<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 23, 1997
REGISTRATION NO. 333-30269
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
GBC BANCORP
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
----------------
<TABLE>
<S> <C>
CALIFORNIA 95-3586596
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
</TABLE>
800 WEST SIXTH STREET
LOS ANGELES, CALIFORNIA 90017
(213) 972-4104
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
----------------
PETER LOWE
CHIEF FINANCIAL OFFICER
800 WEST SIXTH STREET
LOS ANGELES, CALIFORNIA 90017
(213) 972-4104
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
----------------
COPIES TO:
<TABLE>
<S> <C>
STANLEY F. FARRAR WILLIAM T. QUICKSILVER
SULLIVAN & CROMWELL MANATT, PHELPS & PHILLIPS, LLP
444 SOUTH FLOWER STREET 11355 W. OLYMPIC BOULEVARD
LOS ANGELES, CALIFORNIA 90071 LOS ANGELES, CALIFORNIA 90064
(213) 955-8000 (310) 312-4000
</TABLE>
----------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: After the
effective date of this Registration Statement, as determined by market
conditions.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, please check the following box. [_]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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PROPOSED PROPOSED
MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES TO BE OFFERING PRICE AGGREGATE REGISTRATION
REGISTERED PER UNIT OFFERING PRICE FEE
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<S> <C> <C> <C>
% Subordinated Notes due 2007................ 100% $40,000,000 $12,121.21
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</TABLE>
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE OR UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Subject to completion, dated July 23, 1997
PROSPECTUS
dated , 1997
$40,000,000
[LOGO OF GBC BANCORP]
% SUBORDINATED NOTES DUE 2007
Interest on the % Subordinated Notes due 2007 (the "Notes") issued by GBC
Bancorp (the "Company") is payable on the 15th day of October, January, April
and July of each year, commencing October 15, 1997. The Notes mature on ,
2007. The Notes are not redeemable prior to , 2002. Thereafter, the
Notes are redeemable, in whole or in part, at the option of the Company at the
redemption prices set forth in this Prospectus plus accrued interest to the
date of redemption. The Notes have no sinking fund. The Notes will be issued
only in fully registered book-entry form in denominations of $1,000 and any
integral multiple thereof. The Notes will be unsecured general obligations of
the Company and will be pari passu with the Company's existing subordinated
debt and subordinated to all future Senior Indebtedness (as defined herein) of
the Company. There is no limitation in the Indenture on the Company's ability
to create or incur Senior Indebtedness or indebtedness ranking on a parity with
the Notes. The Notes have been approved for listing on the New York Stock
Exchange subject to official notice of issuance. Although the Underwriters have
each indicated an intention to make a market in the Notes, no Underwriter is
obligated to make a market in the Notes and any market making may be
discontinued at any time at the sole discretion of such Underwriter. See
"Description of Notes" and "Underwriting."
Payment of principal of the Notes may be accelerated only in the case of
certain events relating to the bankruptcy, insolvency or reorganization of the
Company. There is no right to acceleration in the case of a default in the
payment of interest on the Notes or in the performance of any other covenant of
the Company. See "Description of Notes."
SEE "RISK FACTORS" BEGINNING ON PAGE 9 FOR A DISCUSSION OF CERTAIN FACTORS THAT
SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.
THE NOTES ARE NOT SAVINGS ACCOUNTS OR DEPOSITS AND ARE NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, ANY OTHER GOVERNMENTAL AGENCY OR
OTHERWISE.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
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PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC DISCOUNT(1) COMPANY(2)
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<S> <C> <C> <C>
Per Note....................... 100.00% % %
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Total.......................... $ $ $
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</TABLE>
(1) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."
(2) Before deducting expenses payable by the Company estimated at $ .
The Notes are being offered by the Underwriters named herein subject to prior
sale and when, as and if delivered to and accepted by the Underwriters. It is
expected that the Notes will be ready for delivery in book-entry form only
through the facilities of The Depository Trust Company (the "Depositary") in
New York, on or about , 1997 against payment therefor in immediately
available funds.
PIPER JAFFRAY INC.
KEEFE, BRUYETTE & WOODS, INC.
OPPENHEIMER & CO., INC.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and, in accordance therewith, files
reports, proxy statements and other information with the Securities and
Exchange Commission (the "Commission"). Such reports, proxy statements and
other information can be inspected and copied at the Public Reference Room of
the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
following Regional Offices of the Commission: Chicago Regional Office,
Citicorp Center, Suite 1400, 500 West Madison Street, Chicago, Illinois 60661;
and New York Regional Office, Seven World Trade Center, 13th Floor, New York,
New York 10048. Copies of such material can also be obtained from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549, at prescribed rates. The Commission maintains a website that
contains reports, proxy and information statements and other information
regarding registrants that file electronically. The address of the website is
http://www.sec.gov. The Company's common stock is traded on the Nasdaq
National Market. Reports and other information concerning the Company can be
inspected at the National Association of Securities Dealers, Inc., 1735 K
Street, N.W., Washington, D.C. 20006.
The Company has filed with the Commission a registration statement on Form
S-3 (herein, together with all exhibits and amendments thereto, called the
"Registration Statement") under the Securities Act of 1933, as amended, with
respect to the securities covered by this Prospectus. This Prospectus does not
contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and
regulations of the Commission. For further information, reference is made to
the Registration Statement. Copies of the Registration Statement, including
any amendments and exhibits thereto, can be inspected and copied at the
offices of the Commission as set forth above. Statements contained in this
Prospectus as to the contents of any contract or any other document are not
necessarily complete, and in each instance reference is made to the copy of
such contract or other document filed as an exhibit to the Registration
Statement, each such statement being qualified in all respects by such
reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents of the Company which have been previously filed with
the Commission are hereby incorporated by reference in this Prospectus:
(a) the Company's Annual Report on Form 10-K for the Fiscal Year Ended
December 31, 1996;
(b) the Company's Quarterly Report on Form 10-Q for the Quarter Ended March
31, 1997; and
(c) the Company's Proxy Statement dated March 24, 1997.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering hereunder shall be deemed to be incorporated by
reference into this Prospectus and to be a part hereof from the date of filing
of such documents. Any statement contained herein or in a document
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained
herein or in any other subsequently filed document which also is or is deemed
to be incorporated by reference herein modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, upon the oral or written request of any such
person, a copy of all documents which are incorporated by reference in this
Prospectus, other than exhibits to such documents (unless such exhibits are
specifically incorporated by reference in such documents). Requests for such
copies should be directed to Amy Lin, GBC Bancorp, 800 West Sixth Street, Los
Angeles, California 90017, telephone number (213) 972-4268.
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE NOTES OFFERED
HEREBY. SUCH TRANSACTIONS MAY INCLUDE STABILIZING, THE PURCHASE OF SECURITIES
TO COVER SYNDICATE SHORT POSITIONS AND THE IMPOSITION OF PENALTY BIDS. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."
2
<PAGE>
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SUMMARY
The following summary is qualified in its entirety by the more detailed
information and consolidated financial information appearing elsewhere in this
Prospectus or incorporated herein by reference. Unless the context clearly
suggests otherwise, and except as described under the caption "Description of
Notes," references to the Company include the Company and its subsidiaries. In
addition to the historical information contained herein, certain statements in
this Prospectus constitute "forward-looking statements" under the Private
Securities Litigation Reform Act of 1995 (the "Reform Act") which involve
risks and uncertainties. The Company's actual results may differ significantly
from those discussed herein. Factors that might cause such a difference
include, but are not limited to, those discussed under the caption "Risk
Factors" as well as those discussed elsewhere in this Prospectus or in
documents incorporated by reference herein. See "Risk Factors--Forward-Looking
Statements."
THE COMPANY
GBC Bancorp (the "Company") is a bank holding company based in Los Angeles,
California, which operates through its principal subsidiary, General Bank (the
"Bank"), a California state-chartered commercial bank. The Bank serves
primarily small to medium-sized businesses and high net worth individuals
through fifteen branch offices located in the greater Los Angeles, San Diego
and Silicon Valley areas of California. The primary emphasis of the Bank is on
commercial and real estate lending, real estate construction lending and to a
lesser extent, residential mortgage lending. Substantially all of the Bank's
funding is comprised of retail and commercial deposits generated within its
market areas. At March 31, 1997, the Company had consolidated assets of $1.4
billion, deposits of $1.2 billion and stockholders' equity of $119.3 million.
The Bank has focused on servicing the Asian community, primarily persons of
Taiwanese and Chinese descent. Consistent with this strategy, the Bank
emphasizes building long-term relationships with its customers and providing
specialized products and services for these markets. Generally the Bank's
customers have a need for both commercial and residential real estate loans to
finance their businesses and homes. In addition, many of the Bank's customers
have operations both in the U.S. and in their home countries and, therefore,
require ongoing trade financing and other international banking services to
conduct business between the two locations. The Bank's specialized services
for its customers include an International Banking Division which provides
expertise on trade-related banking matters, a Small Business Administration
("SBA") department which makes SBA guaranteed loans to assist smaller
businesses and a High Technology Division that services venture-backed, early
stage, emerging growth companies in the high technology market. In concert
with the High Technology Division, the Company established GBC Venture
Capital, Inc. in 1996 to invest in technology ventures, thereby providing a
full range of financing services to its technology customers.
The Bank's funding strategy focuses on servicing its high net worth
customers and their businesses through its fifteen branch offices. Given the
nature of its customers, a significant amount of its funding is in the form of
certificates of deposit of $100,000 or more, nearly all of which mature in one
year or less. At December 31, 1996, approximately half of the funds
represented by such certificates of deposit were maintained by the Bank for
three years or more. The Company believes its success in retaining such funds
is a result of its customers' strong ties to the Bank and their desire for
personal service.
The Company expects to continue its growth by expanding its core business
and by leveraging its product competencies and its experience in dealing with
niche customer markets. The principal components of the Company's strategy are
to:
. Grow core customer base: As a leading lending institution for the
Taiwanese and Chinese communities in California, the Company believes
that it can maintain its existing business with this core customer base
and build its customer base among the growing Taiwanese and Chinese
populations of California.
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3
<PAGE>
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. Continue geographic expansion: The Company plans to explore other
geographic regions with a high concentration of persons of Taiwanese and
Chinese descent and where there is need for trade-related international
banking. The Company believes that the elimination of many barriers to
interstate branching should enable it to expand more efficiently to
other such markets.
. Further develop core product competencies: Through services provided to
its core customer base, the Company has developed expertise in providing
construction lending, commercial and real estate lending, trade-related
international banking and lending to technology companies. The Company
believes that it can continue to market such products to customers
outside of its core customer base. For example, a substantial amount of
the Company's construction loans as of March 31, 1997, were to non-
Taiwanese or Chinese customers.
. Enter new customer markets: Within California, the Company believes
there are growing concentrations of other ethnic groups whose members
have similar characteristics to those of the Company's core customer
base, such as high net worth, as well as similar needs, such as trade-
related international banking needs, a need for real estate lending and
a desire to conduct business in their native language. The Company
believes that it has the experience and product expertise to serve new
customer markets.
The Company is a California corporation with its principal executive offices
at 800 West Sixth Street, Los Angeles, California 90017, and its telephone
number is (213) 972-4104.
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4
<PAGE>
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THE OFFERING
Notes offered.................... $40,000,000 principal amount of %
Subordinated Notes due 2007.
Denominations.................... $1,000 and integral multiples thereof.
Maturity......................... , 2007
Interest payment dates........... Interest on the Notes is payable quarterly
commencing October 15, 1997 and on the 15th
day of each January, April, July and
October thereafter. The first interest
payment will represent interest from the
date of issuance of the Notes through
October 14, 1997.
Sinking fund..................... None.
Optional redemption.............. The Notes may not be redeemed prior to
, 2002. The Company may elect to redeem
the Notes, in whole or in part, upon not
less than 30 nor more than 60 days' prior
written notice, at any time on or after
, 2002 and prior to , 2003 at
102% of the principal amount thereof, on or
after , 2003 and prior to ,
2004 at 101% of the principal amount
thereof and on or after , 2004, at
100% of the principal amount thereof, in
each case plus accrued interest to the date
of redemption. See "Description of Notes--
Redemption at Option of the Company."
Covenants........................ The indenture under which the Notes will be
issued (the "Indenture"), among other
things, restricts the ability of the
Company under certain circumstances to pay
cash dividends or to make other capital
distributions. See "Description of Notes--
Restriction on Dividends and Other
Distributions." The Indenture does not
limit the ability of the Company or its
subsidiaries to incur additional
indebtedness.
Limited rights of acceleration... Payment of principal of the Notes may be
accelerated only in case of certain events
involving the bankruptcy, insolvency or
reorganization of the Company which
constitute an Acceleration Event (as
defined). There is no right of acceleration
in the case of a default in the payment of
principal of or interest on the Notes or
the performance of any other covenant of
the Company in the Indenture. See
"Description of Notes--Acceleration
Events."
Subordination.................... The Notes will be unsecured general
obligations of the Company and will be
subordinated to all existing and future
Senior Indebtedness (as defined) of the
Company in the manner and to the extent
described herein. As of March 31, 1997, the
Company had no outstanding Senior
Indebtedness, and had $15 million of
outstanding subordinated debentures ranking
pari passu with the Notes. There is no
limitation in the Indenture on the
Company's ability to create or incur Senior
Indebtedness or indebtedness ranking on a
parity with the Notes. See "Description of
Notes--Subordination."
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5
<PAGE>
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<TABLE>
<C> <S>
Use of proceeds.................. The net proceeds of this offering will be
used for general corporate purposes, which
may include repayment of the Company's
$15 million of outstanding subordinated
debentures, repurchases by the Company of
its common stock and possible future
acquisitions. The Notes are expected to be
treated as Tier 2 capital for regulatory
purposes. As Tier 2 capital, the Notes are
expected to strengthen further the capital
structure of the Company. See "Use of
Proceeds."
Listing.......................... The Notes have been approved for listing on
the New York Stock Exchange subject to
official notice of issuance.
Trustee.......................... BNY Western Trust Company.
