EXHIBIT 1.1
1,200,000 PREFERRED SECURITIES
PROVIDENT TRUST II
[________%] Trust Preferred Securities
(Liquidation Amount $25 per Preferred Security)
UNDERWRITING AGREEMENT
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____________, 2000
12:00 p.m.
XXXX XXXXX XXXX XXXXXX, INCORPORATED
XXXXXX, XXXXX XXXXX, INCORPORATED
As Representatives of the
Several Underwriters Identified in Schedule I Hereto
c/x Xxxx Xxxxx Xxxx Xxxxxx, Incorporated
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
and c/o Ferris, Baker, Xxxxx, Incorporated
0000 Xxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Ladies and Gentlemen:
Section 1. Introduction. Provident Bankshares Corporation, a Maryland
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corporation (the "Company"), and Provident Trust II, a statutory business trust
created under the Delaware Business Trust Act (the "Delaware Act") (the "Trust"
and, together with the Company, sometimes the "Offerors"), propose, upon the
terms and subject to the conditions set forth in this underwriting agreement
(this "Agreement"), that the Trust issue and sell to the several underwriters
named in Schedule I hereto (each an "Underwriter" and, collectively, subject to
substitution as provided in Section 12 hereof, the "Underwriters"), for which
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated and Xxxxxx, Xxxxx Xxxxx, Incorporated are
acting as Representatives (the "Representatives"), with respect to the proposed
issuance and sale by the Trust of its ____% Preferred Securities, with a
liquidation amount of $_____ per Preferred Security (the "Securities"), the
terms of which are more fully described in the Prospectus (as hereinafter
defined). Such Securities will be issued pursuant to an Amended and Restated
Trust Agreement, dated _________, 2000 (the "Trust Agreement") among the Company
as Depositor, Bankers Trust Company, as Property Trustee and Bankers Trust
(Delaware) as Delaware Trustee. The Preferred Securities will be guaranteed by
the Company with respect to distributions and
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payments upon liquidation, redemption and otherwise (the "Guarantee")
pursuant to and to the extent provided by a Guarantee Agreement (the "Guarantee
Agreement"), dated ______, 2000, between the Company and Bankers Trust Company,
as Guarantee Trustee (the "Guarantee Trustee").
The entire proceeds of the sale of the Securities to be issued
pursuant hereto will be used to purchase an equivalent dollar amount of junior
subordinated debentures (the "Subordinated Debentures") to be issued by the
Company pursuant to a Junior Subordinated Indenture (the "Indenture"), dated
_______, 2000, between the Company and Bankers Trust Company, as Debenture
Trustee (the "Debenture Trustee").
The Securities proposed to be sold by the Trust are referred to herein
as the "Preferred Securities."
The registration statement on Form S-3 under the Securities Act of
1933, as amended (the "Securities Act"), with respect to the Preferred
Securities, the Subordinated Debentures and the Guarantee, as amended at the
time it is or was declared effective by the Securities and Exchange Commission
(the "Commission") and, in the event of any amendment thereto after the
effective date, such registration statement as so amended (but only from and
after the effectiveness of such amendment), including a registration statement
(if any) filed pursuant to Rule 462(b) of the rules and regulations of the
Commission under the Securities Act (the "Securities Act Rules and Regulations")
increasing the size of the offering registered under the Securities Act and
information (if any) deemed to be part of the registration statement at the time
of effectiveness pursuant to Rules 430A(b) and 434(d) of the Securities Act
Rules and Regulations, is hereinafter called the "Registration Statement." The
prospectus included in the Registration Statement at the time it is or was
declared effective by the Commission and any related prospectus supplement or
supplements relating to the Preferred Securities, the Guarantee or the
Subordinated Debentures as previously filed with or promptly hereafter filed
with the Commission pursuant to Rule 424(b) of the Securities Act Rules and
Regulations, is hereinafter called the "Prospectus," except that if any
prospectus (including any term sheet meeting the requirements of Rule 434 of the
Securities Act Rules and Regulations provided by the Offerors for use with a
prospectus subject to completion within the meaning of such Rule 434 in order to
meet the requirements of Section 10(a) of the Securities Act) filed by the
Offerors with the Commission pursuant to Rule 424(b) (and Rule 434, if
applicable) of the Securities Act Rules and Regulations or any other such
prospectus provided to the Underwriters by the Offerors for use in connection
with the offering of the Preferred Securities (whether or not required to be
filed by the Offerors with the Commission pursuant to Rule 424(b) of the
Securities Act Rules and Regulations) differs from the prospectus on file at the
time the Registration Statement is or was declared effective by the Commission,
the term "Prospectus" shall refer to such differing prospectus (including any
term sheet within the meaning of Rule 434 of the Securities Act Rules and
Regulations) from and after the time such prospectus is filed with the
Commission or transmitted to the Commission for filing pursuant to such Rule
424(b) (and Rule 434, if applicable) or from and after the time it is first
provided to the Underwriters by the Offerors for such use. The term "Preliminary
Prospectus" as used herein means the preliminary prospectus included in any
Registration Statement prior to the time it becomes or became effective under
the Securities Act and any prospectus subject to completion as described in Rule
430A or 434 of the
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Securities Act Rules and Regulations. The term "disclosed in" when referring to
the Registration Statement, the Preliminary Prospectus, or the Prospectus
includes documents that are incorporated in or made an exhibit to any of the
foregoing. The term "Material Adverse Effect" means (i) when used in connection
with the Company, any development, change or effect that is materially adverse
to the business, properties, assets, net worth, condition (financial or
otherwise), or results of operations of the Company and the Subsidiaries, taken
as a whole and (ii) when used in connection with the Trust, any development,
change or effect that is materially adverse to the business, properties, assets,
net worth, condition (financial or otherwise) or results of operations of the
Trust.
Section 2. Representations and Warranties and Agreements of the Offerors.
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(a) The Offerors, jointly and severally, represent and warrant to,
and agree with, each of the Underwriters, as of the date hereof, as of the
Closing Date (as such term is defined in Section 5 hereof) (except in respect of
such representations as are specified as being made as of a particular date) as
follows:
(i) A registration statement on Form S-3 (File Nos.
333-_____ and 333-_____-01) under the Securities Act with respect to the
Preferred Securities, the Subordinated Debentures and the Guarantee, including a
form of prospectus subject to completion, has been prepared by the Offerors in
conformity with the requirements of the Securities Act, the Securities Act Rules
and Regulations, the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), and the rules and regulations thereunder and has been filed
with the Commission. The Offerors have prepared and filed such amendments
thereto, if any, and such amended preliminary prospectuses, if any, as may have
been required to the date hereof, and will file such additional amendments
thereto and such amended prospectuses as may hereafter be required. If the
Offerors have elected to rely upon Rule 462(b) of the Securities Act Rules and
Regulations to increase the size of the offering registered under the Securities
Act, the Offerors will prepare and file with the Commission a registration
statement with respect to such increase pursuant to such Rule.
If the Offerors have elected not to rely upon Rule 430A of the
Securities Act Rules and Regulations, the Offerors have prepared and will
promptly file an amendment to the registration statement and an amended
prospectus (including a term sheet meeting the requirements of Rule 434 of the
Securities Act Rules and Regulations) if necessary to complete the Prospectus.
If the Offerors have elected to rely upon Rule 430A of the Securities Act Rules
and Regulations, they will prepare and file a prospectus (or a term sheet
meeting the requirements of Rule 434) pursuant to Rule 424(b) that discloses the
information previously omitted from the prospectus in reliance upon Rule 430A.
Copies of the Registration Statement, any amendment thereto and any
Preliminary Prospectus filed with the Commission, including the exhibits,
financial statements and schedules thereto, have been delivered by the Offerors
to the Representatives on behalf of the Underwriters.
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(ii) If the Registration Statement or any post-effective
amendment thereto has been declared effective, the Commission has not issued any
stop order suspending the effectiveness thereof or any order preventing or
suspending the use of any Preliminary Prospectus, the Prospectus, the
Registration Statement or any amendment or supplement thereto, and the
Commission has not instituted or, to the best knowledge of the offerors,
threatened to institute any proceedings with respect to such an order.
(iii) The Registration Statement, on the date it was or is
declared effective by the Commission, each Preliminary Prospectus, on the date
of the filing thereof with the Commission, and the Prospectus and any amendment
or supplement thereto, on the date of filing thereof with the Commission (or if
not filed, on the date provided by the Offerors to the Underwriters in
connection with offering and sale of the Preferred Securities) at the Closing
Date conformed or will conform in all material respects with the requirements of
the Securities Act, the Securities Act Rules and Regulations, the Trust
Indenture Act and the rules and regulations thereunder and all applicable
federal, state, or local statutes, and any other applicable administrative
regulation or other applicable law enacted, adopted or issued by any
governmental agency; and every request of the Commission, or any securities
authority or agency of any jurisdiction, for additional information (to be
included in the Registration Statement or the Prospectus or otherwise) has been
complied with in all material respects. The Registration Statement, on the date
it was or is declared effective by the Commission, upon the filing or first
delivery to the Underwriters of the Prospectus (or any supplement to the
Prospectus (including any term sheet meeting the requirements of Rule 434 of the
Securities Act Rules and Regulations) at the Closing Date did not and will not
contain an untrue statement of material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; each Preliminary Prospectus on the date of the filing thereof with
the Commission, and the Prospectus and any amendment or supplement thereto on
the date of filing-thereof with the Commission (or if not filed, on the date
provided by the Offerors to the Underwriters in connection with the offering and
sale of the Preferred Securities) at the Closing Date did not and will not
include an untrue statement of material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that the foregoing representation and warranty shall not apply to (i) any
statements or omissions made in reliance upon and in conformity with information
furnished in writing to the Offerors by an Underwriter through the
Representatives or by the Delaware Trustee, the Property Trustee, the Guarantee
Trustee or the Debenture Trustee expressly for use therein (as identified in
Section 9(b) hereof) and (ii) that part of the Registration Statement which
constitutes the Statement of Eligibility and Qualification under the Trust
Indenture Act. As of the date that the Registration Statement was or is declared
effective by the Commission, as of the date that each Preliminary Prospectus was
filed with the Commission, as of the date that the Prospectus and any amendment
or supplement thereto was of is with the Commission (or if not filed, on the
date provided by the Offerors to the Underwriters in connection with offering
and sale of the Preferred Securities), at the Closing Date, no event has or will
have occurred which should have been set forth in an amendment or supplement to
the Registration Statement or the Prospectus which has not then been set forth
in such an amendment or supplement.
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(iv) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Maryland, its jurisdiction of incorporation, has been duly qualified as a
foreign corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases properties
or conducts any business so as to require such qualification, except where the
failure to be so qualified would not have a Material Adverse Effect, and has all
power and authority necessary to own or hold its properties and assets and to
conduct the business in which it engages as described in or contemplated by the
Registration Statement and the Prospectus. The Company is duly registered as a
bank holding company under the Bank Holding Company Act of 1956, as amended.
