SVB CAPITAL I
$40,000,000
(Aggregate Liquidation Amount)
___% Cumulative Trust Preferred Securities
(Liquidation Amount $25 per Preferred Security)
by
BT ALEX. BROWN INCORPORATED
XXXXX, XXXXXXXX & XXXXX, INC.
XXXXXX & XXXXXX, INCORPORATED
UNDERWRITING AGREEMENT
______ __, 1998
BT ALEX. BROWN INCORPORATED
Xxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
XXXXX XXXXXXXX & XXXXX, INC.
Two World Trade Center
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
XXXXXX & XXXXXX, INCORPORATED
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Dear Sirs:
SVB Capital I (the "Trust"), a statutory business trust organized under
the Business Trust Act (the "Delaware Act") of the State of Delaware (Chapter
38, Title 12, of the Delaware Business Code, 12 Del. C. Section 3801 et seq.),
and Silicon Valley Bancshares, a California corporation (the "Company" and,
together with the Trust, the "Offerors"), as depositor of the Trust and as
guarantor, propose, upon the terms and conditions set forth herein, to issue and
sell an aggregate of 1,600,000 shares of the Trust's ___% Cumulative Trust
Preferred Securities having a liquidation amount of $25.00 per share (the
"Preferred Securities") to the several underwriters named in SCHEDULE I hereto
(each an "Underwriter" and collectively, the "Underwriters").
The Preferred Securities and the Common Securities (as defined herein)
are to be issued pursuant to the terms of a Trust Agreement to be dated as of
_____ __, 1998 (the "Trust Agreement"), among the Company, as depositor,
Wilmington Trust Company ("Trust Company"), as property trustee ("Property
Trustee") and as Delaware trustee ("Delaware Trustee"), the Administrative
Trustees named therein (the "Administrative Trustees") and the holders from time
to time of undivided interests in the assets of the Trust. The Preferred
Securities will be guaranteed by the Company (the "Guarantee") on a subordinated
basis and subject to certain limitations with respect to distributions and
payments upon liquidation, redemption or otherwise (the "Guarantee") pursuant to
the Guarantee Agreement to be dated as of _____ __, 1998 (the "Guarantee
Agreement"), between the Company and the Trust Company, as Trustee (the
"Guarantee Trustee"). The assets of the Trust will consist of ___% Junior
Subordinated Deferrable Interest Debentures, due _____ __, 2028 (the
"Subordinated Debentures") of the Company which will be issued under an
indenture to be dated as of _____ __, 1998 (the "Indenture"), between the
Company and the Trust Company, as Trustee (the "Indenture Trustee"). The
Company and the Trust will also enter into an Agreement As To Expenses and
Liabilities, to be dated as of _____ __, 1998 (the "Expense Agreement"). Under
certain circumstances, the Subordinated Debentures will be distributable to the
holders of undivided beneficial interests in the assets of the Trust. The
entire proceeds from the sale of the Preferred Securities will be combined with
the entire proceeds from the sale by the Trust to the Company of the Trust's
common securities (the "Common Securities"), and will be used by the Trust to
purchase an equivalent amount of the Subordinated Debentures.
The Company and the Trust have filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (Nos.
333-____ and 333-____) and a related preliminary prospectus for the registration
of the Preferred Securities, the Subordinated Debentures and the Guarantee under
the Securities Act of 1933, as amended (the "Securities Act"), and the rules and
regulations thereunder (the "Securities Act Regulations"). The Offerors have
prepared and filed such amendments thereto, if any, and such amended preliminary
prospectuses, if any, as may have been required to the date hereof, and will
file such additional amendments thereto and such amended prospectuses as may
hereafter be required. The registration statement has been declared effective
under the Securities Act by the Commission. The registration statement as
amended at the time it became effective (including the Prospectus (as
hereinafter defined) and the documents incorporated by reference therein
pursuant to the section therein entitled "Incorporation of Certain Documents by
Reference" and all information deemed to be a part of the registration statement
at the time it became effective pursuant to Rule 430A(b) of the Securities Act
Regulations, is hereinafter called the "Registration Statement," except that, if
the Company files a post-effective amendment to such registration statement
which becomes effective prior to the Closing Date (as defined below),
"Registration Statement" shall refer to such registration statement as so
amended. Each prospectus included in the registration statement, or amendments
thereof, before it became effective under the Securities Act and any prospectus
filed with the Commission by the Company with the consent of the Underwriters
pursuant to Rule 424(a) of the Securities Act Regulations (including the
-2-
documents incorporated by reference therein) is hereinafter called the
"Preliminary Prospectus." The term "Prospectus" means the final prospectus
(including the documents incorporated by reference therein), as first filed with
the Commission pursuant to paragraph (1) or (4) of Rule 424(b) of the Securities
Act Regulations. The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus.
The Company and the Trust hereby agree with the Underwriters as follows:
SECTION 1. REPRESENTATIONS AND WARRANTIES.
(a) Each of the Offerors represents and warrants to the
Underwriters as follows:
(i) The Registration Statement conforms, and the Prospectus
and any further amendments or supplements thereto will, when they become
effective or are filed with the Commission, as the case may be, conform,
in all material respects with the requirements of the Securities Act, the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), and
the applicable rules and regulations under said acts; the Trust
Agreement, the Guarantee Agreement, and the Indenture conform in all
material respects with the requirements of the Trust Indenture Act, and
the applicable rules and regulations thereunder; the Registration
Statement did not, and any amendment thereto will not, in each case as of
the applicable effective date, contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements made not misleading; and the Prospectus and any amendment or
supplement thereto will not, as of the applicable filing date and at the
Closing Date, contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements made, in
the light of the circumstances under which they were made, not
misleading; PROVIDED, HOWEVER, that the representations and warranties in
this subsection shall not apply to statements in or omissions from the
Registration Statement or Prospectus made in reliance upon and in
conformity with information furnished to the Trust or the Company by or
on behalf of the Underwriters, the Property Trustee, the Guarantee
Trustee or the Indenture Trustee expressly for use in the Registration
Statement or Prospectus.
(ii) The documents incorporated by reference in the
Prospectus pursuant to the section therein entitled "Incorporation of
Certain Information by Reference," at the time they were filed with the
Commission, complied in all material respects with the requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
the rules and regulations of the Commission thereunder, and did not
contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements made, in the
light of the circumstances under which they were made, not misleading.
(iii) Neither the Company nor the Trust is an open-end
investment company, unit investment trust or face-amount certificate
company that is, or is required to be, registered under Section 8 of the
Investment Company
-3-
Act of 1940, as amended (the "Investment Company Act"), nor is either a
closed-end investment company required to be registered, but not
registered, thereunder.
(iv) The Trust and the Company meet the requirements for the
use of Form S-3 under the Securities Act.
(v) The Company is a duly incorporated and subsisting
corporation in good standing under the laws of the State of California
with corporate power and authority to own and lease its properties and to
conduct its business as described in the Prospectus and to enter into and
perform its obligations under this Agreement, the Trust Agreement, the
Guarantee Agreement, the Indenture, the Subordinated Debentures and the
Expense Agreement, the Company is duly qualified as a foreign corporation
to transact business and is in good standing in each jurisdiction, if
any, in which its ownership or leasing of properties or the conduct of
its business requires such qualification, except where the failure to so
qualify would not have a material adverse effect on the conduct of the
business, financial condition, earnings or operations of the Company and
its subsidiaries considered as one enterprise; and the Company is duly
registered as a bank holding company under the Bank Holding Company Act
of 1956, as amended.