</TABLE>
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6
<PAGE>
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SUMMARY CONSOLIDATED FINANCIAL INFORMATION
The following summary consolidated financial information of the Company and
its subsidiaries as of and for the years ended December 31, 1996, 1995, 1994,
1993 and 1992 has been derived from the Company's audited consolidated
financial statements. The following summary consolidated financial information
for the three months ended March 31, 1997 and 1996 has been derived from the
Company's unaudited consolidated quarterly financial statements which, in the
opinion of management, include all adjustments (consisting of normal recurring
adjustments) considered necessary for a fair presentation. The summary
consolidated financial information should be read in conjunction with the
Company's audited consolidated financial statements and related notes
incorporated herein by reference. The consolidated financial information for
the three months ended March 31, 1997 is not necessarily indicative of the
operating results to be expected for the entire year.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
---------------------- --------------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
---------- ---------- ---------- ---------- ---------- --------- ---------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF INCOME
DATA:
Interest income......... $ 25,734 $ 23,284 $ 97,641 $ 85,126 $ 72,782 $ 65,159 $ 65,731
Interest expense........ 11,050 10,666 43,661 37,418 28,889 24,997 28,441
---------- ---------- ---------- ---------- ---------- --------- ---------
Net interest income..... 14,684 12,618 53,980 47,708 43,893 40,162 37,290
Provision for credit
losses................. 1,000 1,500 4,500 18,570 16,194 9,300 3,830
---------- ---------- ---------- ---------- ---------- --------- ---------
Net interest income
after provision for
credit losses.......... 13,684 11,118 49,480 29,138 27,699 30,862 33,460
Non-interest income..... 1,524 1,832 6,073 6,042 5,936 8,286 4,420
Non-interest expense.... 6,790 6,588 27,337 26,104 24,310 22,012 18,283
---------- ---------- ---------- ---------- ---------- --------- ---------
Income before income
taxes.................. 8,418 6,362 28,216 9,076 9,325 17,136 19,597
Provision for income
taxes.................. 2,674 2,053 9,179 1,427 1,796 5,196 6,585
---------- ---------- ---------- ---------- ---------- --------- ---------
Net income.............. $ 5,744 $ 4,309 $ 19,037 $ 7,649 $ 7,529 $ 11,940 $ 13,012
========== ========== ========== ========== ========== ========= =========
Earnings per common
share:
Net income............. $ 0.82 $ 0.62 $ 2.67 $ 1.14 $ 1.12 $ 1.76 $ 1.94
Average common shares
outstanding............ 6,983,000 6,997,000 7,135,000 6,729,000 6,693,000 6,774,000 6,707,000
SELECTED OPERATING
RATIOS AND OTHER DATA:
Return on average
assets(1).............. 1.73% 1.38% 1.46% 0.70% 0.76% 1.32% 1.59%
Return on average common
stockholders'
equity(1).............. 19.55 17.06 17.93 8.13 8.34 14.47 18.25
Net interest
margin(1)(2)........... 4.67 4.25 4.36 4.59 4.74 4.74 4.86
Net charge-offs to
average loans and
leases(1).............. 1.33 1.59 0.96 5.10 1.01 1.00 0.48
Efficiency Ratio (3).... 41.90 45.60 45.50 48.60 48.80 45.40 43.80
Ratio of earnings to
fixed charges(4):
Excluding interest on
deposits.............. 9.42x 5.64x 6.38x 2.37x 2.44x 3.16x 4.91x
Including interest on
deposits.............. 1.68x 1.52x 1.57x 1.17x 1.24x 1.53x 1.61x
BALANCE SHEET DATA:
Assets.................. $1,353,577 $1,365,719 $1,352,115 $1,204,506 $1,081,602 $ 957,260 $ 861,252
Loans and leases, net... 592,158 464,994 582,507 451,891 474,276 489,394 435,880
Securities(5)........... 553,720 662,429 532,095 540,694 440,511 310,979 336,139
Deposits................ 1,199,920 1,208,763 1,201,513 1,046,200 934,020 790,575 697,020
Subordinated debt....... 15,000 15,000 15,000 15,000 15,000 15,000 15,000
Stockholders' equity.... 119,260 101,266 116,636 99,477 87,683 86,438 76,209
Book value per common
share.................. 17.57 15.12 17.24 14.89 13.17 13.00 11.51
</TABLE>
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7
<PAGE>
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<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31, YEAR ENDED DECEMBER 31,
---------------- -------------------------------------------
1997 1996 1996 1995 1994 1993 1992
------- ------- ------- ------- ------- ------- -------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
SELECTED ASSET QUALITY
DATA:
Loans 90 days or more
past due and still
accruing............... $ 5,109 $ 9 $ 6,779 $ 9 $ 999 $ 4,059 $ 87
Non-accrual loans....... 9,096 27,539 11,719 43,712 46,672 22,033 15,965
Restructured loans(6)... 22,240 20,103 23,125 10,151 20,865 11,898 --
------- ------- ------- ------- ------- ------- -------
Total non-performing
loans.................. 36,445 47,651 41,623 53,872 68,536 37,990 16,052
Other real estate owned
("OREO"), net.......... 15,866 10,452 12,988 7,686 5,051 15,541 14,713
------- ------- ------- ------- ------- ------- -------
Total non-performing
assets................. $52,311 $58,103 $54,611 $61,558 $73,587 $53,531 $30,765
======= ======= ======= ======= ======= ======= =======
SELECTED FINANCIAL
CONDITION RATIOS:
Non-accrual loans to
loans and leases, net.. 1.54% 5.92% 2.01% 9.67% 9.84% 4.50% 3.66%
Non-performing assets to
total assets........... 3.86 4.25 4.04 5.11 6.80 5.59 3.57
Non-performing assets to
loans and leases, net
and OREO, net.......... 8.60 12.22 9.17 13.39 15.35 10.60 6.83
Allowance for credit
losses to total loans
and leases............. 2.49 3.37 2.69 3.53 4.60 2.37 1.68
Allowance for credit
losses to non-accrual
loans.................. 167.17 59.21 138.31 38.15 49.33 54.36 47.00
Allowance for credit
losses to non-
performing loans....... 41.72 34.22 38.94 30.95 33.60 31.53 46.74
Regulatory capital
ratios:
Tier 1 risk-based
capital............... 12.51 12.77 11.97 13.83 13.21 11.93 11.77
Total risk-based
capital............... 14.23 14.40 13.69 15.51 15.34 14.44 14.81
Leverage ratio......... 8.98 8.00 8.74 8.27 8.69 8.96 8.67
</TABLE>
- --------
(1) Annualized for the three-month periods ended March 31, 1997 and 1996.
(2) Tax-exempt interest income is not adjusted to a fully taxable equivalent
basis.
(3) Non-interest expense divided by the sum of net interest income plus non-
interest income.
(4) For purposes of computing the ratio on earnings to fixed charges, earnings
represents income before income taxes, extraordinary items and fixed
charges. Fixed charges represents interest expense, and net rental
expense. The portion of rents applicable to interest has been deemed
immaterial and is not included in fixed charges.
(5) Includes securities available for sale and securities held to maturity.
(6) A loan is categorized as restructured if the original interest rate on
such loan, the repayment terms, or both, are modified due to a
deterioration in the financial condition of the borrower. Restructured
loans which are non-accrual loans are not included in the balance of
restructured loans. The weighted average yield of the restructured loans
(on accrual status) as of March 31, 1997, was 10.23%.
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8
<PAGE>
RISK FACTORS
Prospective investors should consider, among other things, the following
factors in connection with a decision to purchase the Notes.
SOURCE OF PAYMENTS TO HOLDERS OF NOTES
As a holding company without significant assets other than its equity
interest in the Bank, the Company's ability to pay the principal of and
interest on the Notes depends primarily upon the cash dividends it receives
from the Bank. The Notes mature on , 2007, and there is no sinking fund
or other mandatory provision for earlier retirement. Dividend payments from
the Bank are subject to regulatory limitations, generally based on current and
retained earnings, imposed by the California Financial Code. Payment of
dividends is also subject to regulatory restrictions if such dividends would
impair the capital of the Bank. No assurance can be given that the Bank will
be able to pay dividends in the future in amounts sufficient to pay principal
and interest on the Notes. Substantially all of the consolidated assets of the
Company are held by the Bank, and, in the event of liquidation of both the
Company and the Bank, creditors of the Bank, including depositors, would have
first claim to such assets before holders of the Notes. At December 31, 1996,
the Bank had outstanding indebtedness and other liabilities, including
deposits, of approximately $1.2 billion.
ECONOMIC CONDITIONS AND GEOGRAPHIC CONCENTRATION
The Company's operations are located in California and concentrated
primarily in Southern California. As a result of the geographic concentration,
the Company's results depend largely upon economic conditions in this area. A
deterioration in economic conditions in the Company's market areas,
particularly in the real estate industry, could have a material adverse impact
on the quality of the Company's loan portfolio and the demand for its products
and services, and accordingly, its results of operations.
CREDIT QUALITY
A significant source of risk for the Company arises from the possibility
that losses will be sustained because borrowers, guarantors and related
parties may fail to perform in accordance with the terms of their loans. The
Company has adopted underwriting and credit monitoring procedures and credit
policies, including the establishment and review of the allowance for credit
losses, that management believes are appropriate to minimize this risk by
assessing the likelihood of nonperformance, tracking loan performance and
diversifying the Company's credit portfolio. Such policies and procedures,
however, may not prevent unexpected losses that could materially adversely
affect the Company's results of operations. Because a high percentage of the
Company's credit portfolio is secured by real estate, a diminution in value of
the real estate market could adversely affect the Company's results of
operations.
DEPENDENCE ON KEY PERSONNEL
The Company's success depends substantially on certain members of its senior
management, in particular Li-Pei Wu, Chairman, President and Chief Executive
Officer of the Bank. Mr. Wu serves as Chairman, President and CEO pursuant to
an Employment Agreement which contains a seven year term that commenced on
January 1, 1992 and ends September 9, 1998. Thereafter, the agreement may be
renewed at Mr. Wu's option for a successive 12-month period. There would
likely be a difficult transition period if the services of Mr. Wu were lost to
the Company. There is no assurance that the Company will be able to retain its
current key personnel or attract additional qualified key persons as needed.
INTEREST RATES
Banking companies' earnings depend largely on the relationship between the
cost of funds, primarily deposits, and the yield on earning assets. This
relationship, known as the interest rate spread, is subject to
9
<PAGE>
fluctuation and is affected by economic and competitive factors which
influence interest rates, the volume and mix of interest-earning assets and
interest-bearing liabilities, and the level of non-performing assets. The
Company is subject to interest rate risk to the degree that its interest
bearing liabilities reprice or mature more slowly or more rapidly or on a
different basis than its interest earning assets. Given the Company's current
volume and mix of interest-bearing liabilities and interest earning assets,
the Company's interest rate spread could be expected to increase during times
of rising interest rates and, conversely, to decline during times of falling
interest rates. Although the Company believes its current level of interest
rate sensitivity is reasonable, declines in interest rates may have an adverse
effect on the Company's results of operations.
COMPETITION
The banking and financial services business in California generally, and in
the Bank's market areas specifically, is highly competitive. The increasingly
competitive environment is a result primarily of changes in regulation,
changes in technology and product delivery systems, and the accelerating pace
of consolidation among financial services providers. The Bank competes for
loans, deposits and customers for financial services with other commercial
banks, savings and loan associations, securities and brokerage companies,
mortgage companies, insurance companies, finance companies, money market
funds, credit unions, and other nonbank financial service providers. The
Bank's profitability is directly impacted by its ability to competitively
price loans and accept deposits in relation to its competitors' abilities to
provide the same or similar services. Many of these competitors are much
larger in total assets and capitalization, have greater access to capital
markets and offer a broader array of financial services than the Bank. There
can be no assurance that the Bank will be able to compete effectively in its
markets, and the results of operations of the Company could be adversely
affected if circumstances affecting the nature or level of competition change.
LIMITED RIGHT OF ACCELERATION OF NOTES
Payment of principal of or interest on the Notes may be accelerated only in
the case of the bankruptcy, insolvency or reorganization of the Company. There
is no right of acceleration in the case of a default in the payment of
principal or interest on the Notes or in the performance of any other covenant
of the Company, or upon a change in control of the Company. There has been and
continues to be merger, acquisition and consolidation activity in the banking
and financial services industry. The Company has from time to time received
inquiries relating to a potential acquisition. The Company hired an investment
banking firm in December 1996 to provide financial advisory and investment
banking services in connection with mergers and acquisitions, including a
potential sale of the Company. Although the Company is not currently in
negotiations with any potential purchaser, there can be no assurance that the
Company will not in the future undergo a change in control through acquisition
or otherwise. See "Description of Notes--Acceleration Events."
LIMITED COVENANTS
The covenants in the Indenture are limited. The covenants do not protect
holders of the Notes in the event of a material adverse change in the
Company's financial condition or results of operations and do not limit the
ability of the Company or any subsidiary to incur additional indebtedness.
Therefore, the provisions of the Indenture should not be considered a
significant factor in evaluating whether the Company will be able to comply
with its obligations under the Notes. See "Description of Notes."
SUBORDINATION OF NOTES
The payment of principal of and interest on the Notes is unsecured and is
subordinated in right of payment to all Senior Indebtedness of the Company, as
defined in the Indenture. As a result, in the event of the dissolution,
liquidation or reorganization of the Company, the holders of Notes would not
receive payment until the holders of Senior Indebtedness were fully satisfied.
As of March 31, 1997, the Company had no outstanding Senior Indebtedness and
had $15 million of outstanding subordinated debentures ranking pari passu with
the Notes.
10
<PAGE>
There is no limitation in the Indenture on the Company's ability to create or
incur Senior Indebtedness or indebtedness ranking on a parity with the Notes.
In addition, because substantially all of the consolidated assets of the
Company are held by the Bank, the Notes are structurally subordinated to the
liabilities of the Bank, which at March 31, 1997 were approximately $1.2
billion. See "--Source of Payments to Holders of Notes" and "Description of
Notes--Subordination."
ABSENCE OF EXISTING PUBLIC MARKET; MARKET PRICES
There is no existing market for the Notes. Application has been made to list
the Notes on the New York Stock Exchange, but there can be no assurance that
an active and liquid trading market will develop or that a continued listing
will be available. Although the Underwriters have each indicated an intention
to make a market in the Notes, none of the Underwriters is obligated to make a
market in the Notes and any market making may be discontinued at any time at
the sole discretion of such Underwriter. If the Notes are traded after their
original issuance, they may trade at a discount to their principal amount.
REGULATION
The Company, as a bank holding company, is subject to extensive regulation
by the Board of Governors of the Federal Reserve System. This regulation
limits the manner in which the Company conducts its businesses and obtains
financing and is designed primarily to protect depositors and not to benefit
holders of securities of financial institutions. The Bank is subject to
extensive regulation and supervision by the California Commissioner of
Financial Institutions, and the Federal Deposit Insurance Corporation (the
"FDIC"). The Company is subject to periodic examinations by the bank
regulatory authorities. As a result of the FDIC's examination of the Bank in
1994, the Bank entered into a Memorandum of Understanding ("MOU") with the
FDIC, which was revised in 1995. In April, 1996, the FDIC terminated the MOU
based upon the results of a safety and soundness examination. There can be no
assurance that the FDIC will not require the Bank to enter into another
memorandum of understanding or take other supervisory actions with respect to
the Bank in the future. The banking industry is subject to rapidly changing
laws and regulations, as well as changing political conditions. There can be
no assurance that implementation of and changes in laws and regulations
affecting banking will not adversely affect the Company, and therefore its
ability to meet the debt service requirements on the Notes.
FORWARD-LOOKING STATEMENTS
Certain statements contained in this Prospectus, including, without
limitation, statements containing the words "believes," "intends," "expects"
and words of similar import, constitute, "forward-looking statements" within
the meaning of the Reform Act. Such forward-looking statements involve known
and unknown risks, uncertainties and other factors that may cause the actual
results, performance or achievements of the Company to be materially different
from any future results, performance or achievements expressed or implied by
such forward-looking statements. Such factors include, among others, the
following: general economics and business conditions in those areas in which
the Company operates; demographic changes; competition; fluctuations in
interest rates; changes in business strategy or development plans; changes in
governmental regulation; credit quality; and other factors referenced in this
Prospectus or in documents incorporated by reference herein, including,
without limitation, under the captions "Summary," and "Risk Factors." Given
these uncertainties, prospective investors are cautioned not to place undue
reliance on such forward-looking statements. The Company disclaims any
obligation to update any such factors or to publicly announce the results of
any revisions to any of the forward-looking statements contained herein to
reflect future events or developments.
11
<PAGE>
RECENT DEVELOPMENTS
Second Quarter Earnings. For the three months ended June 30, 1997 the
Company reported net income of $6.5 million, or $0.92 per share, compared to
$4.7 million, or $0.66 per share, for the same period of 1996. Net income for
the six months ended June 30, 1997 was $12.2 million, or $1.75 per share, up
$3.2 million or 36% from the same period of 1996. The increase in net income
for the six months ended June 30, 1997 was primarily due to an increase in net
interest income, combined with a lower provision for credit losses. Net
interest income was $15.2 million for the second quarter of 1997, up 14.3%
from the same period of 1996, while no provision for credit losses was
recorded in the second quarter of 1997. For the six months ended June 30,
1997, net interest income rose $4.0 million, or 15.3%, from the same period of
1996, while the provision for credit losses was $1 million, as compared to
$2.5 million for the first six months of 1996. The increase in net interest
income was due to an increase in the net interest spread and an increase in
average earning assets. Total non-performing assets, defined as non-accrual
loans and net other real estate owned, totaled $24.6 million at June 30, 1997,
as compared with $24.7 million at December 31, 1996.
The annualized return on equity for the three months ended June 30, 1997 was
21.2%, as compared to 18.2% for the same period in 1996. For the six months
ended June 30, 1997, the return on equity was 20.4%, as compared with 17.6%
for the same period of 1996. Total deposits at June 30, 1997 were $1.3
billion, up $58.6 million from March 31, 1997 and up $57.0 million from
December 31, 1996. Total assets at June 30, 1997 were $1.4 billion, up $71
million from March 31, 1997 and up $72 million from December 31, 1996.
USE OF PROCEEDS
The net proceeds to the Company from the sale of the Notes offered hereby
(after deducting the underwriting discount and the estimated expenses of the
offering) are estimated to be $ . The Company intends to use a
portion of the net proceeds for general corporate purposes, which may include
the repayment of the Company's $15 million of outstanding subordinated
debentures, repurchases of the Company's common stock and possible future
acquisitions. The Company's outstanding subordinated debentures have a stated
maturity of September 1, 2000 and bear interest at a rate of 10.52%. Although
the Company has no contractual right to prepay the subordinated debentures,
the Company is currently negotiating prepayment with the holder of such
debentures. Any such prepayment would require a prepayment premium which would
be paid with a portion of the net proceeds. Pending their ultimate
application, the net proceeds may be loaned to the Bank or invested in short
term investment grade financial instruments.
