SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) December 9, 1998
THE BEAR STEARNS COMPANIES INC.
(Exact name of registrant as specified in its charter)
DELAWARE File No. 1-8989 13-3286161
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification Number)
245 Park Avenue, New York, New York 10167
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(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (212) 272-2000
Not Applicable
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(former name or former address, if changed since last report)
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Item 5. Other Events
Filed herewith are copies of:
(a) Underwriting Agreement, dated December 9, 1998, among The Bear
Stearns Companies Inc. (the "Company"), Bear Stearns Capital
Trust II (the "Trust") and Bear, Stearns & Co. Inc., Lehman
Brothers Inc., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Morgan Stanley & Co. Incorporated, PaineWebber
Incorporated, Prudential Securities Incorporated and Salomon
Smith Barney Inc., as representatives of the Underwriters,
entered into in connection with the offering of 12,000,000
shares of 7 1/2% Trust Issued Preferred Securities of the
Trust;
(b) Opinion of Weil, Gotshal & Manges LLP as to certain federal
income tax consequences described in the Prospectus
Supplement, dated December 9, 1998, included in the
Registration Statement, as amended, filed by the Company and
the Trust (Registration Nos. 333-66861; 333-66861-04).
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements of Businesses Acquired:
Not applicable.
(b) Pro Form Financial Information:
Not applicable.
(c) Exhibits:
(1) Underwriting Agreement, dated December 9, 1998, among The
Bear Stearns Companies Inc., Bear Stearns Capital Trust II and
Bear, Stearns & Co. Inc., Lehman Brothers Inc., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co.
Incorporated, PaineWebber Incorporated, Prudential Securities
Incorporated and Salomon Smith Barney Inc., as representatives
of the Underwriters.
(8) Opinion of Weil, Gotshal & Manges LLP as to certain
federal income tax consequences.
(23.4) Consent of Weil, Gotshal & Manges LLP (Included in
Exhibit 8).
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE BEAR STEARNS COMPANIES INC.
By: /s/ Samuel L. Molinaro Jr.
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Samuel L. Molinaro Jr.
Senior Vice President - Finance
and Chief Financial Officer
Dated: December 11, 1998
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THE BEAR STEARNS COMPANIES INC.
FORM 8-K
CURRENT REPORT
EXHIBIT INDEX
Exhibit No. Description
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(1) Underwriting Agreement, dated December 9, 1998, among The Bear
Stearns Companies Inc., Bear Stearns Capital Trust II and Bear,
Stearns & Co. Inc., Lehman Brothers Inc., Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Morgan Stanley & Co. Incorporated,
PaineWebber Incorporated, Prudential Securities Incorporated and
Salomon Smith Barney Inc., as representatives of the
Underwriters.
(8) Opinion of Weil, Gotshal & Manges LLP as to certain federal
income tax consequences.
(23.4) Consent of Weil, Gotshal & Manges LLP (Included in Exhibit 8).
7 1/2% Trust Issued Preferred Securities
(Liquidation amount $25 per Preferred Security)
of Bear Stearns Capital Trust II
fully and unconditionally guaranteed by
The Bear Stearns Companies Inc.
Underwriting Agreement
December 9, 1998
To the Several Underwriters named
in Schedule I hereto
c/o Bear, Stearns & Co. Inc.
245 Park Avenue
New York, NY 10167
Ladies and Gentlemen:
Bear Stearns Capital Trust II, a statutory business trust created
under the laws of the State of Delaware (the "Trust"), and The Bear Stearns
Companies Inc., a Delaware corporation (the "Guarantor"), as depositor of the
Trust and as Guarantor under the Guarantee referred to herein, propose to sell
to the several underwriters named in Schedule I hereto (the "Underwriters"), the
number of shares of preferred securities referred to in Schedule I hereto (the
"Securities") in the aggregate amount set forth in such Schedule I. The proceeds
of the sale of the Securities and of the common securities of the Trust (the
"Common Securities") to be sold by the Trust to the Guarantor are to be invested
in the 7 1/2% junior subordinated deferrable interest debentures of the
Guarantor (the "Subordinated Debentures") referred to in Schedule II hereto, to
be issued pursuant to an indenture (and any supplements and/or amendments
thereto) (the "Indenture") between the Guarantor and the trustee named in
Schedule II (the "Debenture Trustee"). The Securities will be guaranteed on a
subordinated basis by the Guarantor to the extent set forth in the guarantee
agreement referred in Schedule I hereto (the "Guarantee") between the Guarantor
and the guarantee trustee named in Schedule II (the "Guarantee Trustee").
1. Representations and Warranties. Each of the Guarantor and the Trust
jointly and severally represents and warrants to, and agrees with, the
Underwriters that:
(a) Each of the Trust and the Guarantor meet the requirements for the
use of Form S-3 under the Securities Act of 1933, as amended (the "1933
Act"), and has prepared and filed with the Securities and Exchange
Commission (the "Commission")
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pursuant to the 1933 Act, the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"), and the rules and regulations promulgated by the
Commission thereunder (the "Regulations"), a Registration Statement (the
file number of which is set forth in Schedule II hereto) on such Form,
including a Basic Prospectus, for registration under the 1933 Act of the
offering and sale of securities that include the Securities. The Trust and
the Guarantor have filed one or more amendments to such Registration
Statement as may have been required to be filed through the date hereof and
may have used a Preliminary Final Prospectus, each of which, if any, has
previously been furnished to you. Such Registration Statement, as so
amended (if applicable), has become effective. The offering of the
Securities is a Delayed Offering and, accordingly, it is not necessary that
any further information with respect to the Securities and the offering
thereof required by the 1933 Act and the Regulations thereunder be included
in an amendment to such Registration Statement prior to the Effective Date.
Each of the Trust and the Guarantor will file with the Commission pursuant
to Rules 415 and 424(b)(2), (3) or (5) a final prospectus supplement to the
form of prospectus included in such Registration Statement relating to the
Securities and the offering thereof. As filed, such final prospectus
supplement shall include all required information with respect to the
Securities and the offering thereof and, except to the extent the
Underwriters shall agree, in writing, to a modification, shall be in all
substantive respects in the form furnished to you prior to the Execution
Time or, to the extent not completed at the Execution Time, shall contain
only such specific additional information and other changes (beyond that
contained in the Basic Prospectus and any Preliminary Final Prospectus) as
either the Trust or the Guarantor has advised you, prior to the Execution
Time, will be included or made therein.
(b) The terms which follow, when used in this Agreement, shall have
the meanings indicated. The term "Effective Date" shall mean each date that
the Registration Statement and any post-effective amendment or amendments
thereto became or become effective. "Execution Time" shall mean the date
and time that this Agreement is executed and delivered by the parties
hereto. "Basic Prospectus" shall mean the prospectus referred to in
paragraph (a) above contained in the Registration Statement at the
Effective Date including any Preliminary Final Prospectus. "Preliminary
Final Prospectus" shall mean any preliminary prospectus supplement to the
Basic Prospectus which describes the Securities and the offering thereof
and is used prior to the filing of the Final Prospectus. "Final Prospectus"
shall mean the prospectus supplement relating to the Securities that is
first filed pursuant to Rule 424(b) after the Execution Time, together with
the Basic Prospectus. "Registration Statement" shall mean the registration
statement referred to in paragraph (a) above, including all exhibits,
documents and financial statements incorporated by reference, as amended at
the Execution Time (or, if not effective at the Execution Time, in the form
in which it shall become effective) and, in the event any post-effective
amendment thereto becomes effective prior to the Closing Date (as such term
is hereinafter defined), shall also mean such registration statement as so
amended. "Rule 415," "Rule 424" and "Regulation S-K" refer to such rules or
regulation under the 1933 Act.
Any reference herein to the Registration Statement, the Basic
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Prospectus, any Preliminary Final Prospectus or the Final Prospectus shall
be deemed to refer to and include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 which were filed under the
Securities Exchange Act of 1934, as amended, or the rules and regulations
promulgated thereunder (the "1934 Act") on or before the effective date of
the Registration Statement, or the issue date of the Basic Prospectus, any
Preliminary Final Prospectus, or the Final Prospectus, as the case may be;
and any reference herein to the terms "amend," "amendment," or "supplement"
with respect to the Registration Statement, the Basic Prospectus, any
Preliminary Final Prospectus, or the Final Prospectus shall be deemed to
refer to and include the filing of any document under the 1934 Act after
the Effective Date of the Registration Statement or the issue date of the
Basic Prospectus, any Preliminary Final Prospectus, or the Final
Prospectus, as the case may be, deemed to be incorporated therein by
reference. A "Delayed Offering" shall mean an offering of securities
pursuant to Rule 415 which does not commence promptly after the effective
date of a registration statement, with the result that only information
required pursuant to Rule 415 need be included in such registration
statement at the effective date thereof with respect to the securities so
offered.
(c) The Guarantor has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware
with corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Final Prospectus and any
amendment or supplement thereto; and the Guarantor is duly qualified as a
foreign corporation to transact business, and is in good standing, in each
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the failure to so qualify would not have a material adverse effect on
the financial condition, results of operations, business or properties of
the Guarantor and its subsidiaries considered as one enterprise (any such
material adverse effect being hereinafter referred to as a "Material
Adverse Effect").
(d) The Trust has been duly created and is validly existing as a
statutory business trust in good standing under the laws of the State of
Delaware with the trust power and authority to own its property and conduct
its business as described in the Final Prospectus and any amendment or
supplement thereto. The Trust has conducted no business to date and will
conduct no business other than the transactions contemplated by this
Agreement and the amended and restated trust agreement among the Guarantor,
as depositor, and the trustees named therein (the "Trustees"), the
administrators named therein and holders, from time to time, of the
Securities and the Common Securities (as amended and restated from time to
time, the "Trust Agreement") and as described in the Final Prospectus and
any amendment or supplement thereto. The Trust is not a party to or bound
by any agreement or instrument other than this Agreement, the Trust
Agreement and the agreements and instruments contemplated by the Trust
Agreement and described in the Final Prospectus and any amendment or
supplement thereto. The Trust has no liabilities or obligations other than
those arising out of the transactions contemplated by this Agreement and
the Trust Agreement and described in the Final Prospectus and any
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amendment or supplement thereto. The Trust is not a party to or subject to
any action, suit or proceeding of any nature. The Trust is a "grantor
trust" and is not and will not be classified as an association taxable as a
corporation for United States federal income tax purposes.