(v) Provident Bank of Maryland (the "Bank Subsidiary") is a
state-chartered commercial bank organized, validly existing and in good standing
under the laws of the State of Maryland, its state of organization. All eligible
deposit accounts issued by the Bank Subsidiary are insured by the Federal
Deposit Insurance Corporation (the "FDIC",) up to the maximum applicable amount
in accordance with applicable law and the rules and regulations of the FDIC and
no proceedings for the termination or revocation of such insurance are pending
or, to the best knowledge of the Offerors, threatened. Provident Mortgage Corp.,
Provident Financial Services, Inc., Provident Investment Center, Inc., Banksure
Insurance Corporation, PB Investment Corporation, Provident Lease Corp., Inc.,
PB REIT, Inc., Lexington Properties Management, Inc., LPM Sub 1, Inc., LPM Sub
2, Inc., LPM Sub 3, Inc., LPM Sub 4, Inc., LPM Sub 5, Inc., LPM Sub 6, Inc., LPM
Sub 7, Inc., LPM Sub 8, Inc., LPM Sub 9, Inc., LPM Sub 10, Inc., Court Square
Leasing Corporation (collectively, with the Bank Subsidiary, the "Subsidiaries"
and, each individually, a "Subsidiary"), have been duly incorporated and are
validly existing as corporations in good standing in their jurisdiction of
incorporation. Each Subsidiary has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification (except to the extent the lack of
such qualification will not result in a Material Adverse Effect to the
Offerors), and has all power and authority necessary to own or hold its
properties and assets and to conduct the business in which it engages as
described in or contemplated by the Registration Statement and the Prospectus.
The Subsidiaries are all of the direct and indirect subsidiaries of the Company,
and the Subsidiaries, together with the Trust, include all of the "significant
subsidiaries" of the Company as defined in Rule 1-02 of Regulation S-X of the
Commission.
(vi) The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Act, has been duly
authorized to do business in each jurisdiction where such qualification is
required and has all power and authority necessary to own or hold its properties
and assets and to conduct the business in which it is engaged as described in or
contemplated by the Registration Statement and the Prospectus. The Trust has
conducted and will conduct no business other than as contemplated by the Trust
Agreement and as described in or contemplated by the Registration Statement and
the Prospectus. The Trust is not a party to or otherwise bound by any agreement
other than those described in the Prospectus. At and after such time as the
Company has purchased Common Securities equal to at least 3% of the total equity
of the Trust, the Trust will be classified for United States federal income tax
purposes as a grantor trust and not as an association taxable as a corporation
and the Trust is and
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will be treated as a consolidated subsidiary of the Company pursuant to
generally accepted accounting principles.
(vii) The Company has all power and authority necessary to enter
into, execute, deliver and perform its obligations under and with respect to the
Indenture, the Trust Agreement, the Guarantee Agreement and the Subordinated
Debentures. All necessary corporate proceedings of the Company have been duly
taken to authorize the execution, delivery and performance by the Company of its
obligations under the Indenture, the Trust Agreement, the Guarantee Agreement
and the Subordinated Debentures. The Indenture, the Trust Agreement, the
Guarantee Agreement and the Subordinated Debentures have been duly authorized,
and when executed and delivered by the Company, will be the valid and binding
obligations of the Company, enforceable against the Company, in accordance with
their respective terms (except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws of
general application relating to or affecting the enforcement of creditors'
rights and by the application of equitable principles relating to the
availability of remedies, and except as rights to indemnity or contribution may
be limited by federal or state securities laws and the public policy underlying
such laws). The Indenture has been or will be duly qualified under the Trust
Indenture Act. The Indenture, the Trust Agreement, the Guarantee Agreement and
the Subordinated Debentures conform or will conform in all material respects to
the descriptions thereof contained in the Registration Statement and the
Prospectus and are in substantially the forms filed as exhibits to the
Registration Statement.
(viii) The Trust has all power and authority necessary to enter
into, execute, deliver and perform its obligations under and with respect to the
Common Securities and the Preferred Securities. All necessary trust action on
the part of the Trust has been duly taken to authorize the execution, issuance,
sale, delivery and performance by the Trust of its obligations under the Common
Securities and the Preferred Securities. The Common Securities and the Preferred
Securities have been duly authorized by the Trust Agreement, and when issued by
the Trust against payment therefor as contemplated by the Prospectus, will be
validly issued and (subject to the terms of the Trust Agreement) fully paid and
nonassessable (except with respect to the Common Securities) undivided
beneficial interests in the assets of the Trust, entitled to the benefits
provided by the Trust Agreement. Good and marketable title to the Preferred
Securities will pass to the Underwriters on the Closing Date free and clear of
all liens, security interests, pledges, charges, mortgages or other defects or
encumbrances of any kind or nature. The issuance of the Common Securities and
the Preferred Securities is not subject to preemptive or other similar rights
and holders of Preferred Securities will be entitled to the same limitation of
personal liability under Delaware law as is extended to stockholders of private
corporations for profit organized under the General Corporation Law of the State
of Delaware. The Common Securities and the Preferred Securities conform or will
conform in all material respects to the descriptions thereof contained in the
Registration Statement and the Prospectus.
(ix) The Company has the duly authorized capital stock set
forth in the Prospectus. All of the shares of capital stock of the Company
issued and outstanding have been duly and validly authorized and issued, are
fully paid and nonassessable, without personal liability attaching to the
ownership thereof, and none of such shares have been issued or are owned or held
in violation of any preemptive or other similar rights. There are no holders of
the
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securities of the Company having rights to registration thereof or preemptive or
other similar rights to purchase capital stock or equity interests of the
Company and neither the filing of the Registration Statement nor the offering or
sale of the Preferred Securities or the Subordinated Debentures as contemplated
by the Registration Statement, the Prospectus and this Agreement gives rise to
any rights (other than have been waived or satisfied) for or relating to the
registration of any securities of the Company. The capital stock of the Company
conforms in all material respects to the descriptions thereof contained in the
Registration Statement and the Prospectus. There are no options, warrants, or
other rights to purchase or acquire from the Company or from any of the
Subsidiaries shares of the capital stock of the Company or any such Subsidiary.
All of the issued and outstanding shares of capital stock of each of the
Subsidiaries have been duly authorized, validly issued and are fully paid and
nonassessable, and all such shares are held, in the case of the Bank Subsidiary,
by the Company, and in the case of each other Subsidiary, by the Bank
Subsidiary, free and clear of any liens, security interests, pledges, charges,
mortgages or other defects or encumbrances of any kind or nature, except as
related to ownership of preferred stock of PB REIT, Inc. by employees of the
Company and of the Bank Subsidiary.
(x) The consolidated financial statements of the Company and the
related notes thereto incorporated by reference in the Registration Statement
and the Prospectus comply in all material respects with the requirements of the
Securities Act and the Securities Act Rules and Regulations at the dates and for
the periods indicated, are accurate in all material respects and fairly present
the financial condition, results of operations, stockholders' equity and cash
flows, and the other information of the Company and its consolidated
subsidiaries at the respective dates and for the respective periods specified
therein. Such financial statements and the related notes thereto have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods presented (except as otherwise noted
therein) and have been properly derived from the books and records of the
Company, and such financial statements have been audited by
PricewaterhouseCoopers, LLP, who are independent public accountants within the
meaning of the Securities Act and the Securities Act Rules and Regulations, as
indicated in their reports filed therewith. The selected financial information
and statistical data set forth under the captions "Prospectus Summary,"
"Selected Consolidated Financial Data," "Use of Proceeds", "Capitalization" in
the Prospectus fairly present the information set forth therein, have been
derived from the financial statements or operating records of the Company and
have been compiled on a basis consistent with that of the audited financial
statements incorporated by reference in the Registration Statement and the
Prospectus. No other financial statements or financial information, except that
which is contained in the Registration Statement or the Prospectus, is required
by Form S-3, the Securities Act Rules and Regulations or otherwise, to be
included in the Registration Statement or the Prospectus.
(xi) Since the respective dates as of which information is given
in the Prospectus, and except as otherwise may be stated therein or contemplated
thereby (A) none of the Subsidiaries, the Company or the Trust has entered into
any transaction or incurred any liability or obligation, direct, contingent or
otherwise, which is material to the Company and the Subsidiaries, taken as a
whole or to the Trust, (B) there has not been any material change in the
outstanding capital stock of the Company, or any issuance of options, warrants
or rights to purchase the capital stock of the Company (through any existing
stock repurchase plan, dividend
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reinvestment plan, employee benefit plan or otherwise), or any material increase
in the short-term or long-term debt the Company or the Subsidiaries, except
indebtedness and deposit liabilities incurred by the Bank Subsidiary in the
ordinary course of its banking business, or any event or circumstance giving
rise to a Material Adverse Effect relating to the Company or the Trust; (C) none
of the Subsidiaries, the Company or the Trust has sustained any loss or damage
(whether or not insured) which has resulted in or reasonably could be expected,
in the aggregate, to result in a Material Adverse Effect to the Company or the
Trust; (D) there has not been any material interference with the business of any
of the Subsidiaries taken as a whole, the Company or the Trust from any labor
dispute or court or governmental action, order or decree; (E) there has not been
any change greater than ten percent (10%), contingent or otherwise, in the
direct or indirect control of the Company nor has there been any change in
control, direct or indirect, in the Trust and, to the best knowledge of the
Company and the Trust, there do not exist any events or conditions which would
reasonably be expected to result in such changes in the Company or the Trust,
respectively; (F) other than as set forth in the Prospectus, there are no
actions, suits, proceedings, or investigations or litigation pending, or, to the
best knowledge of the Company or the Trust, threatened or contemplated actions,
suits or proceedings against the Subsidiaries, the Company or the Trust before
any court, regulatory body, administrative agency or other governmental body
which might, in the aggregate, have a Material Adverse Effect on the Company or
the Trust, or which is required by the Securities Act and the Securities Act
Rules and Regulations to be set forth in the Registration Statement or the
Prospectus which has not been so set forth, and (G) there has not occurred any
other event and there has arisen no set of circumstances required by the
Securities Act and the Securities Act Rules and Regulations to be set forth in
the Registration Statement or the Prospectus which has not been so set forth in
the Registration Statement or Prospectus as fairly and accurately summarized
therein. None of the Subsidiaries, the Company or the Trust has any material
contingent liabilities, taken as a whole, that are not disclosed in the
Prospectus.
(xii) Each of the Subsidiaries, the Company and the Trust has
filed all foreign, federal, state and local income, franchise and other material
tax returns required to be filed (or has obtained extensions with respect
thereto) and has paid all taxes shown as due thereunder and all assessments
received by it to the extent that payment has become due, and has made all
required payroll tax payments. All tax liabilities have been adequately provided
for in the consolidated financial statements of the Company and, to the best
knowledge of the Company and the Trust, there are no tax deficiencies which have
been or might be asserted against any of the Company, the Subsidiaries or the
Trust which, if so assessed, would have a Material Adverse Effect on the Company
or the Trust, as the case may be.