The Notes are expected to be treated as Tier 2 capital for regulatory
purposes. As Tier 2 capital, the Notes will help to strengthen further the
capital structure of the Company.
12
<PAGE>
CAPITALIZATION
The following table sets forth the consolidated capitalization of the
Company and its subsidiaries at March 31, 1997, and as adjusted to give effect
to the sale of the $40,000,000 principal amount of Notes offered hereby and
the application of the estimated net proceeds therefrom. At March 31, 1997,
the Company had other funding liabilities consisting of deposits of $1.2
billion. This table should be read in conjunction with the consolidated
financial statements of the Company incorporated herein by reference.
<TABLE>
<CAPTION>
MARCH 31, 1997
------------------------
ACTUAL AS ADJUSTED(1)
-------- --------------
(IN THOUSANDS)
<S> <C> <C>
Borrowings:
Subordinated debt(2)................................ $ 15,000 $ 15,000
Notes offered hereby................................ 0 40,000
-------- --------
Total borrowings.................................. 15,000 55,000
-------- --------
Stockholders' equity:
Common Stock, no par or stated value, 20,000,000
shares authorized;
6,786,589 shares outstanding(3).................... 47,729 47,729
Securities valuation allowance, net of tax.......... (2,108) (2,108)
Retained earnings................................... 73,646 73,646
Foreign currency translation adjustments............ (7) (7)
-------- --------
Total stockholders' equity........................ 119,260 119,260
-------- --------
Total capitalization............................ $134,260 $174,260
======== ========
</TABLE>
- --------
(1) If the Company is successful in negotiating the prepayment of the
outstanding subordinated debt, total borrowings and total capitalization
as of March 31, 1997, as adjusted to give effect to the sale of the Notes
and such prepayment, would be $40,000,000 and $159,260,000, respectively
(without giving effect to any premium payable in connection with such
repayment). See "Use of Proceeds."
(2) The principal of the subordinated debt is payable in four installments of
$3,750,000 each on September 1 of 1997, 1998, 1999 and 2000.
(3) Does not include 642,960 shares of common stock issuable upon exercise of
outstanding employee stock options issued under the Company's 1988 stock
option plan, 308,500 shares of common stock issuable upon exercise of
outstanding stock options issued under the Company's contingency stock
option plan and 444,860 shares reserved for future grant under the
Company's 1988 stock option plan.
13
<PAGE>
MANAGEMENT
The following table sets forth certain information about the executive
officers of the Company and the Bank, and the directors of the Company.
EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
AGE AT EXECUTIVE
DECEMBER 31, OFFICER
NAME 1996 SINCE POSITION/BACKGROUND
---- ------------ --------- -------------------
<C> <C> <C> <S>
Li-Pei Wu.......... 62 1982 President and Chief Executive
Officer of the Company and the
Bank since May 1982, Chairman of
the Board of the Company and the
Bank since 1984.
Peter Wu, Ph.D.(1). 48 1979 Chief Operating Officer of the Bank
since 1995, Executive Vice
President of the Company and
Secretary of the Company and the
Bank since 1979.
Peter Lowe......... 55 1994 Executive Vice President and Chief
Financial Officer of the Company
and the Bank since 1994; prior
thereto, Executive Vice President
and Chief Financial Officer of
Manufacturers Bank from 1990 to
1993.
Eddie Chang........ 41 1995 Senior Vice President and Manager
of the Real Estate Department
since January 1996. From July 1995
to January 1996 Manager of the
Real Estate Department. From July
1994 to July 1995 self-employed.
From 1992 to July 1994, Senior
Vice President and Manager of the
Real Estate Department.
Gloria Chen........ 54 1997 Senior Vice President and
Relationship Manager in the
Corporate Lending Department since
May 1997; prior thereto, Senior
Vice President and Manager of the
International Department at
Preferred Bank from 1992 to 1997.
Sue Lai............ 44 1997 Senior Vice President of the
Corporate Lending Department since
April 1997, Manager of the
Corporate Lending Department since
1994, in various capacities with
the Bank since 1991.
Johnny Lee......... 34 1997 Senior Vice President and Regional
Manager of the Northern California
Region since April 1997, in
various positions with the Bank
since 1990.
Domenic Massei..... 52 1989 Senior Vice President of Operations
Administration of the Bank since
1989; prior thereto, Executive
Vice President and Chief
Administrative Officer of
Transnational Bank from 1984 to
1988.
Richard Voake...... 56 1992 Senior Vice President and Credit
Administrator of the Bank since
1994, Vice President and Manager
of Corporate Credit Examination
from 1992 to 1994.
Thomas Wong, Jr.... 47 1997 Senior Vice President and Special
Assistant to the Chief Executive
Officer since April 1997; prior
thereto, Senior Vice President and
head of International Banking and
Cash Management sales at Whitney
National Bank from 1993 to 1996.
Carl Maier......... 56 1993 Vice President and Controller of
the Bank since July 1993. From
October 1991 to July 1993 self-
employed.
</TABLE>
14
<PAGE>
DIRECTORS
<TABLE>
<CAPTION>
AGE AT
DECEMBER 31, DIRECTOR
NAME 1996 SINCE POSITION/BACKGROUND
---- ------------ -------- -------------------
<C> <C> <C> <S>
Helen Y. Chen....... 54 1986 Vice President of Fullong
Enterprise Corp. from 1974 to
present.
Thomas C. T. Chiu... 49 1983 Medical doctor.
Chuang-I Lin, Ph.D.. 56 1983 Chairman and President of Myriad
Capital, Inc., Monterey Park, CA,
from 1980 to present.
Ko-Yen Lin.......... 53 1986 President of T. K. Lin Investment
Co., Calabasas, CA, from 1977 to
present.
Ting Y. Liu, Ph.D... 60 1981 Chairman of General Link Inc.,
Chatsworth, CA from 1994 to
present and Chairman of Phoenix
Hotel Group, Inc. from 1984 to
present.
John C. Wang(2)..... 34 1989 President of Pacific Coast Realty
Services, Inc. from 1991 to
present, Managing Director of
South Bay Capital Corporation,
Long Beach, CA from 1990 to
present, and Vice President of The
Wang Partnership from 1987 to
present.
Kenneth C. Wang(2).. 35 1991 Executive Vice President of Kenjohn
Trading from 1993 to present and
Executive Vice President of The
Wang Partnership from 1986 to
present.
Chien-Te Wu(1)...... 35 1994 President from August 1993 to
present, and Executive Vice
President from September 1990 to
July 1993, of Tone Yee Investments
& Developments, Rancho Cucamonga,
CA.
Julian Wu, Ph.D(1).. 55 1981 General Partner of West Union
Investment Co., Torrance, CA, from
1977 to present.
Li-Pei Wu........... 62 1982 See "-- Executive Officers."
Peter Wu, Ph.D.(1).. 48 1981 See "-- Executive Officers."
Ping C. Wu(1)....... 51 1981 President of President Global
Corp., Buena Park, CA, from 1975
to present.
Walter Wu........... 51 1981 President of Wenix International
Corp., Los Angeles, CA, from 1984
to present.
Chin-Liang Yen...... 54 1983 President of San Yang Enterprises
Corp. from 1986 to present.
</TABLE>
- --------
(1) Peter Wu, Ph.D., Ping C. Wu and Chien-Te Wu are brothers and are first
cousins to Julian Wu, Ph.D.
(2) John C. Wang and Kenneth C. Wang are brothers.
15
<PAGE>
DESCRIPTION OF NOTES
The Notes are to be issued under an Indenture (the "Indenture"), dated as of
, 1997, between the Company and BNY Western Trust Company, as
trustee (the "Trustee"). The Notes are not savings accounts or deposits of the
Bank and are not insured by the FDIC, any other governmental agency or
otherwise.
The following summaries of certain provisions of the Notes and the Indenture
do not purport to be complete and are subject to, and are qualified in their
entirety by reference to, the provisions of the Indenture (including the
definition of certain terms in the Indenture). The form of the Indenture and
the Notes have been filed with the Commission as an exhibit to the
Registration Statement of which this Prospectus is a part. Wherever particular
provisions or definitions are referred to, such provisions and definitions are
incorporated herein by reference, and the statements made herein are qualified
in their entirety by such reference. Unless otherwise indicated, capitalized
terms shall have the meanings ascribed to them in the Indenture. Article and
Section references are to applicable Articles and Sections of the Indenture.
For purposes of the following summary, the term the "Company" excludes the
Company's Subsidiaries unless otherwise provided.
GENERAL
The Notes offered by this Prospectus will be limited to $40,000,000 in
aggregate principal amount. The Notes will be issued in registered form only,
without coupons, in denominations of $1,000 and any integral multiple thereof.
Interest on the Notes will accrue from the date of original issuance and will
be payable on the 15th day of October, January, April and July of each year,
commencing October 15, 1997, at the rate per annum stated on the cover page of
this Prospectus. Interest will be payable to the person in whose name the Note
is registered at the close of business on the business day next preceding such
Interest Payment Date. Notwithstanding the above, in the event that the Notes
are no longer in book-entry only form, the record date for such payment shall
be the first day of the month in which such payment is made. (Sections 301 and
302) The Notes will mature on , 2007, unless redeemed earlier at the
option of the Company. See "Redemption at Option of the Company."
The Notes will not be secured by the assets of the Company or any of its
Subsidiaries or otherwise and will not have the benefit of a sinking fund for
the retirement of principal. In addition, the rights of the Company to
participate in any distribution of assets of any Subsidiary, including the
Bank, upon its liquidation or reorganization or otherwise (and thus the
ability of the Holders of the Notes to benefit indirectly from such
distribution) are subject to the prior claims of creditors of that Subsidiary.
Claims on the Company's Subsidiaries by creditors other than the Company may
include substantial obligations with respect to deposit liabilities, federal
funds purchased and securities sold under repurchase agreements and other debt
obligations. There are also limitations on the extent to which the Bank may
pay dividends or make other payments to the Company.
So long as the Company is a reporting company under the Exchange Act, the
Company will furnish to Holders of the Notes annual reports of the Company
containing audited consolidated financial statements and interim reports with
unaudited consolidated financial data on a quarterly basis. If the Company
ceases to be a reporting company under the Exchange Act, the Company will
furnish to Holders of the Notes annual audited consolidated financial
statements and quarterly unaudited consolidated summary income statements and
retained earnings data. (Section 704)
The Indenture does not contain provisions that would provide protection to
Holders against a sudden and dramatic decline in credit quality resulting from
takeovers, recapitalizations or similar restructurings.
REDEMPTION AT OPTION OF THE COMPANY
The Notes may not be redeemed prior to , 2002. The Notes are subject
to redemption at the option of the Company, in whole at any time or in part
from time to time, upon not less than 30 nor more than 60 days' notice,
commencing on , 2002, at the following redemption prices (expressed as a
16
<PAGE>
percentage of the principal amount), plus accrued and unpaid interest to the
date fixed for redemption, if redeemed during the 12-month period beginning
of the year indicated:
<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
---- ----------
<S> <C>
2002......................................................... 102%
2003......................................................... 101%
2004 and thereafter.......................................... 100%
</TABLE>
The redemption price will be paid with interest accrued to the date fixed for
redemption (subject to the right of the registered Holder on the Record Date
for an interest payment to receive such interest). If the Company elects to
redeem less than all of the Notes, the Trustee will select which Notes to
redeem using such method as it shall deem fair and appropriate, including the
selection for redemption of a portion of the principal amount of any Note but
not less than $1,000. On and after the redemption date, interest will cease to
accrue on the Notes or portions thereof called for redemption. (Article
Eleven)
SUBORDINATION
The Notes are subordinated, in the manner and to the extent hereinafter
described, to the prior payment of all "Senior Indebtedness" of the Company.
Senior Indebtedness of the Company means the principal of, premium, if any,
and interest on (1) all indebtedness for money borrowed (as defined below) of
the Company (including indebtedness for money borrowed of others guaranteed by
the Company) other than the Notes, whether outstanding on the date of the
Indenture or thereafter created, assumed or incurred, (2) any amendments,
renewals, extensions, modifications and refundings of any such indebtedness,
unless in either case in the instrument creating or evidencing any such
indebtedness or pursuant to which it is outstanding it is provided that such
indebtedness is not superior in right of payments to the Notes, and (3)
Derivative Obligations (as defined below).
For the purposes of such definition, "indebtedness for money borrowed" means
(a) any obligation of, or any obligation, contingent or otherwise, guaranteed
by, the Company for the repayment of borrowed money, whether or not evidenced
by bonds, debentures, notes or other written instruments, (b) any deferred
payment obligation of or any such obligation guaranteed by, the Company for
the payment of the purchase price of property, assets or services and (c) any
obligation of or any such obligation guaranteed by, the Company for the
payment of rent or other amounts under a lease of property or assets which
obligation is required to be classified and accounted for as a capitalized
lease on the balance sheet of the Company under generally accepted accounting
principles. Notwithstanding the foregoing, Senior Indebtedness shall not
include any obligation of the Company that constitutes a trade payable or
accrued liability arising in the ordinary course of business.
"Derivative Obligations" are any obligations of the Company to make payment
pursuant to the terms of any securities contracts and foreign currency
exchange contracts, derivative instruments, such as swap agreements (including
interest rate and currency and foreign exchange rate swap agreements), cap
agreements, floor agreements, collar agreements, interest rate agreements,
foreign exchange agreements, options, commodity futures contracts and
commodity options contracts (other than obligations on account of indebtedness
for money borrowed ranking pari passu with or subordinate to the Notes).
(Section 101)
Upon a distribution of assets, dissolution, winding up, liquidation or
reorganization of the Company, if an event of default has occurred and is
continuing with respect to any Senior Indebtedness or if an Acceleration Event
shall have occurred and the principal of the Notes has been declared due and
payable and such declaration has not been rescinded or annulled, then in any
such instance all Senior Indebtedness must be paid in full before any payment
of principal or interest on the Notes can be made. (Sections 1202 and 1203)
However, subordination does not prevent the occurrence of an Acceleration
Event or an "Event of Default" (as defined below) under the Indenture.
By reason of the subordination of the Notes, in the event of liquidation of
the Company, the Holders of the Notes will not receive payment until the
holders of Senior Indebtedness have been satisfied. As of March 31, 1997, the
Company had no outstanding Senior Indebtedness and had $15 million of
outstanding subordinated
17
<PAGE>
debentures ranking pari passu with the Notes. There is no limitation in the
Indenture on the Company's creation of Senior Indebtedness or indebtedness
ranking on a parity with the Notes.
DENOMINATIONS, REGISTRATION AND TRANSFER
The Notes will be represented by a global certificate registered in the name
of the Depositary or its nominee ("Global Note"). Beneficial interests in the
Notes will be shown on, and transfers thereof will be effected only through,
records maintained by the Depositary. Except as described below, Notes in
certificated form will not be issued in exchange for the global certificate.
Unless and until the Global Note is exchanged in whole or in part for the
individual Notes represented thereby, it may not be transferred except as a
whole by the Depositary for such Global Note to a nominee of such Depositary
or by a nominee of such Depositary to such Depositary or another nominee of
such Depositary or by the Depositary or any nominee to a successor Depositary
or any nominee of such successor.
The Global Note shall be exchangeable for Notes registered in the names of
persons other than the Depositary or its nominee only if (i) the Depositary
notifies the Company that it is unwilling or unable to continue as a
depositary for such Global Note and no successor depositary shall have been
appointed, or if at any time the Depositary ceases to be a clearing agency
registered under the Securities Exchange Act, at a time when the Depositary is
required to be so registered to act as such depositary or (ii) the Company in
its sole discretion determines that such Global Note shall be so exchangeable.
Any Global Note that is exchangeable pursuant to the preceding sentence shall
be exchangeable for definitive certificates registered in such names as the
Depositary shall direct. It is expected that such instructions will be based
upon directions received by the Depositary from its Participants (as defined
below) with respect to ownership of beneficial interests in such Global Note.
In the event that Notes are issued in definitive form, such Notes will be in
denominations of $1,000 and integral multiples thereof and may be transferred
or exchanged at the offices described below.
Payments on Notes represented by a Global Note will be made to the
Depositary, as the depositary for the Notes. In the event Notes are issued in
definitive form, principal and interest will be payable, the transfer of the
Notes will be registrable, and Notes will be exchangeable for Notes of other
denominations of a like aggregate principal amount, at the corporate office of
the Trustee, or at the offices of any paying agent or transfer agent appointed
by the Company, provided that payment of interest may be made at the option of
the Company, the check mailed to the address of the persons entitled thereto
or by wire transfer. In addition, if the Notes are issued in certificated
form, the record dates for payment of interest will be the first day of the
month in which such payment is to be made.
