Exhibit 1.1
1,250,000 SHARES
SILICON VALLEY BANCSHARES
COMMON STOCK
PAR VALUE $0.001 PER SHARE
UNDERWRITING AGREEMENT
November __, 1999
Xxxx Xxxxxxxx Incorporated
As Representative of the several Underwriters
Xxxx Xxxxxxxx Plaza
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
Silicon Valley Bancshares, a Delaware corporation (the
"Company"), proposes, subject to the terms and conditions stated herein, to
issue and sell to the several Underwriters named in Schedule A hereto (the
"Underwriters"), for which you are acting as representative (the
"Representative"), an aggregate of 1,250,000 shares (the "Firm Shares") of
Common Stock, par value $0.001 per share, of the Company (the "Common Stock"),
and, at the election of the Underwriters, up to 187,500 additional shares of
Common Stock (the "Option Shares"). The Firm Shares and the Option Shares are
herein collectively called the "Shares."
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (File No.
333-_______) and a related preliminary prospectus for the registration of the
Shares under the Securities Act of 1933, as amended (the "Act"). The
registration statement, as amended at the time it was declared effective,
including the information (if any) deemed to be part thereof pursuant to Rule
430A under the Act, is herein referred to as the "Registration Statement." The
form of prospectus first filed by the Company with the Commission pursuant to
Rules 424(b) and 430A under the Act is referred to herein as the "Prospectus."
Each preliminary prospectus included in the registration statement prior to the
time it becomes effective or filed with the Commission pursuant to Rule 424(a)
under the Act is referred to herein as a "Preliminary Prospectus." Copies of the
Registration Statement, including all exhibits and schedules thereto, any
amendments thereto and all Preliminary Prospectuses have been delivered to you.
The Company hereby confirms its agreements with respect to the
purchase of the Shares by the Underwriters as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
(a) The Company represents and warrants to, and agrees with,
each of the Underwriters that:
(i) The Registration Statement has been declared effective
under the Act, and no post-effective amendment to the
Registration Statement has been filed as of the date of this
Agreement. No stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceeding for
that purpose has been instituted or threatened by the
Commission.
(ii) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and
each Preliminary Prospectus, at the time of filing thereof,
conformed, in all material respects, to the requirements of
the Act and the rules and regulations of the Commission
promulgated thereunder (collectively, the "Regulations"), and
did not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
provided, however, the Company makes no representation or
warranty as to information contained in or omitted in reliance
upon, and in conformity with, written information furnished to
the Company by or on behalf of any Underwriter through the
Representative expressly for use in the preparation thereof.
(iii) The Registration Statement conforms, and the Prospectus
and any amendments or supplements thereto will conform, in all
material respects to the requirements of the Act and the
Regulations. Neither the Registration Statement nor any
amendment thereto, and neither the Prospectus nor any
amendment or supplement thereto, contains or will contain, as
the case may be, any untrue statement of a material fact or
omits or will omit to state any material fact required to be
stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading; provided, however, that the Company makes no
representation or warranty as to information contained in or
omitted from the Registration Statement or the Prospectus, or
any such amendment or supplement, in reliance upon, and in
conformity with, written information furnished to the Company
by or on behalf of any Underwriter through the Representative,
expressly for use in the preparation thereof.
(iv) The Company has been duly organized, is validly existing
as a corporation in good standing under the laws of Delaware,
has the corporate power and authority to own or lease its
properties and conduct its business as described in the
Prospectus and is duly qualified to transact business in all
jurisdictions in which the failure so to qualify would have a
material adverse effect on the business or
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condition, financial or otherwise, of the Company and its
subsidiaries, taken as a whole.
(v) The Company does not directly or indirectly own any stock
or other equity interest in any corporation, partnership,
joint venture, unincorporated association or other entity
other than (a) Silicon Valley Bank, a California banking
corporation (the "Subsidiary Bank"), SVB Capital I, Silicon
Valley Real Estate Investment Corporation, SVB Securities,
Inc. and SVB Leasing Company (the Subsidiary Bank and such
other entities being collectively referred to herein as, the
"subsidiaries") and (b) rights to acquire stock, in the form
of warrants, in certain entities as part of negotiated credit
facilities and investments in venture capital funds from time
to time, which in each case does not constitute more than 5%
of the outstanding capital stock of such entity or partnership
interest. Each subsidiary of the Company has been duly
incorporated, is validly existing as a corporation in good
standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own or
lease its properties and conduct its business as described in
the Prospectus, and is duly qualified to transact business in
all jurisdictions in which the failure so to qualify would
have a material adverse effect on the business or condition,
financial or otherwise, of the Company and its subsidiaries,
taken as a whole. All outstanding shares of capital stock of
each of the subsidiaries of the Company have been duly
authorized and validly issued, are fully paid and
non-assessable, and are owned, directly or indirectly, by the
Company free and clear of all liens, encumbrances and security
interests, except as disclosed in the Prospectus. No options,
warrants or other rights to purchase, agreements or other
obligations to issue, or other rights to convert any
obligations into, shares of capital stock or ownership
interests in any of the subsidiaries of the Company are
outstanding.
(vi) The Company and each of its subsidiaries holds and is
operating in material compliance with all licenses, approvals,
certificates and permits from governmental and regulatory
authorities, foreign and domestic, which are necessary to the
conduct of its business as described in the Prospectus and the
failure to comply with which would have a material adverse
effect on the business or condition, financial or otherwise,
of the Company and its subsidiaries, taken as a whole. Without
limiting the generality of the foregoing, the Company has all
necessary approvals of the Board of Governors of the Federal
Reserve System to own the stock of its subsidiaries. Neither
the Company nor any subsidiary has received notice of or has
actual knowledge of any basis for any proceeding or action
relating specifically to the Company or its subsidiaries for
the revocation or suspension of any such approval, license,
certificate or permit or any other action or proposed action
by any regulatory authority having jurisdiction over the
Company or its subsidiaries that would, if determined
adversely to the Company, have a material adverse effect on
the Company or any subsidiary.
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(vii) The Company is registered as a bank holding company
under the Bank Holding Company Act of 1956, as amended. The
Subsidiary Bank is a member of the Federal Reserve System and
its deposit accounts are insured by the Federal Deposit
Insurance Corporation (the "FDIC") to the fullest extent
provided by law. No proceeding for the termination of such
insurance is pending or, to the Company's knowledge, is
threatened. Except as disclosed in the Prospectus, neither the
Company nor the Subsidiary Bank is subject to any cease and
desist order, written agreement or memorandum of understanding
with, or is a party to any commitment letter or similar
undertaking to, or is subject to any order or directive (other
than orders or directives applicable to the banking industry
as a whole) by, or is a recipient of any extraordinary
supervisory agreement letter from, or has adopted any board
resolutions (other than board resolutions required by law or
regulation and applicable to the banking industry as a whole)
at the request of, federal or state governmental authorities
charged with the supervision or regulation of national banking
associations, savings banks, banks, savings and loan companies
or associations, bank holding companies or savings and loan
holding companies or engaged in the insurance of bank deposits
(collectively, the "Bank Regulators"), neither the Company nor
the Subsidiary Bank has been advised by any Bank Regulator
that it is contemplating issuing or requesting (or is
considering the appropriateness of issuing or requesting) any
such order, directive or extraordinary supervisory letter, and
neither the Company nor the Subsidiary Bank is contemplating
(A) becoming a party to any such written agreement, memorandum
of understanding, commitment letter or similar undertaking
with any Bank Regulator or (B) adopting any such board
resolutions at the request of any Bank Regulator.