(vi) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as
otherwise stated therein, (A) there has been no material adverse change
in the conduct of the business, financial condition, earnings or
operations of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business,
(B) there have been no material transactions entered into by the Company
or its subsidiaries other than those in the ordinary course of business,
and (C) the Company has not sustained any material loss or interference
with its assets, businesses or properties (whether owned or leased) from
fire, explosion, earthquake, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or any court or
legislative or other governmental action, order or decree.
(vii) The Preferred Securities have been duly and validly
authorized for issuance and sale to the Underwriters pursuant to this
Agreement and, when executed and authenticated in accordance with the
terms of the Trust Agreement and delivered to the Underwriters against
payment of the consideration set forth herein, will constitute valid and
legally binding obligations of the Trust enforceable in accordance with
their terms and entitled to the benefits provided by the Trust Agreement
(except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, receivership, readjustment of debt,
moratorium, fraudulent conveyance or similar laws relating to or
affecting creditors' rights generally, or general equity principles
(whether considered in a proceeding in equity or at law)). The Trust
Agreement has been duly authorized and, when executed by the proper
officers of the Company and delivered by the Company, will have been duly
executed and delivered by the Company and will
-4-
constitute the valid and legally binding instrument of the Company,
enforceable in accordance with its terms (except as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization,
receivership, readjustment of debt, moratorium, fraudulent conveyance or
similar laws relating to or affecting creditors' rights generally, or
general equity principles (whether considered in a proceeding in equity
or at law)). The Subordinated Debentures have been duly and validly
authorized for delivery by the Company and when duly authenticated in
accordance with the terms of the Indenture and delivered to the Trust
against payment of the consideration set forth herein, will constitute
valid and legally binding obligations of the Company, enforceable against
the Company in accordance with their terms (except as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization,
receivership, readjustment of debt, moratorium, fraudulent conveyance or
similar laws relating to or affecting creditors' rights generally, or
general equity principles (whether considered in a proceeding in equity
or at law)) and entitled to the benefits provided by the Indenture. The
Indenture has been duly authorized and, when executed by the proper
officers of the Company and delivered by the Company, will have been duly
executed and delivered by the Company and will constitute the valid and
legally binding instrument of the Company, enforceable in accordance with
its terms (except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, receivership, readjustment of
debt, moratorium, fraudulent conveyance or similar laws relating to or
affecting creditors' rights generally, or general equity principles
(whether considered in a proceeding in equity or at law)). The Guarantee
has been duly authorized and, when executed by the proper officers of the
Company and delivered by the Company, will have been duly executed and
delivered by the Company and, assuming due authorization and execution of
the Guarantee by each other party thereto, will constitute valid and
legally binding instrument of the Company, enforceable in accordance with
its terms (except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, receivership, readjustment of
debt, moratorium, fraudulent conveyance or similar laws relating to or
affecting creditors' rights generally, or general equity principles
(whether considered in a proceeding in equity or at law)). The Expense
Agreement has been duly authorized and, when executed by the proper
officers of the Company and on behalf of the Trust by the Administrative
Trustees, will constitute the valid and binding instrument of each of the
Company and the Trust, enforceable in accordance with its terms (except
as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, receivership, readjustment of debt,
moratorium, fraudulent conveyance or similar laws relating to or
affecting creditors' rights generally, or general equity principles
(whether considered in a proceeding in equity or at law)). The Trust
Agreement, the Guarantee Agreement and the Indenture have been duly
qualified under the Trust Indenture Act and the Preferred Securities, the
Common Securities, the Trust Agreement, the Guarantee Agreement, the
Subordinated Debentures, the Indenture and the Expense Agreement conform
in all material respects to the descriptions thereof contained in the
Registration Statement and the Prospectus.
-5-
(viii) This Agreement has been duly authorized, executed and
delivered by the Trust and the Company and constitutes the valid and
binding agreement of the Trust and the Company enforceable against the
Trust and the Company in accordance with its terms, (except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, receivership, readjustment of debt, moratorium,
fraudulent conveyance or similar laws relating to or affecting creditors'
rights generally, Section 7 hereof or general equity principles (whether
considered in a proceeding in equity or at law)).
(ix) Neither the Trust, nor the Company or any of its
subsidiaries is in violation of its charter or in default in any material
respect in the performance or observance of any material obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to which it is
a party or by which it or any of its properties may be bound and which is
material to either the Trust or the Company and its subsidiaries
considered as one enterprise and the execution and delivery of this
Agreement, the Trust Agreement, the Guarantee Agreement, the Expense
Agreement and the Indenture, the issue and sale of the Preferred
Securities, the issue and sale of the Subordinated Debentures, the
compliance by the Trust and the Company with the provisions of the
Preferred Securities and the Subordinated Debentures, this Agreement, the
Trust Agreement, the Guarantee Agreement, the Expense Agreement and the
Indenture, and the consummation of the transactions herein and therein
contemplated will not conflict with or constitute a breach of, or default
under, the organization documents of the Trust or the articles of
incorporation or by-laws of the Company or any of its subsidiaries or a
material breach or default under any material contract, indenture,
mortgage, loan agreement, note, lease or other instrument to which the
Trust or the Company or any of its subsidiaries is a party or by which it
or any of its or their properties may be bound and which is material to
the Trust or the Company and its subsidiaries considered as one
enterprise, nor will such action result in any material violation on the
part of the Trust or the Company or any of its subsidiaries of any
applicable law or regulation or of any applicable administrative,
regulatory or court decree.
(x) There are no actions, suits, claims or proceedings
pending or, to the knowledge of the Trust or the Company, threatened
against the Trust or the Company or any of its subsidiaries before any
court or administrative agency or otherwise which are required to be
disclosed in the Registration Statement and are not so disclosed which,
if determined adversely to the Trust or the Company or any of its
subsidiaries, would individually or in the aggregate have a material
adverse effect on the business, financial condition, earnings or
operations of the Trust or the Company and its subsidiaries considered as
one enterprise or prevent the consummation of the transactions
contemplated hereby.
(xi) To the Company's knowledge, the Commission has not
issued an order preventing or suspending the use of the Prospectus, nor
instituted proceedings for that purpose.
-6-
(xii) The independent certified public accountants who audited
the consolidated financial statements included or incorporated by
reference in the Prospectus are independent public accountants as
required by the Securities Act and the Securities Act Regulations.
(xiii) The consolidated financial statements of the Company,
including the notes thereto and the supporting schedules, included or
incorporated by reference in the Prospectus, present fairly the financial
position, results of operations and cash flows of the Company and its
subsidiaries at the dates indicated, and the results of their operations
for the periods specified; such consolidated financial statements have
been prepared in conformity with generally accepted accounting principles
applied on a consistent basis except as otherwise stated therein.
(xiv) The Company and its subsidiaries have good and
marketable title to all of the properties and assets described in the
Registration Statement as being owned by them or as reflected in the
consolidated financial statements, subject to no lien, mortgage, pledge,
charge or encumbrance of any kind except those reflected in such
consolidated financial statements (or as described in the Prospectus or
which are not material in amount).
(xv) The Company and its subsidiaries have filed all federal,
state and local tax returns which have been required to be filed and have
paid all taxes indicated by said returns and all assessments received by
them or any of them to the extent that such taxes have become due and are
not being contested in good faith. All tax liabilities have been
adequately provided for in the consolidated financial statements of the
Company.