Upon the issuance of the Global Note, and the deposit of such Global Note
with or on behalf of the Depositary, the Depositary for such Global Note or
its nominee will credit, on its book-entry registration and transfer system,
the respective principal amounts of the individual Notes represented by such
Global Note to the accounts of persons that have accounts with such Depositary
("Participants"). Ownership of beneficial interests in the Global Note will be
limited to Participants or persons that may hold interests through
Participants. Ownership of beneficial interests in the Global Note will be
shown on, and the transfer of that ownership will be effected only through,
records maintained by the applicable Depositary or its nominee (with respect
to interests of Participants) and the records of Participants (with respect to
interests of persons who hold through Participants). The laws of some states
require that certain purchasers of securities take physical delivery of such
securities in definitive form. Such limits and such laws may impair the
ability to transfer beneficial interest in the Global Note.
So long as the Depositary for the Global Note, or its nominee, is the
registered owner of such Global Note such Depositary or such nominee, as the
case may be, will be considered the sole owner or holder of the Notes
represented by such Global Note for all purposes under the Indenture. Except
as provided below, owners of beneficial interests in a Global Note will not be
entitled to have any of the individual Notes represented by such Global Note
registered in their names, will not receive or be entitled to receive physical
delivery of any such Notes in definitive form and will not be considered the
owners or holders thereof under the Indenture.
18
<PAGE>
Payments of principal of and interest on individual Notes represented by a
Global Note registered in the name of the Depositary or its nominee will be
made to the Depositary or its nominee, as the case may be, as the registered
owner of the Global Note. None of the Company, the Trustee, any Paying Agent,
or the Securities Registrar for such Notes will have any responsibility or
liability for any aspect of the records relating to or payments made on
account of beneficial ownership interests of the Global Note representing such
Notes or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
The Company expects that the Depositary or its nominee, upon receipt of any
payment of principal or interest in respect of a permanent Global Note
representing the Notes, immediately will credit Participants' accounts with
payments in amounts proportionate to their respective beneficial interest in
the principal amount of the Global Note as shown on the records of such
Depositary or its nominee. The Company also expects that payments by
Participants to owners of beneficial interests in such Global Note held
through such Participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts
of customers in bearer form or registered in "street name." Such payments will
be the responsibility of such Participants.
If the Depositary is at any time unwilling, unable or ineligible to continue
as depositary and a successor depositary is not appointed by the Company
within 90 days, the Company will issue individual Notes in exchange for the
Global Note. In addition, the Company may at any time and in its sole
discretion, determine not to have the Note represented by a Global Note and,
in such event, will issue individual Notes in exchange for the Global Note.
Further, if the Company so specifies with respect to the Notes, an owner of a
beneficial interest in a Global Note representing Notes may, on terms
acceptable to the Company, the Trustee and the Depositary for such Global
Note, receive individual Notes in exchange for such beneficial interests. In
any such instance, an owner of a beneficial interest in a Global Note will be
entitled to physical delivery of individual Notes equal in principal amount to
such beneficial interest and to have such Notes registered in its name.
Individual Notes so issued will be issued in denominations, unless otherwise
specified by the Company, of $1,000 and integral multiples thereof.
The Depositary is a limited purpose trust company organized under the New
York Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code, and a "clearing
agency" registered pursuant to the provisions of Section 17A of the Exchange
Act. The Depositary holds securities that its Participants deposit with the
Depositary. The Depositary also facilitates the settlement among participants
of securities transactions, such as transfers and pledges, in deposited
securities through electronic computerized book-entry changes in Participants'
accounts, thereby eliminating the need for physical movement of securities
certificates. "Direct Participants" include securities brokers and dealers,
banks, trust companies, clearing corporations and certain other organizations.
The Depositary is owned by a number of its Direct Participants and by the New
York Stock Exchange, Inc., the American Stock Exchange, Inc. and the National
Association of Securities Dealers, Inc. Access to the Depositary system is
also available to others such as securities brokers and dealers, banks and
trust companies that clear through or maintain custodial relationships with
Direct Participants, either directly or indirectly ("Indirect Participants").
The rules applicable to the Depositary and its Participants are on file with
the Commission.
Purchases of Notes within the Depositary system must be made by or through
Direct Participants, which will receive a credit for the Notes on the
Depositary's records. The ownership interest of each actual purchaser of each
Note ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect
Participants' records. Beneficial Owners will not receive written confirmation
from the Depositary of their purchases, but Beneficial Owners are expected to
receive written confirmations providing details of the transactions, as well
as periodic statements of their holdings, from the Direct or Indirect
Participants through which the Beneficial Owners purchased Notes. Transfers of
ownership interests in the Notes are to be accomplished by entries made on the
books of Participants acting on behalf of Beneficial owners. Beneficial Owners
will not receive certificates representing their ownership interests in the
Notes except in the event that use of the book-entry system for the Notes is
discontinued.
19
<PAGE>
The Depositary has no knowledge of the actual Beneficial Owners of the
Notes, the Depositary's records reflect only the identity of the Direct
Participants to whose accounts such Notes are credited, which may or may not
be the Beneficial Owners. The Participants will remain responsible for keeping
account of their holdings on behalf of their customers.
Conveyance of notices and other communications by the Depositary to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners and the voting
rights of Direct Participants, Indirect Participants and Beneficial Owners
will be governed by arrangements among them, subject to any statutory or
regulatory requirements as may be in effect from time to time.
Redemption notices will be sent to Cede & Co. as the registered holder of
the Notes. If less than all of the Notes are being redeemed, the Depositary
will determine by lot or pro rata the amount of the Notes of each Direct
Participant to be redeemed.
Interest payments on the Notes will be made by the Trustee to the
Depositary. The Depositary's practice is to credit Direct Participants'
accounts on the relevant payment date in accordance with their respective
holdings shown on the Depositary's records unless the Depositary has reason to
believe that it will not receive payments on such payment date. Payments by
Participants to Beneficial Owners will be governed by standing instructions
and customary practices and will be the responsibility of such Participant and
not of the Depositary, the Trustee or the Company, subject to statutory or
regulatory requirements as may be in effect from time to time. Payment of
Distributions to the Depositary is the responsibility of the Trustee,
disbursement of such payments to Direct Participants is the responsibility of
the Depositary, and disbursements of such payments to the Beneficial Owners is
the responsibility of Direct and Indirect Participants.
The Depositary may discontinue providing its services as securities
depositary with respect to any of the Notes at any time by giving reasonable
notice to the Trustee and the Company. In the event that a successor
securities depositary is not obtained, definitive Note certificates
representing such Notes are required to be printed and delivered. The Company,
at its option, may decide to discontinue use of the system of book-entry
transfers through the Depositary (or a successor depositary). In any such
event, definitive certificates for such Notes will be printed and delivered.
The information in this section concerning the Depositary and the
Depositary's book-entry system has been obtained from sources that the Company
believes to be accurate, but the Company assumes no responsibility for the
accuracy thereof. The Company has no responsibility for the performance by the
Depositary or its Participants of their respective obligations as described
herein or under the rules and procedures governing their respective
operations.
RESTRICTIONS ON DIVIDENDS AND OTHER DISTRIBUTIONS
The Indenture provides that the Company cannot pay cash dividends or make
any other distribution on, or purchase, redeem or acquire its capital stock,
except that the Company may (1) declare and pay a dividend in capital stock of
the Company and (2) declare and pay dividends, purchase, redeem or otherwise
acquire for value its capital stock or make other distributions in cash or
property other than capital stock of the Company if the amount of such
dividend, purchase or distribution, together with the amount of all previous
such dividends, purchases, redemptions and distributions of capital stock
after December 31, 1996, would not exceed in the aggregate the sum of
(a) $38 million, plus (b) 100% of the Company's consolidated net income (or
minus 100% of the Company's consolidated net loss, as the case may be), based
upon audited consolidated financial statements, plus (c) 100% of the net
proceeds received by the Company on account of any capital stock issued by the
Company (other than to a subsidiary of the Company) after December 31, 1996.
(Section 1008)
CONSOLIDATION, MERGER OR TRANSFER
The Indenture provides that the Company may not consolidate with, merge
with, or transfer all or substantially all of its assets to another entity
(other than a wholly-owned subsidiary, where the Company is the
20
<PAGE>
surviving entity) unless such other entity assumes the Company's obligations
under the Indenture and unless, after giving effect thereto, no event shall
have occurred and be continuing which, after notice or lapse of time, would
become a Event of Default, each insured institution controlled by the
surviving corporation shall be in compliance with applicable minimum capital
requirements and certain other conditions are met. (Section 801)
ACCELERATION EVENTS
The Indenture defines Acceleration Events as certain events involving the
bankruptcy, insolvency, or reorganization of the Company. An Event of Default
is defined in the Indenture as: (a) any Acceleration Event; (b) failure to pay
any interest on any Note when due, continued for 15 days; (c) failure to pay
principal of any Note at Maturity; and (d) failure to perform any other
covenant or warranty of the Company in the Indenture, continued for 30 days
after written notice as provided in the Indenture.
If an Acceleration Event with respect to the Notes occurs and is continuing,
either the Trustee or the Holder or Holders of at least 25% in aggregate
principal amount of the Notes by notice as provided in the Indenture may
declare the principal amount of all Outstanding Notes to be due and payable
immediately, and upon any such declaration such principal amount shall become
immediately due and payable. At any time after such a declaration of
acceleration with respect to the Notes has been made and before a judgment or
decree for payment of the money due has been obtained by the Trustee, and
subject to applicable law and certain other provisions of the Indenture, the
Holder or Holders of a majority in principal amount of the Outstanding Notes,
by written notice to the Company and the Trustee, may, under certain
circumstances, rescind and annul such acceleration.
The Indenture does not provide for any right of acceleration upon an Event
of Default, other than an Event of Default which is also an Acceleration
Event. If an Event of Default with respect to Notes occurs and is continuing,
the Trustee may in its discretion proceed to protect and enforce its rights
and the rights of the Holder or Holders of Notes by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and enforce
any such rights, whether for the specific enforcement of any covenant or
agreement in the Indenture or to enforce any other proper remedy. The
Indenture provides that, subject to the duty of the Trustee during an Event of
Default to act with the required standard of care, the Trustee will be under
no obligation to exercise any of its rights or powers under the Indenture at
the request or direction of any Holder of Holders unless such Holders shall
have offered to the Trustee reasonable indemnity. Subject to such provision
for the indemnification of the Trustee, and subject to applicable law and
certain other provisions of the Indenture, the Holder or Holders of a majority
in aggregate principal amount of the Outstanding Notes will have the right to
direct the time, method and place of any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred on the Trustee,
with respect to the Notes. Any Event of Default with respect to the Notes may
be waived by the Holder or Holders of a majority in aggregate principal amount
of the Notes, except a failure to pay principal or interest with respect to
any Note.
Under the Indenture, the Company is required to furnish to the Trustee
quarterly a statement by certain officers of the Company to the effect that to
the best of their knowledge the Company is not in default in the fulfillment
of any of its obligations under such Indenture or, if there has been such
default, specifying each such default. (Section 1004).
The Indenture provides that the Trustee will, within 90 days after the
occurrence of a default, give to the Holder or Holders of the Notes notice of
such default known to it if uncured; provided that, except in the case of
default in the payment of principal of or interest on any of the Notes, the
Trustee will be protected in withholding such notice if the board of directors
or responsible officers of the Trustee in good faith determine that the
withholding of such notice is in the interest of the Holder or Holders of the
Notes; and, provided further, that such notice shall not be given until 30
days after the occurrence of a default in the performance of the covenants and
warranties of the Company in the Indenture other than for the payment of the
principal of or interest on the Notes. The term "default" for the purpose only
of this provision means the happening of any of the Events of Default
specified in the Indenture, excluding any grace periods and irrespective of
any notice requirements. (Section 602).
21
<PAGE>
The Holder or Holders of a majority in principal amount of the outstanding
Notes will have the right, subject to certain limitations, to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred on the Trustee, and to
waive certain defaults. (Sections 512 and 513). The Indenture provides that,
in case an Acceleration Event shall occur and be continuing, the Trustee shall
exercise such of its rights and powers under the Indenture, and use the same
degree of care and skill in their exercise, as a prudent man would exercise or
use under the circumstances in the conduct of his own affairs. (Section 601).
Subject to certain provisions of the Indenture, the Trustee will be under no
obligation to exercise any of its rights or powers under the Indenture at the
request or direction of any Holder or Holders of the Notes unless they have
offered to the Trustee reasonable security or indemnity against the costs,
expenses, and liabilities which might be incurred by it in compliance with
such request or direction. (Section 603).
MODIFICATION AND WAIVER
With certain limited exceptions which permit modification of the Indenture
by the Company and the Trustee only, the Indenture may be modified by the
Company with the consent of Holders of not less than a majority in aggregate
principal amount of outstanding Notes; provided, however, that no such changes
shall without the consent of the Holder of each Note affected thereby (a)
change the maturity date of the principal of, or the due date of any
installment of interest on, any Note, (b) reduce the principal of, or the rate
of interest on, any Note, (c) change the currency in which any portion of the
principal of, or interest on, any Note is payable, (d) impair the right to
institute suit for the enforcement of any such payment, (e) reduce the above
stated percentage of Holders of the outstanding Notes necessary to modify the
Indenture, or (f) modify the foregoing requirements or reduce the percentage
of outstanding Notes necessary to waive any past default. (Section 902)
The Holders of a majority in aggregate principal amount of outstanding Notes
may waive compliance by the Company with certain restrictive provisions of the
Indenture. (Section 1011)
SATISFACTION AND DISCHARGE OF INDENTURE
The Indenture provides that the Company may terminate its obligations under
the Indenture with respect to all Notes which will become due and payable at
their Stated Maturity within one year or are to be called for redemption
within one year, by delivering to the Trustee, in trust for such purpose,
money, Government Obligations or both which, through the payment of interest
and principal in respect thereof in accordance with their terms, will provide
on the due dates of any payment of principal and interest, or a combination
thereof, money in an amount sufficient to discharge the entire indebtedness of
such Notes. (Section 401)
THE TRUSTEE
BNY Western Trust Company will serve as Trustee under the Indenture and also
as the Note Registrar and Paying Agent. The Indenture contains certain
limitations on the right of the Trustee, should it become a creditor of the
Company, to obtain payment of claims in certain cases or to realize on certain
property received in respect of any such claim as security or otherwise. The
Trustee will generally be permitted to engage in other transactions with the
Company. The Indenture also provides that the Company will indemnify the
Trustee against loss, liability or expense incurred without negligence or bad
faith on the part of the Trustee arising out of or in connection with the
trust under the Indenture. (Sections 607 and 613)
22
<PAGE>
UNDERWRITING
The Underwriters named below have severally agreed, subject to the terms and
conditions of the Purchase Agreement, to purchase from the Company the
respective principal amount of the Notes set forth opposite their names in the
table below:
<TABLE>
<CAPTION>
PRINCIPAL
UNDERWRITER AMOUNT
----------- -----------
<S> <C>
Piper Jaffray Inc............................................. $
Keefe, Bruyette & Woods, Inc..................................
Oppenheimer & Co., Inc........................................
-----------
$40,000,000
===========
</TABLE>
The nature of the obligations of the Underwriters is such that if any of the
Notes are purchased, all of them must be purchased. The Purchase Agreement
provides that the obligations of the Underwriters thereunder are subject to
approval of certain legal matters and to various other conditions.
The Underwriters have advised the Company that they propose to offer the
Notes to the public at the Price to Public and to selected dealers at such
price less a concession of not more than % of the principal amount of the
Notes. The Underwriters may allow, and such dealers may reallow, concessions
not in excess of % of the principal amount of the Notes to certain other
brokers and dealers. After the initial public offering, the Price to Public
and other selling terms may be changed by the Underwriters.
In connection with this offering, the Underwriters may engage in
transactions that stabilize, maintain or otherwise affect the market price of
the Notes. Specifically, the Underwriters may overallot the offering, creating
a syndicate short position. The Underwriters may bid for and purchase in the
open market to cover syndicate short positions. In addition, the Underwriters
may bid for and purchase in the open market to stabilize the price of the
Notes. These activities may stabilize or maintain the market price of the
Notes above independent market levels. The Underwriters are not required to
engage in these activities, and may end these activities at any time.