(xiii) The Company and each of the Subsidiaries maintains
insurance of the types and in amounts which the Company reasonably believes to
be adequate for the conduct of their respective businesses and the value of
their prospective properties and in such amounts and with such deductibles as
are customary for companies in the same or similar businesses, all of which
insurance is in full force and effect.
(xiv) Each of the Company and the Trust has all power and
authority to enter into, execute, deliver and perform its obligations under and
with respect to this Agreement. All necessary corporate or trust proceedings, as
the case may be, of the Company and the Trust
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have been duly taken to authorize the execution, delivery and performance by the
Company and the Trust of this Agreement. This Agreement has been duly
authorized, executed and delivered by the Company and the Trust and constitutes
a valid and binding obligation of the Company and of the Trust, enforceable
against each in accordance with its terms (except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws of general application relating to or affecting the enforcement of
creditors' rights and by the application of equitable principles relating to the
availability of remedies, and except as rights to indemnity or contribution may
be limited by federal or state securities laws and the public policy underlying
such laws).
(xv) None of the Subsidiaries, the Company or the Trust is in
default in the performance or observance of any obligation, agreement, covenant
or condition contained in any contract, indenture, mortgage, loan agreement,
note, lease, franchise, license, bond or other evidence of indebtedness or other
agreement or instrument to which it is a party, by which it may be bound or to
which any of its assets, properties or businesses are or may be subject, except
for such defaults that would not, in the aggregate, have a Material Adverse
Effect on the Company or the Trust, as the case may be, or which could in any
way, in the aggregate, materially impair or delay the consummation of the
transactions contemplated by this Agreement, the Indenture, the Trust Agreement
or the Guarantee Agreement, or the issuance and sale of the Common Securities,
the Preferred Securities or of the Subordinated Debentures, or the consummation
by the Company and the Trust of the other transactions contemplated by this
Agreement, the Indenture, the Trust Agreement or the Guarantee Agreement. The
Company's and the Trust's execution and delivery of this Agreement, and the
Company's execution of the Indenture, the Trust Agreement and the Guarantee
Agreement, and the consummation by the Company and/or the Trust of the
transactions contemplated hereby and thereby, including, without limitation, the
issuance, sale and delivery of the Preferred Securities and the Common
Securities by the Trust and of the Subordinated Debentures by the Company, and
the conduct of their respective businesses as described in or contemplated by
the Registration Statement and the Prospectus, will not violate of any provision
of the charter, bylaws or other governing documents of any of the Subsidiaries,
the Company or the Trust Agreement or the Trust's certificate of trust filed
with the State of Delaware on February 11, 2000 (the "Certificate of Trust"),
and will not result in the breach of, or be in contravention of, constitute a
default under, cause (or permit) the maturation or acceleration of any liability
or the termination of any rights under, or result in the creation or imposition
of any lien, security interest, pledge, charge, mortgage or other defect in or
encumbrance upon, any assets, property or business of the Subsidiaries, the
Company, or the Trust pursuant to the terms of any contract, indenture,
mortgage, loan agreement, note, lease, franchise, license, bond, other evidence
of indebtedness, or other agreement or instrument to which any of the
Subsidiaries, the Company or the Trust is a party, by which it may be bound or
to which any of its assets, properties or businesses are or may be subject, or,
assuming compliance with the Securities Act and applicable state securities or
Blue Sky laws, any statute, judgment, decree, order, rule or regulation
applicable to any of the Subsidiaries, the Company or the Trust of any
arbitrator, court, regulatory body, administrative agency or other governmental
body, except those, if any, that are described in the Prospectus or those which
would not, individually or in the aggregate, have a Material Adverse Effect on
the Company or the Trust, as the case may be.
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(xvi) All executed agreements or copies of executed agreements
filed as exhibits to the Registration Statement to which any of the
Subsidiaries, the Company or the Trust is a party, by which any of them is or
may be bound or to which any of their respective assets, properties or
businesses are or may be subject have been duly and validly authorized, executed
and delivered by such Subsidiary, the Company or the Trust, as the case may be,
and constitute the legal, valid and binding agreements of such Subsidiary, the
Company or the Trust, enforceable against it in accordance with its terms
(except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization or other laws of general application relating to or
affecting enforcement of creditors' rights, and application of equitable
principles relating to the availability of remedies, and except as rights to
indemnity or contribution may be limited by federal or state securities laws and
the public policy underlying such laws). The descriptions and summaries
contained in the Registration Statement of contracts and other documents and the
statements set forth in the Prospectus under the captions "Description of
Preferred Securities Debentures," "Description of Junior Subordinated
Debentures," "Description of Guarantee" and "Relationship Among the Preferred
Securities, the Subordinated Debentures and the Guarantee," insofar as they
purport to constitute a summary of the terms of the Company's and the Trust's
securities, and under the captions (except, with respect to the statements under
the caption "Underwriting," for information furnished in writing to the Company
by the Underwriters through the Representatives expressly for use therein (as
identified in Section 9(b) hereof)) insofar as they purport to describe the
provisions of the laws and the provisions of documents referred to therein, are
accurate and fairly present in all material respects the information required to
be disclosed with respect thereto by the Securities Act and the Securities Act
Rules and Regulations, and there are no contracts, other documents, transactions
or circumstances which are required by the Securities Act and the Securities Act
Rules and Regulations to be described in the Prospectus, the Registration
Statement or filed as exhibits thereto which are not so described or filed. The
exhibits which have been filed are complete and correct copies of the documents
of which they purport to be copies.
(xvii) The Company and the Bank Subsidiary have good and
marketable title in fee simple to all real property and good and marketable
title to all other property and assets owned thereby as set forth in the
Prospectus, in each case free and clear of all liens, security interests,
pledges, charges, mortgages and other defects or encumbrances of any kind or
nature, except in the ordinary course of business, and except such as are
described in the Prospectus or such as do not materially affect the value of any
such property, and do not materially interfere with the use made or proposed to
be made of such property by the Company or the Bank Subsidiary. Any real
properties held or used by the Company or the Bank Subsidiary under lease are
held or used under valid, subsisting and enforceable leases, such leases are in
full force and effect, the Company or the Bank Subsidiary, as the case may be,
is not in default in respect of any material terms of any such lease and enjoys
peaceful and undisturbed possession thereunder and, to the best knowledge of the
Company, there are no claims that have been asserted by any party adverse to the
Company's or the Bank Subsidiary's right as lessee under any such lease or
affecting or challenging the Company's or the Bank Subsidiary's right to
continue possession of the premises subject to any such lease which,
individually or in the aggregate, would have a Material Adverse Affect on the
Company. No real property owned, held or used by the Company or the Bank
Subsidiary is situated in an area which is or, to the best knowledge of the
Company and the Bank Subsidiary, will be, subject to zoning, use, or building
-10-
code restrictions that would prohibit (and no state of facts relating to the
actions or inaction of another person or entity or his or its ownership,
leasing, or use of any real or personal property exists or will exist which
would prevent) the continued effective ownership, holding or use of such real
property in the business of the Company or the Bank Subsidiary as described in
or contemplated by the Registration Statement and the Prospectus.
(xviii) All legally required proceedings in connection with the
issuance and sale of the Common Securities, the Preferred Securities, the
Subordinated Debentures and the Guarantee in accordance with this Agreement and
as contemplated by the Registration Statement and the Prospectus have been taken
and no consent, authorization, approval, order, registration, license,
certificate, declaration or permit of or from, or filing with, any court,
regulatory body, administrative agency or other governmental body, is required
in connection with the execution and delivery of this Agreement, the Indenture,
the Trust Agreement or the Guarantee Agreement, or the issuance and sale of the
Common Securities, the Preferred Securities or the Subordinated Debentures, or
the consummation by each of the Company and the Trust of the transactions
contemplated by this Agreement, the Indenture, the Trust Agreement or the
Guarantee Agreement, except such as have been described in the Prospectus or may
be required, under the Securities Act, the Securities Act Rules and Regulations,
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and such
as may be required under state securities or Blue Sky laws in connection with
the purchase and distribution of the Preferred Securities by the Underwriters,
or by The Nasdaq National Market (the "NNM") to have the Preferred Securities
listed thereon, and by the National Association of Securities Dealers, Inc. (the
"NASD") in connection with the terms and conditions set forth in this Agreement.
No consent of any party to any material contract, agreement, mortgage, loan
agreement, note, franchise, lease, bond, other evidence of indebtedness or other
agreement or instrument, or any arrangement or understanding to which the
Company or the Trust is a party, by which either of them may be bound or to
which any of their respective assets, properties or businesses are or may be
subject, is required for the execution, delivery or performance of this
Agreement, the Indenture, the Trust Agreement or the Guarantee Agreement, or the
issuance and sale of the Common Securities, the Preferred Securities or the
Subordinated Debentures, or the consummation by each of the Company and the
Trust of the transactions contemplated by this Agreement, the Indenture, the
Trust Agreement or the Guarantee Agreement.
(xix) None of the Subsidiaries, the Company or the Trust, or
the conduct of their respective businesses as described in or contemplated by
the Prospectus is in violation of any federal, state or local statute,
administrative regulation or other law, the consequence of which violation(s),
individually or in the aggregate, would have a Material Adverse Effect on the
Company or the Trust, as the case may be, or which could in any way,
individually or in the aggregate, materially impair or delay the consummation of
the transactions contemplated by this Agreement, the Indenture, the Trust
Agreement, or the Guarantee Agreement, or the issuance and sale of the Common
Securities, the Preferred Securities, or of the Subordinated Debentures, or the
consummation by each of the Company and by the Trust of the other transactions
contemplated by this Agreement, the Indenture, the Trust Agreement or the
Guarantee Agreement.
-11-
(xx) The Company has received, subject to notice of issuance,
approval to have the Preferred Securities listed on the NNM and the Company
knows of no reason which is likely to adversely affect such approval.
(xxi) None of the Subsidiaries, the Company or the Trust is
and, after giving effect to the offering and sale of the Preferred Securities,
the Common Securities and the Junior Subordinated Debentures, will not be, an
"investment company" or an "affiliated person" of or a "promoter" or "principal
underwriter" of or an entity "controlled" by an "investment company", as such
terms are defined in the Investment Company Act of 1940 (the "Investment Company
Act").