(xvi) No approval, authorization, consent, registration,
qualification or other order of any public board or body is required in
connection with the execution and delivery of this Agreement, the Trust
Agreement, the Guarantee Agreement, the Expense Agreement or the
Indenture, or the issuance and sale of the Preferred Securities, the
issuance and sale of the Subordinated Debentures, or the consummation by
the Trust and the Company of the other transactions contemplated by this
Agreement, the Trust Agreement, the Guarantee Agreement, the Expense
Agreement or the Indenture, except such as have been described in the
Prospectus or been obtained, or will have been obtained at the Closing
Date, under the Securities Act, the Exchange Act and the Trust Indenture
Act and such as may be required under the blue sky or securities laws of
various states in connection with the offering of the Preferred
Securities.
(xvii) The Company and its subsidiaries possess all material
licenses, certificates, authorities or permits issued by the appropriate
state or federal regulatory agencies or bodies necessary to conduct their
businesses as described in the Prospectus, and neither the Company nor
its subsidiaries have received any notice of proceedings relating to the
revocation or modification of any such license, certificate, authority or
permit which, individually or in the
-7-
aggregate, if the subject of an unfavorable decision, ruling or finding,
would have a material adverse effect on the conduct of the business,
financial condition, earnings or operations of the Company and its
subsidiaries considered as one enterprise. Neither the Company nor any
of its subsidiaries is a party to or otherwise subject to any consent
decree, memorandum of understanding, written commitment or other
supervisory agreement with the Board of Governors of the Federal Reserve
System or any Federal Reserve Bank (the "Federal Reserve"), the Federal
Deposit Insurance Corporation ("FDIC"), the California Department of
Financial Institutions, or any other federal or state authority or agency
responsible for the supervision, regulation or insurance of depository
institutions or their holding companies.
(xviii) There are no contracts or other documents which are
required to be filed as exhibits to the Registration Statement by the
Securities Act or by the Securities Act Regulations which have not been
filed as exhibits to the Registration Statement.
(xix) The Company has applied for the quotation of the
Preferred Securities on the Nasdaq National Market and shall use its best
efforts to have the Preferred Securities quoted on the Nasdaq National
Market or listed or quoted on a similar exchange.
(xx) The Company is in compliance in all material respects
with all presently applicable provisions of the Employee Retirement
Income Security Act of 1974, as amended, including the regulations and
published interpretations thereunder.
(xxi) The Company and its subsidiaries carry, or are covered
by, insurance in such amounts and covering such risks as is adequate for
the conduct of their respective businesses and the value of their
respective properties and as is customary for companies engaged in
similar businesses.
(b) Any certificate signed by any officer of the Trust or
the Company and delivered to you or to your counsel shall be deemed a
representation and warranty by the Trust or the Company to you as to the matters
covered thereby.
SECTION 2. SALE AND DELIVERY TO UNDERWRITER, CLOSING.
On the basis of the representations and warranties herein contained and
subject to the terms and conditions herein set forth, the Trust and the Company,
as the case may be, agree that the Trust will sell to the Underwriters, and each
of the Underwriters agrees, severally and not jointly, to purchase from the
Trust, the aggregate liquidation amount of Preferred Securities set forth
opposite its name on SCHEDULE I hereto, at a purchase price of $25 per Preferred
Security.
Payment of the purchase price for, and delivery of, the Preferred Securities
shall be made at the offices of Manatt, Xxxxxx & Xxxxxxxx, LLP, 00000 Xxxx
Xxxxxxx
-8-
Boulevard, Los Angeles, California, or at such other place as shall be agreed
upon by the Underwriters, the Trust and the Company, at 10:00 A.M. Eastern Time
, on the third (or if the Preferred Securities are priced, as contemplated by
Rule 15c-6(1)(c) under the Exchange Act, after 4:30 P.M. Eastern Time, on the
fourth) business day following the date of this Agreement, or such other time
not later than ten business days after such date as shall be agreed upon by the
Underwriters, the Trust and the Company (such time and date of payment and
delivery being herein called the "Closing Date").
As compensation for the commitments of the Underwriters contained in this
Section 2, and in view of the fact that the proceeds of the sale of the
Preferred Securities will be used by the Trust to purchase the Subordinated
Debentures of the Company, the Company hereby agrees to pay to the Underwriters
on the Closing Date an amount equal to $___ per Preferred Security times the
total number of Preferred Securities purchased by the Underwriters on the
Closing Date as commissions for the sale of such Preferred Securities under this
Agreement.
Payment for the Preferred Securities shall be made to the Trust by wire
transfer of immediately available funds, against delivery of the Preferred
Securities to the Underwriters. The Preferred Securities shall be issued in the
form of one or more fully registered global certificates (the "Global
Certificates") in book-entry form in such denominations and registered in the
name of the nominee of The Depository Trust Company (the "Depository") or in
such names as the Underwriters may request in writing at least two business days
before the Closing Date. The Global Certificates representing the Preferred
Securities shall be made available for examination by the Underwriters not later
than 10:00 A.M. Eastern Time on the last business day prior to the Closing Date.
Delivery of the Preferred Securities may be made by credit through "full fast
transfer" to the accounts at the Depository designated by the Underwriters.
SECTION 3. OFFERING BY THE UNDERWRITER. The Trust and the Company
are advised that the Underwriters propose to make a public offering of the
Preferred Securities, on the terms and conditions set forth in the Registration
Statement from time to time as and when the Underwriters deem advisable after
the Registration Statement becomes effective.
SECTION 4. COVENANTS OF THE OFFERORS. Each of the Trust and the
Company covenants with the Underwriters as follows:
(a) The Trust and the Company will prepare the Prospectus in
a form approved by the Underwriters and will file such Prospectus with the
Commission pursuant to subparagraph (1) or (4) of Rule 424(b) not later than the
Commission's close of business on the second business day following the
execution and delivery of this Agreement. The Trust and the Company will notify
the Underwriters immediately, and confirm the notice in writing, (i) of the
effectiveness of the Registration Statement and any amendment thereto (including
any post-effective amendment), and of the filing of the Prospectus pursuant to
Rule 424(b), (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
-9-
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 the
Prospectus, of the suspension of the qualification of the securities for
offering or sale in any jurisdiction, or of the initiation or threatening of any
proceeding for such purpose. The Trust and the Company will make every
reasonable effort to prevent the issuance of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or the Prospectus
or suspending any such qualification and, if any such order is issued, to obtain
the lifting thereof at the earliest possible moment.
(b) The Trust and the Company will deliver to the
Underwriters notice of their intention to prepare or file any amendment to the
Registration Statement relating to the Preferred Securities (including any
post-effective amendment) or any amendment or supplement to the Prospectus
(including documents deemed to be incorporated by reference into the Prospectus
and including any revised prospectus which the Trust and the Company propose for
use by the Underwriters in connection with the offering of the Preferred
Securities which differs from the prospectus on file at the Commission at the
time the Registration Statement becomes effective, whether or not such revised
prospectus is required to be filed pursuant to Rule 424(b) of the Securities Act
Regulations), will furnish the Underwriters and counsel for the Underwriters
with copies of any such amendment or supplement a reasonable amount of time
prior to such proposed filing or use, as the case may be, and will not file any
such amendment or supplement or use any such prospectus to which the
Underwriters or counsel for the Underwriters shall reasonably object.
(c) The Trust and the Company will deliver to the
Underwriters one manually executed copy of the Registration Statement as
originally filed and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein and documents incorporated by
reference into the Prospectus), such number of conformed copies of the
Registration Statement as originally filed and of each amendment thereto
(including documents incorporated by reference into the Prospectus but without
exhibits) as the Underwriters may reasonably request and copies of each
Preliminary Prospectus, the Prospectus and any amended or supplemented
Prospectus.