(viii) The outstanding shares of capital stock of the Company
have been duly authorized and validly issued and are fully
paid and nonassessable. All offers and sales by the Company of
outstanding shares of capital stock and other securities of
the Company prior to the date hereof, were made in material
compliance with the Act and all applicable state securities or
blue sky laws. The Shares to be issued and sold by the Company
to the Underwriters pursuant to this Agreement have been duly
authorized and, when issued and paid for as contemplated
herein, will be validly issued, fully paid and nonassessable.
There are no preemptive rights or, except as described in the
Prospectus, other rights to subscribe for or to purchase, or
any restriction upon the voting or transfer of, any shares of
capital stock of the Company pursuant to the Company's
Certificate of Incorporation, Bylaws or any agreement or other
instrument to which the Company is a party or by which the
Company is bound. Neither the filing of the Registration
Statement nor the offering or the sale of the Shares as
contemplated by this Agreement gives rise to any rights for,
or relating to, the registration of any shares of capital
stock or other securities of the Company, except such rights
which have been validly waived or satisfied. Except as
described in the Prospectus, there are no outstanding options,
warrants, agreements, contracts or other rights to purchase or
acquire from the Company shares of its capital stock. The
Company has the
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authorized and outstanding capital stock as set forth under
the heading "Capitalization" in the Prospectus. The
outstanding capital stock of the Company, including the
Shares, conforms, and the Shares to be issued by the Company
to the Underwriters will conform, to the description thereof
incorporated by reference into the Prospectus.
(ix) The financial statements, together with the related notes
and schedules as set forth in the Registration Statement,
present fairly the consolidated financial position, results of
operations and changes in financial position of the Company
and its subsidiaries on the basis stated in the Registration
Statement at the indicated dates and for the indicated
periods. Such financial statements have been prepared in
accordance with generally accepted accounting principles
consistently applied throughout the periods involved, and all
adjustments necessary for a fair presentation of results for
such periods have been made, except as otherwise stated
therein and except that the unaudited financial statements
included therein have been prepared in accordance with
generally accepted accounting principles applicable to
unaudited interim financial statements. The summary and
selected financial and statistical data included in the
Registration Statement present fairly the information shown
therein on the basis stated in the Registration Statement and
have been compiled on a basis consistent with the financial
statements presented therein. No other financial statements or
schedules are required to be included in the Registration
Statement or Prospectus. The allowance for loan losses of the
Bank is adequate based on management's assessment of various
factors affecting the loan portfolio, including a review of
problem loans, business conditions, historical loss
experience, evaluation of the quality of the underlying
collateral and holding and disposal costs.
(x) There is no action or proceeding pending or, to the
knowledge of the Company, threatened or contemplated against
the Company or any of its subsidiaries before any court or
administrative or regulatory agency which, if determined
adversely to the Company or any of its subsidiaries, would,
individually or in the aggregate, result in a material adverse
change in the business or condition (financial or otherwise)
or prospects of the Company and its subsidiaries, taken as a
whole, except as set forth in the Registration Statement.
(xi) The Company has good and marketable title to all
properties and assets reflected as owned in the financial
statements hereinabove described (or described as owned in the
Prospectus), in each case free and clear of all liens,
encumbrances and defects, except such as are described in the
Prospectus or do not materially affect the value of such
properties and assets and do not materially interfere with the
use made and proposed to be made of such properties and assets
by the Company and its subsidiaries. Any real property and
buildings held under lease by the Company and its subsidiaries
are held by them under valid, subsisting and enforceable
leases with such exceptions as are not material and do not
interfere
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with the use made and proposed to be made of such property
and buildings by the Company and its subsidiaries.
(xii) Since the respective dates as of which information is
given in the Registration Statement, (A) there has not been
any material adverse change, or any development involving a
prospective material adverse change, in or affecting the
condition, financial or otherwise, of the Company and its
subsidiaries, taken as a whole, or the business affairs,
management, financial position, shareholders' equity or
results of operations of the Company and its subsidiaries,
taken as a whole, whether or not occurring in the ordinary
course of business, including, without limitation, any
material decrease in the volume of loan originations, the
amount of deposits or the amount of loans, (B) there has not
been any transaction not in the ordinary course of business
entered into by the Company or any of its subsidiaries which
is material to the Company and its subsidiaries, taken as a
whole, other than transactions described or contemplated in
the Registration Statement, (C) the Company and its
subsidiaries have not incurred any material liabilities or
obligations, which are not in the ordinary course of business
or which could result in a material reduction in the future
earnings of the Company and its subsidiaries, (D) the Company
and its subsidiaries have not sustained any material loss or
interference with their respective businesses or properties
from fire, flood, windstorm, accident or other calamity,
whether or not covered by insurance, (E) there has not been
any change in the capital stock of the Company (other than
upon the exercise of options described in the Registration
Statement), or any material increase in the total borrowings
of the Company (as calculated under the heading
"Capitalization" in the Prospectus), (F) there has not been
any declaration or payment of any dividends or any
distributions of any kind with respect to the capital stock of
the Company, other than any dividends or distributions
described or contemplated in the Registration Statement, or
(G) there has not been any issuance of warrants, options,
convertible securities or other rights to purchase or acquire
capital stock of the Company.
(xiii) Neither the Company nor any of its subsidiaries is in
violation of, or in default under, its Charter or Bylaws, or
any statute, or any rule, regulation, order, judgment, decree
or authorization of any court or governmental or
administrative agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their properties,
or any indenture, mortgage, deed of trust, loan agreement,
lease, franchise, license or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by
which it or any of them are bound or to which any property or
assets of the Company or any of its subsidiaries is subject,
which violation or default would have a material adverse
effect on the business, condition (financial or otherwise) or
prospects of the Company and its subsidiaries, taken as a
whole.
(xiv) The issuance and sale of the Shares by the Company and
the compliance by the Company with all of the provisions of
this Agreement and the consummation
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of the transactions contemplated herein will not violate any
provision of the Charter or Bylaws of the Company or any of
its subsidiaries or any statute or any order, judgment,
decree, rule, regulation or authorization of any court or
governmental or administrative agency or body having
jurisdiction over the Company or any of its subsidiaries or
any of their properties, and will not conflict with, result in
a breach or violation of, or constitute, either by itself or
upon notice or passage of time or both, a default under any
indenture, mortgage, deed of trust, loan agreement, lease,
franchise, license or other agreement or instrument to which
the Company or any of its subsidiaries is a party or by which
the Company or any of its subsidiaries is bound or to which
any property or assets of the Company or any of its
subsidiaries is subject. No approval, consent, order,
authorization, designation, declaration or filing by or with
any court or governmental agency or body is required for the
execution and delivery by the Company of this Agreement and
the consummation of the transactions herein contemplated,
except as may be required under the Act or any state
securities or blue sky laws.
(xv) The Company has the power and authority to enter into
this Agreement and to authorize, issue and sell the Shares it
will sell hereunder as contemplated hereby. This Agreement
have been duly and validly authorized, executed and delivered
by the Company.