(xxii) Each of the Company, the Subsidiaries, the Company and
the Trust owns or is licensed or otherwise has sufficient right to use the
proprietary knowledge, trademarks, service marks, trade names, trademark
registrations, service xxxx registrations, logo marks, copyrights and rights
(collectively, "Intellectual Property") necessary for the conduct of its
business as described in or contemplated by the Registration Statement and the
Prospectus. To the best knowledge of the Company and the Trust, none of the
activities engaged in by the Company, the Subsidiaries or the Trust materially
infringes upon or otherwise materially conflicts with Intellectual Property
rights of others. No claims have been asserted or, to the best knowledge of the
Offerors, threatened against the Company, the Subsidiaries or the Trust by any
person with respect to the use of any such Intellectual Property or challenging
or questioning the validity or effectiveness of any such Intellectual Property.
(xxiii) No labor disturbance(s) by, or labor dispute(s) with the
employees of the Company or the Subsidiaries exists or, to the best knowledge of
the Offerors, is threatened or imminent which, in the aggregate, would have a
Material Adverse Effect on the Company.
(xxiv) Each of the administrators under the Trust Agreement
(each of the "Administrators") has been duly authorized to execute and deliver
the Trust Agreement.
(xxv) To the best knowledge of the Offerors, no hazardous
substances, hazardous wastes, pollutants or contaminants have been deposited or
disposed of in, on or under the properties of the Company, or any of the
Subsidiaries (including properties owned, managed or controlled by a Subsidiary
in connection with its lending activities) during the period in which the
Company or the Subsidiary has owned, occupied, managed, controlled or operated
such properties, in violation of any environmental, safety, health or similar
laws or regulations, orders, decrees or permits relating to the protection of
human health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("Environmental Regulations"), or any order,
judgment, decree or permit which would require remedial action under any
Environmental Regulations, except for any violations or remedial actions which
would not have, in the aggregate, a Material Adverse Effect on the Company. The
Company and each of the Subsidiaries (i) is in material compliance with all
applicable Environmental Regulations and (ii) has received all permits,
licenses, consents or other approvals required under applicable Environmental
Regulations to conduct its business, in each case except where the failure(s) to
do so would not, in the aggregate, have a Material Adverse Effect on the
Company.
-12-
(xxvi) The employee benefit plans, including employee welfare
benefit plans, of the Company and each of the Subsidiaries (the "Employee
Plans",) have been operated in material compliance with the applicable
provisions of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), the Internal Revenue Code of 1986, as amended (the "Code"), all
regulations, rulings and announcements promulgated or issued thereunder and all
other applicable governmental laws and regulations (except to the extent such
noncompliance would not, in the aggregate, have a Material Adverse Effect on the
Company). No reportable event under Section 4043(c) of ERISA has occurred with
respect to any Employee Plan of the Company or any of the Subsidiaries for which
the reporting requirements have not been waived by the Pension Benefit Guaranty
Corporation. No prohibited transaction under Section 406 of ERISA, for which an
exemption does not apply, has occurred with respect to any Employee Plan of the
Company or any of the Subsidiaries. There are no pending or, to the Company's
best knowledge, threatened claims by or on behalf of any Employee Plan, by any
employee or beneficiary covered under any such Plan or by any governmental
authority or otherwise involving such Plans or any of their respective
fiduciaries (other than for routine claims for benefits). All Employee Plans
that are group health plans have been operated in material compliance with the
group health plan continuation coverage requirements of Section 4980B of the
Code.
(xxvii) None of the Company, the Subsidiaries or the Trust is
party to or otherwise subject to any consent decree, memorandum of
understanding, written commitment or other supervisory agreement (restricting
the activities of the Company, the Subsidiaries or the Trust in a material way)
with the Board of Governors of the Federal Reserve System or any Federal Reserve
Bank (the "Federal Reserve"), the FDIC, the Maryland Commissioner of Financial
Regulation (the "Maryland Commissioner") or any other federal or state authority
or agency responsible for the supervision, regulation or insurance of depository
institutions, mortgage companies and their subsidiaries and holding companies
(any "Bank Regulator").
(xxviii) None of the Company, the Subsidiaries, the Trust or, to
the best knowledge of the Offerors, any other person associated with or acting
on behalf of the Company, any of the Subsidiaries or the Trust, including,
without limitation, any director, officer, agent, or employee of any of the
Subsidiaries or the Company has, directly or indirectly, while acting on behalf
of such Subsidiary, the Company or the Trust (i) used any corporate funds for
unlawful contributions, gifts, entertainment, or other unlawful expenses
relating to political activity; (ii) made any unlawful contribution to any
candidate for foreign or domestic office, or to any foreign or domestic
government officials or employees or other person charged with similar public or
quasi-public duties, other than payments required or permitted by the laws of
the United States or any jurisdiction thereof or to foreign or domestic
political parties or campaigns from corporate funds, or failed to disclose fully
any contribution in violation of law; (iii) violated any provision of the
Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any other
payment of funds of the Company or a Subsidiary or retained any funds which
constitute a violation of any law, rule or regulation or which was or is
required to be disclosed in the Registration Statement or the Prospectus
pursuant to the requirements of the Securities Act or the Securities Act Rules
and Regulations.
-13-
(xxix) The Bank Subsidiary is in good standing with the
Maryland Division of Financial Regulation of the Department of Licensing and
Regulations and the activities of the Company and the Bank Subsidiary are
permitted under applicable federal and state banking laws, rules and
regulations. The Company and each of the Subsidiaries have all necessary
approvals, including approvals of each Bank Regulator having jurisdiction over
it, to conduct their respective business as described in the Registration
Statement and the Prospectus, except where the failure to have such approvals
would not in the aggregate have a Material Adverse Effect on the Company. The
Company and each Subsidiary has filed with the appropriate governmental
authorities each and every statement, report, information or form required to be
filed by it pursuant to any applicable law, regulation, license, permit or
order, except where the failure(s) to so file would not, in the aggregate, have
a Material Adverse Effect on the Company, all such filings or submissions were
in compliance in all material respects with applicable laws and regulations when
filed, and no deficiencies have been asserted by any regulatory commission,
agency or authority with respect to such filings or submissions, except where
the failure(s) to so file or cure would not, in the aggregate, have such a
Material Adverse Effect in the Company. No report or application filed by the
Company or any of the Subsidiaries with any Bank Regulator (each such report or
application, together with all exhibits thereto, a "Regulatory Report"), as of
the date it was filed, contained any material misstatement or omission or failed
to comply with the applicable requirements of the applicable Bank Regulators, as
the case may be. The Company and each of the Subsidiaries has filed each
Regulatory Report that it was required to file with any Bank Regulator except
where the failure(s) to so file would not, in the aggregate, have a Material
Adverse Effect on the Company.
(xxx) The books, records and accounts and systems of internal
accounting controls of the Company and of each of the Subsidiaries comply in all
material respects with the requirements of Section 13(b)(2) of the Exchange Act.
(xxxi) The minute books of the Company and each of the
Subsidiaries are current and contain a correct record, in all material respects,
of all corporate action reflected therein as taken by the Boards of Directors
and shareholders of the Company and the Subsidiaries and a correct and complete
record of the ratification by the Boards of Directors of the Company and the
Subsidiaries of all corporate action taken by such Boards for which such minute
books do not contain a record, and all signatures contained therein are true
signatures of the persons whose signatures they purport to be.
(xxxii) Except pursuant to this Agreement, the Company has not
incurred, directly or indirectly, any liability for a fee, commission or other
compensation or reimbursement on account of the employment of a broker, finder
agent, investment adviser or otherwise in connection with the transactions
contemplated by this Agreement, the Indenture, the Trust Agreement, or the
Guarantee Agreement.
(xxxiii) There are no business relationships or related party
transactions of the nature described in Item 404 of Regulation S-K of the
Commission involving the Company, the Subsidiaries or the Trust and any person
referred to in Items 401 or 404 of Regulation S-K, except as required to be
described, and as so described, in the Prospectus.
-14-
(xxxiv) To the best knowledge of the Company, since its
inception, the Company has not incurred any liability arising under or as a
result of the application of the provisions of the Securities Act. Without
limiting the generality of the foregoing, all offers and sales of the Company's
capital stock prior to the date hereof were at all relevant times exempt from
the registration requirements of the Securities Act and from applicable state
securities or Blue Sky laws or were made pursuant to effective registration
statements in conformity with the Securities Act and the Securities Act Rules
and Regulations and were properly qualified under all applicable state
securities or Blue Sky laws in all material respects. Any offering materials
prepared in connection therewith did not include any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(xxxv) The conditions for use of Form S-3, as set forth
in the General Instructions thereto, have been satisfied in all material
respects.
(b) Any certificate signed by any officer of the Company or
Administrator of the Trust and delivered to the Representatives or to counsel to
the Underwriters shall be deemed a representation and warranty by the Company
and each of the Subsidiaries or of the Trust, as the case may be, to the
Underwriters as to the matters covered thereby.
Section 3. Purchase of Securities by the Underwriters. On the basis of
------------------------------------------
the representations, warranties, covenants and agreements herein contained, and
subject to the terms and conditions herein set forth, the Trust agrees to issue
and sell to the Underwriters, and each of the Underwriters agrees, severally and
not jointly, to purchase from the Trust, the respective number of Preferred
Securities set forth opposite the name of each such Underwriter in Schedule I
hereto at a purchase price of $______ per Preferred Security (the "Purchase
Price"). As compensation to the Underwriters for their commitments hereunder and
in view of the fact that the proceeds of the sale of the Preferred Securities
(together with the entire proceeds from the sale by the Trust to the Company of
the Common Securities) will be used to purchase the Subordinated Debentures, on
the Closing Date, the Company hereby agrees to pay to the Representatives, on
behalf of the several Underwriters, a commission of $____ per Preferred Security
($_______ in the aggregate).
Section 4. Offering of the Preferred Securities by the Underwriters.
--------------------------------------------------------
The Company and the Trust are advised that the Underwriters propose to make a
public offering of the Preferred Securities, on the terms and conditions set
forth in the Registration Statement from time to time as and when the
Representatives deem advisable after the Registration Statement becomes
effective. Because the NASD is expected to view the Preferred Securities as
interests in a direct participation program, the offering of the Preferred
Securities is being made in compliance with the applicable provisions of Rule
2810 of the NASD's Conduct Rules.
Section 5. Delivery of and Payment for the Preferred Securities.
-----------------------------------------------------
(a) Delivery to the Underwriters of, and payment to the Trust
for, the Preferred Securities shall be made at 10:00 a.m., Washington, DC time,
on the third (or if the Preferred Securities are priced, as contemplated by Rule
l5c6-l(c) under the Exchange Act, after
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4:30 p.m., on the fourth) full business day (such time and date being referred
to as the "Closing Date") following the date of the initial public offering of
the Preferred Securities as advised to the Representatives by the Company, at
such place as the Representatives shall designate.