(d) The Trust and the Company will furnish to the
Underwriters, from time to time during the period when the Prospectus is
required to be delivered under the Securities Act, such number of copies of the
Prospectus (as amended or supplemented, if applicable) as they may reasonably
request for the purposes contemplated by the Securities Act or the Securities
Act Regulations.
(e) If any event shall occur as a result of which it is
necessary, in the reasonable opinion of counsel for the Underwriters, to amend
or supplement the Prospectus in order to make the Prospectus not misleading in
the light of the circumstances existing at the time it is delivered to a
purchaser, the Trust and the Company will forthwith amend or supplement the
Prospectus by preparing and furnishing to the Underwriters a reasonable number
of copies of an amendment of or supplement to the Prospectus (in form and
substance satisfactory to counsel for the Underwriters) so
-10-
that, as so amended or supplemented, the Prospectus will not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements made, in the light of the circumstances existing at the
time it is delivered to a purchaser, not misleading.
(f) The Trust and the Company, during the period when the
Prospectus is required to be delivered under the Securities Act, will file
promptly all documents required to be filed with the Commission pursuant to
Section 13, 14 or 15 of the Exchange Act subsequent to the time the Registration
Statement becomes effective.
(g) Both the Trust and the Company will endeavor, in
cooperation with the Underwriters, to qualify the Preferred Securities for
offering and sale under the applicable securities laws of such states and other
jurisdictions of the United States as the Underwriters may designate, and will
maintain such qualifications in effect for as long as may be required for the
distribution of the Preferred Securities, except that neither the Trust nor the
Company shall be required in connection therewith to qualify as a foreign
corporation or to execute a general consent to service of process in any state
or other jurisdiction. The Trust and the Company will file such statements and
reports as may be required by the laws of each jurisdiction in which the
Preferred Securities have been qualified as above provided.
(h) The Company will make generally available to its
security holders, as soon as it is practicable to do so, but in any event not
later than 15 months after the effective date of the Registration Statement, an
earnings statement (which need not be audited) in reasonable detail, covering a
period of at least 12 consecutive months beginning on the first day of the first
full fiscal quarter after the effective date of the Registration Statement,
which earnings statement shall satisfy the requirements of Section 11(a) of the
Securities Act and Rule 158 of the Securities Act Regulations and will advise
you in writing when such statement has been so made available. Such earnings
statement shall be made available not later than 45 days after the close of the
period covered thereby.
(i) The Trust and the Company will take such action as may
be necessary to comply with the rules and regulations of the Nasdaq National
Market in respect of the offering of the Preferred Securities.
(j) The Trust and the Company, for a period of 180 days from
the date hereof, will not, directly or indirectly, sell, offer to sell, grant
any option for sale of, or otherwise dispose of, any Preferred Securities, any
security convertible into or exchangeable into or exercisable for Preferred
Securities or Subordinated Debentures or any debt securities substantially
similar to the Subordinated Debentures or equity securities substantially
similar to the Preferred Securities (except for Subordinated Debentures and the
Preferred Securities offered hereby), without the prior written consent of the
Underwriters.
(k) For a period of five years after the Closing Date (but
not beyond any such date on which no Securities shall be outstanding), the Trust
and the Company
-11-
will furnish to the Underwriters copies of all reports and communications
delivered to the Company's shareholders or to holders of the Preferred
Securities, not later than the time such reports or information are first
furnished to such shareholders or security holders generally.
(l) The Trust shall apply the net proceeds of its sale of
the Preferred Securities, combined with the entire proceeds from the sale by the
Trust to the Company of the Trust's Common Securities, to purchase an equivalent
amount of the Subordinated Debentures of the Company. All the net proceeds to
be received by the Company from the sale of the Subordinated Debentures of the
Company will be used as described in the Prospectus.
(m) Neither the Company nor the Trust shall enter into any
contractual agreement with respect to the distribution of the Preferred
Securities except for the arrangements with the Underwriters.
SECTION 5. COSTS AND EXPENSES. The Company will pay all costs,
expenses and fees incident to the performance of its obligations under this
Agreement (except for the fees and disbursements of counsel for the Underwriters
other than pursuant to item (vi) of this Section 5), including: (i) the
printing and filing of the Registration Statement as originally filed and any
amendments and exhibits thereto, (ii) the filing fee of the National Association
of Securities Dealers, Inc. and expenses relating to any review of the offering
and the listing of the Preferred Securities on the Nasdaq National Market,
(iii) all expenses (including fees and disbursements of counsel to the Company
and the Trust) payable pursuant to Section 4 of this Agreement, (iv) all costs
and expenses incurred in connection with the preparation, issuance and delivery
of the Preferred Securities to the Underwriters, (v) the fees and disbursements
of the Trust's and the Company's counsel and accountants, (vi) the expenses in
connection with the qualification of the Preferred Securities under state
securities laws in accordance with the provisions of Section 4(g), including
filing fees and the reasonable fees and disbursements of counsel to the
Underwriters in connection therewith and in connection with the preparation of
the preliminary and final blue sky memoranda and Legal Investment Surveys,
(vii) the printing and delivery to the Underwriters of copies of the preliminary
and final blue sky memoranda and Legal Investment surveys, (viii) all costs and
expenses incurred in the preparation and the printing (including word processing
and duplication costs) of the Preferred Securities, the Indenture, the Guarantee
Agreement, the Trust Agreement, the Expense Agreement and all other documents
relating to the issuance and public offering of the Preferred Securities, and
(ix) the fees and expenses of the Property Trustee, the Delaware Trustee, the
Indenture Trustee, and the Guarantee Trustee, and any agent of the Property
Trustee, the Delaware Trustee, the Indenture Trustee, and the Guarantee Trustee,
and the fees and disbursements of the Property Trustee's counsel, in connection
with the Trust Agreement and the Preferred Securities.
If this Agreement is terminated by the Underwriters in accordance with
the provisions of Section 6 or Section 9(a) or (c), the Company shall reimburse
the Underwriters for all of their reasonable out-of-pocket expenses, including
the reasonable
-12-
fees and disbursements of counsel for the Underwriters, incurred in connection
with investigating, marketing and proposing to market the Preferred Securities.
SECTION 6. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several obligations
of the Underwriters to purchase and pay for the Preferred Securities at the
Closing Date are subject to the accuracy of the representations and warranties
of the Trust and the Company herein contained at and as of the date hereof and
the Closing Date, to the performance by the Trust and the Company of their
respective obligations hereunder, and to the following further conditions:
(a) The Prospectus shall have been timely filed with the
Commission in accordance with Section 4(a); and at the Closing Date, no stop
order suspending the effectiveness of the Registration Statement or any part
thereof shall have been issued under the Securities Act or proceedings therefor
initiated or threatened by the Commission; and any request of the Commission for
inclusion of additional information in the Registration Statement or the
Prospectus shall have been complied with and there shall not have come to the
attention of the Underwriters any facts that would cause the Underwriters to
believe that the Prospectus, at the time it was required to be delivered to a
purchaser of the Preferred Securities, contained any untrue statement of a
material fact or omitted to state a material fact necessary in order to make the
statements made, in light of the circumstances existing at such time, not
misleading.
(b) On the Closing Date, the Underwriters shall have
received:
(i) The favorable opinion, dated as of the Closing Date, of
Xxxxxx, Xxxxxx & Xxxxxxxx, LLP, counsel for the Company, in form and
substance substantially as attached hereto as EXHIBIT A.