(e) The Securities have been duly authorized, and, when issued,
delivered and paid for pursuant to this Agreement and the Trust Agreement,
will be validly issued and fully paid and non-assessable undivided
beneficial interests in the assets of the Trust entitled to the benefits of
the Trust Agreement. The Securities will conform in all material respects
to the description thereof in the Final Prospectus and any amendment or
supplement thereto. The Subordinated Debentures, the Indenture, the
Guarantee and the Trust Agreement have each been duly authorized and, at
the Closing Date (as defined in Section 3 hereof), when executed,
authenticated and delivered by the Guarantor against payment therefor as of
the Closing Date, and, (i) in the case of the Subordinated Debentures, when
issued by the Guarantor and duly authenticated by the Debenture Trustee,
(ii) in the case of the Indenture, by the Trustee named therein, (iii) in
the case of the Guarantee, by the Guarantee Trustee (as defined in the
Guarantee), and (iv) in the case of the Trust Agreement, by the Trustees
and Administrators (each as defined in the Trust Agreement), will
constitute valid and legally binding obligations of the Guarantor and the
Trust, as applicable, and in the case of the Subordinated Debentures, will
also be entitled to the benefits provided by the Indenture, enforceable in
accordance with their respective terms, subject, as to enforcement, to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors'
rights and to general equity principles. The Subordinated Debentures, the
Indenture, the Guarantee and the Trust Agreement will conform in all
material respects to the descriptions thereof in the Final Prospectus; the
Indenture and the Guarantee substantially comply with the Trust Indenture
Act.
(f) The holders of the Securities will be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of the
State of Delaware; provided that the holders of the Securities may be
obligated, pursuant to the Trust Agreement, to (a) provide indemnity and/or
security in connection with and pay taxes or governmental charges arising
from transfers or exchanges of Securities certificates and the issuance of
replacement Securities certificates and (b) provide security and indemnity
in connection with requests of or directions to the Property Trustee (as
defined in the Trust Agreement) to exercise its rights and remedies under
the Trust Agreement.
(g) The Trust has all trust power and authority necessary to execute
and deliver this Agreement, and the Securities and to perform its
obligations hereunder and thereunder. The issuance and sale of the
Securities and the Common Securities by the Trust, the purchase of the
Subordinated Debentures by the Trust and the compliance by the Trust with
the provisions of the Securities, the Trust Agreement and this Agreement
and the consummation of the transactions herein and therein contemplated do
not, as of the date hereof, and will not as of the Closing Date, (A)
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conflict with or result in a breach of any of the terms and provisions of,
or constitute a default (or an event which with notice or lapse of time, or
both, would constitute a default) or require consent under, or result in
the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Trust pursuant to, the terms of any contract,
agreement, indenture, mortgage, loan agreement, note, lease or other
instrument, franchise, license or permit to which the Trust is a party or
by which the Trust or its properties or assets may be bound or subject, or
(B) violate or conflict with any provisions of the Trust Agreement, or any
law, judgment, decree, order, statute, rule or regulation of any court or
any public, governmental or regulatory agency or body or any arbitrator
having jurisdiction over the Trust, or any of its properties or assets. No
consent, approval, authorization, order, registration, filing,
qualification, license or permit of or with any court or any public,
governmental or regulatory agency or body having jurisdiction over the
Trust, or any of its properties or assets, is required for the execution,
delivery and performance of this Agreement, and the Trust Agreement and the
compliance with the provisions hereby and thereby, the issuance, sale and
delivery of the Securities and Common Securities by the Trust and the
purchase of the Subordinated Debentures by the Trust, except such as may be
required under applicable state securities or "blue sky" laws.
(h) On the Effective Date, and at all times subsequent thereto to and
including the Closing Date (as such term is defined in Section 3), and
during such longer period as the Final Prospectus may be required to be
delivered in connection with sales by the Underwriters or a dealer, and
during such longer period until any post-effective amendment to the
Registration Statement shall become effective, the Registration Statement
(including any post effective amendment) and the Final Prospectus (as
amended or as supplemented if the Guarantor and the Trust shall have filed
with the Commission any amendment or supplement to the Registration
Statement or the Final Prospectus) will comply with the requirements of the
1933 Act, the 1934 Act, the Trust Indenture Act and the Regulations
promulgated under each of the 1933 Act, the 1934 Act and the Trust
Indenture Act, will comply with the requirements of the 1933 Act, the 1934
Act, the Trust Indenture Act and the Regulations promulgated under each of
the 1933 Act, the 1934 Act and the Trust Indenture Act, and will not
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein in the light of the circumstances in which they were
made not misleading, and no event will have occurred which should have been
set forth in an amendment or supplement to the Registration Statement or
the Final Prospectus which has not then been set forth in such an amendment
or supplement; and each Basic Prospectus and each Preliminary Final
Prospectus, as of the date filed with the Commission, did not include any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein
in light of the circumstances in which they were made not misleading;
provided, however, that neither Guarantor nor the Trust makes any
representation and warranty as to information contained in or omitted from
(i) the Registration Statement, the Basic Prospectus, any Preliminary Final
Prospectus, or the Final Prospectus made in reliance upon and in conformity
with information furnished to the Guarantor or the Trust, in writing, by
any Underwriter expressly for use in the Registration Statement or such
Basic Prospectus, any Preliminary Final Prospectus, or the Final Prospectus
and (ii) the Statement of
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Eligibility and Qualification on Form T-1 of the Debenture Trustee, the
Property Trustee under the Trust Agreement and the Guarantee Trustee under
the Trust Indenture Act, except statements or omissions in such statements
made in reliance upon information furnished to such trustees by or on
behalf of the Guarantor or the Trust for inclusion therein.
(i) Neither the Commission nor the "blue sky" or securities authority
of any jurisdiction has issued an order (a "Stop Order") suspending the
effectiveness of the Registration Statement, preventing or suspending the
use of the Basic Prospectus, any Preliminary Final Prospectus, the Final
Prospectus, the Registration Statement, or any amendment or supplement
thereto, refusing to permit the effectiveness of the Registration
Statement, or suspending the registration or qualification of the
Securities, nor has any of such authorities instituted or, to the knowledge
of either the Guarantor or the Trust, threatened to institute any
proceedings with respect to a Stop Order in any jurisdiction in which the
Securities are to be sold, nor, with respect to accuracy at the Closing
Date, has there been any Stop Order issued or proceedings with respect to a
Stop Order instituted or, to the knowledge of either the Guarantor or the
Trust, threatened on or after the effective date of the Registration
Statement in any jurisdiction.
(j) The documents incorporated by reference in the Final Prospectus
and any amendment or supplement thereto (the "Incorporated Documents"), at
the time they were or hereafter are filed with the Commission, complied or
when so filed will comply, in all material respects, with the requirements
of the 1933 Act, or the 1934 Act, the Trust Indenture Act, as applicable,
and the regulations promulgated under each of the 1933 Act, the 1934 Act
and the Trust Indenture Act, and on the Effective Date and through and
including the Closing Date, did not and will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they are made, not misleading.
(k) Since the respective dates as of which information is given in the
Registration Statement and the Final Prospectus, except as otherwise stated
therein or contemplated thereby, there has been no material adverse change
in, or any adverse development which materially affects, the financial
condition, results of operations, business or properties of the Guarantor
and its subsidiaries considered as one enterprise.
(l) Since the respective dates as of which information is given in the
Registration Statement and the Final Prospectus, except as otherwise stated
therein or contemplated thereby, there has been no material adverse change
in, or any adverse development which materially affects, the financial
condition, results of operations, business or properties of the Trust.
(m) The Guarantor has all corporate power and authority necessary to
execute and deliver this Agreement, the Indenture, the Subordinated
Debentures, the
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Guarantee and the Trust Agreement and to perform its obligations hereunder
and thereunder; the execution, delivery and performance of this Agreement,
the Indenture, the Guarantee and the Trust Agreement, the issuance,
authentication, and sale of the Subordinated Debentures by the Guarantor,
and compliance with the provisions hereof and thereof by the Guarantor, do
not, as of the date hereof, and will not, as of the Closing Date, (A)
conflict with or result in a breach of any of the terms and provisions of,
or constitute a default (or an event which with notice or lapse of time, or
both, would constitute a default) or require consent under, or result in
the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Guarantor or any of its subsidiaries considered
as one enterprise pursuant to, the terms of any contract, agreement,
indenture, mortgage, loan agreement, note, lease or other instrument,
franchise, license or permit to which the Guarantor or any of its
subsidiaries is a party or by which the Guarantor or any of its
subsidiaries or their respective properties or assets may be bound or
subject and that is material to the Guarantor and its subsidiaries
considered as one enterprise, or (B) violate or conflict with any provision
of the certificate of incorporation or by-laws of the Guarantor or any of
its subsidiaries, or any law, judgment, decree, order, statute, rule or
regulation of any court or any public, governmental or regulatory agency or
body or any arbitrator having jurisdiction over the Guarantor or any of its
subsidiaries, or any of their respective properties or assets. No consent,
approval, authorization, order, registration, filing, qualification,
license or permit of or with any court or any public, governmental or
regulatory agency or body having jurisdiction over the Guarantor or any of
its subsidiaries, or any of their respective properties or assets, is
required for the execution, delivery and performance of this Agreement, the
Indenture, the Guarantee and the Trust Agreement and the compliance with
the provisions hereof and thereof, including the issuance, authentication,
sale and delivery of the Subordinated Debentures, except such as may be
required under applicable state securities or "blue sky" laws.
(n) The Common Securities have been duly authorized and when issued
and delivered at the Closing Date against payment therefor, will be validly
issued and fully paid and non-assessable undivided beneficial interests in
the assets of the Trust and will conform in all material respects to the
description thereof contained in the Final Prospectus; the issuance of the
Common Securities is not subject to preemptive or other similar rights; on
the Closing Date, all of the issued and outstanding Common Securities of
the Trust will be directly owned by the Guarantor, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or other
defect of title whatsoever; and the Common Securities and the Securities
are the only interests authorized to be issued by the Trust.