(b) The Preferred Securities will be delivered by the Trust to
the Underwriters on the Closing Date against payment of the Purchase Price
therefor by wire transfer of same-day funds, payable to the order of the Trust
to an account designated thereby. Delivery of the Preferred Securities may be
made by credit through full fast transfer to the accounts at The Depository
Trust Company designated by the Representatives. The Preferred Securities shall
be represented in the form of one or more fully registered global notes (the
"Global Notes") in book-entry form registered in the name of the nominee of The
Depository Trust Company. The Global Notes representing the Preferred Securities
shall be made available for examination by the Representatives not later than
10:00 a.m., Washington, DC time, on the last business day prior to the Closing
Date with any transfer taxes payable upon initial issuance or the transfer
thereof duly paid by the Company for the respective accounts of the Underwriters
against payment of the Purchase Price therefor.
(c) The documents to be delivered on the Closing Date by or on
behalf of the parties hereto pursuant to Section 8 hereof, including the cross-
receipt for the Preferred Securities to be purchased and any additional
documents requested by the Underwriters, will be delivered at the offices of
Xxxxxx Xxxxxxxxx, Xxxxxxx, Xxxxxxxxxx & Xxxxxxxxx, LLC, 000 Xxxx Xxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxx 00000, or such other location as the Representatives may
designate (the "Closing Location").
(d) A meeting will be held at the Closing Location at 2:00 p.m.,
Washington, D.C. time, on the business day next preceding Closing Date or at
such other time(s) and location as is mutually agreed upon by the parties
hereto, at which meeting(s) the final drafts of the documents to be delivered
pursuant to the preceding paragraph will be available for review by the parties
hereto.
Section 6. Covenants of the Company and the Trust. The Offerors,
--------------------------------------
jointly and severally, covenant and agree with each of the Underwriters as
follows:
(a) The Offerors will use their respective best efforts to cause
the Registration Statement, if not effective at the time of execution of this
Agreement, to become effective as promptly as practicable thereafter. If
required, the Offerors will file the Prospectus and any amendments or
supplements thereto with the Commission in the manner and within the time period
required by Rule 424(b) under the Securities Act. During any time when a
prospectus relating to the Preferred Securities is required to be delivered
under the Securities Act, each of the Offerors will comply in all material
respects with all requirements imposed by the Securities Act and the Securities
Act Rules and Regulations to the extent necessary to permit the continuance of
sales of or dealings in the Preferred Securities in accordance with the
provisions hereof and as contemplated by the Registration Statement and the
Prospectus. With respect to any registration statement, prospectus, amendment
(including any post-effective amendment), or supplement to be filed with the
Commission in connection with the Preferred Securities, the Offerors will
provide a copy of each such document to the Representatives a reasonable time
-16-
prior to the date such document is proposed to be filed with the Commission and
will not file any such document without the consent of the Representatives. Any
such registration statement, prospectus, amendment or supplement, when filed,
will comply in all material respects with the Securities Act and the Securities
Act Rules and Regulations. In the event that the Registration Statement is
effective at the time of execution of this Agreement, but the total number of
Preferred Securities subject to this Agreement exceeds the number of Preferred
Securities covered by the Registration Statement, the Offerors promptly will
file with the Commission the date hereof a registration statement pursuant to
Rule 462(b) of the Rules and Regulations in accordance with the requirements of
such Rule and will make payment of the filing fee therefor in accordance with
the requirements of Rule 111(b) of the Rules and Regulations.
(b) The Offerors will advise the Representatives promptly and, if
requested by the Representatives, will confirm such advice in writing (i) when
the Registration Statement, as amended, has become effective; (ii) if the
provisions of Rule 430A of the Securities Act Rules and Regulations will be
relied upon, when the Prospectus has been filed in accordance with said Rule
430A; (iii) when any post-effective amendment to the Registration Statement
becomes effective; (iv) of any request made by the Commission for amendments or
supplements to the Registration Statement, any Preliminary Prospectus or
Prospectus or for additional information; (v) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration Statement or
any post-effective amendment thereto or any order preventing or suspending the
use of any Preliminary Prospectus or Prospectus or any amendment or supplement
thereto or the qualification of the securities for offering or sale in any
jurisdiction, or the institution or threat of any investigation or proceedings
for any such purpose by the Commission, any state securities commission or any
other regulatory authority; and (vi) of the receipt of any comments from the
Commission regarding the Registration Statement, any post-effective amendment
thereto, the Preliminary Prospectus, the Prospectus, or any amendment or
supplement thereto. The Offerors will use their best efforts to prevent the
issuance of any stop order by the Commission, and if at any time the Commission
shall issue any stop order, the Offerors will use their best efforts to obtain
the withdrawal of such stop order at the earliest possible moment.
(c) The Offerors will cooperate with the Representatives, the
Underwriters and counsel to the Underwriters in qualifying or registering the
Preferred Securities for sale, or obtaining an exemption therefrom, under the
securities or Blue Sky laws of such jurisdictions as the Representatives shall
designate, and will continue such qualifications or registrations or exemptions
in effect so long as necessary to complete the distribution of the Preferred
Securities. Notwithstanding the foregoing, neither of the Offerors shall be
required to qualify as a foreign corporation or to file a general consent to
service of process in any such jurisdiction where it is not presently qualified.
(d) The Offerors' consent to the use of the Prospectus (and any
amendment or supplement thereto) by the Underwriters and all dealers to whom the
Preferred Securities may be sold, in connection with the offering or sale of the
Preferred Securities and for such period of time thereafter as the Prospectus is
required by law to be delivered in connection therewith. If, at any time when a
prospectus relating to the Preferred Securities is required under the Securities
Act to be delivered in connection with sales of the securities by an underwriter
or dealer, any
-17-
event occurs as a result of which the Prospectus, as then amended or
supplemented, would include any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, or if it becomes
necessary at any time to amend or supplement the Prospectus to comply in all
material respects with the Securities Act or the Securities Act Rules and
Regulations, the Offerors promptly will so notify the Representatives and will
prepare and file with the Commission an amendment to the Registration Statement
or an amendment or supplement to the Prospectus which will correct such
statement or omission or effect such compliance. The Offerors will provide a
copy of each such amendment or supplement to the Representatives a reasonable
time prior to the date on which it is proposed to be filed with the Commission
and will not file any such amendment or supplement without the consent of the
Representatives, which shall not be unreasonably withheld.
(e) As soon as practicable, but in any event not later than forty-
five (45) calendar days after the end of the twelve (12) month period beginning
on the day after the end of the fiscal quarter of the Offerors during which the
effective date of the Registration Statement occurs (ninety (90) calendar days
in the event that such quarter is the last fiscal quarter), the Offerors, to the
extent not exempt pursuant to the Securities Act, the Securities Act Rules and
Regulations or the exemptive authority of the Commission, will make generally
available to their security holders, in the manner specified in Rule 158(b) of
the Securities Act Rules and Regulations, and will deliver to the
Representatives, an earnings statement which will be in the detail required by,
and will otherwise comply with, the provisions of Section 11(a) of the
Securities Act and Rule 158(a) of the Securities Act Rules and Regulations,
which statement need not be audited unless required by the Securities Act or the
Securities Act Rules and Regulations, covering a period of at least twelve (12)
consecutive months after the effective date of the Registration Statement.
(f) For a period of three (3) years commencing with the date hereof,
as promptly as practical after filing or release, as the case may be, each of
the Offerors will furnish to the Representatives copies of (i) all annual
reports, quarterly reports and current reports filed thereby with the Commission
on Forms 10-K, 10-Q and 8-K, or such other similar forms as may be designated by
the Commission; (ii) such other documents, proxy statements, reports and
information as are furnished thereby to its security holders generally; (iii)
each report filed thereby with the NNM; (iv) each press release in respect
thereof; (v) and such other public information relating to the Offerors as the
Representatives may reasonably request.
(g) The Offerors will furnish, without charge, to the Representatives
or on the Representatives' request, at such place as the Representatives may
designate, copies of each Preliminary Prospectus, the Registration Statement and
any amendments thereto, any registration statement filed pursuant to Rule 462(b)
(of which copies two (2) will be signed and will include all financial
statements and exhibits) and the Prospectus, and all amendments and supplements
thereto, in each case as soon as available and in such quantities as the
Representatives may reasonably request.
(h) Each of the Offerors will use its best efforts to cause the
Preferred Securities to be duly approved for listing on the NNM, subject to
notice of issuance, prior to the
-18-
Closing Date and to cause the Preferred Securities to remain listed for at least
thirty-six (36) months thereafter.
(i) None of the Offerors, the Subsidiaries or any of their officers
or directors, trustees or affiliates, (within the meaning of the Securities Act
Rules and Regulations) will take, directly or indirectly, any action designed
to, or which might reasonably be expected to, cause or result in stabilization
or manipulation of the price of any securities of the Offerors.
(j) The Offerors will apply the net proceeds from the sale of the
Preferred Securities and the Subordinated Debentures in the manner and for the
purposes set forth in the Prospectus and will make such disclosures of the
application of such proceeds as may be required by Rule 463 of the Securities
Act Rules and Regulations. Pending application of the net proceeds of the sale
of the Common Securities, the Preferred Securities and the Subordinated
Debentures in such manner, the Offerors and each of the Subsidiaries will
operate their businesses in such manner and for such purposes and each will
invest such net proceeds in such securities, so as not to become an "investment
company" as such term is defined under the Investment Company Act.
(k) To the extent not exempt pursuant to the Securities Act, the
Securities Act Rules and Regulations or the exemptive authority of the
Commission, each of the Offerors will timely file all such reports, forms or
other documents as may be required from time to time, under the Securities Act,
the Securities Act Rules and Regulations, the Exchange Act and the rules and
regulations thereunder, and all such reports, forms and documents so filed will
materially comply as to form and substance with the applicable requirements
under the Securities Act, the Securities Act Rules and Regulations, the Exchange
Act and the rules and regulations thereunder which may from time to time be
applicable thereto. Each of the Offerors shall comply with the provisions of all
undertakings contained in the Registration Statement.
(l) Neither of the Offerors shall offer, sell, contract to sell or
otherwise dispose of any securities issued or guaranteed by the Trust or the
Company that, in the reasonable judgment of the Representatives, is
substantially similar to the Preferred Securities, without the prior written
consent of the Representatives, which shall not be unreasonably withheld.
(m) The Offerors will not, without the prior written consent of the
Representatives, which shall not be unreasonably withheld, incur any material
liability or obligation, direct or contingent, or enter into any material
transaction, other than in the ordinary course of business, except as described
in or contemplated by the Registration Statement and the Prospectus.
(n) Neither of the Offerors shall enter into any contractual
agreement with respect to the distribution of the Preferred Securities except
for the arrangements with the Underwriters pursuant hereto.
(o) Each of the Offerors will use its best efforts to comply or cause
to be complied with the conditions to the Underwriters' obligations set forth in
Section 8 hereof.
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Section 7. Expenses.