The Notes have been approved for listing on the New York Stock Exchange
subject to official notice of issuance. The Underwriters have indicated an
intention to make a market in the Notes as permitted by applicable laws and
regulations. No Underwriter, however, is obligated to make a market in the
Notes, and any such market making may be discontinued at any time at the sole
discretion of such Underwriter. There can be no assurance that an active
trading market for the Notes will develop. If the Notes are traded after their
initial issuance, they may trade at a discount from their principal amount.
Oppenheimer & Co., Inc. provides ongoing financial advisory and investment
banking services for the Company including in connection with mergers and
acquisitions and related matters. See "Risk Factors--Limited Right of
Acceleration of Notes."
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended.
23
<PAGE>
LEGAL OPINIONS
The validity of the Notes to be offered hereby will be passed upon for the
Company by Sullivan & Cromwell, Los Angeles, California. Certain legal matters
will be passed upon for the Underwriters by Manatt, Phelps & Phillips, LLP,
Los Angeles, California.
EXPERTS
The consolidated financial statements of GBC Bancorp and subsidiaries as of
December 31, 1996 and 1995, and for each of the years in the three-year period
ended December 31, 1996 have been incorporated by reference herein and in the
Registration Statement in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accountants, incorporated herein by reference,
and upon the authority of said firm as experts in accounting and auditing.
24
<PAGE>
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION SHOULD NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR THE UNDERWRITERS. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE
ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY OR
ITS SUBSIDIARIES OR THAT INFORMATION CONTAINED HEREIN IS CURRENT AS OF ANY
TIME SUBSEQUENT TO THE DATE HEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES
OFFERED HEREBY TO ANY PERSON OR IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING THE OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION.
--------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information...................................................... 2
Incorporation of Certain Documents by Reference............................ 2
Summary.................................................................... 3
Summary Consolidated Financial Information................................. 7
Risk Factors............................................................... 9
Recent Developments........................................................ 12
Use of Proceeds............................................................ 12
Capitalization............................................................. 13
Management................................................................. 14
Description of Notes....................................................... 16
Underwriting............................................................... 23
Legal Opinions............................................................. 24
Experts.................................................................... 24
</TABLE>
$40,000,000
[LOGO OF GBC BANCORP]
% Subordinated Notes
due 2007
-----------------
P R O S P E C T U S
-----------------
Piper Jaffray inc.
Keefe, Bruyette & Woods, Inc.
Oppenheimer & Co., Inc.
, 1997
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses in connection with the issuance and distribution of the
securities being registered, other than underwriting discounts and
commissions, are estimated as follows:
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee................ $ 12,121
NASD Filing Fee.................................................... 4,500
Stock Exchange Listing Fees........................................ 2,500
Transfer Agent and Registrar Fees*................................. 7,500
Legal Fees and Expenses*........................................... 75,000
Accounting Fees and Expenses*...................................... 100,000
Rating Agency Fees................................................. 35,000
Blue Sky Fees and Expenses......................................... 5,000
Printing Expenses*................................................. 25,000
Miscellaneous*..................................................... 33,379
--------
Total............................................................ $300,000
========
</TABLE>
- --------
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 317 of the California General Corporation Law (the "Corporation
Law") contains provisions for the indemnification of directors and officers on
terms substantially identical to those contained in the Company's Bylaws. The
Company's Bylaws require the Company to indemnify its officers and directors
to the fullest extent permitted by California law against expenses, judgments,
fines, settlements, and other amounts actually and reasonably incurred in
connection with any proceeding arising by reason of the fact any such person
is or was an officer or director. Pursuant to California law, a corporation
shall have the power to indemnify an officer or director who was or is a party
or is threatened to be made a party in a proceeding by reason of his position
as an officer or director if the officer or director acted in good faith, in
the best interest of the corporation and with such care as an ordinarily
prudent person in a like position would use under the circumstances. To the
extent that a director or officer is successful on the merits in the defense
of certain proceedings, the Company is required to indemnify such party
against expenses actually and reasonably incurred. Otherwise, indemnification
of officers and directors must be authorized by the corporation in each
specific case, after a determination is made by a majority vote of a quorum of
directors not parties to the proceeding, or by independent legal counsel, or
the approval of a majority of the stockholders voting for such approval, or
the court in which the proceeding was or is pending.
Section 204(a)(11) of the Corporation Law provides for the indemnification,
subject to certain limitations, of directors and officers for breach of their
duty to the Company and its stockholders in excess of that expressly permitted
by Section 317 of the Corporation Law. The Company's Articles of
Incorporation, as amended, contain a provision implementing Section
204(a)(11).
In addition, and subject to California law, the Company's Stock Option Plans
(the "Plans") specifically provide that the Company and its subsidiaries shall
pay the expenses incurred by, and satisfy a judgment or fine rendered or
levied against, a present or former director in any action brought by a third
party against such person (whether or not the Company is joined as a party
defendant) to impose a liability or penalty on such person while a director
arising with respect to the Plans or administration thereof or of the Company.
Section 317 of the Corporation Law also provides that a corporation shall
have the power to purchase and maintain insurance on behalf of any agent of
the corporation against any liabilities asserted against or incurred
II-1
<PAGE>
by the agent in such capacity. The Company maintains an officers' and
directors' liability insurance policy insuring the Company's officers and
directors against certain liabilities and expenses incurred by them in their
capacities as such, and insuring the Company under certain circumstances, in
the event that indemnification payments are made by the Company to such
officers and directors.
Reference is made to the form of Underwriting Agreement filed as Exhibit 1.1
to the Registration Statement for Company's and the Underwriter's respective
agreements to indemnify each other and to provide contribution in
circumstances where indemnification is unavailable.
ITEM 16. EXHIBITS.
<TABLE>
<C> <S>
1.1 Form of Purchase Agreement.
4.1 Form of Indenture.*
4.2 Form of Notes (included in Exhibit 4.1).*
5.1 Opinion of Sullivan & Cromwell as to the validity of the Notes.*
12.1 Statement re computation of ratios.*
23.1 Consent of KPMG Peat Marwick LLP.*
23.2 Consent of Sullivan & Cromwell (included in Exhibit 5.1).*
24.1 Power of Attorney (contained on page II-3).*
25.1 Statement of Eligibility and Qualification of Trustee on Form T-1.*
</TABLE>
- --------
* Previously filed
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933 (the "Securities
Act"), each filing of the Registrant's annual report pursuant to Section 13(a)
or Section 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act")
(and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(b) Insofar as indemnification for liabilities under the Securities Act may
be permitted to directors, officers and controlling persons of the Registrant
pursuant to the provisions described in Item 15 above, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in a successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of
whether such indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final adjudication of such
issue.
(c) The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Los Angeles, California, on the 23rd day of July, 1997.
GBC Bancorp
(Registrant)
/s/ Peter Lowe
By: _________________________________
Peter Lowe
Executive Vice President and
Chief Financial Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Li-Pei Wu and Peter Lowe, as his or her true
and lawful attorneys-in-fact and agents, each acting alone, with full power of
substitution and resubstitution, for him or her and in his or her name, place
and stead, in any and all capacities, to sign any and all amendments,
including post-effective amendments, to this Registration Statement and any
related Rule 462(b) registration statement or amendment thereto, and to file
the same, with all exhibits thereto, and other documents in connection
therewith with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully and to all intents and purposes as he or she
might or could do in person hereby ratifying and confirming all that said
attorneys-in-fact and agents, or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated and on July 23, 1997.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
Li-Pei Wu* President, Chief Executive Officer and
________________________________________ Director
Li-Pei Wu
/s/ Peter Lowe Executive Vice President and
________________________________________ Chief Financial Officer (Chief
Peter Lowe Accounting Officer)
Helen Chen* Director
________________________________________
Helen Chen
Thomas C.T. Chiu* Director
________________________________________
Thomas C.T. Chiu
Chuang-I Ling* Director
________________________________________
Chuang-I Ling
Ko-Yen Lin* Director
________________________________________
Ko-Yen Lin
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
Ting Y. Liu* Director
________________________________________
Ting Y. Liu
John C. Wang* Director
________________________________________
John C. Wang
Kenneth C. Wang* Director
________________________________________
Kenneth C. Wang
Chien-Te Wu* Director
________________________________________
Chien-Te Wu
Julian Wu* Director
________________________________________
Julian Wu
Peter Wu* Director
________________________________________
Peter Wu
Ping C. Wu* Director
________________________________________
Ping C. Wu
Walter Wu* Director
________________________________________
Walter Wu
Director
________________________________________
Chin-Liang Yen
*By: /s/ Peter Lowe
________________________________________
Peter Lowe,
Attorney-in-fact
</TABLE>
II-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DOCUMENT DESCRIPTION
------- --------------------
<C> <S>
1.1 Form of Purchase Agreement.
4.1 Form of Indenture.*
4.2 Form of Notes (included in Exhibit 4.1).*
5.1 Opinion of Sullivan & Cromwell as to the validity of the Notes.*
12.1 Statement re computation of ratios.*
23.1 Consent of KPMG Peat Marwick LLP.*
23.2 Consent of Sullivan & Cromwell (included in Exhibit 5.1).*
24.1 Power of Attorney (contained on page II-3).*
25.1 Statement of Eligibility and Qualification of Trustee on Form T-1.*
</TABLE>
- --------
* Previously filed
<PAGE>
$40,000,000
GBC BANCORP
____ % SUBORDINATED NOTES DUE 2007
PURCHASE AGREEMENT
PIPER JAFFRAY INC. ______________, 1997
KEEFE, BRUYETTE & WOODS, INC.
OPPENHEIMER & CO., INC.
c/o Piper Jaffray Inc.
Piper Jaffray Tower
222 South Ninth Street
Minneapolis, Minnesota 55402
Ladies and Gentlemen:
Pursuant to the terms of this Purchase Agreement (this "Agreement"),
GBC Bancorp, a California corporation (the "Company"), proposes to sell to the
underwriters named in Schedule I hereto (the "Underwriters"), an aggregate of
$40,000,000 in aggregate principal amount of its ____% Subordinated Notes due
2007 (the "Notes"). The Notes are to be sold to the Underwriters, acting
severally and not jointly in such amounts as are set forth in Schedule I hereto
opposite the name of such Underwriter. The Notes are to be issued pursuant to an
Indenture (the "Indenture"), to be dated as of __________, 1997, among the
Company and BNY Western Trust Company, as trustee (the "Trustee").
The Company hereby confirms its agreement with respect to the purchase
and sale of the Notes:
1. REGISTRATION STATEMENT AND PROSPECTUS. The Company has prepared and
-------------------------------------
filed with the Securities and Exchange Commission (the "Commission") in
conformity with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations (the "Rules and Regulations") of the Commission
thereunder (collectively, the "Act"), a registration statement on Form S-3 (File
No. 333-30269), including a preliminary prospectus and a Statement of
Eligibility on Form T-1 with respect to the Trustee (File No. __________)
pursuant to the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"), relating to the Notes; one or more amendments to such registration
statement have also been so prepared and have been, or will be, so filed; and,
if the Company has elected to rely upon Rule 462(b) under the Act to increase
the size of the offering registered under the Act, the Company will prepare and
file with the Commission a registration statement with respect to such increase
pursuant to Rule 462(b). Copies of such registration statement(s) and amendments
and each related preliminary prospectus have been delivered to you.
1
<PAGE>
If the Company has elected not to rely upon Rule 430A of the Rules and
Regulations, the Company has prepared and will promptly file an amendment to the
registration statement and an amended prospectus (including a term sheet meeting
the requirements of Rule 434 of the Rules and Regulations). If the Company has
elected to rely upon Rule 430A of the Rules and Regulations, it will prepare and
file a prospectus (or a term sheet meeting the requirements of Rule 434)
pursuant to Rule 424(b) that discloses the information previously omitted from
the prospectus in reliance upon Rule 430A. Such registration statement as
amended at the time it is or was declared effective by the Commission, and, in
the event of any amendment thereto after the effective date and prior to the
Closing Date (as hereinafter defined), such registration statement as so amended
(but only from and after the effectiveness of such amendment), including a
registration statement (if any) filed pursuant to Rule 462(b) of the Rules and
Regulations increasing the size of the offering registered under the Act and
information (if any) deemed to be part of the registration statement at the time
of effectiveness pursuant to Rules 430A(b) and 434(d) of the Rules and
Regulations, is hereinafter called the "Registration Statement." The prospectus
included in the Registration Statement at the time it is or was declared
effective by the Commission is hereinafter called the "Prospectus," except that
if any prospectus (including any term sheet meeting the requirements of Rule 434
of the Rules and Regulations provided by the Company for use with a prospectus
subject to completion within the meaning of Rule 434 in order to meet the
requirements of Section 10(a) of the Rules and Regulations) filed by the Company
with the Commission pursuant to Rule 424(b) (and Rule 434, if applicable) of the
Rules and Regulations or any other such prospectus provided to the Underwriters
by the Company for use in connection with the offering of the Notes (whether or
not required to be filed by the Company with the Commission pursuant to Rule
424(b) of the Rules and Regulations) differs from the prospectus on file at the
time the Registration Statement is or was declared effective by the Commission,
the term "Prospectus" shall refer to such differing prospectus (including any
term sheet within the meaning of Rule 434 of the Rules and Regulations) from and
after the time such prospectus is filed with the Commission or transmitted to
the Commission for filing pursuant to such Rule 424(b) (and Rule 434, if
applicable) or from and after the time it is first provided to the Underwriters
by the Company for such use. The term "Preliminary Prospectus" as used herein
means any preliminary prospectus included in the Registration Statement prior to
the time it becomes or became effective under the Act and any prospectus subject
to completion as described in Rule 430A or 434 of the Rules and Regulations. Any
reference herein to the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the Act as of the date of such Prospectus. Any reference to any amendment
or supplement to the Prospectus (including any supplement to the Prospectus)
shall be deemed to refer to and include any documents filed after the date of
such Prospectus under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and incorporated therein by reference.
2. AGREEMENT TO SELL AND PURCHASE. On the basis of the representations,
------------------------------
warranties and agreements of the Company herein contained and subject to the
terms and conditions set forth herein, the Company hereby agrees to issue and
sell to the Underwriters, and each Underwriter agrees, severally and not
jointly, to purchase from the Company, at the purchase price of $_____
2
<PAGE>
per $1,000 principal amount, the aggregate principal amount of Notes set forth
opposite the name of such Underwriter in Schedule I hereto (or such aggregate
principal amount of Notes as such Underwriter shall be obligated to purchase
pursuant to the provisions of Section 10 hereof).
3. TERMS OF PUBLIC OFFERING. The Company is advised by the Underwriters
------------------------
that the Underwriters have agreed to make a public offering of their respective
portions of the Notes as soon after the Registration Statement has become
effective and this Agreement has been executed as in the judgment of the
Underwriters is advisable and to first offer the Notes upon the terms set forth
in the Prospectus.
4. DELIVERY OF THE NOTES AND PAYMENT THEREFOR. The Notes to be purchased
------------------------------------------
by each Underwriter in book-entry form and in authorized denominations and
registered in the name of the nominee of The Depository Trust Company, shall be
delivered by or on behalf of the Company through the facilities of The
Depository Trust Company for the account of such Underwriter, against payment by
such Underwriter or on its behalf of the purchase price therefor by certified or
official bank check or checks or wire transfer of same day funds payable to the
order of the Company at the offices of Sullivan & Cromwell, 444 South Flower
Street, Los Angeles, California, at 8:00 a.m., California time, on the third (or
if the Notes are priced, as contemplated by Rule 15c6-1(c) under the Exchange
Act, after 4:30 p.m. Eastern time on the date of this Agreement, the fourth)
business day following the date of this Agreement, (the "Closing Date"). The
place of the closing and the Closing Date may be varied by agreement among the
Underwriters and the Company. Delivery of the Notes may be made by credit
through full fast transfer to the accounts at The Depository Trust Company
designated by the Underwriters.