(xvi) KPMG Peat Marwick has certified certain of the financial
statements filed with the Commission as part of the
Registration Statement and is an independent public accountant
as required by the Act and the Regulations.
(xvii) The accountant's reports on the financial statements of
the Company for each of the past two fiscal years did not
contain in adverse opinion or a disclaimer of opinion, and was
not qualified as to uncertainty, audit scope, or accounting
principles. During the two most recent fiscal years, there
were no disagreements between the Company and KPMG Peat
Marwick LLP on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope
or procedure.
(xviii) The Company has not taken and will not take, directly
or indirectly, any action designed to, or which has
constituted, or which might reasonably be expected to cause or
result in, stabilization or manipulation of the price of the
Common Stock.
(xix) The Shares have been approved for designation upon
notice of issuance on the Nasdaq National Market.
(xx) The Company has obtained and delivered to the
Representative written agreements, in form and substance
satisfactory to the Representative, of each of its directors
and executive officers that no offer, sale, assignment,
transfer,
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encumbrance, contract to sell, grant of an option to purchase
or other disposition of any Common Stock or other capital
stock of the Company will be made for a period of 120 days
after the date of the Prospectus, directly or indirectly,
by such holder otherwise than hereunder or with the prior
written consent of the Representative.
(xxi) The Company has not distributed and will not distribute
any prospectus or other offering material in connection with
the offering and sale of the Shares other than any Preliminary
Prospectus or the Prospectus or other materials permitted by
the Act to be distributed by the Company.
(xxii) The Company is in compliance with all provisions of
Florida Statutes Section 517.075 (Chapter 92-198, laws of
Florida). The Company does not do any business, directly or
indirectly, with the government of Cuba or with any person or
entity located in Cuba.
(xxiii) The Company and its subsidiaries have filed all
federal, state, local and foreign tax returns or reports
required to be filed, and have paid in full all taxes
indicated by said returns or reports and all assessments
received by it or any of them to the extent that such taxes
have become due and payable, except where the Company and its
subsidiaries are contesting in good faith such taxes and
assessments. The Company and the Subsidiary Bank have also
filed all required applications, reports, returns and other
documents and information with all Bank Regulators, and no
such application, report, return or other document or
information contained, as of the date it was filed, an untrue
statement of a material fact required to be stated therein or
necessary to make the statements therein not misleading when
made or failed to comply with the applicable requirements of
the Bank Regulator with which such application, report,
return, document or information was filed.
(xxiv) The Company and each of its subsidiaries owns or
licenses all patents, patent applications, trademarks, service
marks, tradenames, trademark registrations, service xxxx
registrations, copyrights, licenses, inventions, trade secrets
and other similar rights necessary for the conduct of its
business as described in the Prospectus. The Company has no
knowledge of any infringement by it or its subsidiaries of any
patents, patent applications, trademarks, service marks,
tradenames, trademark registrations, service xxxx
registrations, copyrights, licenses, inventions, trade secrets
or other similar rights of others, and neither the Company nor
any of its subsidiaries has received any notice or claim of
conflict with the asserted rights of others with respect any
of the foregoing.
(xxv) The Company is not, and upon completion of the sale of
Shares contemplated hereby will not be, required to register
as an "investment company" under the Investment Company Act of
1940, as amended.
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(xxvi) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (A)
transactions are executed in accordance with management's
general or specific authorization; (B) transactions are
recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting
principles and the rules of Bank Regulators, and to maintain
accountability for assets; (C) access to records is permitted
only in accordance with management's general or specific
authorization; and (D) the recorded accountability for assets
is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(xxvii) Other than as contemplated by this Agreement, the
Company has not incurred any liability for any finder's or
broker's fee or agent's commission in connection with the
execution and delivery of this Agreement or the consummation
of the transactions contemplated hereby.
(xxviii) The minute books and stock record books of the
Company and the subsidiaries are complete and correct and
accurately reflect all material actions taken at meetings of
the shareholders and directors of the Company and the
subsidiaries, and of all committees thereof, including,
without limitation, the loan committees and the audit
committees of the Subsidiary Bank, since September 1, 1994,
and all issuances and transfers of any shares of the capital
stock of the Company and the subsidiaries since September 1,
1994.
(xxix) No material labor dispute with the employees of the
Company or any of its subsidiaries exists or, to the Company's
knowledge, is imminent.
(xxx) The Company and its subsidiaries maintain insurance of
the types and in the amounts generally deemed adequate in
their respective businesses and consistent with insurance
coverage maintained by similar companies and businesses, and
as required by the rules and regulations of all governmental
agencies having jurisdiction over the Company or the
Subsidiary Bank, all of which insurance is in full force and
effect.
(xxxi) Neither the Company nor its subsidiaries have, directly
or indirectly, at any time during the past five years (A) made
any unlawful contribution to any candidate for public office,
or failed to disclose fully any contribution in violation of
law, or (B) made any payment to any federal or state
governmental officer or official, or other person charged with
similar public or quasi-public duties, other than payments
required or permitted by the laws of the United States or any
jurisdiction thereof.
(b) Any certificate signed by any officer of the Company and
delivered to the Representative or counsel to the Underwriters shall be
deemed to be a representation and warranty of the Company to each
Underwriter as to the matters covered thereby.
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2. PURCHASE, SALE AND DELIVERY OF SHARES. On the basis of the
representations, warranties and covenants contained herein, and subject to the
terms and conditions herein set forth, the Company agrees to sell to each
Underwriter and each Underwriter agrees, severally and not jointly, to purchase
from the Company, at a price of $____ per share, the number of Firm Shares set
forth opposite the name of each Underwriter in Schedule A hereto, subject to
adjustments in accordance with Section 8 hereof.
In addition, on the basis of the representations, warranties
and covenants herein contained and subject to the terms and conditions herein
set forth, the Company hereby grants to the several Underwriters an option to
purchase, at their election, up to 187,500 Option Shares at a price of $______
per share, for the sole purpose of covering overallotments in the sale of the
Firm Shares. The option granted hereby may be exercised in whole or in part, but
only once, and at any time upon written notice given within 30 days after the
date of this Agreement, by you, as Representative of the several Underwriters,
to the Company setting forth the number of Option Shares as to which the several
Underwriters are exercising the option and the time and date at which
certificates are to be delivered. If any Option Shares are purchased, each
Underwriter agrees, severally and not jointly, to purchase that portion of the
number of Option Shares as to which such election shall have been exercised
(subject to adjustment to eliminate fractional shares) determined by multiplying
such number of Option Shares by a fraction the numerator of which is the maximum
number of Option Shares which such Underwriter is entitled to purchase as set
forth opposite the name of such Underwriter in Schedule A hereto and the
denominator of which is the maximum number of Option Shares which all of the
Underwriters are entitled to purchase hereunder. The time and date at which
certificates for Option Shares are to be delivered shall be determined by the
Representative but shall not be earlier than two or later than ten full business
days after the exercise of such option, and shall not in any event be prior to
the Closing Date. If the date of exercise of the option is three or more full
days before the Closing Date, the notice of exercise shall set the Closing Date
as the Option Closing Date.