---------
(a) If the Underwriters purchase the Preferred Securities in
accordance with the terms of this Agreement, the Company shall pay all costs,
expenses and fees incident to the performance of its obligations and those of
the Trust under this Agreement including the costs and expenses associated with
(i) the printing and filing of the Registration Statement as originally filed
and any amendments and exhibits thereto; (ii) the filing fee of the NASD and
expenses relating to any review of the offering and listing of the Preferred
Securities on the NNM; (iii) all costs and expenses incurred in connection with
the preparation, issuance and delivery of the Preferred Securities to the
Underwriters; (iv) the fees and disbursements of the Trust's and the Company's
counsel and accountants; (v) all costs and expenses in connection with the
qualification of the Preferred Securities under state securities laws in
accordance with the provisions of Section 6(c), including filing fees and the
reasonable fees and disbursements of counsel to the Underwriters in connection
therewith and in connection with the preparation of the preliminary and final
Blue Sky memoranda; (vi) the printing and delivery of copies of the preliminary
and final Blue Sky memoranda; and (vii) the fees and expenses of the Property
Trustee, the Delaware Trustee, the Indenture Trustee, and the Guarantee Trustee,
and any agent of the Property Trustee, the Delaware Trustee, the Indenture
Trustee, and the Guarantee Trustee, and the fees and disbursements of Trustees'
counsel, in connection with the Trust Agreement and the issuance and delivery of
the Preferred Securities.
(b) If the purchase of the Preferred Securities as herein
contemplated is not consummated for any reason other than the Underwriters'
default under this Agreement is not consummated or by reason of Section 11(a)
hereof, the Company shall pay all reasonable costs, expenses and fees incident
to the performance of its obligations and those of the Trust under this
Agreement and shall reimburse the several Underwriters for their reasonable out-
of-pocket expenses (including but not limited to reasonable counsel fees and
disbursements) in connection with any investigation made by them, and any
preparation made by them in respect of marketing of the Preferred Securities or
in contemplation of the performance by them of their obligations hereunder,
provided, however, that in no event shall the amount of such reimbursement
exceed $35,000 in the aggregate.
Section 8. Conditions of the Underwriters' Obligations. The
--------------------------------------------
obligations. of each Underwriter to purchase and pay for the number of Preferred
Securities set forth opposite the name of such Underwriter in Schedule I on the
Closing Date are subject to the continuing accuracy of the representations and
warranties of the Offerors contained herein as of the date hereof, as of the
Closing Date as if they had been made on and as of the Closing Date; the
accuracy on and as of the Closing Date of the statements of officers or trustees
of the Offerors, as the case may be, made pursuant to the provisions hereof; the
performance by the Offerors, on and as of the Closing Date of their respective
covenants and agreements hereunder and the following additional conditions
(which may, in the absolute and sole discretion of the Representatives, be
waived, in whole or in part):
(a) The Registration Statement shall have been declared
effective, and the Prospectus (containing the information omitted pursuant to
Rule 430(A)) shall have been filed
-20-
with the Commission not later than the Commission's close of business on the
second business day following the date hereof or such later time and date to
which the Representatives shall have consented. No stop order suspending the
effectiveness of the Registration Statement or any post-effective amendment
thereto or any order preventing or suspending the use of any Prospectus or any
amendment or supplement thereto shall have been issued, and no proceedings for
that purpose shall have been instituted or pending or, to the best knowledge of
the Offerors or the Representatives, shall be contemplated or threatened by the
Commission. The Offerors shall have complied in all material respects with any
request of the Commission for additional information (to be included in the
Registration Statement or the Prospectus or otherwise). No stop orders
suspending the sale of the Preferred Securities in any jurisdiction referred to
in Section 6(c) shall have been issued, and no proceedings for that purpose
shall have been instituted or shall be pending or, to the best knowledge of the
Offerors or the Representatives, shall be contemplated or threatened by the
officials of any such jurisdiction.
(b) The Representatives shall not have advised the Offerors in
writing that the Registration Statement contains an untrue statement of fact
which the Representatives reasonably believe is material, or omits to state a
fact which the Representatives reasonably believe is material and is required to
be stated therein or is necessary to make the statements therein not misleading,
or that the Prospectus, or any supplement thereto, contains an untrue statement
of fact which the Representatives reasonably believe is material, or omits to
state a fact which the Representatives reasonably believe is material and is
required to be stated therein or is necessary to make the statements therein not
misleading.
(c) On or prior to the Closing Date, the Representatives shall
have received from counsel to the Underwriter, such opinion or opinions with
respect to the issuance and sale of the Common Securities, the Preferred
Securities and the Subordinated Debentures, the Registration Statement and the
Prospectus and such other related matters as the Representatives reasonably may
request, and such counsel shall have received such documents and other
information as it requests to enable it to pass upon such matters.
(d) On the Closing Date, the Representatives shall receive:
(i) The favorable opinion, dated as of the Closing Date,
of Xxxxxxx, Xxxxxx & Xxxxxxxx LLP, counsel to the Company, substantially in the
form and substance of Exhibit A attached hereto. In rendering such opinion,
---------
counsel may state that it is passing only on matters of Maryland and United
States federal laws. In rendering such opinion, counsel may rely upon an opinion
or opinions, each dated the Closing Date, of other counsel retained by it, the
Company or the Trust as to laws of any jurisdiction other than the United States
or the State of Maryland, provided that (A) such reliance is expressly
authorized by each opinion so relied upon and a copy of each such opinion is
delivered to the Underwriters and (B) counsel to the Company shall state in its
opinion that it is justified in relying thereon. Insofar as such opinions
involve factual matters, such counsel may rely, to the extent such counsel deems
proper, upon certificates of officers and trustees of the Company, the
Subsidiaries and the Trust, as the case may be, and certificates of public
officials, provided that copies of all such certificates shall be attached to or
referenced in the opinion.
-21-
(ii) The favorable opinion, dated the Closing Date, of White &
Case, counsel to Bankers Trust (Delaware), as the Property Trustee, the
Debenture Trustee and the Guarantor Trustee, substantially in the form and
substance of Exhibit B attached hereto.
---------
(iii) The favorable opinion, dated the Closing Date, of Xxxxxxxx,
Xxxxxx & Finger, P.A., special Delaware counsel to the Company and the Trust,
substantially in the form and substance of Exhibit C attached hereto.
---------
In rendering the opinions contemplated by clauses (ii) and (iii) above,
counsel may rely upon an opinion or opinions, each dated the Closing Date, of
other counsel retained by it or the Company as to laws of any jurisdiction other
than the United States or the State of Delaware, provided that (A) such reliance
is expressly authorized by each opinion so relied upon and a copy of each such
opinion is delivered to the Representatives and (B) counsel shall state in its
opinion that it believes that it is justified in relying thereon. Insofar as
such opinions involve factual matters, such counsel may rely, to the extent such
counsel deems proper, upon certificates of officers and trustees of the Company,
the Subsidiaries and the Trust, as the case may be, and certificates of public
officials, provided that copies of all such opinions shall be attached to or
referenced in the opinion.
(e) On or prior to the Closing Date, counsel to the Underwriters
shall have been furnished such documents, certificates and opinions as they may
reasonably request in order to evidence the accuracy, completeness or
satisfaction of any of the representations or warranties of the Company or the
Trust or conditions herein contained.
(f) On the date hereof, the Representatives shall have received
a "comfort" letter from PricewaterhouseCoopers, LLP dated as of the date of this
Agreement, in form and substance satisfactory to the Representatives, to the
effect that (i) they are independent public accountants as required by the
Securities Act of 1933, as amended ("Securities Act") and the applicable rules
and regulations thereunder; (ii) it is their opinion that the financial
statements included or incorporated by reference in the Registration Statement
comply as to form in all material respects with the applicable accounting
requirements of the Securities Act and the Exchange Act and the applicable rules
and regulations thereunder; (iii) based upon consultations with officers and
other employees of the Company responsible for financial and accounting matters
and other specified procedures and inquires, nothing has come to their attention
that caused them to believe that unaudited financial statements included in the
Registration Statement do not comply as to form in all material respects with
the applicable accounting requirements of Rule 11-02 of Regulation S-X; (iv)
based upon limited procedures set forth in detail in such letter, nothing has
come to their attention which causes them to believe that during the period from
December 31, 1999 to a specified date not more than five days prior to the date
of this Agreement, there has been any decrease in the capital stock or increase
in long-term debt of the Company or its subsidiaries or any decrease in
consolidated total assets of the Company and its subsidiaries as compared with
the amounts shown in the December 31, 1999 consolidated balance sheet
incorporated by reference in the Registration Statement, or any decrease, as
compared with the corresponding period in the preceding year, in net income or
net interest income of the Company and its subsidiaries on a consolidated basis,
except in each case as set forth or contemplated in the Registration Statement;
(v) they have read the Registration
-22-
Statement and certain dollar amounts, percentages and other financial
information specified by the Underwriters which is included or incorporated by
reference in the Registration Statement and have performed the procedures set
forth in detail in such letter and have found such amounts, percentages or other
financial information to be in agreement with the relevant accounting and
financial records of the Company and the Subsidiaries; and (vi) statements as to
such other matters incidental to the transactions contemplated hereby as the
Underwriters may reasonably request.
(g) On the Closing Date, the Representatives shall have received from
PricewaterhouseCoopers, LLP a letter, dated as of the such date, to the effect
that they reaffirm the statements made in the letter furnished pursuant to
Section 8(f).
(h) On the Closing Date, the Underwriters shall have received a
certificate, dated such date, of the Chief Executive Officer and Chief Financial
Officer of the Company to the effect that each such person has carefully
examined the Registration Statement, to the best knowledge of each such person,
and the Prospectus and any amendments or supplements thereto and this Agreement,
and that:
(i) The representations and warranties of the Company in this
Agreement are true and correct in all material respects, as if made on and as of
the Closing Date, and the Company has complied with all agreements and covenants
and satisfied, in all material respects, all conditions contained in this
Agreement on its part to be performed or satisfied at or prior to the Closing
Date;
(ii) No stop order suspending the effectiveness of the
Registration Statement or post-effective amendment thereto or suspending the use
of any Prospectus or amendment or supplement thereto or the qualification of the
Preferred Securities for offering or sale has been issued, and no proceedings
for that purpose have been instituted or are pending or, to the best knowledge
of each such person, are contemplated or threatened under the Securities Act,
and any and all filings required by Rule 424, Rule 430A and Rule 462(b) have
been timely made; and
(iii) The Registration Statement and Prospectus and, if any, each
amendment and each supplement thereto, contain all statements and information
required to materially comply with the Securities Act or the Securities Act
Rules and Regulations to be included therein, and neither the Registration
Statement or the Prospectus nor any amendment or supplement thereto includes any
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 not materially
misleading in the light of the circumstances under which they were made.
References to the Registration Statement and the Prospectus in
this Section 8(h) are to such documents as amended and supplemented at the date
of the certificate required hereby.