(o) Neither the Trust nor the Guarantor is or, after giving effect to
the offering and sale of the Securities, will be an "investment company" or
an entity "controlled" by an "investment company", as such terms are
defined in the Investment Company Act of 1940, as amended (the "Investment
Company Act").
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(p) Except for Bear, Stearns & Co. Inc. ("Bear Stearns"), Bear,
Stearns Securities Corp. ("BSSC"), Bear, Stearns International Limited
("BSIL") and Bear Stearns Holdings Limited ("BSHL"), no subsidiary of the
Guarantor is a "significant subsidiary" as defined in Rule 405 of
Regulation C of the Regulations; each of Bear Stearns, BSSC, BSIL and BSHL
has been duly incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, has the
corporate power and authority to own, lease and operate its properties and
to conduct its business as described in the Final Prospectus and any
amendment or supplement thereto and is duly qualified as a foreign
corporation to transact business, and is in good standing, in each
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the failure to so qualify would not have a Material Adverse Effect;
and all of the issued and outstanding capital stock of Bear Stearns, BSSC,
BSIL and BSHL has been duly authorized and validly issued and is fully paid
and non-assessable and was not issued in violation of or subject to
preemptive rights, and, except for directors' qualifying shares, is owned,
directly or indirectly, by the Guarantor free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or other defect of
title whatsoever.
(q) There are no holders of securities of either the Guarantor or the
Trust or any of their respective subsidiaries who, pursuant to any
agreement, understanding or otherwise, have any right to have securities of
the Guarantor, the Trust or any of their respective subsidiaries registered
under the 1933 Act in connection with the offering contemplated by the
Final Prospectus.
(r) The Securities have been rated investment grade by at least one
nationally recognized rating agency.
(s) Deloitte & Touche LLP, the accountants who certified the financial
statements included or incorporated by reference in the Guarantor's most
recent Annual Report on Form 10-K which is incorporated by reference in the
Final Prospectus, were independent public accountants at the time such
statements were certified and during the periods covered by such statements
as required by the 1933 Act and the Regulations.
(t) The financial statements of the Guarantor and its consolidated
subsidiaries included or incorporated by reference in the Registration
Statement and the Final Prospectus, and any amendment or supplement
thereto, present fairly the consolidated financial position of the
Guarantor and its consolidated subsidiaries as at the dates indicated and
the consolidated results of their operations for the periods specified; and
said financial statements have been prepared in conformity with generally
accepted accounting principles in the United States (except to the extent
that certain footnote disclosures regarding any stub period may have been
omitted in accordance with the 1934 Act and the regulations promulgated
thereunder) applied on a consistent basis.
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(u) Except as may be set forth in the Final Prospectus, there is no
action, suit or proceeding before or by any court or governmental agency or
body or arbitrator, domestic or foreign, now pending, or, to the knowledge
of the Guarantor, threatened against or affecting, the Guarantor, the
Trust, Bear Stearns, BSSC, BSIL and BSHL which is required to be disclosed
in the Registration Statement or Final Prospectus, or would have a Material
Adverse Effect or would otherwise be expected to materially and adversely
affect the consummation of the transactions contemplated hereby or by the
Indenture, the Guarantee or the Trust Agreement.
(v) The Guarantor, the Trust, Bear Stearns, BSSC, BSIL and BSHL
possess such certificates, authorities or permits issued by the appropriate
state, federal or foreign regulatory agencies or bodies necessary to
conduct the business now operated by them, except where the failure to
obtain such certificates, authorities or permits, individually or in the
aggregate, would not have a Material Adverse Effect. None of the Guarantor,
the Trust, Bear Stearns, BSSC, BSIL and BSHL has received any notice of
proceedings relating to the revocation or modification of any such
certificate, authority or permit which, singly or in the aggregate, if the
subject of any unfavorable decision, ruling or finding, would materially
and adversely affect the financial condition, results of operations,
business or properties of the Guarantor and its subsidiaries considered as
one enterprise.
2. Purchase and Sale. On the basis of the terms and conditions and in
reliance upon the representations, warranties, covenants and agreements herein
set forth, the Guarantor and the Trust agree that the Trust will sell to the
Underwriters, and the Underwriters agree to purchase from the Trust, in the
respective amounts set forth opposite their names on Schedule I hereto and at
the purchase price set forth in Schedule II hereto, the Securities. The
obligations of the Underwriters under this Section 2 are several and not joint.
As compensation to the Underwriters for their commitment hereunder,
and in view of the fact that the proceeds from the sale of the Securities will
be used by the Trust to purchase the Subordinated Debentures, upon payment of
the purchase price for the Securities as contemplated in the immediately
preceding paragraph, the Guarantor on the Closing Date will pay by wire transfer
of immediately available funds to the Underwriters the amount per Security set
forth in Schedule II hereto in respect of the Securities to be delivered by the
Trust hereunder on the Closing Date.
3. Delivery and Payment. Delivery of and payment for the Securities
shall be made at the office, on the date and at the time specified in Schedule
II hereto, which date and time may be postponed by agreement among the
Underwriters, the Trust and the Guarantor (such date and time of delivery of and
payment for the Securities being herein called the "Closing Date"). The
Securities to be purchased by the Underwriters hereunder will be represented by
one or more global Securities which will be deposited by or on behalf of the
Trust with The Depository Trust Company ("DTC") or its designated custodian.
Delivery of the Securities shall be made by causing DTC to credit the Securities
to the account of the Underwriters at DTC, against payment by the Underwriters
of the purchase
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price thereof to or upon the order of the Trust in the manner and type of funds
specified in Schedule II.
The Trust and the Guarantor agree to have the certificates
representing the Securities available for checking in New York, New York, on the
business day prior to the Closing Date.
4. Covenants of the Guarantor and the Trust. Each of the Guarantor and
the Trust covenant and agree with the several Underwriters as follows:
(a) Each of the Guarantor and the Trust will use its best efforts to
cause the Registration Statement, if not effective at the Execution Time,
to become effective as promptly as possible. The Guarantor will notify you
immediately, and confirm such notice in writing, (i) when the Registration
Statement (including any amendments thereto) becomes effective, (ii) of any
request by the Commission for any amendment of or supplement to the
Registration Statement or the Final Prospectus or for any additional
information, (iii) of the issuance by the Commission of a Stop Order
suspending the effectiveness of the Registration Statement (including any
post-effective amendment thereto) or of the initiation, or the threatening,
of any proceedings therefor, (iv) of the receipt of any comments from the
Commission and (v) of the receipt by either the Trust or the Guarantor of
any notification with respect to the suspension of the qualification of the
Securities for sale in any jurisdiction or the initiation, or threatening,
of any proceeding for that purpose. If the Commission shall propose or
enter a Stop Order at any time, each of the Guarantor and the Trust will
make every reasonable effort to prevent the issuance of any such Stop Order
and, if issued, to obtain the withdrawal of such order as soon as possible.
Neither the Guarantor nor the Trust will file any amendment to the
Registration Statement or supplement (including the Final Prospectus or any
Preliminary Final Prospectus) to the Basic Prospectus before or after the
Effective Date unless the Guarantor or the Trust, as applicable, has
furnished you with a copy for your review prior to filing and will not file
any such proposed amendment or supplement to which you reasonably object.
(b) During the time when a prospectus relating to the Securities is
required to be delivered hereunder or under the 1933 Act or the
Regulations, the Guarantor and the Trust will comply with all requirements
imposed upon it by the 1933 Act and the Trust Indenture Act as now existing
and as hereafter amended, and by the Regulations promulgated under each of
the 1933 Act and the Trust Indenture Act, as from time to time in force, so
far as necessary to permit the continuance of sales of or dealing in the
Securities in accordance with the provisions thereof and the Final
Prospectus. If at any time when a prospectus relating to the Securities is
required to be delivered under the 1933 Act or the Regulations, any event
shall have occurred as a result of which, in the judgment of the Guarantor
and the Trust, you or your counsel, the Final Prospectus as then amended or
supplemented includes an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances
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under which they were made, not misleading, or if it shall be necessary at
any time to amend or supplement the Final Prospectus or Registration
Statement to comply with the 1933 Act, the Trust Indenture Act or the
Regulations promulgated thereunder, and the Guarantor and the Trust will
notify you promptly and prepare and file with the Commission an appropriate
amendment or supplement (in form and substance satisfactory to you) which
will correct such statement or omission and will use its best efforts to
have any amendment to the Registration Statement declared effective as soon
as possible and will deliver to the several Underwriters, without charge,
such number of copies thereof as may be reasonably requested by the
Underwriters; provided that the Guarantor and the Trust will promptly
notify you if such judgment has been reached by them.
(c) The Guarantor and the Trust will promptly deliver to you a copy of
the Registration Statement, including exhibits and all amendments thereto,
and the Guarantor and the Trust will promptly deliver without charge to you
such number of copies of the Basic Prospectus, any Preliminary Final
Prospectus, the Final Prospectus, the Registration Statement, and all
amendments of and supplements to such documents, if any, as may be
reasonably requested by the Underwriters.
(d) Each of the Guarantor and the Trust will endeavor in good faith,
in cooperation with you, to timely qualify the Securities for offering and
sale under the securities laws of such jurisdictions as you may designate
and to maintain such qualification in effect for so long as required for
the distribution thereof; provided that in no event shall either the
Guarantor or the Trust be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take action which would
subject it to general service of process in any jurisdiction where it is
not now so subject or to conduct its business in a manner in which it is
not currently so conducting its business.
(e) Each of the Guarantor and the Trust will make generally available
(within the meaning of Section 11(a) of the 1933 Act and Rule 158 of the
Regulations) to its security holders and to you as soon as practicable an
earnings statement which need not be audited but which shall satisfy the
provisions of Section 11(a) of the 1933 Act and Rule 158 of the
Regulations.