Certificates in definitive form for the Shares to be purchased
by each Underwriter hereunder, and in such denominations and registered in such
names as Xxxx Xxxxxxxx Incorporated may request upon at least 48 hours' prior
notice to the Company, shall be delivered by or on behalf of the Company to you
for the account of such Underwriter at such time and place as shall hereafter be
designated by the Representative, against payment by such Underwriter or on its
behalf of the purchase price therefor by certified or official bank check or
checks, payable to the order of the Company in next day funds. The time and date
of such delivery and payment shall be, with respect to the Firm Shares, 6:30
a.m. Palo Alto time, at the offices of Xxxxxx, Xxxx & Xxxxxxxx LLP, Xxx
Xxxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000 on December __,
1999, or such other time and date as you and the Company may agree upon in
writing, such time and date being herein referred to as the "Closing Date," and,
with respect to the Option Shares, at the time and on the date specified by you
in the written notice given by you of the Underwriters' election to purchase the
Option Shares, or such other time and date as you and the Company may agree upon
in writing, such time and date being referred to herein as the "Option Closing
Date." Such certificates will be made available for
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checking and packaging at least twenty-four hours prior to the Closing Date or
the Option Closing Date, as the case may be, at a location as may be designated
by you.
3. OFFERING BY UNDERWRITERS. It is understood that the several
Underwriters propose to make a public offering of the Firm Shares as soon as the
Representative deems it advisable to do so. The Firm Shares are to be initially
offered to the public at the initial public offering price of $______ per share.
To the extent, if at all, that any Option Shares are purchased pursuant to
Section 2 hereof, the Underwriters will offer such Option Shares to the public
on the foregoing terms.
4. COVENANTS OF THE COMPANY. The Company covenants and agrees
with the several Underwriters that:
(a) The Company will prepare and timely file with the
Commission under Rule 424(b) under the Act a Prospectus
containing information previously omitted at the time of
effectiveness of the Registration Statement in reliance on
Rule 430A under the Act, and will not file any amendment to
the Registration Statement or supplement to the Prospectus of
which the Representative shall not previously have been
advised and furnished with a copy or as to which the
Representative shall have objected in writing promptly after
reasonable notice thereof or which is not in compliance with
the Act or the Regulations.
(b) The Company will advise the Representative
promptly of any request of the Commission for amendment of the
Registration Statement or for any supplement to the Prospectus
or for any additional information, or of the issuance by the
Commission of any stop order suspending the effectiveness of
the Registration Statement or the use of the Prospectus, of
the suspension of the qualification of the Shares for offering
or sale in any jurisdiction, or of the institution or
threatening of any proceedings for that purpose, and the
Company will use its best efforts to prevent the issuance of
any such stop order preventing or suspending the use of the
Prospectus or suspending such qualification and to obtain as
soon as possible the lifting thereof, if issued.
(c) To the extent required of issuers listed on the
Nasdaq National Market, the Company will endeavor to qualify
the Shares for sale under the securities laws of such
jurisdictions as the Representative may reasonably have
designated in writing and will, or will cause counsel to, make
such applications, file such documents, and furnish such
information as may be reasonably requested by the
Representative, provided that the Company shall not be
required to qualify as a foreign corporation or to file a
general consent to service of process in any jurisdiction
where it is not now so qualified or required to file such a
consent. The Company will, from time to time, prepare and file
such statements, reports and other documents as are or may be
required to continue such qualifications in effect for so long
a period as the Representative may reasonably request for
distribution of the Shares.
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(d) The Company will furnish the Underwriters with as
many copies of any Preliminary Prospectus as the
Representative may reasonably request and, during the period
when delivery of a prospectus is required under the Act, the
Company will furnish the Underwriters with as many copies of
the Prospectus in final form, or as thereafter amended or
supplemented, as the Representative may, from time to time,
reasonably request. The Company will deliver to the
Representative, at or before the Closing Date, two signed
copies of the Registration Statement and all amendments
thereto, including all exhibits filed therewith, and will
deliver to the Representative such number of copies of the
Registration Statement, without exhibits, and of all
amendments thereto, as the Representative may reasonably
request.
(e) If, during the period in which a prospectus is
required by law to be delivered by an Underwriter or dealer,
any event shall occur as a result of which the Prospectus as
then amended or supplemented would include an untrue statement
of a material fact or omit to state any material fact
necessary in order to make the statements therein, in light of
the circumstances existing at the time the Prospectus is
delivered to a purchaser, not misleading, or if for any other
reason it shall be necessary at any time to amend or
supplement the Prospectus to comply with any law, the Company
promptly will prepare and file with the Commission an
appropriate amendment to the Registration Statement or
supplement to the Prospectus so that the Prospectus as so
amended or supplemented will not include an untrue statement
of a material fact or omit to state any material fact
necessary in order to make the statements therein in light of
the circumstances existing when it is so delivered, not
misleading, or so that the Prospectus will comply with law. In
case any Underwriter is required to deliver a prospectus in
connection with sales of any Shares at any time nine months or
more after the effective date of the Registration Statement,
upon the request of the Representative but at the expense of
such Underwriter, the Company will prepare and deliver to such
Underwriter as many copies as the Representative may request
of an amended or supplemented Prospectus complying with
Section 10(a)(3) of the Act.
(f) The Company will make generally available to its
security holders, as soon as it is practicable to do so, but
in any event not later than 18 months after the effective date
of the Registration Statement, an earnings statement (which
need not be audited) in reasonable detail, covering a period
of at least 12 consecutive months beginning after the
effective date of the Registration Statement, which earnings
statement shall satisfy the requirements of Section 11(a) of
the Act and Rule 158 thereunder and will advise you in writing
when such statement has been so made available.
(g) The Company will, for a period of five years from
the Closing Date, deliver to the Representative copies of its
annual report and copies of all other documents, reports and
information furnished by the Company to its
12
security holders or filed with any securities exchange
pursuant to the requirements of such exchange or with the
Commission pursuant to the Act or the Securities Exchange Act
of 1934, as amended.
(h) No offering, sale or other disposition of any
Common Stock or other capital stock of the Company, or
warrants, options, convertible securities or other rights to
acquire such Common Stock or other capital stock (other than
pursuant to employee stock option plans, outstanding options
or on the conversion of convertible securities outstanding on
the date of this Agreement) will be made for a period of 180
days after the date of this Agreement, directly or indirectly,
by the Company otherwise than hereunder or with the prior
written consent of the Representative.
(i) The Company will apply the net proceeds from the
sale of the Shares to be sold by it hereunder substantially in
accordance with the purposes set forth under "Use of Proceeds"
in the Prospectus. The Company will invest such proceeds
pending their use in such a manner that, upon completion of
such investment, the Company will not be an "investment
company" as defined in the Investment Company Act of 1940, as
amended.
(j) The Company will use its best efforts to maintain
the designation of the Common Stock on the Nasdaq National
Market.
(k) The Company will file with the Commission such
information with respect to the use of proceeds from the sale
of the shares as may be required pursuant to Rule 463 under
the Act.