(j) On the Closing Date, the Underwriters shall have received a
certificate, dated the Closing Date, of the Administrators to the effect that
each such Administrator has
-23-
carefully examined the Registration Statement and the Prospectus and any
amendments or supplements thereto and this Agreement, and that, to the best
knowledge of each person:
(i) the representations and warranties of the Trust in
this Agreement are true and correct in all material respects, as if made on and
as of the Closing Date, and the Trust has complied with all agreements and
covenants and satisfied, in all material respects, all conditions contained in
this Agreement on its part to be performed or satisfied at or prior to the
Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto or suspending the
use of any Prospectus in any amendment or supplement thereto, or the
qualification of the Preferred Securities for offering or sale has been issued
has been issued, and no proceedings for that purpose have been instituted or are
pending or, to the best knowledge of each such person, are contemplated or
threatened under the Securities Act, and any and all filings required by Rule
424, Rule 430A and Rule 462(b) have been timely made; and
(iii) the Registration Statement and Prospectus and, if
any, each amendment and supplement thereto, contain all statements and
information required to materially comply with the Securities Act and the Rules
and the Securities Act Regulations to be included therein, and neither the
Registration Statement or the Prospectus nor any amendment or supplement thereto
includes any 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
not materially misleading in the light of the circumstances under which they
were made.
References to the Registration Statement and the Prospectus in
this Section 8(j) are to such documents as amended and supplemented at the date
of the certificate required hereby.
(k) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus up to and including
the Closing Date, there has not been any material change in the business or
properties of the Company, any of the Subsidiaries or the Trust which change,
taken as a whole, makes it reasonably impractical or inadvisable in the
Representatives' reasonable judgment to proceed with the public offering or the
delivery of the Preferred Securities as contemplated by the Prospectus.
(l) Prior to the Closing Date, the Preferred Securities shall
have been duly authorized for listing on the NNM.
(m) Prior to the Closing Date, the Preferred Securities shall
have been qualified under the securities or Blue Sky laws of such jurisdictions
as the Representatives shall have designated or an exemption therefrom shall be
available;
(n) Prior to the Closing Date, the NASD, upon review of the
terms of the public offering of the Preferred Securities contemplated hereby,
shall have indicated that it has
-24-
no objection to the underwriting arrangements pertaining to the sale of the
Preferred Securities and the Underwriters' participation in the sale of the
Preferred Securities as so contemplated.
All opinions, certificates, letters and documents to be furnished
by the Offerors will comply with the provisions hereof only if they are
reasonably satisfactory in all material respects to the Representatives. The
Offerors shall furnish the Underwriters with manually signed or conformed copies
of such opinions, certificates, letters and documents in such quantities as the
Representatives reasonably request. The certificates delivered under this
Section 8 shall constitute representations, warranties and agreements of the
Offerors as to all matters set forth therein as fully and effectively as if such
matters had been set forth in Section 2 of this Agreement.
If any condition to the Underwriters' obligations hereunder to be
satisfied prior to or at the Closing Date is not so satisfied, in all material
respects, or waived by the Representatives, in their discretion, this Agreement,
at the Representatives' election, will terminate upon notification to the
Offerors without liability on the part of any Underwriter (including the
Representatives), or the Offerors, except for the expenses to be paid by the
Company pursuant to Section 7 hereof and except to the extent provided in
Section 9 hereof.
Section 9. Indemnification and Contribution.
---------------------------------
(a) The Offerors agree, jointly and severally, to indemnify and
hold harmless each Underwriter, and its officers, directors, partners, employees
and agents and each person, if any, who controls such Underwriter within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
against any and all losses, claims, damages, liabilities or expenses whatsoever
(which shall include, for all purposes of this Section 9, but not be limited to,
attorneys' fees and any and all fees and 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),
joint or several (and actions in respect thereof), to which such Underwriter,
officer, partner, employee, agent, counsel or controlling person may become
subject, under the Securities Act or other federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages,
liabilities, expenses or actions arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement or the Prospectus or any Preliminary Prospectus, or any
Blue Sky application or other document executed by the Offerors specifically for
the purposes of qualifying, or based upon written information furnished by the
Offerors in any state or other jurisdiction in order to qualify, any or all of
the Preferred Securities under the securities or Blue Sky laws thereof (any such
application, document or information being hereinafter called a "Blue Sky
Application"), or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse, as
incurred, expenses of such Underwriter, partner, employee, agent or controlling
person in connection with investigating, defending or appearing as a third party
witness in connection with any such loss, claim, damage, liability, expense or
action; provided, however, that neither of the Offerors will be liable in any
such case to the extent that any such loss, claim, damage, liability, expense or
action arises out of or is based upon any untrue statement or alleged untrue
statement or omission
-25-
or alleged omission made in any of such documents in reliance upon and in
conformity with information furnished in writing to the Offerors on behalf of
such Underwriter through the Representatives expressly for use therein (as
identified in Section 9(b) hereof), or provided, that such indemnity with
respect to any Preliminary Prospectus shall not inure to the benefit of any
Underwriter (or to the benefit of any person controlling such Underwriter) from
whom the person asserting any such loss, claim, damage, liability or action
purchased Preferred Securities which are the subject thereof to the extent that
any such loss, claim, damage, liability or action (i) results from the fact that
such Underwriter failed to send or give a copy of the Prospectus to such person
at or prior to the confirmation of the sale of such Preferred Securities to such
person in any case where such delivery is required by the Securities Act or (ii)
arises out of or is based upon an untrue statement or omission of a material
fact contained in such Preliminary Prospectus that was corrected in the
Prospectus, unless such failure resulted from non-compliance by the Offerors
with Section 6(d) hereof. The indemnity agreement in this Section 9(a) shall be
in addition to any liability which the Offerors may otherwise have.
Notwithstanding the foregoing, the Offerors shall not be liable for any losses,
claims, damages, liabilities or expenses that a court having jurisdiction shall
have determined such loss, claim, damage, liability or expenses resulted from
any of the Underwriters' negligence or willful misconduct.
(b) Each of the Underwriters agrees severally, but not jointly,
to indemnify and hold harmless the Offerors, each of their respective directors
or trustees, as the case may be, each of their respective officers or
Administrators, as the case may be, who has signed the Registration Statement,
their respective employees and agents and each person, if any, who controls
either of the Offerors within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act against any and all losses, claims, damages,
liabilities or expenses whatsoever (which shall include, for all purposes of
this Section 9, but not be limited to, attorneys' fees and any and all fees and
expenses whatsoever incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever and any and all
amounts paid in settlement), and actions in respect thereof to which the
Offerors or any such director, trustee, Administrator, officer, employee, agent
or controlling person may become subject, under the Securities Act or other
federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages, liabilities, expenses or actions arise
out of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement or the Prospectus or any
Preliminary Prospectus, or in any Blue Sky Application, or arise out of or are
based upon the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with information furnished by the
Underwriters through the Representatives to the Offerors expressly for use
therein. The Company and the Trust acknowledge that the statements with respect
to the public offering of the Preferred Securities set forth under the caption
"Underwriting" and the stabilization legend in the Prospectus have been
furnished by the Underwriters to the Offerors expressly for use therein and
constitute the only information furnished in writing by or on behalf of the
Underwriters for inclusion in the Prospectus. The indemnity agreement contained
in this Section 9(b) shall be in addition to any liability which the
Underwriters may otherwise have. Each Underwriter will severally reimburse any
legal fees or other expenses reasonably incurred by the Offerors, or any such
director, officer, or controlling
-26-
person in connection with investigating or defending any such claims or
threatened claim, and from any and all claims or threatened claims resulting
from failure of such Underwriter to deliver a copy of the Prospectus, if the
person asserting such claim or threatened claim purchased Preferred Securities
from such Underwriter and a copy of the Prospectus (as then amended if the
Offerors shall have amended the Prospectus) was not sent or given by or on
behalf of such Underwriter to such person, if required by law so to have been
delivered, at or prior to the written confirmation of the sale of the Preferred
Securities to such person, and if the Prospectus (as so amended) would have
cured the defect giving rise to such Claim (unless such failure was due to a
failure by the Company and the Trust to provide sufficient copies of the
Prospectuses (as so amended) to each Underwriter).
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against one or more
indemnifying parties under this Section 9, notify such indemnifying party or
parties of the commencement thereof; but the failure to so notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under Section 9(a) or Section 9(b) to the
extent that the indemnifying party was not actually prejudiced by such omission.
In case any such action is brought against an indemnified party and it notifies
an indemnifying party or parties of the commencement thereof, the indemnifying
party or parties against which a claim is to be made will be entitled to
participate therein and, to the extent that it or they may wish, to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified party;
provided, however, that if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party has
reasonably concluded that there may be legal defenses available to it and/or
other indemnified parties which are different from or additional to those
available to the indemnifying party, the indemnified party or parties shall have
the right to select separate counsel to assume such legal defenses and otherwise
to participate in the defense of such action on behalf of such indemnified party
or parties. Upon receipt of notice from the indemnifying party to such
indemnified party of its election so to assume the defense of such action and
approval by the indemnified party of counsel which approval shall not be
unreasonably denied or delayed, the indemnifying party will not be liable to
such indemnified party under this Section 9 for any legal or other expenses
(other than the reasonable costs of investigation) subsequently incurred by such
indemnified party in connection with the defense thereof unless (i) the
indemnified party has employed such counsel in connection with the assumption of
such different or additional legal defenses in accordance with the proviso to
the immediately preceding sentence, (ii) the indemnifying party has not employed
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of commencement of the
action, or (iii) the indemnifying party has authorized in writing the employment
of counsel for the indemnified party at the expense of the indemnifying party.
It is understood that the indemnifying party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
reasonable fees and expenses for more than one separate firm (and appropriate
local counsel) for all such indemnified parties, except to the extent such
counsel advises the indemnifying party of a conflict of interest whereby the
indemnifying party shall be liable for the reasonable fees and expenses for
additional counsel for all such indemnified parties to remedy the conflict of
interest. The indemnifying party shall not be liable for any settlement or any
proceeding effected without its written consent but if settled with such consent
or if there be
-27-
a final judgment for the plaintiff, the indemnifying party agrees to indemnify
the indemnified party from and against any loss or liability by reason of such
settlement or judgment.