(f) Each of the Guarantor and the Trust, during the period when the
Final Prospectus is required to be delivered under the 1933 Act, will file
promptly all documents required to be filed with the Commission pursuant to
Section 13 or 14 of the 1934 Act and the Regulations promulgated
thereunder.
(g) During the period of one year after the date hereof, the Guarantor
and the Trust will furnish to you (i) as soon as publicly available, a copy
of each Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current
Report on Form 8-K, annual report to stockholders and definitive proxy
statement of the Guarantor and the Trust filed with the Commission under
the 1934 Act and the Regulations promulgated thereunder or mailed to
stockholders and (ii) from time to time, such
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other information concerning the Guarantor and the Trust as you may
reasonably request.
(h) Each of the Guarantor and the Trust will apply the proceeds from
the sale of the Securities as set forth under the caption "Use of Proceeds"
in the Final Prospectus.
(i) Prior to the Closing Date, the Guarantor and the Trust shall
furnish to you, as soon as they have been prepared, copies of any unaudited
interim consolidated financial statements of the Guarantor and its
subsidiaries, for any periods subsequent to the periods covered by the
financial statements appearing or incorporated by reference in the
Registration Statement and the Final Prospectus.
(j) The Securities have been approved for listing, subject to official
notice of issuance, on the New York Stock Exchange (the "NYSE").
(k) Each of the Guarantor and the Trust will comply with all
provisions of all undertakings contained in the Registration Statement.
(l) Each of the Guarantor and the Trust consent to the use of the
Final Prospectus or any amendment or supplement thereto by you and by all
dealers to whom the Securities may be sold, both in connection with the
offering or sale of the Securities and for such period of time thereafter
as the Final Prospectus is required by law to be delivered in connection
therewith.
(m) Prior to the Closing Date, the Guarantor and the Trust will not,
without the consent of the Underwriters, offer, sell or contract to sell,
or announce the offering of, shares of any class of capital stock of either
the Guarantor or the Trust (other than the Securities) which is ranked
prior as to the payment of dividends, or as to the distribution of assets
upon any liquidation, dissolution or winding up of either the Guarantor or
the Trust over shares of any other class of capital stock of either of the
Guarantor and the Trust.
5. Payment of Expenses. Whether or not the transactions contemplated
in this Agreement are consummated or this Agreement is terminated, each of the
Guarantor and the Trust hereby covenant and agree with the several Underwriters
that the Guarantor and the Trust will pay or cause to be paid the following: (i)
the fees, disbursements and expenses of the Guarantor's and the Trust's counsel
and accountants in connection with the registration of the Securities under the
1933 Act, the qualification of the Indenture and the Guarantee under the Trust
Indenture Act, and all other expenses in connection with the preparation,
printing and filing of the Registration Statement, the Basic Prospectus, any
Preliminary Final Prospectus, the Final Prospectus and amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Underwriters and dealers; (ii) all costs and expenses related to the issuance,
transfer and delivery of the Securities to the Underwriters, including any
transfer or other taxes payable thereon; (iii) the cost of printing or producing
this Agreement, any "blue sky" and legal investment memoranda and any other
documents in
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connection with the offering, purchase, sale and delivery of the Securities;
(iv) all expenses in connection with the qualification of the Securities for
offering and sale under state securities laws as provided in Section 4(d)
hereof, including the fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky and legal
investment memoranda; (v) any fees charged by securities rating agencies for
rating the Securities and the Subordinated Debentures; (vi) any filing fees
incident to any required reviews by the National Association of Securities
Dealers, Inc. (the "NASD") of the terms of the sale of the Securities; (vii) the
costs and expenses of any qualified independent underwriter which may be
required by the rules and regulations of the NASD; (viii) all costs and expenses
incident to listing the Securities on the NYSE or other national securities
exchange; (ix) the cost of preparing certificates for the Securities and the
cost and charges of any Trustee and its nominee for acting as a depository for
the Securities and otherwise effecting any book entry ownership system for the
Securities; (x) the cost and charges of the Trustee, any transfer agent,
calculation agent, registrar or disbursing agent; and (xi) all other costs and
expenses incident to the performance of the Guarantor's and the Trust's
obligations hereunder which are not otherwise specifically provided for in this
Section. It is understood, however, that, except as provided in this Section and
Sections 6 and 7 hereof, the Underwriters will pay all of their own costs and
expenses, including the fees of their counsel, transfer taxes on resale of any
of the Securities by them and any advertising expenses connected with any offers
they may make.
If this Agreement is entered into and the purchase of Securities by
the Underwriters pursuant to this Agreement is not consummated because any
condition to the obligations of the Underwriters set forth in Section 6 hereof
is not satisfied, because of any termination pursuant to Section 11(b) hereof or
because of any refusal, inability or failure on the part of the Guarantor or the
Trust to perform any agreement herein or comply with any provision hereof other
than by reason of a default by the Underwriters, the Guarantor or the Trust will
reimburse the Underwriters severally upon demand for all out-of-pocket expenses
(including reasonable fees and disbursements of counsel) that shall have been
incurred by them in connection with the proposed purchase and sale of the
Securities.
6. Conditions to the Obligations of the Underwriters. The obligations
of the several Underwriters to purchase and pay for the Securities shall be
subject to the continuing accuracy of the representations and warranties on the
part of each of the Guarantor and the Trust contained herein as of the date
hereof and the Closing Date, to the accuracy of the statements of the Guarantor
and the Trust made in any certificates delivered pursuant to the provisions
hereof, to the performance by each of the Guarantor and the Trust of its
obligations hereunder and to the following additional conditions:
(a) If the Registration Statement has not become effective prior to
the Execution Time, the Registration Statement shall have become effective
not later than 6:00 p.m., New York City time, on the date of this Agreement
or such later date and time as shall be consented to, in writing, by you,
and, if filing of the Final Prospectus, or any supplement thereto, is
required pursuant to Rule 424(b), the Final Prospectus, and any such
supplement, shall have been filed in the manner and within the time period
required by Rule 424(b).
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(b) At the Closing Date (i) no Stop Order suspending the effectiveness
of the Registration Statement or any part thereof shall have been issued
under the 1933 Act, and no proceeding under the 1933 Act or the 1934 Act
therefor shall have been initiated or threatened by the Commission, or,
with respect to the filing of any Form 8-A under the 1934 Act, by any
national securities exchange; and all requests for additional information
on the part of the Commission shall have been complied with or such
requests shall have been otherwise satisfied; (ii) the rating assigned by
any nationally recognized securities rating agency to any debt securities,
preferred stock or other obligations of the Guarantor and the Trust as of
the date of this Agreement shall not have been lowered since the execution
of this Agreement and no such agency shall have publicly announced since
the execution of this Agreement that it has under surveillance or review,
with possible negative implications, its rating of any of the debt
securities or preferred stock of either of the Guarantor or the Trust; and
(iii) since the respective dates as of which information is given in the
Registration Statement and the Final Prospectus, except as otherwise stated
therein or contemplated thereby, there shall not have been any material
adverse change in, or any adverse development which materially affects, the
financial condition, results of operations, business or properties of
either of the Guarantor or the Trust or their respective subsidiaries, the
effect of which is in your reasonable judgment so material and adverse as
to make it impracticable or inadvisable to proceed with the public offering
or the delivery of the Securities on the terms and in the manner
contemplated in the Final Prospectus.
(c) At the Closing Date, you shall have received the opinion of
Cadwalader, Wickersham & Taft, counsel for the Guarantor and the Trust,
dated the date of delivery and substantially in the form set forth in
Schedule III hereto, addressed to the Underwriters and in form and scope
reasonably satisfactory to Underwriters' Counsel.
(d) At the Closing Date, you shall have received the opinion of Mark
E. Lehman, Esq., Senior Managing Director of the Guarantor's Legal &
Compliance Department, dated the date of delivery and substantially in the
form set forth in Schedule IV, addressed to the Underwriters and in form
and scope reasonably satisfactory to Underwriters' Counsel.
(e) At the Closing Date, you shall have received a certificate of the
Chief Financial Officer or the Controller of each of the Guarantor and the
Trust, dated the date of delivery, to the effect that the conditions set
forth in subsections (a) and (b) of this Section 6 have been satisfied,
that as of the date hereof and at the date of delivery, the representations
and warranties of each of the Guarantor and the Trust set forth in Section
1 hereof are accurate, and that at the date of delivery, the obligations of
each of the Guarantor and the Trust to be performed hereunder on or prior
thereto have been duly performed in all material respects.
(f) At each of the Execution Time and the Closing Date, you shall have
received a letter (which may be an update or "bringdown" letter) from
Deloitte &
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Touche LLP, independent public accountants for the Guarantor and its
subsidiaries, and the Trust dated the date of delivery, substantially in
the form set forth in Schedule V hereto, addressed to the Underwriters and
in form and scope reasonably satisfactory to you.
(g) The Underwriters shall have received from Kramer Levin Naftalis &
Frankel LLP ("Underwriters' Counsel") an opinion, dated the Closing Date,
with respect to the issuance and sale of the Securities, the Registration
Statement, the Final Prospectus, and any amendments or supplements to the
Registration Statement or Final Prospectus and such other related matters,
as you may reasonably require, and either the Trust or the Guarantor shall
have furnished to Underwriters' Counsel such documents as they request for
the purpose of enabling them to pass upon such matters.
(h) All proceedings taken in connection with the offering and sale of
the Securities as contemplated herein shall be satisfactory in form and
scope to you and to Underwriters' Counsel, and, prior to the Closing Date,
either the Trust or the Guarantor shall have furnished to you such further
information, certificates and documents as you may reasonably request.
(i) The NASD, upon review of the terms of the public offering of the
Securities, shall have no objections to the fairness of the underwriting
terms and arrangements of the offering.
(j) At the Closing Date, Form 8-A under the 1934 Act (the "Form 8-A")
shall have become effective.
(k) Richards Layton & Finger, P.A., special Delaware counsel to the
Guarantor and the Trust, shall have furnished to the several Underwriters
an opinion dated the Closing Date, substantially in the form set forth in
Schedule V hereto, addressed to the several Underwriters and in form and
scope reasonably satisfactory to Underwriters' Counsel.