5. AGREEMENTS OF THE COMPANY. The Company agrees with the several
-------------------------
Underwriters as follows:
(i) If the Registration Statement has not already been declared
effective by the Commission, the Company will use its best efforts to cause the
Registration Statement and any post-effective amendments thereto to become
effective as promptly as possible; the Company will notify you promptly of the
time when the Registration Statement or any post-effective amendment to the
Registration Statement has become effective or any supplement to the Prospectus
(including any term sheet within the meaning of Rule 434 of the Rules and
Regulations) has been filed and of any request by the Commission for any
amendment or supplement to the Registration Statement or Prospectus or
additional information; if the Company has elected to rely on Rule 430A of the
Rules and Regulations, the Company will prepare and file a Prospectus (or term
sheet within the meaning of Rule 434 of the Rules and Regulations) containing
the information omitted therefrom pursuant to Rule 430A of the Rules and
Regulations with the Commission within the time period required by, and
otherwise in accordance with the provisions of, Rules 424(b), 430A and 434, if
applicable, of the Rules and Regulations; if the Company has elected to rely
upon Rule 462(b) of the Rules and Regulations to increase the size of the
offering registered under the Act, the Company will prepare and file a
registration statement with respect to such increase with the
3
<PAGE>
Commission within the time period required by, and otherwise in accordance with
the provisions of, Rule 462(b); the Company will prepare and file with the
Commission, promptly upon your request, any amendments or supplements to the
Registration Statement or Prospectus (including any term sheet within the
meaning of Rule 434 of the Rules and Regulations) that, in your opinion, may be
necessary or advisable in connection with the distribution of the Notes by the
Underwriters; and the Company will not file any amendment or supplement to the
Registration Statement or Prospectus (including any term sheet within the
meaning of Rule 434 of the Rules and Regulations), other than filings made under
the Exchange Act with the exception of the Company's quarterly report on Form
10-Q for the quarter ended June 30, 1997, to which you shall reasonably object
by notice to the Company after having been furnished a copy a reasonable time
prior to the filing.
(ii) The Company will advise you, promptly after it shall receive
notice or obtain knowledge thereof, of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement, of the
suspension of the qualification of the Notes for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceeding for any such
purpose; and the Company will promptly use its best efforts to prevent the
issuance of any stop order or to obtain its withdrawal if such a stop order
should be issued.
(iii) Within the time during which a prospectus (including any term
sheet within the meaning of Rule 434 of the Rules and Regulations) relating to
the Notes is required to be delivered under the Act, the Company will comply as
far as it is able with all requirements imposed upon it by the Act, as now and
hereafter amended, and by the Rules and Regulations, as from time to time in
force, so far as is necessary to permit the continuance of sales of or dealings
in the Notes as contemplated by the provisions hereof and the Prospectus. If
during such period any event occurs as a result of which the Prospectus would
include an untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances then
existing, not misleading, or if during such period it is necessary to amend the
Registration Statement or supplement the Prospectus to comply with the Act, the
Company will promptly notify you and will amend the Registration Statement or
supplement the Prospectus (at the expense of the Company) so as to correct such
statement or omission or effect such compliance.
(iv) The Company will furnish to each of the Underwriters and their
counsel, without charge, one signed copy of the Registration Statement and of
each amendment thereto, including all exhibits thereto and documents
incorporated therein by reference, and will also furnish to each of the
Underwriters, without charge, such number of conformed copies of the
Registration Statement and of each amendment thereto as each of the Underwriters
may reasonably request.
(v) The Company will not file any amendment to the Registration
Statement or make any amendment or supplement to the Prospectus, other than
filings made under the Exchange Act with the exception of the Company's
quarterly report on Form 10-Q for the quarter
4
<PAGE>
ended June 30, 1997, of which the Underwriters shall not previously have been
advised or to which any of the Underwriters promptly after being so advised
shall reasonably have objected in writing.
(vi) Prior to the effective date of the Registration Statement, the
Company will have delivered or will deliver to each Underwriter, without charge,
copies of each form of preliminary prospectus in such quantities as such
Underwriter has reasonably requested or may hereafter reasonably request for the
purposes contemplated by the Act.
(vii) On the effective date of the Registration Statement and
thereafter from time to time during such period as in the opinion of counsel for
the Underwriters a prospectus is required by law to be delivered in connection
with offers or sales of the Notes by an Underwriter or a dealer, the Company
will deliver to each Underwriter and dealer, without charge, as many copies of
the Prospectus (and of any amendment or supplement thereto) as they may
reasonably request. During such period, if any event occurs which in the
judgment of the Company, or in the opinion of counsel for the Underwriters,
should be set forth in the Prospectus in order to ensure that no part of the
Prospectus includes an untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances at the time the Prospectus is delivered to a purchaser, not
misleading, the Company will forthwith prepare, submit to the Underwriters, file
with the Commission and deliver, without charge to the several Underwriters and
dealers (whose names and addresses will be furnished by the Underwriters to the
Company) to whom Notes have been sold by the Underwriters or to other dealers
upon request, an amendment or supplement, as appropriate, to the Prospectus so
that the statements in the Prospectus, as so amended or supplemented, will
comply with the standards set forth in this sentence. The Company consents to
the use of such Prospectus (and of any amendments or supplements thereto) in
accordance with the provisions of the Act and with the securities or Blue Sky
laws of the jurisdictions described in the preliminary Blue Sky memorandum in
which the Notes are lawfully offered by the several Underwriters and by all
dealers to whom Notes may be sold, both in connection with the offering or sale
of the Notes and for such period of time thereafter as the Prospectus is
required by law to be delivered in connection therewith. In case any
Underwriter is required to deliver a Prospectus (and any amendment or supplement
thereto) more than nine months after the first date upon which the Notes are
offered to the public, the Company will, upon the request of the Underwriters
but at the expense of such Underwriter, furnish such Underwriter with reasonable
quantities of a Prospectus complying with Section 10(a)(3) of the Act.
(viii) The Company will cooperate with the Underwriters and counsel
for the Underwriters in connection with the registration or qualification of the
Notes for offer and sale by the several Underwriters and by dealers under the
securities or Blue Sky laws of such jurisdictions as the Underwriters may
designate and will file such consents to service of process or other documents
as may be necessary in order to effect such registration or qualification;
provided that in no event shall the Company be obligated (w) to qualify to do
business in any jurisdiction where it is not now so qualified, (x) to file any
general consent to service of process, (y) take any action
5
<PAGE>
that would subject it to income taxation in any jurisdiction where it is not so
qualified or (z) to take any action to amend its Articles of Incorporation in
order to make the Company's securities eligible for registration or
qualification in any state.
(ix The Company will make generally available to the holders of Notes
an earnings statement of the Company and its subsidiaries, which need not be
audited, as soon as practicable but not later than 18 months after the effective
date of the Registration Statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Act and the rules and regulations of the
Commission thereunder (including Rule 158).
(x) For a period of five years after the date of this Agreement:
(A) the Company will furnish to the Underwriters (1) as soon as
available, a copy of each report of the Company of general interest mailed to
any class of its security holders, (2) copies of all annual, quarterly reports
and current reports filed with the Commission on Forms 10-K, 10-Q and 8-K and
any amendment thereto or such other similar forms as may be designated by the
Commission or required to be filed by the Company pursuant to Sections 13, 14
and 15 of the Exchange Act, which the Company agrees to timely file with the
Commission for so long as may be required, (3) a copy of each report furnished
to or filed with any securities exchange or the National Market of the National
Association of Securities Dealers Automated Quotation System ("Nasdaq National
Market") and (4) from time to time, such other information concerning the
Company as the Underwriters may reasonably request; and
(B) if at any time during such five-year period, the Company shall
cease filing with the Commission the annual, quarterly reports and current
reports on Forms 10-K, 10-Q and 8-K or other similar forms referred to in clause
(A) above, the Company will forward to the Underwriters (1) as soon as
practicable after the end of each fiscal year, copies of a balance sheet and
statements of income and retained earnings of the Company as of the end of and
for such fiscal year, audited by independent public accountants, and (2) as soon
as practicable after the end of each quarterly fiscal period, except for the
last quarterly fiscal period in each fiscal year, a summary statement (which
need not be audited) of income and retained earnings of the Company for such
period, which shall also be made publicly available.
If and so long as the Company shall have any subsidiaries, the financial
statements referred to above shall be consolidated to the extent the accounts of
the Company and such subsidiaries are consolidated, and separate financial
statements shall be furnished for each significant subsidiary, as defined in
Regulation S-X of the Commission, whose accounts are not so consolidated.
(xi) Prior to the Closing Date, the Company will issue no press
release or other public communication directly or indirectly and hold no press
conference with respect to the Company or any subsidiary or this offering,
without the Underwriters' prior written consent.
6
<PAGE>
(xii) Company will pay, or reimburse if paid by the Underwriters,
whether or not the transactions contemplated hereby are consummated or this
Agreement is prevented from becoming effective under the provisions of Section
11 hereof or is terminated, all costs and expenses incident to the performance
by it of its obligations under this Agreement including, without limiting the
generality of the foregoing, (1) typesetting, printing, duplicating, and filing
(and all preparation therefor) and distribution (including, without limitation,
postage, air freight charges and charges for counting and packaging) of the
original registration statement, the Registration Statement, each Preliminary
Prospectus, the Prospectus, each amendment and/or supplement to any of the
foregoing, and this Agreement and other underwriting documents and the
Indenture, (2) all costs of furnishing to the several Underwriters and dealers
copies of the foregoing materials, (3) the registrations or qualifications
referred to in paragraph (viii) above (including reasonable fees and
disbursements of counsel in connection therewith) and expenses of printing and
delivering to the several Underwriters copies of the preliminary and final Blue
Sky memorandum, (4) the review of the terms of the public offering of the Notes
by the National Association of Securities Dealers, Inc. (the "NASD") (including
the filing fees paid to the NASD in connection therewith) and the reasonable
fees and disbursements of counsel for the Underwriters in connection therewith,
(5) the performance by the Company of its other obligations under this
Agreement, including the fees of the Company's counsel and accountants, (6) the
issuance of the Notes and the preparation and printing of the certificates
representing the Notes, (7) the fees and expenses of the Trustee and any agent
of the Trustee and any transfer or paying agent for the Company, (8) all travel,
lodging and reasonable living expenses incurred by the Company in connection
with marketing, dealer and other meetings attended by the Company and the
Underwriters in marketing the Notes, (9) listing fees, if any, (10) any fees
charged by security rating services for rating the Notes and (11) furnishing to
the several Underwriters copies of all reports and information required by
paragraph (x) above, including costs of shipping and mailing.
(xiii) If the sale of the Notes provided for herein is not
consummated by reason of action by the Company pursuant to Section 11 hereof
which prevents this Agreement from becoming effective, or by reason of any
failure, refusal or inability on the part of the Company to perform any
agreement on its part to be performed, or because any other condition of the
Underwriters' obligations hereunder required to be fulfilled by the Company is
not fulfilled, the Company will reimburse the several Underwriters for all out-
of-pocket disbursements (including fees and disbursements of counsel) incurred
by the Underwriters in connection with their investigation, preparing to market
and marketing the Notes or in contemplation of performing their obligations
hereunder. The Company shall not in any event be liable to any of the
Underwriters for loss of anticipated profits from the transactions covered by
this Agreement.
(xiv) The Company will apply the net proceeds from the sale of the
Notes to be sold by it under this Agreement for the purposes set forth in the
Prospectus under the caption "Use of Proceeds."
7
<PAGE>
(xv) The Company will comply (1) with all registration, filing and
reporting requirements of the Exchange Act which may from time to time be
applicable to the Company and (2) all provisions of all undertakings contained
in the Registration Statement.
(xvi) The Company will not incur 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.
(xvii) The Company has not taken and will not take, directly or
indirectly, any action designed to or which might reasonably be expected to
cause or result in, or which has constituted, the stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of
the Notes.
6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
---------------------------------------------
and warrants to each Underwriter that:
(i) Each Preliminary Prospectus, at the time of filing thereof, 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 the light of the circumstances under which they were made, not misleading;
except that the foregoing shall not apply to statements in or omissions from any
Preliminary Prospectus in reliance upon, and in conformity with, information
furnished in writing to the Company by any Underwriter expressly for use in the
Prospectus.
(ii) As of the time the Registration Statement (or any post-effective
amendment thereto) is or was declared effective by the Commission, upon the
filing or first delivery to the Underwriters of the Prospectus (or any
supplement to the Prospectus (including any term sheet meeting the requirements
of Rule 434)) and at the Closing Date, (A) the Registration Statement and
Prospectus (in each case, as so amended or supplemented) conformed or will
conform in all material respects to the requirements of the Act and Regulations,
(B) the Registration Statement (as so amended) did not or will not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading,
and (C) the Prospectus (as so supplemented) did not or will not include 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 the light of
the circumstances in which they are or were made, not misleading; provided,
however, that this representation and warranty shall not apply to the Statement
of Eligibility of the Trustee on Form T-1 filed as an Exhibit to the
Registration Statement or to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Company by any
Underwriter specifically for use in the preparation of the Registration
Statement or the Prospectus (in each case, as amended or supplemented). The
Registration Statement has been declared effective by the Commission; no stop
order suspending the effectiveness of the Registration Statement has been
issued; and no proceeding for that purpose has been initiated or to the
Company's knowledge, threatened by the Commission.
8
<PAGE>
(iii) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and any further documents so filed
and incorporated by reference in the Prospectus, or any amendment or supplement
thereto, when such documents become effective or are filed with the Commission,
as the case may be, will conform in all material respects to the requirements of
the Act or the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder and will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances in which they
are made not misleading; provided, however, that this representation and
warranty shall not apply to the Statement of Eligibility of the Trustee on Form
T-1 filed as an Exhibit to the Registration Statement or to any statements or
omissions made in reliance upon and in conformity with information furnished in
writing to the Company by any Underwriter expressly for use in the Prospectus as
supplemented to relate to the Notes.
(iv) The Registration Statement and Prospectus conform, and any
amendments or supplements thereto will conform, in all material respects to the
requirements of the Trust Indenture Act, and the rules and regulations of the
Commission thereunder and do not and will not, as of the applicable effective
date in the case of the Registration Statement and any amendment thereto and as
of the applicable filing date as to the Prospectus and any amendment or
supplement thereto, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, provided, however, that this representation
and warranty shall not apply to the Statement of Eligibility of the Trustee on
Form T-1 filed as an Exhibit to the Registration Statement or to any statements
or omissions made in reliance upon and in conformity with information furnished
in writing to the Company by any Underwriter expressly for use in the Prospectus
as supplemented to relate to the Securities.
(v) Any contract, agreement, instrument, lease, or license required to
be described in the Registration Statement or Prospectus has been properly
described therein. Any contract, agreement, instrument, lease, or license
required to be filed as an exhibit to the Registration Statement has been filed
with the Commission as an exhibit to the Registration Statement.
(vi) KPMG Peat Marwick LLP, the Company's auditors, are independent
public accountants with respect to the Company as required by the Act.
(vii) The consolidated financial statements and schedules of the
Company and its consolidated subsidiaries and the financial information with
respect to the subsidiaries of the Company included or incorporated by reference
in the Registration Statement and the Prospectus
9
<PAGE>
present fairly the financial position of the Company and its consolidated
subsidiaries (including, without limitation, the reserves for credit losses) as
of the dates indicated, and the results of operations, cash flows and changes in
financial position of the Company and its consolidated subsidiaries for the
periods specified. Such financial statements and schedules have been prepared in
conformity with generally accepted accounting principles applied on a consistent
basis throughout the entire period involved, except to the extent disclosed
therein. No other financial statements are required to be included in the
Registration Statement or Prospectus.
(viii) The Company has been duly organized and is validly existing as
a corporation in good standing under the laws of the State of California and is
duly registered as a bank holding company under the Bank Holding Company Act of
1956, as amended, supervised by the Board of Governors of the Federal Reserve
System (the "FRB"). The Company has all requisite corporate power and corporate
authority to own or lease its property and conduct its business as described in
the Registration Statement and the Prospectus and is qualified to do business as
a foreign corporation in each jurisdiction in which the ownership or lease of
its properties, or the conduct of its business, requires such qualification and
in which the failure to be so qualified or in good standing would have a
material adverse effect on the financial condition, affairs, business or
prospects of the Company and the Subsidiaries (defined below) considered as a
whole. The Company does not own or lease property or transact business in any
other jurisdiction where the ownership of such property or the transaction of
such business would require it to qualify as a foreign corporation under the
laws of such jurisdiction.
(ix) The Company has an authorized and outstanding capitalization as
set forth in the Prospectus and the Notes conform in all material respects to
the description thereof contained in the Prospectus. All of the issued and
outstanding shares of capital stock of the Company and all of the issued and
outstanding shares of capital stock of each Subsidiary have been duly
authorized, validly issued and are fully paid and non-assessable and, in the
case of the Subsidiaries, are owned of record and beneficially by the Company,
and, except as set forth in the Registration Statement, are free and clear of
any liens, claims, security interests, pledges, charges, encumbrances,
shareholders' agreements, and voting trusts or rights of others. Except as set
forth in the Prospectus and other than shares of common stock issuable upon
exercise of options under the Company's stock option plans, there are no
options, agreements, contracts, preemptive rights, or other rights in existence
(i) to acquire from the Company any shares of capital stock or (ii) to acquire
from the Company or any Subsidiary any of the capital stock of any Subsidiary.