5. COSTS AND EXPENSES. Whether or not the transactions
contemplated by this Agreement are consummated, the Company will pay (directly
or by reimbursement) all costs, expenses and fees incident to the performance of
the obligations of the Company under this Agreement, including, without limiting
the generality of the foregoing, the following: accounting fees of the Company;
the fees and disbursements of counsel for the Company; the cost of preparing,
printing and filing of the Registration Statement, Preliminary Prospectuses and
the Prospectus and any amendments and supplements thereto and the printing,
mailing and delivery to the Underwriters and dealers of copies thereof and of
this Agreement, the Master Agreement Among Underwriters, any Master Selected
Dealers Agreement, the Blue Sky Memorandum and any supplements or amendments
thereto; the filing fees of the Commission; the filing fees and expenses
(including legal fees and disbursements of counsel for the Underwriters)
incident to securing any required review by the NASD of the terms of the sale of
the Shares; transfer taxes and the expenses, including the fees and
disbursements of counsel for the Underwriters incurred in connection with the
qualification of the Shares under state securities or Blue Sky laws; the fees
and expenses incurred in connection with the designation of the Shares on the
Nasdaq National Market; the costs of preparing stock certificates; the costs and
fees of any registrar or transfer agent and all other costs and expenses
incident to the performance of its obligations hereunder which are not otherwise
specifically provided for in this
13
Section 5. In addition, the Company will pay all travel and lodging expenses
incurred by management of the Company in connection with any informational "road
show" meetings held in connection with the offering and will also pay for the
preparation of all materials used in connection with such meetings. The Company
shall not, however, be required to pay for any of the Underwriters' expenses
(other than those related to qualification of the Shares under state securities
or Blue Sky laws and those incident to securing any required review by the NASD
of the terms of the sale of the Shares) except that, if this Agreement shall not
be consummated because the conditions in Section 6 hereof are not satisfied, or
because this Agreement is terminated by the Representative pursuant to Section
10(a) hereof, or by reason of any failure, refusal or inability on the part of
the Company to perform any undertaking or satisfy any condition of this
Agreement or to comply with any of the terms hereof on its part to be performed,
unless such failure to satisfy said condition or to comply with said terms shall
be due to the default or omission of any Underwriter, then the Company shall
promptly upon request by the Representative reimburse the several Underwriters
for all appropriately itemized out-of-pocket accountable expenses, including
fees and disbursements of counsel, incurred in connection with investigating,
marketing and proposing to market the Shares or in contemplation of performing
their obligations hereunder; but the Company shall not in any event be liable to
any of the several Underwriters for damages on account of loss of anticipated
profits from the sale by them of the Shares.
6. CONDITIONS OF OBLIGATIONS OF THE UNDERWRITERS. The several
obligations of the Underwriters to purchase the Firm Shares on the Closing Date
and the Option Shares, if any, on the Option Closing Date, are subject to the
condition that all representations and warranties of the Company contained
herein are true and correct, at and as of the Closing Date or the Option Closing
Date, as the case may be, the condition that the Company shall have performed
all of its covenants and obligations hereunder and to the following additional
conditions:
(a) The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed
for such filing by the Regulations and in accordance with Section 4(a)
hereof; no stop order suspending the effectiveness of the Registration
Statement, as amended from time to time, or any part thereof shall have
been issued, and no proceedings for that purpose shall have been
initiated or threatened, by the Commission; and all requests for
additional information on the part of the Commission shall have been
complied with to the reasonable satisfaction of the Representative.
(b) The Representative shall have received on the Closing Date
or the Option Closing Date, as the case may be, the opinion of Xxxxxx,
Xxxx & Xxxxxxxx LLP, counsel for the Company, dated the Closing Date or
the Option Closing Date, as the case may be, addressed to the
Underwriters, to the effect that:
(i) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of
Delaware, with corporate power and authority to own or lease
its properties and conduct its business as described in the
Prospectus.
14
(ii) The Company does not own any stock or other equity
interest in any corporation, partnership, joint venture,
unincorporated association or other entity other than (a) the
Subsidiary Bank, SVB Capital I, Silicon Valley Real Estate
Investment Corporation, SVB Securities, Inc. and SVB Leasing
Company and (b) rights to acquire stock, in the form of
warrants, in certain entities as part of negotiated credit
facilities and investments in venture capital funds from time
to time, which in each case does not constitute more than 5%
of the outstanding capital stock of such entity or partnership
interest. Each subsidiary of the Company has been duly
organized and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its
incorporation, with corporate power and authority to own or
lease its properties and conduct its business as described in
the Prospectus. The Company owns all of the issued and
outstanding capital stock of the Subsidiary Bank, SVB Capital
I, Silicon Valley Real Estate Investment Corporation, SVB
Securities, Inc. and SVB Leasing Company. The outstanding
shares of capital stock of each such subsidiary have been duly
authorized and validly issued, are fully paid and
nonassessable and are owned, directly or indirectly, by the
Company, free and clear of all liens, encumbrances and
security interests, other than security interests specifically
disclosed in the Prospectus. No options, warrants or other
rights to purchase, agreements or other obligations to issue
or other rights to convert any obligations into any shares of
capital stock or ownership interests in each such subsidiary
are outstanding.
(iii) The Company has authorized and outstanding capital stock
as described in the Prospectus. The outstanding shares of the
Company's capital stock have been duly authorized and validly
issued and are fully paid and nonassessable. The form of
certificate for the Shares is in due and proper form and
complies with all applicable statutory requirements. The
Shares to be issued and sold by the Company pursuant to this
Agreement have been duly authorized and, when issued and paid
for as contemplated herein, will be validly issued, fully paid
and nonassessable. To the knowledge of such counsel, no
preemptive or other similar subscription rights of
shareholders of the Company, or of holders of warrants,
options, convertible securities or other rights to acquire
shares of capital stock of the Company, exist with respect to
any of the Shares or the issue and sale thereof. To the
knowledge of such counsel, no rights to register outstanding
shares of the Company's capital stock, or shares issuable upon
the exercise of outstanding warrants, options, convertible
securities or other rights to acquire shares of such capital
stock, exist which have not been validly exercised or waived
with respect to the Registration Statement. The capital stock
of the Company, including the Shares, conforms in all material
respects to the description thereof incorporated by reference
into the Prospectus.
(iv) The Registration Statement has become effective under the
Act and, to the knowledge of such counsel, no stop order
proceedings with respect thereto have been instituted or are
pending or threatened by the Commission.
15
(v) The Registration Statement, the Prospectus, and each
amendment or supplement thereto comply as to form in all
material respects with the requirements of the Act and the
Regulations (except that such counsel need express no opinion
as to the financial statements and related schedules included
therein).
(vi) The statements in the Prospectus under the caption "MD&A
- Regulatory Matters" insofar as such statements constitute a
summary of matters of law, are, in all material respects,
accurate summaries and fairly present the information called
for with respect to such matters.
(vii) Such counsel does not know of any contracts, agreements,
documents or instruments required to be filed as exhibits to
the Registration Statement, incorporated by reference into the
Prospectus, or described in the Registration Statement or the
Prospectus which are not so filed, incorporated by reference
or described as required; and insofar as any statements in the
Registration Statement or the Prospectus constitute summaries
of any contract, agreement, document or instrument to which
the Company is a party, such statements are, in all material
respects, accurate summaries and fairly present the
information called for with respect to such matters.