(l) Weil, Gotshal & Manges LLP, tax counsel for the Guarantor, shall
have furnished to the several Underwriters an opinion, dated the Closing
Date, to the effect that such firm confirms its opinion set forth in the
Final Prospectus under the caption "Certain Federal Income Tax
Consequences."
(m) The Guarantor shall have furnished to the several Underwriters
such further information, certificates and documents as they may reasonably
request prior to the Closing Date.
If any of the conditions specified in this Section 6 shall not have
been fulfilled when and as provided in this Agreement, or if any of the
opinions and certificates mentioned above or elsewhere in this Agreement
shall not be reasonably satisfactory in form and substance to the several
Underwriters and counsel for the several
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Underwriters, this Agreement and all obligations of the several
Underwriters, hereunder may be cancelled at, or at any time prior to, the
Closing Date by the several Underwriters. Notice of such cancellation shall
be given to the Guarantor and the Trust in writing or by telephone or
telegraph confirmed in writing.
7. Indemnification.
(a) Each of the Guarantor and the Trust agree, jointly and severally,
to indemnify and hold harmless each Underwriter and each person, if any,
who controls any Underwriter within the meaning of Section 15 of the 1933
Act or Section 20(a) of the 1934 Act, against any and all losses,
liabilities, claims, damages and out-of-pocket expenses whatsoever
(including but not limited to attorneys' fees and any and all expenses
whatsoever reasonably incurred in investigating, preparing or defending
against any litigation, commenced or threatened, or any claim whatsoever,
and any and all amounts paid in settlement of any claim or litigation), to
which you or any such person may become subject under the 1933 Act, the
1934 Act or otherwise, insofar as such losses, liabilities, claims, damages
or expenses (or actions in respect thereof) arise out of or are based upon
(i) any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or any related Basic Prospectus,
Preliminary Final Prospectus, or Final Prospectus, or in any supplement
thereto or amendment thereof, 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 (in the case
of the Basic Prospectus, any Preliminary Final Prospectus or the Final
Prospectus, in light of the circumstances under which they were made) not
misleading or (ii) any breach of any representation, warranty, covenant or
agreement of the Guarantor or the Trust contained in this Agreement;
provided, however, that neither the Guarantor nor the Trust will be liable
to any Underwriter or any person so controlling such Underwriter in any
such case to the extent, but only to the extent, that any such loss,
liability, claim, damage or expense arises out of or is based upon (x) any
such untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to either the Guarantor or the Trust by or on behalf
of any Underwriter through you expressly for use therein, such written
information being as set forth in penultimate sentence of subsection (b)
below, or (y) any failure of such Underwriter to deliver the Final
Prospectus to a purchaser of Securities as required by applicable law. This
indemnity agreement will be in addition to any liability which the
Guarantor or the Trust may otherwise have including under this Agreement.
(b) Each Underwriter severally, and not jointly, agrees to indemnify
and hold harmless each of the Guarantor and the Trust, each of its
directors, each of its officers who shall have signed the Registration
Statement, and each other person, if any, who controls either of the
Guarantor or the Trust within the meaning of Section 15 of the 1933 Act or
Section 20(a) of the 1934 Act against any losses, liabilities, claims,
damages and expenses whatsoever (including but not limited to attorneys'
fees and any and all out-of-pocket expenses whatsoever reasonably incurred
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in investigating, preparing or defending against any litigation, commenced
or threatened, or any claim whatsoever and any and all amounts paid in
settlement of any claim or litigation), joint and several, to which they or
any of them may become subject under the 1933 Act, the 1934 Act or
otherwise, insofar as such losses, liabilities, claims, damages or expenses
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, or any related Basic Prospectus, Preliminary Final
Prospectus or Final Prospectus, or in any amendment thereof or supplement
thereto, 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 (in the case of a Basic Prospectus,
Preliminary Final Prospectus or Final Prospectus, in light of the
circumstances under which they were made) not misleading, in each case to
the extent, but only to the extent, that any such loss, liability, claim,
damage or expense arises out of or is based upon any such untrue statement
or alleged untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with written information furnished to
either of the Guarantor or the Trust by or on behalf of such Underwriter
through you expressly for use therein. For all purposes of this Agreement,
the identification of the name of, and the number of shares of Preferred
Securities to be purchased by, each of the Underwriters, amounts of the
selling concession and reallowance, and the stabilization language set
forth under the heading "Underwriting" in the Final Prospectus constitute
the only information furnished in writing by or on behalf of any
Underwriter expressly for inclusion in any Basic Prospectus or Preliminary
Final Prospectus, the Final Prospectus, or the Registration Statement (as
from time to time amended or supplemented), or any amendment or supplement
thereto. This indemnity will be in addition to any liability which any
Underwriter may otherwise have, including under this Agreement; provided,
however, that in no case shall any Underwriter be liable or responsible for
any amount in excess of the underwriting discounts and commissions received
by such Underwriter.
(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 each party
against whom indemnification is to be sought in writing of the commencement
thereof (but the failure so to notify an indemnifying party shall not
relieve it from any liability which it may have under this Section 7 except
to the extent that it has been prejudiced in any material respect by such
failure or from any liability which it may have otherwise). In case any
such action is brought against any indemnified party, and it notifies an
indemnifying party of the commencement thereof, the indemnifying party will
be entitled to participate therein, and to the extent it may elect by
written notice delivered to the indemnified party promptly after receiving
the aforesaid notice from such indemnified party, to assume the defense
thereof with counsel satisfactory to such indemnified party.
Notwithstanding the foregoing, the indemnified party or parties shall have
the right to employ its or their own counsel in any such case, but the fees
and expenses of such counsel shall be at the expense of such indemnified
party or parties unless (i) the employment of such
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counsel shall have been authorized in writing by one of the indemnifying
parties in connection with the defense of such action, (ii) the
indemnifying parties shall not have employed counsel to have charge of the
defense of such action within a reasonable time after notice of
commencement of the action, or (iii) such indemnified party or parties
shall have reasonably concluded that there may be defenses available to it
or them which are different from or additional to those available to one or
all of the indemnifying parties (in which case the indemnifying parties
shall not have the right to direct the defense of such action on behalf of
the indemnified party or parties, it being understood, however, that the
indemnifying party shall not, in connection with any one such claim, action
or proceeding or separate but substantially similar or related claims,
actions or proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the fees and expenses
of more than one separate firm (together with appropriate local counsel) at
any time for the indemnified party or parties, which firm shall be
designated in writing by the indemnified party or parties, unless such
indemnified party or parties shall have reasonably concluded that there may
be defenses available to it or them which are different from or additional
to those available to one or all of the other indemnified party or parties
(in which case the indemnifying party shall be liable for the fees and
expenses of only one additional separate firm (together with appropriate
local counsel) for such indemnified party or parties at any time)), in any
of which events such fees and expenses shall be borne by the indemnifying
parties. Anything in this Section 7 to the contrary notwithstanding, an
indemnifying party shall not be liable for any settlement of any claim or
action effected without its written consent; provided, however, that such
consent was not unreasonably withheld.
8. Contribution. In order to provide for contribution in circumstances
in which the indemnification provided for in Section 7 hereof is for any reason
held to be unavailable from the Trust or the Guarantor or is insufficient to
hold harmless a party indemnified thereunder, the Guarantor and the Trust, on
one hand, and the Underwriters, on the other hand, shall contribute to the
aggregate losses, claims, damages, liabilities and out-of-pocket expenses of the
nature contemplated by such indemnification provision (including any
investigation, legal and other expenses incurred in connection with, and any
amount paid in settlement of, any action, suit or proceeding or any claims
asserted, but after deducting in the case of losses, claims, damages,
liabilities and expenses suffered by the Guarantor and the Trust, any
contribution received by the Guarantor and the Trust from persons, other than
the Underwriters, who may also be liable for contribution, including persons who
control the Guarantor or the Trust within the meaning of Section 15 of the 1933
Act or Section 20(a) of the 1934 Act, officers of the Guarantor and the Trust
who signed the Registration Statement and directors of the Guarantor and the
Trust) to which the Guarantor and the Trust and one or more of the Underwriters
may be subject, in such proportions as is appropriate to reflect the relative
benefits received by the Guarantor and the Trust, on the one hand, and the
Underwriters, on the other hand, from the offering of the Securities or, if such
allocation is not permitted by applicable law or indemnification is not
available as a result of the indemnifying party not having received notice as
provided in Section 7 hereof, in such proportion as is appropriate to reflect
not only the relative benefits referred to above but also the relative fault of
the Guarantor and the Trust, on the one hand, and the Underwriters, on
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the other hand, in connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative benefits received by the
Guarantor and the Trust, on the one hand, and the Underwriters, on the other
hand, shall be deemed to be in the same proportion as the total proceeds from
the offering (net of underwriting discounts and commissions but before deducting
expenses) received by the Guarantor and the Trust, bear to the underwriting
discounts and commissions received by the Underwriters, respectively, in each
case as set forth in the table on the cover page of the Final Prospectus. The
relative fault of the Guarantor and the Trust, on the one hand, and of the
Underwriters, on the other hand, 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 Guarantor and the Trust, on the one hand, or the
Underwriters, on the other hand, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Guarantor and the Trust, on the one hand, and the Underwriters, on
the other hand, agree that it would not be just and equitable if contribution
pursuant to this Section 8 were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other method
of allocation which does not take account of the equitable considerations
referred to above. Notwithstanding the provisions of this Section 8, (i) in no
case shall any Underwriter be liable or responsible for any amount in excess of
the underwriting discounts and commissions applicable to the Securities
purchased by such Underwriter hereunder, and (ii) no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 8, each person, if any, who
controls an Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20(a) of the 1934 Act shall have the same rights to contribution as such
Underwriter, and each person, if any, who controls the Guarantor or the Trust
within the meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934
Act, each officer of the Guarantor and the Trust who shall have signed the
Registration Statement and each director of the Guarantor and the Trust shall
have the same rights to contribution as the Guarantor and the Trust, subject in
each case to clauses (i) and (ii) of the preceding sentence of this Section 8.