(x) The Company has no direct or indirect significant subsidiaries (as
such term is defined in Regulation S-X of the Commission) except for General
Bank, a state bank chartered under the banking laws of the State of California
(the "Bank" or a "Subsidiary"). Other than GBC Venture Capital, Inc., a
California corporation, GBC Investment and Consulting Company, Inc., a
California corporation, GBC Insurance Services, Inc., a California corporation,
Southern Counties Escrow , a California corporation, and GBC Leasing Company,
Inc., a California corporation, (each a "Subsidiary" and, together with the
Bank, the "Subsidiaries"), the Company
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owns no capital stock or other equity or ownership or proprietary interest in
any corporation, partnership, association, trust or other entity.
(xi) Each of the Subsidiaries has been duly organized and is validly
existing as a corporation and is in good standing under the laws of its
jurisdiction of incorporation or charter, has all requisite corporate power and
corporate authority to own, lease and operate its properties and conduct its
business as described in the Registration Statement and Prospectus. Each of the
Subsidiaries is duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction in which the ownership or lease of its
properties, or the conduct of its business, requires such qualification and in
which the failure to be so qualified or in good standing would have a material
adverse effect on the financial condition, affairs, business or prospects of the
Company and the Subsidiaries considered as a whole. The accounts of the Bank
are insured by the Bank Insurance Fund of the Federal Deposit Insurance
Corporation (the "FDIC") up to the maximum applicable amount in accordance with
the rules and regulations of the FDIC, and no proceedings for the termination or
revocation of such membership or insurance are pending, or, to the knowledge of
the Company, threatened.
(xii) Each of the Company and each Subsidiary has all necessary and
material authorizations, approvals, licenses, certificates, permits and orders
(collectively, "Permits") of and from all governmental regulatory officials and
bodies to own its properties and to conduct its business as presently conducted;
except in any case where the failure to possess any such Permit would not have a
material adverse effect on the financial condition, affairs, business or
prospects of the Company and the Subsidiaries considered as a whole.
(xiii) The Indenture, which will be substantially in the form filed
as an exhibit to the Registration Statement, has been duly authorized and duly
qualified under the Trust Indenture Act and when executed and delivered by the
Company and the Trustee, the Indenture will have been duly authorized, executed
and delivered by the Company and will constitute a valid and legally binding
agreement of the Company, enforceable against the Company in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization,
moratorium and other laws affecting creditors' rights generally and to general
principles of equity; and the Indenture conforms in all material respects to the
description thereof in the Prospectus.
(xiv) The Notes have been duly authorized and, when executed and
authenticated in accordance with the terms of the Indenture and issued and
delivered in accordance with the terms of this Agreement against payment
therefor, will have been duly authorized, executed, authenticated and delivered
by the Company and will constitute valid and binding obligations of the Company
entitled to the benefits of the Indenture, enforceable against the Company in
accordance with their terms, subject, as to such benefit and enforcement, to
bankruptcy, insolvency, reorganization, moratorium and other laws affecting
creditors' rights generally and to general principles of equity; the Notes
conform in all material respects to the description thereof contained in the
Prospectus and will be substantially in the form filed as an exhibit to the
Registration Statement.
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(xv) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as otherwise stated or
contemplated therein, there has not been (A) any material adverse change in the
condition (financial or otherwise), affairs, business or key personnel,
property, prospects, net worth or results of operations of the Company and its
Subsidiaries considered as a whole, whether or not arising in the ordinary
course of business, (B) any material transaction entered into, or any material
liability or obligation incurred, direct or contingent, by the Company or any
Subsidiary, other than in the ordinary course of business, (C) any change in the
capital stock (other than the issuance of shares of common stock upon the
exercise of options under the Company's stock option plans), or material
increase in the short-term debt or long-term debt of the Company or any
Subsidiary, or any issuance of options, warrants, convertible securities or
other rights to purchase the capital stock of the Company or any Subsidiary
(other than the issuance of options or the issuance of shares of common stock
upon the exercise of options under the Company's stock option plans) or (D) any
dividend or distribution of any kind declared, paid or made by the Company on
its capital stock other than the dividend on the Company's common stock paid on
July 15, 1997.
(xvi) The Company and the Subsidiaries have good and marketable title
to all properties and assets described in the Prospectus as owned by them, free
and clear of all liens, charges, encumbrances or restrictions, except such as
are referred to in the Prospectus or are not materially significant in relation
to the financial condition, affairs, business or prospects of the Company and
the Subsidiaries considered as a whole; all of the leases and subleases material
to the business of the Company or under which the Company or any Subsidiary
holds properties described in the Prospectus are in full force and effect; and
neither the Company nor any Subsidiary has any notice of any material claim of
any sort which has been asserted by anyone adverse to the rights of the Company
or such Subsidiary as owner or as lessee or sublessee under any of the leases or
subleases mentioned above, or affecting or questioning the rights of the Company
or the Subsidiary to the continued possession of the leased or subleased
premises under any such lease or sublease.
(xvii) Neither the Company nor any Subsidiary is in default nor will
the performance of this Agreement or the issuance and sale of the Notes result
in a default in the observance of any provision of its charter, certificate of
incorporation or by-laws, or in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture, mortgage,
loan agreement, note, lease, license or other agreement or instrument to which
it is a party or by which it or any of its respective properties are subject or
may be bound, which would have a materially adverse effect on the financial
condition, affairs, business or prospects of the Company and the Subsidiaries
considered as a whole. No consent of any party to any contract, indenture,
mortgage, loan agreement, note, lease, license or other agreement or instrument
to which the Company or any Subsidiary is a party, or by which it or any of its
respective properties or assets are subject or may be bound, is required for the
execution, delivery or performance of this Agreement, or the issuance and sale
of the Notes, other than such consents which have been obtained.
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(xviii) This Agreement has been duly authorized, executed and
delivered by the Company, and constitutes a valid, legal and binding obligation
of the Company, enforceable in accordance with its terms, except as rights to
indemnity hereunder may be limited by federal or state securities laws and
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting the rights of creditors generally and
subject to general principles of equity. The Company has full power and
authority to enter into this Agreement and to authorize, issue and sell the
Notes as contemplated by this Agreement.
(xix) The execution and delivery by the Company of this Agreement and
the Indenture, the issuance and delivery of the Notes, the consummation of the
transactions contemplated herein and in the Registration Statement and
compliance with the terms of this Agreement have been duly authorized by all
necessary corporate action and will not result in any violation of the Articles
of Incorporation or Bylaws of the Company, and will not conflict with or result
in a breach of any of the terms or provisions of, or constitute a default under,
or result in the creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company or any Subsidiary under any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument to which the Company or any Subsidiary is a party or by which the
Company or any Subsidiary, or any of their respective properties, is bound, or
any existing applicable law, rule, regulation, judgment, order or decree of any
government, governmental instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any Subsidiary or any of their respective
properties.
(xx) No consent, approval, authorization or order of, or filing with
any court, governmental authority or agency having jurisdiction over the Company
or any Subsidiary is required in connection with the execution, delivery and
performance of this Agreement or for the consummation of the transactions
contemplated hereby, including the issuance, sale and delivery of the Notes in
accordance with the terms of this Agreement and the Indenture, except such as
may be required under the Act, the Securities Exchange Act of 1934, as amended,
the Trust Indenture Act, the New York Stock Exchange and state securities or
Blue Sky laws.
(xxi) Neither the Commission nor the Blue Sky or securities authority
of any jurisdiction has issued a stop order (a "Stop Order") suspending the
effectiveness of the Registration Statement, preventing or suspending the use of
any Preliminary Prospectus, the Prospectus, the Registration Statement, or any
amendment or supplement thereto, refusing to permit the effectiveness of the
Registration Statement, suspending the registration or qualification of the
Notes, nor has any of such authorities instituted or, to the knowledge of the
Company, threatened to institute, any proceedings with respect to a Stop Order.
(xxii) Except as disclosed in the Prospectus, there is no action,
suit or proceeding before or by any court or governmental agency or body,
domestic or foreign, or any arbitrator or arbitration panel, now pending or, to
the knowledge of the Company, threatened against or affecting the Company or any
Subsidiary which might result in any material adverse change in the financial
condition, affairs, business, prospects, net worth or results of operations of
the Company
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and the Subsidiaries considered as a whole, or which might materially and
adversely affect their properties or assets; and there is no decree, judgment or
order of any kind in existence against or restraining the Company or any
Subsidiary, or any of the officers, employees or directors of either, from
taking any actions of any kind in connection with the business of the Company or
any Subsidiary.
(xxiii) The Company is and each of its Subsidiaries is in compliance
with all applicable federal, state and local laws and regulations to which they
are subject or that regulate the business of the Company or its Subsidiaries,
where the effect of the failure to comply would be materially adverse to the
financial condition, affairs, business or prospects of the Company and the
Subsidiaries considered as a whole.
(xxiv) The Bank owns or possesses, or can acquire on reasonable
terms, trademarks, service marks and trade names necessary to conduct the
business now operated by it, and the Bank has not received any notice of
infringement of or conflict with asserted rights of others with respect to any
trademarks, service marks or trade names which, singly or in the aggregate, if
the subject of any unfavorable decision, ruling or finding, would materially
adversely effect the financial condition, affairs, business or prospects of the
Company and the Subsidiaries considered as a whole.
(xxv) The Company and each of its Subsidiaries has filed all
necessary federal and state income and franchise tax returns and paid all taxes
shown as due thereon. Except as is otherwise expressly stated in the
Registration Statement, the Company has no knowledge of any tax deficiency which
might be asserted against it which would have a material adverse effect on the
financial condition, affairs, business or prospects of the Company and the
Subsidiaries considered as a whole.
(xxvi) The Company and the Subsidiaries are not and do not intend to
conduct their businesses in a manner which would cause any of them to be an
"investment company" as defined in Section 3(a) of the Investment Company Act of
1940, as amended (the "Investment Company Act").
(xxvii) To the best of the Company's knowledge, there are no
affiliations between (i) any of the Company's officers, directors or 5% or
greater security holders, and (ii) any Underwriter or NASD-registered broker or
dealer except as set forth in the Registration Statement or as otherwise
disclosed in writing to the Underwriters.
(xxviii) The Notes have been duly authorized for listing by the New
York Stock Exchange upon official notice of issuance.
(xxix) The Company has not distributed and will not distribute any
prospectus or other offering material in connection with the offering and sale
of the Notes other than any
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Preliminary Prospectus or the Prospectus or other materials permitted by the Act
to be distributed by the Company.
(xxx) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(xxxi) No hazardous substances, hazardous wastes, pollutants or
contaminants have been deposited or disposed of in, on or under the properties
of the Company or any Subsidiary (including properties owned, managed or
controlled by a Subsidiary in connection with its lending operations) during the
period in which the Company or any Subsidiary has owned, occupied, managed,
controlled or operated such properties in material violation of any applicable
law, ordinance, rule, regulation, order, judgment, decree or permit or which
would require remedial action under any applicable law, ordinance, rule,
regulation, order, judgment, decree or permit, except for any violation or
remedial action which would not have, or could not be reasonably likely to have,
singularly or in the aggregate with all such violations or remedial actions, a
material adverse effect on the general affairs, condition (financial, or
otherwise), business, key personnel, property, prospects, net worth or results
of operations of the Company and its Subsidiaries, taken as a whole.
7. INDEMNIFICATION AND CONTRIBUTION.
--------------------------------
(a) The Company agrees to indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise (including in
settlement of any litigation if such settlement is effected with the written
consent of the Company), insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon a untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, including the information deemed to be a part of the
Registration Statement at the time of effectiveness pursuant to Rules 430A and
434(d) under the Act, if applicable, any Preliminary Prospectus, the Prospectus,
or any amendment or supplement thereto (including any term sheet within the
meaning of Rule 434 under the Act), or arise out of or are based upon 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
will reimburse each Underwriter for any legal or other out-of-pocket expenses
reasonably incurred by it in connection with investigating or defending against
such loss, claim, damage, liability or action; provided, however, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage, liability or action
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<PAGE>
rises 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 any such amendment or supplement, in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter specifically for use in the preparation thereof.
In addition to their other obligations under this Section 7(a), the Company
agrees that, as an interim measure during the pendency of any claim, action,
investigation, inquiry or other proceeding arising out of or based upon any
statement or omission, or any alleged statement or omission, described in this
Section 7(a), they will reimburse each Underwriter on a monthly basis for all
reasonable legal fees or other out-of-pocket expenses incurred in connection
with investigating or defending any such claim, action, investigation, inquiry
or other proceeding, notwithstanding the absence of a judicial determination as
to the propriety and enforceability of the Company's obligation to reimburse the
Underwriters for such expenses and the possibility that such payments might
later be held to have been improper by a court of competent jurisdiction. To
the extent that any such payments might later be held to have been improper by a
court of competent jurisdiction. To the extent that any such interim
reimbursement payment is so held to have been improper, the Underwriter that
received such payment shall promptly return it to the party or parties that made
such payment, together with interest, compounded daily, determined on the basis
of the prime rate (or other commercial lending rate for borrowers of the highest
credit standing) announced from time to time by Norwest Bank Minnesota, National
Association (the "Prime Rate"). Any such interim reimbursement payments which
are not made to an Underwriter within 30 days of a request for reimbursement
shall bear interest a the Prime Rate from the date of such request. This
indemnity agreement shall be in addition to any liabilities which the Company
may otherwise have.
(b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of such
Underwriter), insofar such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement, any
Preliminary Prospectus, the Prospectus, or an amendment or supplement thereto
(including any term sheet within the meaning of Rule 434 under the Act), or
arise out of or are based upon 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 each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was 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 specifically for use in the preparation thereof, and will reimburse
the Company for any legal or other out-of-pocket expenses reasonably incurred by
the Company in connection with investigating or defending against any such loss,
claim, damage, liability or action.
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<PAGE>
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; provided, however, that the failure so to
notify the indemnifying party shall not relieve the indemnifying party from any
liability that it may have under this Section 7 except to the extent it has been
materially prejudiced by such failure and, provided further, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have to an indemnified party otherwise than under this Section 7. In case
any such action 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 in, and, to the extent that it shall
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party of the
indemnifying party's election so to assume the defense thereof, the indemnifying
party shall not be liable to such indemnified party under such subsection for
any legal or other out-of-pocket expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation; provided, however, that if, in the sole judgment of the
Underwriters, it is advisable for the Underwriters to be represented as a group
by separate counsel, the Underwriters shall have the right to employ a single
counsel to represent themselves, in which event the reasonable fees and expenses
of such separate counsel shall be borne by the indemnifying party or parties and
reimbursed to the Underwriters as incurred (in accordance with the provisions of
the second paragraph in subsection (a) above). An indemnifying party shall not
be obligated under any settlement agreement relating to any action under this
Section 7 to which it has not agreed in writing.
(d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above, (i)
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Underwriters on the other from the
offering of the Notes or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and the Underwriters on the other
in connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, 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 bear 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 or the Underwriters and the parties'
relevant intent, knowledge, access
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to information and opportunity to correct or prevent such untrue statement or
omission. The Company and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this subsection (d) were to be 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 in the first sentence of this
subsection (d). The amount paid by an indemnified party as a result of the
losses, claims, damages or liabilities referred to in the first sentence of this
subsection (d) shall be deemed to include any legal or other out-of-pocket
expenses reasonably incurred by such indemnified party in connection with
investigating or defending against any action or claim which is the subject of
this subsection (d). Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Notes underwritten by it and distributed
to the public were offered to the public exceeds the amount of any damages that
such Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this subsection
(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 shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 7 shall be in addition to any liability that the
respective Underwriters may otherwise have and shall extend, upon the same terms
and conditions, to each director of the Company (including any person who, with
his consent, is named in the Registration Statement as about to become a
director of the Company), to each officer of the Company who has signed the
Registration Statement and to each person, if any, who controls the Company
within the meaning of the Act.
8. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The several obligations
-------------------------------------------
of the Underwriters to purchase the Notes hereunder are subject to the following
conditions:
(a) The Registration Statement shall have become effective not later
than 5:00 p.m., Eastern time, on the date hereof, or at such later date and time
as shall be consented to in writing by the Underwriters, and, if the
Underwriters and the Company have elected to rely upon Rule 430A under the Act,
the price of the Notes and any price-related or other information previously
omitted from the Registration Statement pursuant to such Rule 430A under the Act
shall have been transmitted to the Commission for filing pursuant to Rule 424
(b) within the prescribed time period, and on or prior to the Closing Date, the
Company shall have provided evidence satisfactory to the Underwriters of such
timely filing, or a post-effective amendment providing such information shall
have been promptly filed and declared effective in accordance with the
requirements of Rule 430A.