(viii) Such counsel knows of no legal or governmental
proceeding, pending or threatened, before any court or
administrative body or regulatory agency, to which the Company
or any of its subsidiaries is a party or to which any of the
properties of the Company or any of its subsidiaries is
subject that are required to be described in the Registration
Statement or Prospectus and are not so described, or statutes
or regulations that are required to be described in the
Registration Statement or the Prospectus that are not so
described.
(ix) The execution and delivery of this Agreement and the
consummation of the transactions herein contemplated do not
and will not conflict with or result in a violation of or
default under the charter or bylaws of the Company or any of
its subsidiaries, or under any statute, permit, judgment,
decree, order, rule or regulation known to such counsel of any
court or governmental agency or body having jurisdiction over
the Company or any of its subsidiaries or any of their
properties, or under any lease, contract, indenture, mortgage,
loan agreement or other agreement or other instrument or
obligation known to such counsel to which the Company or any
of its subsidiaries is a party or by which the Company or any
of its subsidiaries is bound or to which any property or
assets of the Company or any of its subsidiaries is subject,
except such agreements, instruments or obligations with
respect to which valid consents or waivers have been obtained
by the Company or any of its subsidiaries.
16
(x) The Company has the corporate power and authority to enter
into this Agreement and to authorize, issue and sell the
Shares as contemplated hereby. This Agreement has been duly
and validly authorized, executed and delivered by the Company.
(xi) No approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory,
administrative or other governmental body is necessary in
connection with the execution and delivery of this Agreement
and the consummation of the transactions herein contemplated
(other than as may be required by state securities and blue
sky laws, as to which such counsel need express no opinion)
except such as have been obtained or made, specifying the
same.
(xii) The Company is not, and immediately upon completion of
the sale of Shares contemplated hereby will not be, required
to register as an "investment company" under the Investment
Company Act of 1940, as amended.
(xiii) Such counsel has no reason to believe that, as of its
effective date, the Registration Statement or any further
amendment thereto made by the Company prior to the Closing
Date or the Option Closing Date, as the case may be (other
than the financial statements and related schedules therein,
as to which such counsel need express no opinion), contained
an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading or that, as of its
date, the Prospectus or any further amendment or supplement
thereto made by the Company prior to the Closing Date or the
Option Closing Date, as the case may be (other than the
financial statements and related schedules therein, as to
which such counsel need express no opinion), contained an
untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in
light of the circumstances in which they were made, not
misleading or that, as of the Closing Date or the Option
Closing Date, as the case may be, either the Registration
Statement or the Prospectus or any further amendment or
supplement thereto made by the Company prior to the Closing
Date or the Option Closing Date, as the case may be (other
than the financial statements and related schedules therein,
as to which such counsel need express no opinion), contains an
untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein, in
light of the circumstances in which they were made, not
misleading; and they do not know of any amendment to the
Registration Statement required to be filed.
(xiv) The Subsidiary Bank has been duly organized and is
validly existing as a corporation in good standing under the
laws of California, with corporate power and authority to own
or lease its properties and conduct its business as described
in the Prospectus. The Company has all necessary power and
authority to own the Subsidiary Bank. The Subsidiary Bank is a
member of the Federal Reserve
17
System and the deposits of the depositors in the Subsidiary
Bank are insured by the FDIC. The Company and the Subsidiary
Bank have all necessary consents and approvals under
applicable federal and state laws and regulations relating to
banks and bank holding companies to own their respective
assets and carry on their respective businesses as currently
conducted.
(xv) The Company is duly registered as a bank holding company
under the Bank Holding Company Act of 1956, as amended.
(xvi) The Company has all necessary approvals of the Board of
Governors to own the stock of its subsidiaries. Except as
disclosed in the Prospectus, based on such counsel's
reasonable reliance on the Company's certification, neither
the Company nor the Subsidiary Bank is subject to any cease
and desist order, written agreement or memorandum of
understanding with, or are a party to any commitment letter or
similar undertaking to, or are subject to any order or
directive (other than orders or directives applicable to the
banking industry as a whole) by, or is a recipient of any
extraordinary supervisory agreement letter from, or has
adopted any board resolutions (other than board resolutions
required by law or regulation and applicable to the banking
industry as a whole) at the request of any of the Bank
Regulators, and based on such counsel's reasonable reliance at
the Company's certification, neither the Company nor the
Subsidiary Bank has been advised by any of the Bank Regulators
that it is contemplating issuing or requesting (or is
considering the appropriateness of issuing or requesting) any
such order, directive, or extraordinary supervisory letter,
and neither the Company nor the Subsidiary Bank is
contemplating (A) becoming a party to any such written
agreement, memorandum of understanding, commitment letter or
similar undertaking with any Bank Regulator or (B) adopting
any such board resolutions at the request of any Bank
Regulator. Based on such Counsel's reasonable reliance on the
Company's certification, neither the Company nor any
subsidiary has received notice of or has knowledge of any
basis for any proceeding or action relating specifically to
the Company or its subsidiaries for the revocation or
suspension of any consent, authorization, approval, order,
license, certificate or permit issued by, or any other action
or proposed action by, any regulatory authority having
jurisdiction over the Company or its subsidiaries that would
have a material effect on the Company or any subsidiary.
(xvii) For purposes of the opinion of counsel described in
this Section 6(b), "based on such counsel's reasonable
reliance upon the Company's certification" means that such
counsel has relied solely upon a certification signed by a
duly authorized officer of the Company and to which such
counsel has no actual knowledge to the contrary.
(c) The Representative shall have received from O'Melveny & Xxxxx LLP,
counsel for the Underwriters, an opinion dated the Closing Date or the
Option Closing Date, as the case may be, with respect to the
incorporation of the Company, the validity of the
18
Shares, the Registration Statement, the Prospectus, and other related
matters as the Representative may reasonably request, and such counsel
shall have received such papers and information as they may reasonably
request to enable them to pass upon such matters.
(d) The Representative shall have received on each of the date hereof,
the Closing Date and the Option Closing Date, as the case may be, a
signed letter, dated as of the date hereof, the Closing Date or the
Option Closing Date, as the case may be, in form and substance
satisfactory to the Representative, from KPMG Peat Marwick LLP, to the
effect that they are independent public accountants with respect to the
Company and its subsidiaries within the meaning of the Act and the
Regulations and containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus.
(e) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date or the Option Closing Date, as the case may
be, there shall not have been any change or any development involving a
prospective change, in or affecting the general affairs, management,
financial position, stockholders' equity or results of operations of
the Company and its subsidiaries, otherwise than as set forth or
contemplated in the Prospectus, the effect of which, in the judgment of
the Representative, is material and adverse to the Company and makes it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Shares being delivered at the Closing Date or the
Option Closing Date, as the case may be, on the terms and in the manner
contemplated in the Prospectus.
(f) The Representative shall have received on the Closing Date or the
Option Closing Date, as the case may be, a certificate or certificates
of the chief executive officer and the chief financial officer of the
Company to the effect that, as of the Closing Date or the Option
Closing Date, as the case may be, each of them severally represents as
follows:
(i) The Prospectus was filed with the Commission pursuant to
Rule 424(b) within the applicable period prescribed for such
filing by the Regulations and in accordance with Section 4 of
this Agreement; no stop order suspending the effectiveness of
the Registration Statement has been issued, and no proceedings
for such purpose have been initiated or are, to the knowledge
of such officers, threatened by the Commission.