Any party entitled to contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in respect of
which a claim for contribution may be made against another party or parties
under this Section 8, notify such party or parties from whom contribution may be
sought, but the omission to so notify such party or parties shall not relieve
the party or parties from whom contribution may be sought from any obligation it
or they may have under this Section 8 or otherwise. No party shall be liable for
contribution with respect to any action or claim settled without its consent;
provided, however, that such consent was not unreasonably withheld.
9. Default by an Underwriter.
(a) If any Underwriter or Underwriters shall default at the Closing
Date in its or their obligation to purchase the Securities hereunder and if
the number of shares of the Securities to which such default relates does
not (after giving effect to arrangements, if any, made by you pursuant to
subsection (b) below) exceed in the aggregate
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10% of the total number of shares of the Securities that all Underwriters
have agreed to purchase hereunder, then such shares of the Securities to
which the default relates shall be purchased by the non-defaulting
Underwriters in proportion to their respective commitments hereunder.
(b) If such default relates to more than 10% of the total number of
shares of the Securities that all the Underwriters have agreed to purchase,
you may in your discretion arrange for yourself or for another party or
parties (including any other non-defaulting Underwriter or Underwriters who
so agree) to purchase the shares of the Securities to which such default
relates on the terms contained herein. If within five calendar days after
such a default you do not arrange for the purchase of the shares of the
Securities to which such default relates as provided in this Section 9,
this Agreement shall thereupon terminate, without liability on the part of
the Guarantor or the Trust with respect thereto (except in each case as
provided in Sections 5, 7 and 8 hereof) or the several Underwriters, but
nothing in this Agreement shall relieve a defaulting Underwriter or
Underwriters of its or their liability, if any, to the other several
Underwriters and the Guarantor or the Trust for damages occasioned by its
or their default hereunder.
(c) If the shares of the Securities to which the default relates are
to be purchased by the non-defaulting Underwriters, or are to be purchased
by another party or parties as aforesaid, you or the Guarantor shall have
the right to postpone the Closing Date for a period, not exceeding five
business days, in order to effect whatever changes may thereby be made
necessary in the Registration Statement or the Final Prospectus or in any
other documents and arrangements, and each of the Guarantor and the Trust
agrees to file promptly any amendment or supplement to the Registration
Statement or the Final Prospectus which, in the opinion of Underwriters'
Counsel, may thereby be made necessary or advisable. The term "Underwriter"
as used in this Agreement shall include any party substituted under this
Section 9 with like effect as if it had originally been a party to this
Agreement with respect to such Securities.
10. Survival of Representations and Agreements. All representations
warranties, covenants and agreements of the Underwriters and the Guarantor and
the Trust contained in this Agreement, including the representations and
warranties contained in Section 1, the agreements contained in Sections 4 and 5,
the indemnity agreements contained in Section 7 and the contribution agreements
contained in Section 8, shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of any Underwriter or any
controlling person thereof or by or on behalf of the Guarantor and the Trust,
any of its officers and directors or any controlling person thereof, and shall
survive delivery of and payment for the Securities to and by the several
Underwriters. The representations contained in Section 1 and the agreements
contained in Sections 5, 7, 8, 10 and 11 hereof shall survive the termination of
this Agreement including pursuant to Section 11 hereof.
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<PAGE>
11. Effective Date of this Agreement and Termination.
(a) This Agreement shall become effective as of the time, after the
Registration Statement becomes effective, of the release by you for
publication of the first newspaper advertisement which is subsequently
published relating to the Securities or the time, after the Registration
Statement becomes effective, when the Securities are first released by you
for offering by you or dealers by letter or telegram, whichever shall first
occur. You or the Guarantor and the Trust may prevent this Agreement from
becoming effective without liability of any party to any other party,
except as noted below in this Section 11, by giving the notice indicated in
Section 11(c) before the time this Agreement becomes effective.
(b) You shall have the right to terminate this Agreement at any time
prior to the Closing Date if, after the date hereof: (i) any domestic or
international event or act or occurrence has materially disrupted, or in
your opinion will in the immediate future materially disrupt, the
securities markets; (ii) a general suspension of, or a general limitation
on prices for, trading in securities on the NYSE or the American Stock
Exchange or in the over-the-counter market; (iii) a banking moratorium
shall have been declared either by Federal or New York State authorities;
(iv) there shall have occurred any outbreak or material escalation of
hostilities or other calamity or crisis the effect of which on the
financial markets of the United States or on the United States is such as
to make it, in the judgment of the Underwriters, impracticable to market
the Securities; (v) any restriction materially adversely affecting the
distribution of the Securities which was not in effect on the date hereof
shall have become effective; or (vi) there shall have been such change in
the market for the securities of either the Trust or the Guarantor or
securities in general or in political, financial or economic conditions as
in your judgment makes it inadvisable to proceed with the offering, sale
and delivery of the Securities on the terms contemplated by the Final
Prospectus.
(c) Any notice of termination pursuant to this Section 11 shall be by
telephone, telex, or telegraph, confirmed in writing by letter.
12. Notice. All communications hereunder, except as may be otherwise
specifically provided herein, shall be in writing and, if sent to you shall be
mailed, delivered, or telexed or telecopied and confirmed in writing, to such
Underwriter c/o Bear, Stearns & Co. Inc., 245 Park Avenue, New York, New York
10167, Attention: Corporate Finance Department; if sent to the Guarantor or the
Trust, shall be mailed, delivered, or telexed or telecopied and confirmed in
writing to the Guarantor, 245 Park Avenue, New York, NY 10167, Attention: Chief
Financial Officer.
13. Parties. This Agreement shall inure solely to the benefit of, and
shall be binding upon, the several Underwriters, the Guarantor and the Trust and
the controlling persons, directors, officers, employees and agents referred to
in Sections 7 and 8, and their respective successors and assigns, and no other
person shall have or be construed to have any legal or equitable right, remedy
or claim under or in respect of or by virtue of this
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<PAGE>
Agreement or any provision herein contained. The term "successors and assigns"
shall not include a purchaser, in its capacity as such, of Securities from any
of the Underwriters. Notwithstanding anything contained in this Agreement to the
contrary, all of the obligations of the Underwriters hereunder are several and
not joint.
14. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
15. Construction. This Agreement shall be construed in accordance with
the laws of the State of New York without regard to principles of conflict of
law.
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<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us four counterparts hereof, whereupon this
letter and your acceptance shall represent a binding agreement among the Trust,
the Guarantor and the several Underwriters.
Very truly yours,
BEAR STEARNS CAPITAL TRUST II
By: THE BEAR STEARNS COMPANIES
INC., AS DEPOSITOR
By: /s/ William J. Montgoris
--------------------------------
William J. Montgoris
Chief Operating Officer
THE BEAR STEARNS COMPANIES INC.
By: /s/ William J. Montgoris
--------------------------------
William J. Montgoris
Chief Operating Officer
The foregoing Agreement is hereby
confirmed and accepted as of the date
first above written on behalf of
themselves and as Representatives of
the several underwriters listed in
Schedule I hereto.
BEAR, STEARNS & CO. INC.
LEHMAN BROTHERS INC.
MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED
MORGAN STANLEY & CO. INCORPORATED
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
SALOMON SMITH BARNEY INC
By: BEAR, STEARNS & CO. INC.
By: /s/ Samuel L. Molinaro Jr.
--------------------------------
Samuel L. Molinaro Jr.
Chief Financial Officer and
Senior Vice President - Finance
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<PAGE>
SCHEDULE I
Number of Shares
of Securities
Underwriters to be Purchased
- ------------ ---------------
Bear, Stearns & Co. Inc................................................1,411,200
Lehman Brothers Inc....................................................1,410,800
Merrill Lynch, Pierce, Fenner & Smith Incorporated.....................1,410,800
Morgan Stanley & Co. Incorporated......................................1,410,800
PaineWebber Incorporated...............................................1,410,800
Prudential Securities Incorporated.....................................1,410,800
Salomon Smith Barney Inc...............................................1,410,800
ABN AMRO Incorporated....................................................108,000
A.G. Edwards & Sons, Inc. ...............................................108,000
BT Alex. Brown Incorporated..............................................108,000
CIBC Oppenheimer Corp....................................................108,000
Donaldson, Lufkin & Jenrette Securities Corporation......................108,000
A.G. Edwards & Sons, Inc.................................................108,000
EVEREN Securities, Inc...................................................108,000
First Chicago Capital Markets, Inc.......................................108,000
Fleet Securities, Inc....................................................108,000
Furman Selz LLC..........................................................108,000
Goldman, Sachs & Co......................................................108,000
NationsBanc Montgomery Securities LLC....................................108,000
SG Cowen Securities Corporation..........................................108,000
Warburg Dillon Read LLC..................................................108,000
Advest, Inc...............................................................30,000
J.C. Bradford & Co........................................................30,000
Blaylock & Partners, L.P..................................................30,000
Craigie Incorporated......................................................30,000
Crowell, Weedon & Co......................................................30,000
Dain Rauscher Incorporated................................................30,000
Fahnestock & Co. Inc......................................................30,000
Fidelity Capital Markets
A Division of National Financial Services Corporation...................30,000
Fifth Third/The Ohio Corporation..........................................30,000
First Albany Corporation..................................................30,000
First of Michigan Corporation.............................................30,000
Interstate/Johnson Lane Corporation.......................................30,000
Legg Mason Wood Walker, Incorporated......................................30,000
Muriel Siebert & Co., Inc.................................................30,000
McDonald & Company Securities, Inc........................................30,000
Morgan Keegan & Company, Inc..............................................30,000
Olde Discount Corporation.................................................30,000
Piper Jaffray Inc.........................................................30,000
II-1
<PAGE>
The Robinson-Humphrey Company, LLC........................................30,000
Stephens Inc..............................................................30,000
TD Securities (USA) Inc...................................................30,000
Tucker Anthony Incorporated...............................................30,000
Utendahl Capital Partners, L.P............................................30,000
Wheat First Securities, Inc...............................................30,000
------
Total.......................................................12,000,000
==========
II-2
<PAGE>
SCHEDULE II
Registration Statement No. 333-66861; 333-66861-04
Title of Securities
7 1/2% Trust Issued Preferred Securities
Number of Securities:
12,000,000 shares
Purchase Price by Underwriters per Security:
$25.00
Underwriters' Compensation per Security:
$.7875
Specified Funds for Payment of Purchase Price:
Immediately available funds by wire transfer
Amount of Common Securities:
360,000 shares
Trust Agreement:
Trust Agreement, dated as of November 4, 1998, between The Bear Stearns
Companies Inc. and the trustees named therein, as amended and restated by
the Amended and Restated Trust Agreement, to be dated as of December 16,
1998, among The Bear Stearns Companies Inc., as Depositor, The Chase
Manhattan Bank, as Property Trustee, and The Chase Manhattan Bank Delaware,
as Delaware Trustee, the administrators named therein and the holders, from
time to time, of the Securities and the Common Securities.