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(b) Subsequent to the effective date of the Registration Statement,
(i) there shall not have occurred any change, or any material development
involving a prospective change, in or affecting particularly the business or
properties of the Company and the Subsidiaries, taken as a whole, not
contemplated by the Prospectus, which, in the Underwriters' opinion would
materially adversely affect the market for the Notes or make it impracticable or
inadvisable to proceed with the offering or the delivery of the Notes, as
contemplated herein and in the Prospectus, or to attempt to enforce contracts
for the purchase of the Notes, and (ii) the business and operations of the
Company and the Subsidiaries shall not have been materially interfered with by
strike, fire, flood, accident or other calamity (whether or not insured).
(c) The Underwriters shall have received from Sullivan & Cromwell,
counsel for the Company, a favorable opinion dated the Closing Date and
satisfactory to the Underwriters and the Underwriters' counsel to the effect
that:
(i) Each of the Company and the Bank has been duly organized and is
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation; each has all requisite corporate power and
corporate authority to own, lease and operate its properties and conduct its
business as described in the Registration Statement and the Prospectus. The
Bank is wholly-owned by the Company and the Bank and GBC Venture Capital, Inc.
are the Company's only direct subsidiaries.
(ii) The Company has an authorized capitalization as set forth in the
Prospectus. Each outstanding share of capital stock of the Company is duly
authorized, validly issued, fully paid and non-assessable and each outstanding
share of capital stock of the Bank is duly authorized, validly issued, fully
paid assessable, in the manner and to the extent provided in the California
Financial Code, has not been issued and is not owned or held in violation of any
preemptive right of shareholders. Each outstanding share of capital stock of
the Bank is owned of record and, to such counsel's knowledge, beneficially by
the Company and, except as disclosed in the Registration Statement, to the
knowledge of such counsel, is held free and clear of all liens, claims, security
interests, pledges, charges, encumbrances, shareholders' agreements, voting
trusts or claims of others. To such counsel's knowledge, except as set forth in
the Prospectus, neither the Board of Directors of the Company nor any committee
thereof has authorized or entered into any commitment or arrangement to issue,
and neither the Board of Directors nor any committee thereof has authorized the
issuance of any outstanding option, warrant or other right calling for the
issuance or sale of, any share of capital stock of the Company or the Bank or
any security or other instrument which by its terms is convertible into,
exercisable for or exchangeable for capital stock of the Company or the Bank.
To such counsel's knowledge, neither the Board of Directors nor any committee
thereof of the Bank has authorized any options, agreements, contracts or other
rights in existence to purchase or acquire from the Company or the Bank any
issued and outstanding shares of the capital stock of the Company or the Bank.
(ii) This Agreement has been duly authorized, executed and delivered
by the Company.
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(iv) The Notes have been duly and validly authorized, executed and
delivered by the Company and when delivered and paid for pursuant hereto will
constitute valid and binding obligations of the Company entitled to the benefits
of the Indenture, enforceable against the Company in accordance with their
terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equitable principles.
(v) The Indenture has been duly authorized, executed and delivered by
the Company and constitutes a valid and legally binding obligation of the
Company, enforceable against the Company in accordance with its terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equitable principles.
(vi) All regulatory consents, authorizations, approvals and filings
required to be obtained or made by the Company under the Federal laws of the
United States and the laws of the States of New York and California for the
issuance, sale and delivery of the Notes by the Company to you have been
obtained or made.
(vii) The issuance of the Notes in accordance with the Indenture and
the sale of the Notes by the Company to you pursuant to this Agreement do not,
and the performance by the Company of its obligations under the Indenture, this
Agreement and the Note will not (A) violate the Company's or the Bank's
Articles of Incorporation or Bylaws, (B) result in a default under or breach of
the agreements identified to us as material to the Company and the Subsidiaries
in the Officers' Certificate, dated the date of this opinion, of Peter Lowe,
Chief Financial Officer of the Company or (C) violate any Federal law of the
United States or law of the States of New York or California applicable to the
Company or its Subsidiaries; provided that such counsel may state that they
express no opinion with respect to Federal or state securities laws, other
antifraud laws and fraudulent transfer laws, and that insofar as performance by
the Company of its obligations under the Indenture, this Agreement and the
Notes, such counsel need express no opinion as to bankruptcy, insolvency,
reorganization, moratorium and similar laws of general applicability relating
to or affecting creditors' rights.
(viii) The Registration Statement has become effective under the Act,
and, to the best of the knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued, nor has any
proceeding for the issuance of such an order been initiated or, to the knowledge
of such counsel, threatened.
(ix) Such counsel does not know of any pending or threatened
litigation which would prevent the consummation of the transactions contemplated
by this Agreement or the Indenture.
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(x) The Company and the Subsidiaries are not an "investment company"
or a person "controlled by" an "investment company" within the meaning of the
Investment Company Act.
In addition, you shall have received from Sullivan & Cromwell a letter
stating that as counsel to the Company, they reviewed the Registration Statement
and the Prospectus, participated in discussions with your representatives and
those of the Company and its accountants, and advised the Company as to the
requirements of the Act and the applicable rules and regulations thereunder; on
the basis of the information that such counsel gained in the course of the
performance of such services, considered in the light of their understanding of
the applicable law (including the requirements of Form S-3 and the character of
the prospectus contemplated thereby) and the experience they have gained through
their practice under the Act, they confirm to you that, in their opinion, the
Registration Statement and the Prospectus, as of the effective date of the
Registration Statement, appeared on their face to be appropriately responsive in
all material respects to the requirements of the Act, the Trust Indenture Act
and the applicable rules and regulations of the Commission thereunder; nothing
that came to such counsel's attention in the course of such review has caused
such counsel to believe that the Registration Statement or the Prospectus, as of
such effective date, contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or necessary to
make the statements therein not misleading; nothing that has come to such
counsel's attention in the course of the limited procedures described in such
letter has caused them to believe that the Prospectus, as of the date and time
of delivery of such letter, contained any untrue statement of a material fact or
omitted to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, and such counsel do not know of any litigation or any governmental
proceeding instituted or threatened against the Company or any of its
consolidated Subsidiaries that would be required to be disclosed in the
Prospectus and is not so disclosed, and do not know of any documents that are
required to be filed as exhibits to the Registration Statement and are not so
filed or of any documents that are required to be summarized in the Prospectus
and are not so summarized. Such counsel may state that the limitations inherent
in the independent verification of factual matters and the character of
determinations involved in the registration process are such that they do not
assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus except for
those made under the captions "Risk Factors -- Source of Payments to Holder of
Notes," "-- Limited Right of Acceleration of Notes," "--Limited Covenants," "--
Subordination of Notes" and "-- Regulation" and "Description of Notes" in the
Prospectus insofar as they relate to provisions of the Indenture and the Notes
therein described and the caption "Underwriting" insofar as they relate to
provisions of this Agreement; that such counsel do not express any opinion or
belief as to the financial statements or other financial data derived from
accounting records contained in the Registration Statement or the Prospectus, or
as to the statement of the eligibility and qualification of the Trustee under
the Indenture; and that their letter is furnished as counsel for the Company to
the several Underwriters and is solely for the benefit of the several
Underwriters.
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<PAGE>
In rendering such opinions, such counsel may rely as to matters of
fact, to the extent they deem proper on certificates of responsible officers of
the Company and the Subsidiaries and on certificates of public officials.
(d) The Underwriters shall have received on the Closing Date a
favorable opinion dated the Closing Date from Manatt, Phelps & Phillips, LLP,
counsel for the Underwriters, as to such matters as the Underwriters may
reasonably require.
(e) The Underwriters shall have received letters addressed to the
Underwriters and dated the date hereof and the Closing Date, as the case may be,
from KPMG Peat Marwick LLP, independent public accountants for the Company,
substantially in the forms heretofore approved by the Underwriters and counsel
for the Underwriters.
(f) That (i) no Stop Order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been taken or, to the knowledge of the Company, shall be
contemplated by the Commission at or prior to the Closing Date; (ii) there shall
not have been any change in the capital stock of the Company or any Subsidiary
nor any material increase in the short or long-term debt of the Company and its
Subsidiaries taken as a whole from that set forth or contemplated in the
Registration Statement and Prospectus; (iii) the Company and its Subsidiaries
shall not have incurred any material liabilities or obligations, direct or
contingent (whether or not in the ordinary course of business), other than those
reflected in or contemplated by the Registration Statement and Prospectus; and
(iv) all of the representations and warranties of the Company contained in this
Agreement shall be true and correct in all material respects on and as of the
date hereof and on and as of the Closing Date as if made on and as of each such
date, and the Underwriters shall have received a certificate, dated the Closing
Date and in form and substance reasonably satisfactory to the Underwriters
signed by the President or a Vice President and the Chief Financial Officer of
the Company (or such other officers as are acceptable to the Underwriters) to
the effect set forth in this Section 8(f) and in Section 8(h) hereof.
(g) The Notes shall have been qualified for sale or exempted from such
qualification under the securities laws of such jurisdictions as the
Underwriters shall have designated prior to the time of execution of this
Agreement and such qualification or exemption shall continue in effect to and
including the Closing Date.
(h) The Company shall not have failed at or prior to the Closing Date
to have performed or complied in all material respects with any of the
agreements herein contained and required to be performed or complied with by it
at or prior to the Closing Date.
(i) The Notes shall not have received from Duff & Phelps Credit Rating
Co. a credit rating lower than BB-.
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<PAGE>
9. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
--------------------------------------------------
representations, warranties, and agreements of the Company herein or in
certificates delivered pursuant hereto, and the agreements of the Company and
the Underwriters contained in Section 7 hereof shall remain operative and in
full force and effect regardless of any investigation made by the Underwriters
or on the Underwriters' behalf or any controlling person thereof, or the Company
or any of its officers, directors, or controlling persons and shall survive
delivery of, and payment for, the Notes to and by the Underwriters hereunder.
10. EFFECTIVE DATE OF AGREEMENT.
---------------------------
(a) If the Registration Statement has not yet been declared effective,
this Agreement shall become effective contemporaneously with the effectiveness
of the Registration Statement. Until such time as this Agreement shall have
become effective, it may be terminated by the Company by notifying the
Underwriters, or by the Underwriters by notifying the Company.
(b) If any Underwriter shall fail or refuse to purchase Notes which it
has agreed to purchase under this Agreement and the aggregate principal amount
of Notes which such defaulting Underwriter agreed but failed or refused to
purchase is not more than one-tenth of the aggregate principal amount of Notes,
the other Underwriters shall be obligated, pro rata to purchase the Notes which
the defaulting Underwriter agreed but failed or refused to purchase. If any
Underwriter shall fail or refuse to purchase Notes and the aggregate principal
amount of Notes with respect to which such default occurs is more than one-tenth
of the aggregate principal amount of Notes and arrangements satisfactory to the
non-defaulting Underwriters and the Company for the purchase of such Notes are
not made within 36 hours after such default, this Agreement will terminate
without liability on the part of the non-defaulting Underwriters or the Company.
In any such case which does not result in termination of this Agreement, either
the non-defaulting 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
required changes, if any, in the Registration Statement and the Prospectus or
any other documents or arrangements may be effected. Any action taken under
this paragraph shall not relieve any defaulting Underwriter from liability in
respect of its default under this Agreement.
(c) Any notice under this Section 10 may be made by telecopy or
telephone but shall be subsequently confirmed by letter.
11. TERMINATION OF AGREEMENT. The Underwriters shall have the right to
------------------------
terminate this Agreement at any time prior to the Closing Date by notice to the
Company from the Underwriters, without liability on the Underwriters' part to
the Company if, on or prior to such date, (i) the Company shall have failed,
refused or been unable to perform in any material respect any agreement on its
part to be performed hereunder, (ii) any other condition to the obligations of
the Underwriters hereunder as provided in Section 8 is not fulfilled when and as
required in any material respect, (iii) trading in securities generally on the
New York Stock Exchange, the
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American Stock Exchange or the NASD Automated Quotation System shall have been
suspended or materially limited, or minimum prices shall have been established
on such exchange or system by the Commission, or by such exchange or system or
other regulatory body or governmental authority having jurisdiction, (iv) a
general banking moratorium shall have been declared by Federal, California or
New York State authorities, (v) there is an outbreak or material escalation of
armed hostilities involving the United States on or after the date hereof, or
there has been a declaration by the United States of a national emergency or
war, the effect of which shall be, in the Underwriters' reasonable judgment, to
make it inadvisable or impracticable to proceed with the public offering or
delivery of the Notes on the terms and in the manner contemplated in the
Prospectus as supplemented or amended prior to the occurrence of such event,
(vi) in the Underwriters' reasonable opinion any material adverse change shall
have occurred since the respective dates as of which information is given in the
Registration Statement or the Prospectus (as supplemented or amended prior to
the occurrence of such event) in the condition (financial or other) of the
Company or the Subsidiaries, taken as a whole, whether or not arising in the
ordinary course of business other than as set forth in the Prospectus as
supplemented or amended prior to the occurrence of such event, or (vii) there
shall have been such a material adverse change in general economic, political or
financial conditions or if the effect of international conditions on the
financial markets in the United States shall be such as, in the Underwriters'
reasonable opinion, makes it inadvisable or impracticable to proceed with the
delivery of the Notes as contemplated hereby. Notice of such cancellation shall
be given to the Company by telecopy or telephone but shall be subsequently
confirmed by letter.
12. INFORMATION FURNISHED BY UNDERWRITER. The statements set forth in the
------------------------------------
last sentence of the first paragraph on the cover page, the last paragraph of
the cover page, the third sentence, in the paragraph under the caption "Risk
Factors -- Absence of Existing Public Market; Market Prices", in the third and
fourth paragraphs and the second and third sentence of the fifth paragraph under
the caption "Underwriting" in any Preliminary Prospectus and in the Prospectus
constitute the written information furnished by the Underwriter or on its behalf
referred to in Section 2 and Section 6 hereof.
13. MISCELLANEOUS. Except as otherwise provided in Sections 10 and 11
-------------
hereof, notice given pursuant to any of the provisions of this Agreement shall
be in writing and shall be delivered (i) if to the Company, at the office of the
Company at 800 West Sixth Street, Los Angeles, California 90017, Attention:
Chief Financial Officer, with a copy to Stanley F. Farrar, Esq., Sullivan &
Cromwell, 444 South Flower Street, Suite 1200, Los Angeles, California 90071, or
(ii) if to the Underwriters, at the offices of Piper Jaffray Inc., Piper Jaffray
Tower, 222 South Ninth Street, Minneapolis, Minnesota 55402, Attention:
Corporate Finance Department, with a copy to William T. Quicksilver, Esq.,
Manatt, Phelps & Phillips, LLP, 11355 West Olympic Boulevard, Los Angeles,
California 90064, or in any case to such other address as the person to be
notified may have requested in writing.
14. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall inure
----------------------------------------
to the benefit of and be binding upon the parties hereto and their respective
successors and
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<PAGE>
assigns and the controlling persons, officers and directors referred to in
Section 7. Nothing in this Agreement is intended or shall be construed to give
to any other person, firm or corporation any legal or equitable remedy or claim
under or in respect of this Agreement or any provision herein contained. The
term "successors and assigns" as herein used shall not include any purchaser, as
such purchaser, of any of the Notes from the Underwriters.
15. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Minnesota.
16. COUNTERPARTS. This Agreement may be signed in various counterparts
which together shall constitute one and the same instrument.
Please confirm that the foregoing correctly sets forth the agreement
among the Company and the Underwriters.
Very truly yours,
GBC BANCORP
By: __________________________________
Name:
Title:
Accepted and delivered as of
the date first written above
PIPER JAFFRAY INC.
KEEFE, BRUYETTE & WOODS, INC.
OPPENHEIMER & CO., INC.
By: PIPER JAFFRAY INC.
By: ______________________________
Name:
Managing Director
25
<PAGE>
GBC BANCORP
SCHEDULE I
----------
UNDERWRITERS
<TABLE>
<CAPTION>
NAME PRINCIPAL
- ---- AMOUNT OF
NOTES
<S> <C>
Piper Jaffray, Inc................ $__________
Keefe, Bruyette & Woods, Inc...... $__________
Oppenheimer & Co., Inc............ $__________
TOTAL............................. $40,000,000
===========
</TABLE>
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