In rendering such opinion, counsel may state that they are passing
only on matters of California law and United States federal law. In
rendering such opinion, counsel may rely upon an opinion or opinions,
each dated the Closing Date, of other counsel retained by them or the
Company as to laws of any jurisdiction other than the United States or
the State of California, provided that (A) such reliance is expressly
authorized by each opinion so relied upon and a copy of each such opinion
is delivered to the Underwriters, and (B) counsel shall state in their
opinion that they and the Underwriters are justified in relying thereon.
Insofar as such opinions involve factual matters, such counsel may rely,
to the extent such counsel deems proper, upon certificates of officers of
the Company, its subsidiaries and the Trust and certificates of public
officials.
(ii) The favorable opinion, dated the Closing Date, of Xxxxxxxx, Xxxxxx &
Xxxxxx, P.A., counsel to the Trust Company, in form and substance substantially
as attached hereto as EXHIBIT B.
(iii) The favorable opinion, dated the Closing Date of
Xxxxxxxx, Xxxxxx & Xxxxxx, P.A., special counsel to the Company and the
Trust, in form and substance substantially as attached hereto as EXHIBIT
C.
-13-
(iv) The favorable opinion, dated the Closing Date, of
O'Melveny & Xxxxx LLP, counsel to the Underwriters, as to such matters as
the Underwriters shall reasonably request.
In rendering such opinion, counsel may rely upon an opinion or
opinions, each dated the Closing Date, of other counsel retained by them
or the Company as to laws of any jurisdiction other than the United
States or the State of California, provided that (A) such reliance is
expressly authorized by each opinion so relied upon and a copy of each
such opinion is delivered to the Underwriters, and (B) counsel shall
state in their opinion that they believe that they and the Underwriters
are justified in relying thereon. Insofar as such opinions involve
factual matters, such counsel may rely, to the extent such counsel deems
proper, upon certificates of officers of the Company, its subsidiaries
and the Trust and certificates of public officials.
(c) At the time of the execution of this Agreement, the
Underwriters shall have received from KPMG Peat Marwick LLP a letter dated such
date, in form and substance satisfactory to the Underwriters, to the effect that
(i) they are independent public accountants as required by the Securities Act
and the Securities Act Regulations; (ii) it is their opinion that the financial
statements included or incorporated by reference in the Registration Statement
comply as to form in all material respects with the applicable accounting
requirements of the Securities Act and the Exchange Act and the applicable rules
and regulations thereunder; (iii) based upon limited procedures set forth in
detail in such letter, nothing has come to their attention which causes them to
believe that during the period from March 31, 1998 to a specified date not more
than five days prior to the date of this Agreement, there has been any decrease
in the capital stock or increase in long-term debt of the Company or its
subsidiaries or any decrease in consolidated total assets of the Company and its
subsidiaries as compared with the amounts shown in the March 31, 1998
consolidated balance sheet incorporated by reference in the Registration
Statement, or any decrease, as compared with the corresponding period in the
preceding year, in net income or net interest income of the Company and its
subsidiaries on a consolidated basis, except in each case as set forth or
contemplated in the Registration Statement; and (iv) they have read the
Registration Statement and certain dollar amounts, percentages and other
financial information specified by the Underwriters which is included or
incorporated by reference in the Registration Statement and have performed the
procedures set forth in detail in such letter and have found such amounts,
percentages or other financial information to be in agreement with the relevant
accounting and financial records of the Company and its subsidiaries.
(d) On the Closing Date, the Underwriters shall have
received from KPMG Peat Marwick LLP a letter, dated as of the Closing Date, to
the effect that they reaffirm the statements made in the letter furnished
pursuant to paragraph (c) of this Section, except that the "specified date"
referred to shall be a date not more than five days prior to the Closing Date.
-14-
(e) On the Closing Date, the Underwriters shall have
received a certificate signed by the President and the Chief Executive Officer
and the principal financial or accounting officer of the Company, dated the
Closing Date, to the effect that the signers of such certificate have carefully
examined the Registration Statement and this Agreement and that, to the best of
their knowledge:
(i) The representations and warranties of the Company
in this Agreement are true and correct in all material respects on and as
of the Closing Date with the same effect as if made on the Closing Date
and the Company has complied in all material respects with all the
agreements and satisfied in all material respects all the conditions on
its part to be performed or satisfied at or prior to the Closing Date;
(ii) Since the date of the most recent financial
statements included in the Registration Statement (exclusive of any
supplement thereto), there has been no material adverse change in the
financial condition, earnings, business, operations or properties of the
Company and its subsidiaries taken as a whole, whether or not arising
from transactions in the ordinary course of business, except as set forth
in or contemplated in the Registration Statement (exclusive of any
supplement thereto); and
(iii) The condition set forth in Section 6(a) has been
fulfilled.
(f) On the Closing Date, there shall not have been, since
the respective dates as of which information is given in the Registration
Statement, any material adverse change in the financial condition, earnings,
business, operations or properties of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary course of
business.
(g) Prior to the Closing Date, the Company shall have
furnished to the Underwriters such further information, certificates and
documents as the Underwriters may reasonably request in connection with the
offering of the Preferred Securities.
If any condition specified in this Section shall not have been fulfilled
when and as required to be fulfilled, this Agreement may be terminated by the
Underwriters by notice to the Company at any time at or prior to the Closing
Date, and such termination shall be without liability of any party to any other
party except as provided in Section 5 and except that Sections 7 and 8 hereof
shall survive such termination.
SECTION 7. INDEMNIFICATION.
(a) Each of the Company and the Trust jointly and severally
agrees to indemnify and hold harmless each Underwriter and each person, if any,
who controls such Underwriter within the meaning of the Securities Act against
any losses, claims, damages or liabilities to which such Underwriter or such
controlling person may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of or are based upon
-15-
(i) any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto, or (ii) the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and subject to
Section 7(c) hereof, will reimburse each Underwriter and each such controlling
person for any legal or other expenses reasonably incurred by such Underwriter
or such controlling person in connection with investigating or defending any
such loss, claim, damage, liability, action or proceeding; provided, however,
that the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement, or omission or alleged omission made in
the Registration Statement, any Preliminary Prospectus, the Prospectus, or such
amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company by the Underwriters specifically for use in
the preparation thereof. This indemnity agreement will be in addition to any
liability which the Company or the Trust may otherwise have.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, each of its directors, each of its
officers who have signed the Registration Statement and each person, if any, who
controls the Company, against any losses, claims, damages or liabilities to
which the Company or any such director, officer, or controlling person may
become subject under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in the Registration Statement, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto, or arise out
of or are based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances under which they were
made, and will reimburse any legal or other expenses reasonably incurred by the
Company or any such director, officer or controlling person in connection with
investigating or defending any such loss, claim, damage, liability, action or
proceeding; provided, however, that an Underwriter will be liable in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission has been made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or such
amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company by or through such Underwriter specifically
for use in the preparation thereof. For purposes of this Section 7, the only
written information furnished by the Underwriters for use in the Registration
Statement and the Prospectus is the information in the last paragraph of the
_____ page of the Prospectus (regarding stabilizing transactions) and the third,
fourth and the second sentence of the eighth paragraphs under the caption
"Underwriting" in the Prospectus. This indemnity agreement will be in addition
to any liability which an Underwriter may otherwise have.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to this Section 7, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in
-16-
writing. No indemnification provided for in Section 7(a) or (b) shall be
available to any party who shall fail to give notice as provided in this
Section 7(c) if the party to whom notice was not given was unaware of the
proceeding to which such notice would have related and was materially prejudiced
by the failure to give such notice, but the failure to give such notice shall
not relieve the indemnifying party or parties from any liability which it or
they may have to the indemnified party for contribution under Section 7(d)
hereof or otherwise than on account of the provisions of Section 7(a) or (b).