Designation of Subordinated Debentures:
7 1/2% Junior Subordinated Deferrable Interest Debentures due 2028
II-3
<PAGE>
Aggregate Principal Amount of Subordinated Debentures:
$309,000,000
Indenture:
Indenture, dated as of December 16, 1998, between The Bear Stearns
Companies Inc. and The Chase Manhattan Bank, as Trustee and the First
Supplemental Indenture, dated as of December 16, 1998, between The Bear
Stearns Companies Inc. and The Chase Manhattan Bank, as Trustee.
Guarantee:
Guarantee Agreement, dated as of December 16, 1998, between The Bear
Stearns Companies Inc. as Guarantor, and The Chase Manhattan Bank, as
Guarantee Trustee.
Closing Date:
December 16, 1998 at 10:00 a.m. (New York City time)
Closing Location:
Kramer Levin Naftalis & Frankel LLP
919 Third Avenue
New York, New York 10022
II-4
<PAGE>
SCHEDULE III
(i) Each of the Guarantor, Bear, Stearns & Co. Inc. ("Bear
Stearns"), Bear, Stearns Securities Corp. ("BSSC"), Bear Stearns
International Limited ("BSIL") and Bear Stearns Holdings Limited
("BSHL") is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation, and has
all requisite corporate power and authority to own, lease and operate
its properties and to carry on its business as described in the Final
Prospectus. Each of the Guarantor, Bear Stearns, BSSC, BSIL and BSHL
is duly qualified to transact business and is in good standing as a
foreign corporation in each jurisdiction in which such qualification
is required, whether by reason of ownership or leasing of property or
conduct of business, except where the failure to so qualify would not
have a material adverse effect. All of the outstanding shares of
capital stock of Bear Stearns, BSSC, BSIL and BSHL is owned of record
and, to the best of our knowledge, beneficially by the Guarantor and
by Bear Stearns, respectively, in each case free and clear, to the
best of our knowledge, of any lien, security interest or other
encumbrance.
(ii) The execution, delivery and performance by the Guarantor of
the Indenture, the Guarantee and the Trust Agreement and the
consummation by the Guarantor of the transactions contemplated thereby
have been duly authorized by all necessary corporate action on the
part of the Guarantor. Each of the Indenture, the Guarantee and the
Trust Agreement has been duly and validly executed and delivered by
the Guarantor and (assuming the due authorization, execution and
delivery thereof by the Trustee) constitutes the legal, valid and
binding obligation of the Guarantor, enforceable against it in
accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally and
subject, as to enforceability, to general principles of equity,
including principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a proceeding
at law or in equity).
(iii) The Guarantor has all requisite corporate power to
authorize, create and issue the Subordinated Debentures, and the
Subordinated Debentures, when duly executed by the Guarantor,
authenticated by the Debenture Trustee pursuant to the terms of the
Indenture, and sold and delivered by the Guarantor pursuant to the
Indenture, will be duly authorized and legally issued and will
constitute binding obligations of the Guarantor entitled to the
benefits of the Indenture in accordance with the terms of such
Subordinated Debentures, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally and subject, as to
enforceability, to general principles of equity, including principles
of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity).
The statements in the Final Prospectus insofar as they purport to
summarize certain provisions of
III-1
<PAGE>
documents specifically referred to therein, are accurate summaries in
all material respects.
(iv) The Guarantor has all requisite corporate power and
authority to execute and deliver the Underwriting Agreement and to
perform its obligations thereunder. The execution, delivery and
performance by the Guarantor of the Underwriting Agreement and the
consummation by the Guarantor of the transactions contemplated thereby
have been duly authorized by all necessary corporate action on the
part of the Guarantor. The Underwriting Agreement has been duly and
validly executed and delivered by the Guarantor and (assuming the due
authorization, execution and delivery by the other parties hereto),
constitutes the legal, valid and binding obligation of the Guarantor,
enforceable against it in accordance with its terms, subject to the
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally and subject, as to enforceability, to
general principles of equity, including principles of commercial
reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity), and except
to the extent that rights to indemnification and contribution
thereunder may be limited by federal or state securities laws or
public policy relating thereto.
(v) The execution and delivery of the Underwriting Agreement, the
Indenture, the Guarantee and the Trust Agreement, the consummation of
the transactions contemplated thereby and compliance by the Guarantor
with any of the provisions thereof will not (i) conflict with or
violate any of the terms, conditions or provisions of the Certificate
of Incorporation or By-Laws of the Guarantor, (ii) conflict with, or
result in a breach of any of the terms of, or constitute a default (or
an event which with notice or lapse of time, or both, would constitute
a default) or require consent under, or result in imposition of, any
lien or encumbrance upon any property or assets of the Guarantor
pursuant to the terms of, any material document, agreement or other
instrument of which we are aware to which the Guarantor is a party or
by which it is bound, (iii) conflict with or violate any New York,
Delaware corporate or federal law or regulation (other than federal
and state securities or blue sky-laws, as to which we express no
opinion in this sentence), or (iv) conflict with or violate any
judgment, writ, injunction, decree, order or ruling of any court or
governmental authority binding on the Guarantor of which we are aware.
No consent, approval, waiver, license or authorization or other action
by or filing with any New York, Delaware corporate or federal
governmental authority is required in connection with the execution
and delivery by the Guarantor of the Underwriting Agreement, the
Indenture, the Guarantee, and the Trust Agreement or the consummation
by the Guarantor of the transactions contemplated thereby except for
those that (i) may be required by Rule 424(b) promulgated under the
1933 Act, (ii) may be required under federal and state
III-2
<PAGE>
securities or blue sky laws, as to which we express no opinion or
(iii) have been made under the 1933 Act or the Trust Indenture Act.
(vi) Neither the Trust nor the Guarantor is or, after giving
effect to the offering and sale of the Securities, will be an
"investment company" or an entity "controlled" by an "investment
company", as such terms are defined in the Investment Company Act.
(vii) The Registration Statement, as of its effective date, and
the Final Prospectus, as of its issue date and as of the date hereof,
complied and comply as to form in all material respects with the
requirements of the 1933 Act and the Trust Indenture Act and the rules
and regulations thereunder (except that no opinion is expressed herein
with respect to the financial statements and notes thereto, the
financial statement schedules and the other financial, statistical and
accounting data included or incorporated by reference therein or that
should have been included therein).
(viii) To the best of our knowledge, based upon telephonic
confirmation from the Commission, the Registration Statement was
declared effective under the 1933 Act and, to the best of our
knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings therefor
have been initiated or threatened by the Commission. Any required
filing of the Basic Prospectus, any Preliminary Final Prospectus and
the Final Prospectus, and any amendments thereto, pursuant to Rule
424(b) has been made in the manner and within the time period required
by Rule 424(b).
(ix) To the best of our knowledge, based on telephone
confirmation from the Commission, the Indenture and the Guarantee have
been qualified under the Indenture Act.
We have participated in conferences with directors, officers and
other representatives of the Guarantor, representatives of the Underwriters
and representatives of Kramer Levin Naftalis & Frankel LLP, counsel for the
Underwriters, at which conferences the contents of the Registration
Statement or the Final Prospectus and related matters were discussed, and,
although we have not independently verified and are not passing upon and
assume no responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Final Prospectus,
no facts have come to our attention that lead us to believe that the
Registration Statement, on the effective date thereof, contained or
contains an untrue statement of a material fact or omitted or omits to
state a material fact required to be stated therein or necessary to make
the statements contained therein, in light of the circumstances under which
they were made, not misleading (it being understood that we express no view
with respect to the financial statements and notes thereto, the financial
statement schedules and the other financial, statistical and accounting
data included or incorporated by reference in the Registration Statement or
the Final Prospectus).
III-3
<PAGE>
SCHEDULE IV
To the best of my knowledge, there are no legal or governmental
proceedings pending or threatened that are required to be disclosed in the Final
Prospectus, other than those disclosed therein, and there is no pending legal or
governmental proceeding to which the Guarantor or any subsidiary of the
Guarantor is a party or of which any of their property is the subject that is
not described in the Final Prospectus, including ordinary routine litigation
incidental to the business, which, if adversely decided, will have a material
adverse effect upon the operations, business or assets of the Guarantor and its
subsidiaries considered as one enterprise.
IV-1
<PAGE>
SCHEDULE V
(i) The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Business Trust
Act, and all filings required under the laws of the State of Delaware
with respect to the creation and valid existence of the Trust as a
business trust have been made.
(ii) Under the Delaware Business Trust Act and the Trust
Agreement, the Trust has the trust power and authority to own property
and conduct its business, all as described in the Final Prospectus.
(iii) The Trust Agreement constitutes a valid and binding
obligation of the Guarantor and the Trustees, and is enforceable
against the Guarantor and the Trustees, in accordance with its terms,
subject to the effect upon the Trust Agreement of (i) bankruptcy,
insolvency, moratorium, receivership, reorganization, liquidation,
fraudulent conveyance or transfer and other similar laws relating to
or affecting the rights and remedies of creditors generally, (ii)
principles of equity, including applicable law relating to fiduciary
duties (regardless of whether considered and applied in a proceeding
in equity or at law), and (iii) the effect of applicable public policy
on the enforceability of provisions relating to indemnification or
contribution.
(iv) Under the Delaware Business Trust Act and the Trust
Agreement, the Trust has the trust power and authority to (a) execute
and deliver this Agreement and to perform its obligations hereunder
and (b) issue and perform its obligations under the Securities and the
Common Securities.