(ii) The representations and warranties of the Company set
forth in Section 1 of this Agreement are true and correct at
and as of the Closing Date or the Option Closing Date, as the
case may be, and the Company has performed all of its
obligations under this Agreement to be performed at or prior
to the Closing Date or the Option Closing Date, as the case
may be.
19
(g) The Company shall have furnished to the Representative such further
certificates and documents as the Representative may reasonably have
requested.
The opinions and certificates mentioned in this Agreement
shall be deemed to be in compliance with the provisions hereof only if they are
in all material respects reasonably satisfactory to the Representative and to
O'Melveny & Xxxxx LLP, counsel for the Underwriters.
If any of the conditions hereinabove provided for in this
Section 6 shall not have been fulfilled when and as required by this Agreement
to be fulfilled, the obligations of the Underwriters hereunder may be terminated
by the Representative by notifying the Company of such termination in writing or
by telegram at or prior to the Closing Date or the Option Closing Date, as the
case may be. In such event, the Company and the Underwriters shall not be under
any obligation to each other (except to the extent provided in Sections 5 and 7
hereof).
7. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each
Underwriter, each officer and director thereof, and each person, if
any, who controls any Underwriter within the meaning of the Act,
against any losses, claims, damages or liabilities to which such
Underwriter or such persons may became subject under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) arise out of or are based
upon (i) any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, any Preliminary
Prospectus or the Prospectus, including any amendments or supplements
thereto, (ii) the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make the
statements therein not misleading in light of the circumstances under
which they were made, or (iii) any act or failure to act or any alleged
act or failure to act by any Underwriter in connection with or relating
in any manner to, the Common Stock or the offering contemplated hereby,
which is made in reliance upon any statement or omission of the type
referred to in clause (i) or (ii) above, and will reimburse each
Underwriter and each such controlling person for any legal or other
expenses reasonably incurred by such Underwriter or such controlling
person in connection with investigating or defending any such action or
claim as such expenses are incurred; provided, however, that the
Company shall not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement, or omission or alleged
omission, made in the Registration Statement, any Preliminary
Prospectus or the Prospectus, including any amendments or supplements
thereto, in reliance upon and in conformity with written information
furnished to the Company by any Underwriter through the Representative
specifically for use therein; and provided, further, that the Company
shall not be liable in the case of any matter covered by clause (iii)
above to the extent that it is determined in a final judgment by a
court of competent jurisdiction that such losses, claims, damages or
liabilities resulted directly from any such acts or failures to act
undertaken or omitted to be taken by such Underwriter through its gross
negligence or willful misconduct.
20
(b) Each Underwriter agrees to indemnify and hold harmless the
Company, each of its directors, each of its officers who have signed
the Registration Statement and each person, if any, who controls the
Company within the meaning of the Act, against any losses, claims,
damages or liabilities to which the Company or any such director,
officer or controlling person may become subject under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto, or
arise out of or are based upon the omission or the alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of
the circumstances under which they were made, and will reimburse any
legal or other expenses reasonably incurred by the Company or any such
director, officer or controlling person in connection with
investigating or defending any such action or claim as such expenses
are incurred; provided, however, that each Underwriter will be liable
in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission
has been made in the Registration Statement, any Preliminary
Prospectus, the Prospectus or any such amendment or supplement in
reliance upon and in conformity with written information furnished to
the Company by any Underwriter through the Representative specifically
for use therein.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of
which indemnity or contribution may be sought pursuant to this Section
7, such person (the "indemnified party") shall promptly notify the
person against whom such indemnity may be sought (the "indemnifying
party") in writing. No indemnification provided for in Section 7(a) or
(b) or contribution provided for in Section 7(d) shall be available
with respect to a proceeding to any party who shall fail to give notice
of such proceeding as provided in this Section 7(c) if the party to
whom notice was not given was unaware of the proceeding to which such
notice would have related and was prejudiced by the failure to give
such notice, but the failure to give such notice shall not relieve the
indemnifying party or parties from any liability which it or they may
have to the indemnified party otherwise than on account of the
provisions of Section 7(a), (b) or (d). In case any such proceeding
shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party
shall be entitled to participate therein and, to the extent that it
shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party and shall pay as incurred the
fees and disbursements of such counsel related to such proceeding. In
any such proceeding, any indemnified party shall have the right to
retain its own counsel at its own expense. Notwithstanding the
foregoing, the indemnifying party shall pay promptly as incurred the
reasonable fees and expenses of the counsel retained by the indemnified
party in the event (i) the indemnifying party and the indemnified party
shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties)
include both the indemnifying party and the indemnified party and the
indemnified party shall have
21
reasonably concluded that there may be a conflict between the
positions of the indemnifying party and the indemnified party in
conducting the defense of any such action or that there may be legal
defenses available to it or other indemnified parties which are
different from or additional to those available to the indemnifying
party. It is understood that the indemnifying party shall not, in
connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more than one
separate firm at any time for all such indemnified parties. Such firm
shall be designated in writing by the Representative and shall be
reasonably satisfactory to the Company in the case of parties
indemnified pursuant to Section 7(a) and shall be designated in
writing by the Company and shall be reasonably satisfactory to the
Representative in the case of parties indemnified pursuant to Section
7(b). The indemnifying party shall not be liable for any settlement of
any proceeding effected without its written consent, but if settled
with such consent or if there be a final judgment for the plaintiff,
the indemnifying party agrees to indemnify the indemnified party from
and against any loss or liability by reason of such settlement or
judgment.
(d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
Section 7(a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions or proceedings in respect
thereof) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters
on the other from the offering of the Shares. If, however, the
allocation provided by the immediately preceding sentence is not
permitted by applicable law, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in
such proportion as is appropriate to reflect not only such relative
benefits but also the relative fault of the Company on the one hand and
the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities
(or actions or proceedings in respect thereof), as well as any other
relevant equitable considerations. The relative benefits received by
the Company on the one hand and the Underwriters on the other shall be
deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company bears to
the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page
of the Prospectus. The relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company on the one
hand or the Underwriters on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company and the Underwriters agree that
it would not be just and equitable if contributions pursuant to this
Section 7(d) were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable
considerations referred to above in this Section 7(d). The amount paid
or payable by an
22
indemnified party as a result of the losses, claims, damages or
liabilities (or actions or proceedings in respect thereto) referred to
above in this Section 7(d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7(d), no Underwriter
shall be required to contribute any amount in excess of the
underwriting discounts and commissions applicable to the Shares
purchased by such Underwriter; and no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. The Underwriters' obligations in
this Section 7(d) to contribute are several in proportion to their
respective underwriting obligations and not joint.
(e) The obligations of the Company under this Section 7 shall
be in addition to any liability which the Company may otherwise have,
and the obligations of the Underwriters under this Section 7 shall be
in addition to any liability which the Underwriters may otherwise have.