In case any such proceeding shall be brought against any indemnified party and
it shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall retain counsel reasonably satisfactory to the
indemnified party to defend the indemnified party and shall pay as incurred the
fees and disbursements of such counsel related to such proceeding. The
indemnifying party shall be entitled to participate therein and, to the extent
that it shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel reasonably satisfactory to
such indemnified party. In any such proceeding, any indemnified party shall
have the right to retain its own counsel at its own expense. Notwithstanding
the foregoing, the indemnifying party shall pay as incurred the fees and
expenses of the counsel retained by the indemnified party in the event (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel, (ii) the indemnifying party has failed to assume the
defense of such proceeding or shall have failed to retain counsel reasonably
satisfactory to the indemnified party, or (iii) the named parties to any such
proceeding (including any impleaded parties) include both the indemnifying party
and the indemnified party and representation of both parties by the same counsel
under applicable rules of professional conduct, would be inappropriate due to
actual or potential differing interests between them. It is understood that the
indemnifying party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees and
expenses of more than one separate firm (and appropriate local counsel) for all
such indemnified parties. Such firm shall be designated in writing by the
Underwriters in the case of parties indemnified pursuant to Section 7(a) and by
the Company in the case of parties indemnified pursuant to Section 7(b). The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment.
(d) If the indemnification provided for in this Section 7 is
unavailable (other than by reason of the exception contained in the second
sentence of Section 7(c) hereof) to or insufficient to hold harmless an
indemnified party under Section 7(a) or (b) above in respect of any losses,
claims, damages or liabilities (or actions or proceedings in respect thereof
referred to therein), then each indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof) in
such proportion as is appropriate to reflect the relative benefits received by
the Company on the one hand and the Underwriters on the other from the offering
of the Preferred Securities. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under Section 7(c) above,
then each indemnifying party shall contribute to such amount paid or
-17-
payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company on the one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) as well as any other
relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bears to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus. The relative fault
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company on the
one hand or the Underwriter on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
(e) The Company, the Trust and the Underwriters agree that
it would not be just and equitable if contributions pursuant to this Section 7
were determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to above in
Section 7(d). The amount paid or payable by an indemnified party as a result of
the losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) referred to above in Section 7(d) shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (e): (i) except with respect to information
contained or omitted from the Registration Statement, 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 or through an
Underwriter specifically for use in the preparation thereof, such Underwriter
shall not be required to contribute any amount in excess of the underwriting
discounts and commissions applicable to the Preferred Securities purchased by
such Underwriter and (ii) no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(f) In any proceeding relating to the Registration
Statement, any Preliminary Prospectus, the Prospectus or any supplement or
amendment thereto, each party against whom contribution may be sought under this
Section 7 hereby consents to the jurisdiction of any court having jurisdiction
over any other contributing party, agrees that process issuing from such court
may be served upon him or it by any other contributing party and consents to the
service of such process and agrees that any other contributing party may join
him or it as an additional defendant in any such proceeding in which such other
contributing party is a party.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. The reimbursement, indemnification and contribution agreements
contained in this Agreement and the representations, warranties and covenants
contained in this
-18-
Agreement shall remain in full force and effect, regardless of (a) any
termination of this Agreement, (b) any investigation made by or on behalf of an
Underwriter or by or on behalf of any person controlling such Underwriter, or by
or on behalf of the Company, and (c) delivery of and payment for the Preferred
Securities to the Underwriters.
SECTION 9. TERMINATION OF AGREEMENT. The Underwriters may
terminate this Agreement, by notice to the Company, at any time at or prior to
the Closing Date (a) if there has been, since the respective dates as of which
information is given in the Registration Statement, any material adverse change
in the condition, financial or otherwise, of the Company and its subsidiaries
considered as one enterprise, or in the earnings or operations of the Company
and its subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (b) if there has occurred any new outbreak of
hostilities or escalation of any existing hostilities or other calamity or
crisis the effect of which on the financial markets of the United States is such
as to make it, in the reasonable professional judgment of the Underwriters,
impracticable to market the Preferred Securities or to enforce contracts for the
sale of the Preferred Securities, or (c) if trading in the securities of the
Company has been suspended by the Commission or if trading or quotation
generally on the Nasdaq National Market has been suspended, or minimum or
maximum prices for trading have been fixed, or maximum ranges of prices for
securities have been required by the Nasdaq National Market or by order of the
Commission or any other governmental authority, or (d) if a banking moratorium
has been declared by federal, New York or California authorities. If this
Agreement is terminated pursuant to this Section 9, such termination shall be
without liability of any party to any other party, except as provided in
Section 7, and provided further that Sections 5, 7 and 8 hereof shall survive
such termination.
SECTION 10. PRO RATA PURCHASE IN CERTAIN EVENTS. If on the Closing
Date any one or more of the Underwriters shall fail or refuse to purchase
Preferred Securities that it or they have agreed to purchase hereunder and the
aggregate liquidation amount of Preferred Securities that such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not more
than one-tenth of the aggregate liquidation amount of Preferred Securities to be
purchased on such date, the other Underwriters shall be obligated severally in
the proportions which the aggregate liquidation amount of Preferred Securities
set forth opposite their names in SCHEDULE I to this Agreement bears to the
aggregate liquidation amount of Preferred Securities set forth opposite the
names of all such non-defaulting Underwriters, or in such other proportions as
the Underwriters may specify, to purchase the Preferred Securities that such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
on such date. If on the Closing Date any Underwriter or Underwriters shall fail
or refuse to purchase Preferred Securities and the aggregate liquidation amount
of Preferred Securities with respect to which such default occurs is more than
one-tenth of the aggregate liquidation amount of Preferred Securities to be
purchased on such date, and arrangements satisfactory to the Underwriters and
the Company for the purchase of such Preferred Securities are not made within
48 hours after such default, this Agreement shall thereupon terminate without
liability on the part of any non-defaulting Underwriters or of the Company or
the Trust. In any such case, either the Underwriters or the Company shall have
the right to postpone the Closing Date, but in no event for longer than seven
days, in order that the
-19-
required changes, if any, in the Registration Statement or in any other
documents or arrangements may be affected. An action taken under this
Section 10 shall not relieve any defaulting Underwriter from liability in
respect of any default of such Underwriter under this Agreement.
SECTION 11. REIMBURSEMENT UPON TERMINATION IN CERTAIN CIRCUMSTANCES.
If this Agreement shall be terminated by the Underwriters or any of them,
because of any failure or refusal on the part of the Company to comply in any
material respect with the terms or to fulfill in any material respect any of the
conditions of this Agreement, or if for any reason the Company shall be unable
to perform in any material respect its obligations under this Agreement, the
Company shall reimburse the Underwriters or such Underwriters as have so
terminated the Agreement, with respect to themselves, severally, for all
reasonable out-of-pocket expenses reasonably incurred by such Underwriters in
connection with the offering of the Preferred Securities.
SECTION 12. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunications. Notices to the
Underwriters shall be directed to them in care of BT Xxxx. Xxxxx Incorporated,
Xxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, Attention of Xxxxxx X. Xxxxxxxxxx.