(v) Under the Delaware Business Trust Act and the Trust
Agreement, the execution and delivery by the Trust of this Agreement
and the performance by the Trust of its obligations hereunder, have
been duly authorized by all necessary trust action on the part of the
Trust.
(vi) The Securities have been duly authorized by the Trust
Agreement and duly and validly issued and, subject to the
qualifications set forth herein, are fully paid and nonassessable
undivided beneficial interests in the assets of the Trust and are
entitled to the benefits provided by the Trust Agreement; the holders
of the Securities (the "Securityholders"), as beneficial owners of the
Trust, will be entitled to the same limitation of personal liability
extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware; provided
that such counsel may note that the Securityholders may be obligated,
pursuant to the Trust Agreement, to (a) provide indemnity and/or
security in connection with and pay taxes or governmental charges
arising from transfers or exchanges of Securities certificates and the
issuance of replacement Securities certificates and (b) provide
security and indemnity in connection with requests of or
V-1
<PAGE>
directions to the Property Trustee (as defined in the Trust Agreement)
to exercise its rights and remedies under the Trust Agreement.
(vii) The Common Securities have been duly authorized by the
Trust Agreement and represent validly issued undivided beneficial
interests in the assets of the Trust.
(viii) Under the Delaware Business Trust Act and the Trust
Agreement, the issuance of the Securities and the Common Securities is
not subject to preemptive rights.
(ix) The issuance and sale by the Trust of the Securities and the
Common Securities, the execution, delivery and performance by the
Trust of this Agreement, the consummation by the Trust of the
transactions contemplated hereby and compliance by the Trust with its
obligations hereunder and thereunder do not violate (a) any of the
provisions of the Certificate of Trust of the Trust or the Trust
Agreement, or (b) any applicable Delaware law or administrative
regulation.
(x) Assuming that the Trust derives no income from or connected
with services provided within the State of Delaware and has no assets,
activities (other than maintaining the Delaware Trustee (as defined in
the Trust Agreement) and the filing of documents with the Secretary of
State of the State of Delaware) or employees in the State of Delaware,
no authorization, approval, consent or order of any Delaware court or
governmental authority or agency is required to be obtained by the
Trust solely in connection with the issuance and sale of the
Securities and the Common Securities. In rendering the opinion
expressed in this paragraph (xi), such counsel need express no opinion
concerning the securities laws of the State of Delaware.
(xi) Assuming that the Trust derives no income from or connected
with services provided within the State of Delaware and has no assets,
activities (other than maintaining the Delaware Trustee and the filing
of documents with the Secretary of State of the State of Delaware) or
employees in the State of Delaware and that the Trust is treated as a
grantor trust for federal income tax purposes, the Securityholders
(other than those holders of the Securities who reside or are
domiciled in the State of Delaware) will have no liability for income
taxes imposed by the State of Delaware solely as a result of their
participation in the Trust, and the Trust will not be liable for any
income tax imposed by the State of Delaware.
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<PAGE>
SCHEDULE VI
(i) They are independent certified public accountants with respect to
the Guarantor and its subsidiaries within the meaning of the Securities Act, the
Exchange Act and the applicable published rules and regulations thereunder.
(ii) In their opinion, the consolidated financial statements and any
supplementary financial information and schedules examined or audited by them
and included in the Final Prospectus as amended or supplemented comply as to
form in all material respects with the applicable accounting requirements of the
1933 Act or the 1934 Act, as applicable, and the published rules and regulations
thereunder.
(iii) They have performed certain specified procedures, not
constituting an audit, including a reading of the unaudited interim consolidated
financial statements of the Guarantor incorporated by reference in the Final
Prospectus, as amended or supplemented, and of the latest available unaudited
interim consolidated financial data of the Guarantor; a reading of the minutes
of the meetings and consents of the stockholders, the Board of Directors and the
Executive Committee of the Board of Directors of the Guarantor and of each of
the Significant Subsidiaries (as such term defined in Rule 405 of Regulation C
of the Regulations) of the Guarantor since the end of the most recent fiscal
year with respect to which an audit report has been issued; inquiries of certain
officials of the Guarantor who have responsibility for financial and accounting
matters with respect to the unaudited consolidated financial statements
incorporated by reference in the Final Prospectus, as and the latest available
unaudited interim consolidated financial data of the Guarantor.
(iv) Nothing came to their attention as a result of the foregoing
procedures that caused them to believe that:
(a)(i) The unaudited consolidated financial statements described
in paragraph (iii) above incorporated by reference in the Final
Prospectus comply as to form in all material respects with the
applicable accounting requirements of the Acts and with the related
published rules and regulations and (ii) any material modifications
should be made to the unaudited consolidated financial statements for
them to be conformity with generally accepted accounting principles;
or
(b) as of a specified date not more than five days prior to the
date of such letter and as of the date of the latest available
unaudited consolidated monthly financial data of the Guarantor, there
was any change in the capital stock or long-term indebtedness of the
Guarantor and its subsidiaries or any decrease in the stockholders'
equity of the Guarantor, in each case as compared with the amounts
shown on the most recent unaudited consolidated statement of financial
condition of the Guarantor included and incorporated by reference in
the Final Prospectus, or during the period from the date of such
statement of financial condition to the date of the latest available
unaudited
VI-1
<PAGE>
consolidated financial data of the Guarantor, there were any
decreases, as compared with the corresponding period in the preceding
year, in consolidated revenues, revenue net of interest expense, if
any, and net income of the Guarantor and its subsidiaries, except in
each such case for changes or decreases set forth in or contemplated
by the Final Prospectus, or except for such changes or decreases set
forth in such letter.
(v) They have performed certain other specified procedures as a result
of which they determined that certain information of an accounting, financial or
statistical nature (which is limited to accounting, financial or statistical
information derived from the general accounting records of the Guarantor and its
subsidiaries) set forth in the Final Prospectus, including the information
included or incorporated in certain specified Items of the Guarantor's Annual
Report on Form 10-K, incorporated in the Final Prospectus, as amended or
supplemented, and the information included in the "Management's Discussion and
Analysis of Financial Condition and Results of Operations" included or
incorporated in the Guarantor's Quarterly Reports on Form 10-Q, incorporated in
the Final Prospectus, agrees with the accounting records of the Guarantor and
its subsidiaries, excluding any questions of legal interpretation.
(vi) In addition to the examination referred to in their report
included or incorporated by reference in the Final Prospectus, and the limited
procedures referred to in paragraph (iii) above, they have provided such
additional information as the Underwriters reasonably request with respect to
certain amounts, percentages and financial information which are included or
incorporated by reference in the Final Prospectus, and have found such amounts,
percentages and financial information to be in agreement with the relevant
accounting records or computations therefrom.
VI-2
[Letterhead of Weil, Gotshal & Manges LLP]
December 9, 1998
The Bear Stearns Companies Inc.
245 Park Avenue
New York, NY 10167
Ladies and Gentlemen:
We have acted as special counsel to The Bear Stearns Companies Inc., a
Delaware corporation (the "Company"), and Bear Stearns Capital Trust II, a
Delaware business trust (the "Trust"), in connection with the preparation and
filing with the Securities and Exchange Commission (the "Commission") of the
Prospectus Supplement dated the date hereof (the "Prospectus Supplement") and of
the Registration Statement on Form S-3, as amended to the date hereof, filed
with the Commission (the "Registration Statement") under the Securities Act of
1933, as amended, with respect to $300,000,000 aggregate principal amount of
7-1/2% Junior Subordinated Deferrable Interest Debentures (the "Debentures") of
the Company and $300,000,000 aggregate liquidation amount of 7-1/2% Trust Issued
Preferred Securities (the "Preferred Securities") of the Trust. All capitalized
terms not otherwise defined herein shall have the same meaning ascribed thereto
in the Prospectus Supplement.
In so acting, we have examined originals or copies, certified or otherwise
identified to our satisfaction, of the Registration Statement, the Prospectus
Supplement, the forms of Preferred Securities and Common Securities,
(collectively, the "Trust Securities"), the form of Trust Agreement, the form of
Indenture, the form of supplemental indenture relating to the Debentures, the
form of Guarantee and the form of guarantee of the Common Securities
(collectively, the "Agreements"). In addition, we have examined originals or
copies, certified or otherwise identified to our satisfaction of such corporate
records, agreements, documents and other instruments, and have made such
inquiries of such officers and representatives of the Company, as we have deemed
relevant and necessary as a basis for the opinion hereinafter set forth.
In such examination, we have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of documents submitted to us as certified or photostatic
copies and the authenticity of the originals of such latter documents. We have
further assumed (i) that the Agreements and Trust Securities as executed and
delivered by the requisite signatories thereto will conform in substance and
form in all material respects to the respective forms thereof examined by us,
(ii) timely compliance by all parties to the Agreements to the terms thereof
(without waiver or amendment of any of the terms thereof) and (iii) that the
Agreements constitute all the agreements, arrangements and understandings
between the parties thereto with respect to the transactions contemplated
therein and that the representations and warranties contained therein are true.
The terms of the Agreements and the Trust Securities are incorporated
herein by reference.
Based on the foregoing, it is our opinion that the statements contained in
the Prospectus Supplement, under the caption "Certain Federal Income Tax
Consequences," insofar as such statements constitute matters of law or legal
conclusions and except to the extent qualified therein, are correct in all
material respects.
The foregoing opinion is based on current provisions of the Internal
Revenue Code of 1986, as amended, the Treasury Regulations promulgated
thereunder (including proposed Treasury Regulations), published pronouncements
of the Internal Revenue Service, and case law, any of which may be changed at
any time with retroactive effect. We express no opinion as to the effect on the
matters covered by this opinion of the laws of any other jurisdiction.
We hereby consent to the filing of this opinion with the Commission as an
exhibit to the Registration Statement and to the references to our firm under
the captions "Certain Federal Income Tax Consequences" and "Legal Matters" in
the Prospectus Supplement. This opinion may not be used for any other purpose
and may not otherwise be relied upon by, or disclosed to, any other person,
quoted or referred to.
Very truly yours,
/s/ Weil, Gotshal & Manges LLP