8. DEFAULT BY UNDERWRITERS. If on the Closing Date or the
Option Closing Date, as the case may be, any Underwriter shall fail to purchase
and pay for the portion of the Shares which such Underwriter has agreed to
purchase and pay for on such date (otherwise than by reason of any default on
the part of the Company), you, as Representative of the Underwriters, shall use
your best efforts to procure within 36 hours thereafter one or more of the other
Underwriters, or any others, to purchase from the Company such amounts as may be
agreed upon, and upon the terms set forth herein, of the Firm Shares or Option
Shares, as the case may be, which the defaulting Underwriter or Underwriters
failed to purchase. If during such 36 hours, you, as Representative, shall not
have procured such other Underwriters, or any others, to purchase the Firm
Shares or Option Shares, as the case may be, agreed to be purchased by the
defaulting Underwriter or Underwriters, then (a) if the aggregate number of
Shares with respect to which such default shall occur does not exceed 10% of the
Firm Shares or Option Shares, as the case may be, covered hereby, the other
Underwriters shall be obligated, severally, in proportion to the respective
numbers of Firm Shares or Option Shares, as the case may be, which they are
obligated to purchase hereunder, to purchase the Firm Shares or Option Shares,
as the case may be, which such defaulting Underwriter or Underwriters failed to
purchase, or (b) if the aggregate number of shares of Firm Shares or Option
Shares, as the case may be, with respect to which such default shall occur
exceeds 10% of the Firm Shares or Option Shares, as the case may be, covered
hereby, the Company or you as the Representative of the Underwriters will have
the right, by written notice given within the next 36-hour period to the parties
to this Agreement, to terminate this Agreement without liability on the part of
the non-defaulting Underwriters or of the Company except for expenses to be
borne by the Company and the Underwriters as provided in Section 5 hereof and
the indemnity and contribution agreements in Section 7 hereof. In the event of a
default by any Underwriter or Underwriters, as set forth in this Section 8, the
Closing Date or Option Closing Date, as the case may be, may be postponed for
such period, not exceeding seven days, as you, as Representative, may determine
in order that the required changes in the Registration Statement or in the
Prospectus or in any other documents or arrangements may be effected. The term
"Underwriter" includes any person
23
substituted for a defaulting Underwriter. Any action taken under this Section 8
shall not relieve any defaulting Underwriter from liability in respect of any
default of such Underwriter under this Agreement.
9. NOTICES. All communications hereunder shall be in writing
and, except as otherwise provided herein, will be mailed, delivered or
telegraphed and confirmed as follows: if to the Underwriters, to Xxxx Xxxxxxxx
Incorporated, 00 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxx, XX 00000, fax: (000) 000-0000,
Attention: Xxxxx Xxxxx, with a copy to O'Melveny & Xxxxx LLP, 000 Xxxxx Xxxx
Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx, fax: (000) 000-0000, Attention: Xxxxxxx X.
Xxxxxxx, Esq.; and if to the Company, to Silicon Valley Bancshares, 0000 Xxxxxx
Xxxxx, Xxxxx Xxxxx, Xxxxxxxxxx 00000, fax: (000) 000-0000, Attention: A.
Xxxxxxxxx Xxx, with a copy to Xxxxxx, Xxxx & Xxxxxxxx LLP, Xxx Xxxxxxxxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, fax: (000) 000-0000,
Attention: Xxxx X. Xxxxx, Esq.
10. TERMINATION. This Agreement may be terminated by the
Representative by notice to the Company as follows:
(a) at any time prior to the Closing Date if any of the
following has occurred: (i) since the respective dates as of which
information is given in the Registration Statement and the Prospectus,
any material adverse change in or affecting the condition, financial or
otherwise, of the Company and the Subsidiary Bank taken as a whole or
the business affairs, management, financial position, stockholders'
equity or results of operations of the Company and the Subsidiary Bank
taken as a whole, whether or not arising in the ordinary course of
business, (ii) any outbreak or escalation of hostilities or declaration
of war or national emergency after the date hereof or other national or
international calamity or crisis or change in economic or political
conditions if the effect of such outbreak, escalation, declaration,
emergency, calamity, crisis or change on the financial markets of the
United States would, in your judgment, make the offering or delivery of
the Shares impracticable or inadvisable, (iii) suspension of trading in
securities on the New York Stock Exchange or the American Stock
Exchange or limitation on prices (other than limitations on hours or
numbers of days of trading) for securities on either such Exchange, or
a halt or suspension of trading in securities generally which are
quoted on Nasdaq National Market System, or (iv) declaration of a
banking moratorium by either federal or New York State authorities; or
(b) as provided in Sections 6 and 8 of this Agreement.
This Agreement also may be terminated by the Representative,
by notice to the Company, as to any obligation of the Underwriters to purchase
the Option Shares, upon the occurrence at any time prior to the Option Closing
Date of any of the events described in subparagraph (b) above or as provided in
Sections 6 and 8 of this Agreement.
11. WRITTEN INFORMATION. For all purposes under this Agreement
(including, without limitation, Section 1, Section 2 and Section 7 hereof), the
Company understands and agrees with each of the Underwriters that the following
constitutes the only written information
24
furnished to the Company by or through the Representative specifically for use
in preparation of the Registration Statement, any Preliminary Prospectus, the
Prospectus, or any amendment or supplement thereto: (i) the per share "Price to
Public" and per share "Underwriting Discounts and Commissions" set forth on the
cover page of the Prospectus and (ii) the information set forth under the
caption "Underwriting" in the Preliminary Prospectus and the Prospectus.
12. SUCCESSORS. This Agreement has been and is made solely for
the benefit of and shall be binding upon the Underwriters, the Company and their
respective successors, executors, administrators, heirs and assigns, and the
officers, directors and controlling persons referred to herein, and no other
person will have any right or obligation hereunder. The term "successors" shall
not include any purchaser of the Shares merely because of such purchase.
13. MISCELLANEOUS. The reimbursement, indemnification and
contribution agreements contained in this Agreement and the representations,
warranties and covenants in this Agreement shall remain in full force and effect
regardless of (a) any termination of this Agreement, (b) any investigation made
by or on behalf of any Underwriter or controlling person thereof, or by or on
behalf of the Company or its directors and officers and (c) delivery of and
payment for the Shares under this Agreement.
Each provision of this Agreement shall be interpreted in such
a manner as to be effective and valid under applicable law, but if any provision
of this Agreement is held to be invalid, illegal or unenforceable under any
applicable law or rule in any jurisdiction, such provision will be ineffective
only to the extent of such invalidity, illegality or unenforceability in such
jurisdiction or any provision hereof in any other jurisdiction
This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of Minnesota, without regard to
conflicts of law principles.
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If the foregoing letter is in accordance with your
understanding of our agreement, please sign and return to us the enclosed
duplicates hereof, whereupon it will become a binding agreement among the
Company and the several Underwriters in accordance with its terms.
Very truly yours,
SILICON VALLEY BANCSHARES
By:
---------------------------
Xxxx X. Xxxx
Chief Executive Officer
The foregoing Underwriting Agreement
is hereby confirmed
and accepted as of the date
first above written.
XXXX XXXXXXXX INCORPORATED
As Representative of the several Underwriters
By:
--------------
J. Xxxxx Xxxxx
Its Managing Director
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SCHEDULE A
SCHEDULE OF UNDERWRITERS
Number of Firm Maximum Number
Underwriter Shares to be Purchased of Option Shares
----------- ---------------------- ----------------
Xxxx Xxxxxxxx Incorporated....................................
Xxxxx, Xxxxxxxx & Xxxxx ......................................
Xxxxxx & Xxxxxx, Incorporated ................................
Total....................................... 1,250,000 187,500
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