Notice to the Company and the Trust shall be directed to Silicon Valley
Bancshares, 0000 Xxxxxx Xxxxx, Xxxxx Xxxxx, Xxxxxxxxxx 00000, Attention of
Xxxxx Xxxxxx, Senior Vice President and Treasurer, with a copy to Xxxxxx X.
Xxxx, Managing Partner, Xxxxxx, Xxxxxx & Xxxxxxxx, LLP, 00000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000.
SECTION 13. PARTIES. This Agreement shall 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
parties hereto and their respective successors and the controlling persons and
officers and directors referred to in Sections 7 and 8 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 parties hereto 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 an Underwriter shall be deemed to be a successor
by reason merely of such purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE
GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SAID STATE. SPECIFIED
TIMES OF DAY REFER TO EASTERN TIME.
[SIGNATURES APPEAR ON THE FOLLOWING PAGE]
-20-
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument along with all counterparts will become a binding agreement among the
Underwriters, the Company and the Trust in accordance with its terms.
Very truly yours,
SVB CAPITAL I
By:
----------------------------------
Xxxxxxx X. Xxxx, Trustee
----------------------------------
Xxxxxxxxxxx X. Xxxxx, Trustee
----------------------------------
Xxxxx Xxxxxx, Trustee
SILICON VALLEY BANCSHARES
By:
----------------------------------
Name:
Title:
Confirmed and accepted, as of the date
first above written.
BT ALEX. BROWN INCORPORATED XXXXXX & XXXXXX,
INCORPORATED
By: By:
------------------------------ -------------------------------
Name: Name:
Title: Title:
XXXXX, XXXXXXXX & XXXXX, INC.
By:
------------------------------
Name:
Title:
-21-
SCHEDULE I
Underwriter Number of Shares
----------- ----------------
BT Xxxx. Xxxxx Incorporated. . . . . . .
Xxxxx, Xxxxxxxx & Xxxxx, Inc. . . . . .
Xxxxxx & Xxxxxx, Incorporated . . . . .
Total . . . . . . . . . . . . . . 1,600,000
-22-
EXHIBIT A
The opinion of Xxxxxx, Xxxxxx & Xxxxxxxx, LLP, counsel to the Company, to
be delivered pursuant to Section 6(b)(i) of the Underwriting Agreement shall be
substantially to the effect that:
1. The Company is a corporation validly organized and presently subsisting
under the laws of the State of California, with requisite corporate power and
authority to own its properties and conduct its business as described in the
Registration Statement, except for such power and authority the absence of which
would not have a material adverse effect on the Company, and is duly registered
as bank holding company under the Bank Holding Company Act of 1956, as amended.
2. Each of the subsidiaries of the Company, other than the Trust, is a
corporation validly organized and presently subsisting under the laws of the
state of its incorporation, with requisite corporate power and authority to own
its properties and conduct its business as described in the Registration
Statement, except for such power and authority the absence of which would not
have a material adverse effect on such subsidiary.
3. No holders of securities of the Company or the Trust have rights to
require either the Company or the Trust to arrange for the offer or sale of such
securities in connection with the transactions contemplated by this Agreement.
4. All of the outstanding capital stock of Silicon Valley Bank (the "Bank")
is owned by the Company and the Bank is a member of the Federal Reserve System
and the deposits of the depositors in the Bank are insured by the Federal
Deposit Insurance Corporation.
5. All of the outstanding Common Securities of the Trust are owned by the
Company.
6. The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
7. Each of the Trust Agreement, the Guarantee Agreement and the Indenture
has been duly authorized, executed and delivered by the Company, has been duly
qualified under the Trust Indenture Act, and is a valid and binding obligation
of the Company, enforceable against the Company in accordance with its terms
(except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, receivership, readjustment of debt, moratorium,
fraudulent conveyance or similar laws relating to or affecting creditors' rights
generally, or general equity principles (whether considered in a proceeding in
equity or at law)) and an implied covenant of good faith and fair dealing.
-23-
8. The Expense Agreement has been duly authorized, executed and delivered by
the Company and is a valid and binding obligation of the Company enforceable
against the Company in accordance with its terms (except as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization,
receivership, readjustment of debt, moratorium, fraudulent conveyance or similar
laws relating to or affecting creditors' rights generally, or general equity
principles (whether considered in a proceeding in equity or at law)) and an
implied covenant of good faith and fair dealing.
9. Assuming each of the Indenture and Guarantee Agreement have been duly
authorized, executed and delivered by the Trust Company and the Expense
Agreement has been duly executed and delivered by the Trust, each of the
Indenture, the Guarantee Agreement and the Expense Agreement is a valid and
binding agreement of the Trust Company (in the case of the Indenture and the
Guarantee Agreement) and the Trust (in the case of the Expense Agreement),
enforceable against the Trust Company or the Trust, as the case may be, in
accordance with its terms (except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, receivership, readjustment of
debt, moratorium, fraudulent conveyance or similar laws relating to or affecting
creditors' rights generally, or general equity principles (whether considered in
a proceeding in equity or at law)) and an implied covenant of good faith and
fair dealing.
10. The Subordinated Debentures have been duly authorized, executed and
delivered by the Company and when duly authenticated in accordance with the
Indenture and delivered and paid for in accordance with the Underwriting
Agreement, will be valid and binding obligations of the Company, entitled to the
benefits of the Indenture and enforceable against the Company in accordance with
their terms (except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, receivership, readjustment of debt,
moratorium, fraudulent conveyance or similar laws relating to or affecting
creditors' rights generally, or general equity principles (whether considered in
a proceeding in equity or at law)) and an implied covenant of good faith and
fair dealing.
11. The Trust is not an "investment company" or an entity "controlled" by an
"investment company," as such terms are defined in Investment Company Act of
1940, as amended.
12. The statements set forth in the Registration Statement under the captions
"Description of the Trust Preferred Securities," "Description of Junior
Subordinated Debentures," "Description of Guarantee," "Expense Agreement" and
"Relationship Among the Trust Preferred Securities, the Junior Subordinated
Debentures and the Guarantee," and under the caption "Business - Supervision and
Regulation" in the Company's Annual Report on Form 10-K for the year ended
December 31, 1997 incorporated by reference in the Registration Statement,
insofar as they purport to describe the provisions of the laws and documents
referred to therein, fairly summarize the matters described therein; and the
Preferred Securities, the Debentures and the Guarantee conform to the
descriptions contained in the Registration Statement in all material respects.
-24-
[13. The statements of law or legal conclusions and opinions set forth in the
Registration Statement under the caption "Certain Federal Income Tax
Consequences," subject to the assumptions and conditions described therein,
constitute such counsel's opinion.]
14. The Registration Statement was declared effective under the Securities
Act as of the date and time specified in such opinion and, to the best of such
counsel's knowledge and information, no stop order suspending the effectiveness
of the Registration Statement has been issued under the Securities Act and no
proceedings therefor have been initiated or threatened by the Commission.
15. The Registration Statement and the Prospectus and any amendment or
supplement thereto made by the Company prior to the Closing Date (other than the
financial statements and financial data included therein, as to which no opinion
need be rendered), when it or they became effective or were filed with the
Commission, as the case may be, and in each case at the Closing Date, complied
as to form in all material respects with the requirements of the Securities Act,
the Trust Indenture Act and the applicable rules and regulations under said acts
and the documents incorporated by reference into the Prospectus (other than the
financial statements and financial data included therein, as to which no opinion
need be rendered) complied as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations of the Commission
thereunder, and such counsel has no reason to believe that the Registration
Statement, at the time it became effective, contained any untrue statement of a
material fact or omitted to state a material fact necessary in order to make the
statements contained therein, not misleading, or that the Prospectus, at the
time it was mailed to the Commission for filing or at the Closing Date,
contained any untrue statement of a material fact or omitted to state a material
fact necessary in order to make the statements contained therein, in the light
of the circumstances under which they were made, not misleading.
