhibit B
., 1997
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, INC.
as Representative of the several
Underwriters to be named in the
within-mentioned Purchase Agreement
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Proposed Public Offering by First State Bancorporation
------------------------------------------------------
Dear Sirs:
The undersigned, a stockholder [and an officer and/or director]/1/ of First
State Bancorporation, a New Mexico corporation (the "Company"), understands that
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc. ("KBW") proposes to enter into a Purchase
Agreement (the "Purchase Agreement") with the Company providing for the public
offering of $__________ aggregate principal amount of the Company's Convertible
Subordinated Debentures due 2017 (the "Securities"). In recognition of the
benefit that such an offering will confer upon the undersigned as a stockholder
[and an officer and/or director]/2/ of the Company, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the undersigned agrees with each underwriter to be named in the
Purchase Agreement that, during a period of 180 days from the date of the
Purchase Agreement, the undersigned will not, without the prior written consent
of KBW, 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, no par value per share (the
"Common Stock"), or any securities convertible into or exchangeable or
exercisable for Common Stock, whether now owned or hereafter acquired by the
undersigned or with respect to which the undersigned has or hereafter acquires
the power of disposition, or file or caused to be filed any registration
statement under the Securities Act of 1933, as amended, with respect to any of
the foregoing or (ii) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of Common Stock or any securities convertible
into or exchangeable for Common Stock, whether any such swap or transaction is
to be settled by delivery of Common Stock or other securities, in cash or
otherwise.
Very truly yours,
Signature:
-----------------------
Print Name:
----------------
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/1/ Delete or revise bracketed language as appropriate.
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