16. Such counsel knows of no material legal or governmental proceedings
pending to which the Company or any of its subsidiaries is a party or of which
any property of the Company or any of its subsidiaries is the subject which are
required to be disclosed in the Registration Statement or which would affect the
consummation of the transactions contemplated in this Agreement, the Indenture
or the Preferred Securities; and such counsel knows of no such proceedings which
are threatened or contemplated by governmental authorities or threatened by
others.
17. Such counsel knows of no contracts, indentures, mortgages, loan
agreements, notes, leases or other instruments required to be described in the
Registration Statement or to be filed as exhibits thereto other than those
described therein or filed or incorporated by reference as exhibits thereto, and
such instruments as are summarized in the Registration Statement are fairly
summarized in all material respects.
18. No approval, authorization, consent, registration, qualification or other
order of any public board or body is required in connection with the execution
and delivery of this Agreement, the Trust Agreement, the Guarantee Agreement,
the Expense Agreement and the Indenture or the issuance and sale of the
Preferred Securities or the Subordinated
-25-
Debentures or the consummation by the Company of the other transactions
contemplated by this Agreement, the Trust Agreement, the Guarantee Agreement,
the Expense Agreement or the Indenture, except such as have been described in
the Prospectus or been obtained under the Securities Act, the Exchange Act and
the Trust Indenture Act or such as may be required under the blue sky or
securities laws of various states in connection with the offering and sale of
the Preferred Securities (as to which such counsel need express no opinion).
19. The execution and delivery of this Agreement, the Trust Agreement, the
Guarantee Agreement, the Expense Agreement and the Indenture, the issue and sale
of the Preferred Securities and the Subordinated Debentures, the compliance by
the Company with the provisions of the Preferred Securities, the Subordinated
Debentures, the Indenture, the Trust Agreement, the Guarantee Agreement, the
Expense Agreement and this Agreement and the consummation of the transactions
herein and therein contemplated will not conflict with or constitute a breach
of, or default under, the articles of incorporation or by-laws of the Company or
any of its subsidiaries or a breach or default under any contract, indenture,
mortgage, loan agreement, note, lease or other instrument known to such counsel
to which either the Company or any of its subsidiaries is a party or by which
either of them or any of their respective properties may be bound except for
such breaches as would not have a material adverse effect on the Company and its
subsidiaries considered as one enterprise, nor will such action result in a
violation on the part of the Company or any of its subsidiaries of any
applicable law or regulation or of any administrative, regulatory or court
decree known to such counsel.
-26-
EXHIBIT B
The opinion of counsel to the Trust Company to be delivered pursuant to
Section 6(b)(ii) of the Underwriting Agreement shall be substantially to the
effect that:
1. The Trust Company is duly incorporated and is validly existing in good
standing as a banking corporation with trust powers under the laws of the State
of Delaware.
2. The Trust Company has the requisite power and authority to execute,
deliver and perform its obligations under each of the Indenture, the Guarantee
Agreement and the Trust Agreement, has taken all necessary corporate action to
authorize the execution, delivery and performance by it of each of the
Indenture, the Guarantee Agreement and the Trust Agreement, and each of the
Indenture, Guarantee Agreement and Trust Agreement has been duly executed and
delivered by the Trust Company.
3. The Subordinated Debentures delivered on the date hereof have been duly
authenticated by the Indenture Trustee in accordance with the terms of the
Indenture.
-27-
EXHIBIT C
The opinion of counsel to the Company and the Trust to be delivered
pursuant to Section 6(b)(iii) of the Underwriting Agreement shall be
substantially to the effect that:
1. The Trust has been duly created and is validly existing in good standing
as a business trust under the Delaware Business Trust Act, 12 Del. C. Section
3801 et seq. (the "Delaware Act"), and all filings required under the laws of
the State of Delaware with respect to the creation and valid existence of the
Trust as a business trust have been made.
2. Under the Delaware Act and the Trust Agreement, the Trust has the trust
power and authority to own its property and to its conduct its business, all as
described in the Prospectus.
3. Assuming the due authorization, execution and delivery thereof by each of
the Company and the Administrative Trustees, the Trust Agreement constitutes a
valid and binding obligation of the Company and the Trust Company, and is
enforceable against the Company and the Trust Company, in accordance with its
terms.
4. Under the Delaware Act and the Trust Agreement, (a) the Trust has the
trust power and authority to execute and deliver, and to perform its obligations
under, this Agreement and (b) to issue and perform its obligations under the
Preferred Securities and the Common Securities.
5. Under the Delaware Act and the Trust Agreement, the execution and
delivery by the Trust of each of this Agreement and the Expense Agreement, and
the performance by the Trust of its obligations hereunder and thereunder, have
been duly authorized by all necessary trust action on the part of the Trust; and
this Agreement and the Expense Agreement has been duly executed and delivered by
the Trust.
6. The Preferred Securities have been duly authorized by the Trust Agreement
and are duly and validly issued and, subject to the qualifications set forth
herein, fully paid and nonassessable undivided beneficial interests in the
assets of the Trust and are entitled to the benefits of the Trust Agreement.
The Holders, as beneficial owners of the Trust, will be entitled to the same
limitations of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of the State
of Delaware. We note that the Holders may be obligated pursuant to the Trust
Agreement, (a) to provide indemnity and/or security in connection with and pay
taxes or governmental charges arising from transfers or exchanges of Preferred
Securities Certificates and the issuance of replacement Preferred Securities
Certificates, and (b) to provide security or indemnity in connection with
requests of or directions to the Property Trustee to exercise its rights and
powers under the Trust Agreement.
-28-
7. The Common Securities have been duly authorized by the Trust Agreement
and are duly and validly issued and, subject to the qualifications set forth
herein, fully paid and nonassessable undivided beneficial interests in the
assets of the Trust and are entitled to the benefits of the Trust Agreement.
The Holders, as beneficial owners of the Trust, will be entitled to the same
limitations of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of the State
of Delaware. We note that the Holders may be obligated pursuant to the Trust
Agreement, (a) to provide indemnity and/or security in connection with and pay
taxes or governmental charges arising from transfers or exchanges of Common
Securities Certificates and the issuance of replacement Common Securities
Certificates, and (b) to provide security or indemnity in connection with
requests of or directions to the Property Trustee to exercise its rights and
powers under the Trust Agreement.
8. Under the Delaware Act and the Trust Agreement, the issuance of the
Preferred Securities and Common Securities is not subject to preemptive rights.
9. The issuance and sale by the Trust of the Preferred Securities and Common
Securities, the purchase by the Trust of the Subordinated Debentures, the
execution, delivery and performance by the Trust of each of this Agreement and
the Expense Agreement, the consummation by the Trust of the transactions
contemplated by each of this Agreement and the Expense Agreement and the
compliance by the Trust with its obligations hereunder and thereunder will not
violate (i) any of the provisions of the Certificate of Trust or the Trust
Agreement or (ii) any applicable Delaware law or administrative regulation.
10. The Delaware Trustee is duly incorporated and is validly existing in good
standing as a banking corporation with trust powers under the laws of the State
of Delaware.
11. The Delaware Trustee has the requisite power and authority to execute and
deliver the Trust Agreement, and has taken all necessary corporate action to
authorize the execution and delivery of the Trust Agreement.
-29-