(d) If the indemnification provided for in this Section 9 is
unavailable or insufficient to hold harmless an indemnified party under Section
9(a) or Section 9(b) above in respect of any losses, claims, damages,
liabilities or expenses (or actions in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages, liabilities
or expenses (or actions in respect thereof) (i) in such proportion as is
appropriate to reflect the relative benefits received by each of the
contributing parties, on the one hand, and the party to be indemnified, on the
other hand, from the offering of the Preferred Securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of each of the
contributing parties, on the one hand, and the party to be indemnified, on the
other hand in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. In any case where the Company and/or the Trust is a contributing
party and the Underwriters are the indemnified party, the relative benefits
received by the Company and/or 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 net
proceeds (before deducting expenses) from the initial offering and issuance of
the Preferred Securities bear to the total underwriting compensation received by
the Underwriters hereunder, in each case as set forth in the table on the cover
page of the Prospectus. Relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company and/or the Trust or the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The amount paid or payable
by an indemnified party as a result of the losses, claims, damages, liabilities
or expenses (or actions in respect thereof) referred to above in this Section
9(d) shall be deemed to include any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 9(d), the
Underwriters shall not be required to contribute any amount in excess of the
underwriting discounts applicable to the Preferred Securities purchased by the
Underwriters hereunder. The Underwriters' obligations to contribute pursuant to
this Section 9(d) are several in proportion to their respective underwriting
obligations, and not joint. No person guilty of fraudulent misrepresentations
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 9(d), (i) each person, if any,
who controls an Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act shall have the same rights to contribution as
such Underwriter and (ii) each director of the Company, each trustee of the
Trust, each officer of the Company or trustee of the Trust who has signed the
Registration Statement, and each person, if any, who controls the Company or the
Trust within the meaning of Section 15 of the Act or Section 20 of the Exchange
Act shall have the same rights to contribution as the Company or the Trust, as
the case may be. Any party entitled to contribution will, promptly after receipt
of notice of commencement of any action, suit or proceeding against such party
in respect to which claim for contribution may be made against another party or
parties under this Section 9(d), notify such
-28-
party or parties from whom contribution may be sought, but the omission so to
notify such party or parties shall not relieve the party or parties from whom
contribution may be sought from any other obligation (x) it or they may have
hereunder or otherwise than under this Section 9(d) or (y) to the extent that
such party or parties were not actually prejudiced by such omission. The
contribution agreement set forth above shall be in addition to any liabilities
which any indemnifying party may otherwise have.
Section 10. Representations, Etc. to Survive Delivery. The
------------------------------------------
representations, warranties, agreements, covenants, indemnities and statements
contained shall remain in full force and effect, regardless of (a) any
termination of this Agreement; (b) any investigation made by or on behalf of the
Underwriters or by or on behalf of any person controlling the Underwriters, or
by or on behalf of the Offerors; and (c) delivery of and payment for the
Preferred Securities.
Section 11. Effective Date and Termination.
-------------------------------
(a) This Agreement shall become effective at 9:00 a.m.,
Washington, DC time, on the first business day following the date hereof, or at
such earlier time after the Registration Statement becomes effective as the
Representatives, in their sole discretion, shall release the Preferred
Securities for the sale to the public, unless prior to such time the
Representatives shall have received written notice from the Company on behalf of
itself and the Trust that they elect that this Agreement shall not become
effective, or the Representatives shall have given written notice to the
Offerors that the Representatives on behalf of the Underwriters elects that this
Agreement shall not become effective; provided, however, that the provisions of
this Section 11 and of Section 7 and Section 9 hereof shall at all times be
effective. For purposes of this Section 1l(a), the Preferred Securities to be
purchased hereunder shall be deemed to have been so released upon the earlier of
notification by the Representatives to securities dealers releasing such
Preferred Securities for offering or the release by the Representatives for
publication of the first newspaper advertisement which is subsequently published
relating to the Preferred Securities.
(b) This Agreement (except for the provisions of Sections 7 and
9 hereof) may be terminated by the Representatives by written notice to the
Company and the Trust in the event that either of the Offerors has failed to
comply in any material respect with any of the provisions of this Agreement
required on its part to be complied with at or prior to the Closing Date, or if
any of the representations or warranties of the Offerors are not materially
accurate in any respect or if the covenants, agreements or conditions of, or
applicable to, the Offerors herein contained have not been complied with in any
material respect or satisfied within the time specified or the Closing Date,
unless waived by the Representatives, as the case may be, or if prior to the
Closing Date:
(i) the Company or the Subsidiaries, taken as a whole, or
the Trust shall have sustained a loss by strike, fire, flood, accident or other
calamity of such a character, in the reasonable judgment of the Representatives,
as to interfere materially with the conduct of the business and operations of
the Company, the Subsidiaries or the Trust, as the case may be, regardless of
whether or not such loss was insured;
-29-
(ii) trading in the securities of the Company or in
securities generally on the New York Stock Exchange or the NNM shall have been
suspended or a material limitation on such trading shall have been imposed or
minimum or maximum prices shall have been established on either such exchange or
market;
(iii) a banking moratorium shall have been declared by
Maryland, Delaware or United States authorities;
(iv) there shall have been an outbreak or escalation of
hostilities between the United States and any foreign power or an outbreak or
escalation of any other insurrection or armed conflict involving the United
States which, in each Representatives' reasonable judgment, will materially
affect the general securities market or make it inadvisable, in their sole,
reasonable judgment, to proceed with the sale of and payment for the Preferred
Securities;
(v) there shall have been commenced any action, suit or
proceeding at law or in equity against the Company, the Bank Subsidiary or the
Trust, or by any federal, state or other commission, board or agency, wherein,
in the reasonable judgment of the Representatives, any unfavorable decision
would have a Material Adverse Effect on the Company or the Trust;
(vi) there shall have occurred the enactment, publication,
decree or other promulgation of any federal or state statute, regulation, rule
or order of any court or other governmental authority that in the reasonable
judgment of the Representatives has or will have a Material Adverse Effect on
the Company or the Trust;
(vii) there shall have been taken any action by any
federal, state or local government or agency in respect of its monetary or
fiscal affairs that in the reasonable judgment of the Representatives has a
Material Adverse Effect or will materially adverse affect the financial markets
in the United States; or
(viii) the Company's independent public accountants shall
have imposed qualifications in certifying to, or its attorneys in opining upon,
material items including, without limitation, information in the footnotes to
the financial statements or matters incident to the issuance and sale of the
Common Securities, the Preferred Securities or the Subordinated Debentures,
corporate proceedings or other subjects; or
(ix) there shall have been a material adverse change in
(A) general economic, political or financial conditions or (B) the present or
prospective business or condition (financial or other) of the Company, the
Subsidiaries or the Trust, as the case may be that, in each case, in the
reasonable judgment of the Representatives, makes it impracticable or
inadvisable to make or consummate the public offering, sale or delivery of the
Preferred Securities on the terms and in the manner contemplated in the
Prospectus and the Registration Statement.
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(c) Termination of this Agreement shall be without liability of any
party to any other party other than as provided in Sections 7 and 9 hereof.
Section 12. Substitution of Underwriters. If one or more of the
-----------------------------
Underwriters shall fail or refuse (otherwise than for a reason sufficient to
justify the termination of this Agreement under the provisions of Section 8 or
11 hereof) to purchase and pay for the number of Preferred Securities agreed to
be purchased by such Underwriter or Underwriters (pursuant to Section 3 hereof)
upon tender of such number of Preferred Securities in accordance with the terms
hereof, and the number of such Preferred Securities shall not exceed ten percent
(10%) of the Preferred Securities required to be purchased on the Closing Date,
then, each of the non-defaulting Underwriters shall purchase and pay for (in
addition to the number of such Preferred Securities which it has severally
agreed to purchase hereunder) its proportionate share (based on the monetary
obligations of the several Underwriters hereunder on account of the purchase of
Preferred Securities, excluding the Preferred Securities allocable to the
defaulting Underwriter or Underwriters) which the defaulting Underwriter or
Underwriters shall have so failed or refused to purchase on such Closing Date.
In such case, the Representative, on behalf the Underwriters, shall have the
right to postpone the Closing Date to a date not exceeding seven (7) full
business days after the date originally fixed as such Closing Date pursuant to
the terms hereof in order that any necessary changes in the Registration
Statement, the Prospectus or any other documents or arrangements may be made.
If one or more of the Underwriters shall fail or refuse (otherwise
than for a reason sufficient to justify the termination of this Agreement under
the provisions of Section 8 or 11 hereof) to purchase and pay for the number of
Preferred Securities agreed to be purchased by such Underwriter or Underwriters
upon tender to the Representatives on behalf thereof of such Preferred
Securities in accordance with the terms hereof and the number of such Preferred
Securities shall equal or exceed ten percent (10%) of the Preferred Securities
required to be purchased by all the Underwriters on the Closing Date (unless
within forty-eight (48) hours after such default arrangements to the
satisfaction of the Representatives shall have been made for the purchase of the
defaulted Preferred Securities by an Underwriter or Underwriters) and subject to
the provisions of Section 1l(b) hereof, this Agreement will terminate without
liability on the part of any non-defaulting Underwriter or on the part of the
Company or the Trust except as otherwise provided in Sections 7 and 9 hereof. As
used in this Agreement, the term "Underwriter" includes any person substituted
for an Underwriter under this Section 12. Nothing in this Section 12, and no
action taken hereunder, shall relieve any defaulting Underwriter from liability
in respect of any default of such Underwriter under this Agreement.
Section 13. Default by the Company or the Trust. If the Trust shall fail
------------------------------------
at the Closing Date to sell and deliver the number of Preferred Securities which
it is obligated to sell hereunder or the Company fails to deliver the number of
Subordinated Debentures required to be delivered pursuant to the Trust
Agreement, then this Agreement shall terminate without any liability on the part
of any non-defaulting party. Nothing in this Section 13 shall relieve the Trust
or the Company so defaulting from liability, if any, in respect of such default.
Section 14. Notices. All communications hereunder shall be in writing
--------
and if sent to the Representatives shall be mailed or delivered or sent by
facsimile transmission and confirmed
-31-
by letter to Xxxx Xxxxx Xxxx Xxxxxx, Incorporated, 0000 Xxxxxxxxxxxx Xxxxxx,
X.X., Xxxxxxxxxx, X.X. 00000, attention: _______________ (facsimile number:
____________), and to Xxxxxx, Xxxxx Xxxxx, Incorporated at 0000 Xxx Xxxxxx, XX,
Xxxxxxxxxx, XX 00000, Attention: Xxxxxxx X. Xxxxx (facsimile number: (410) 659-
4632), with a copy to Xxxxxx, Feinblatt, Rothman, Hoffberger & Xxxxxxxxx, LLC,
The Xxxxxxx Building, 000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, XX 00000, attention:
Abba Xxxxx Xxxxxxxxx (facsimile number: (000) 000-0000), or, if sent to the
Company or the Trust, shall be mailed or delivered or sent by facsimile
transmission and confirmed by letter to the Company at 000 Xxxx Xxxxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxx X. Xxxxx, Esquire
(facsimile number: (000) 000-0000), with a copy to Xxxx X. Xxxx, Esquire,
Xxxxxxx, Xxxxxx & Xxxxxxxx LLP, 0000 Xxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X.
00000 (facsimile number: (000) 000-0000).
Section 15. Successors. This Agreement shall inure to the benefit of and
----------
be binding upon the Company, the Trust and each Underwriter and the respective
successors and legal Representatives thereof, and nothing expressed or mentioned
in this Agreement is intended or shall be construed to give any other person any
legal or equitable right, remedy or claim under or in respect of this Agreement,
or any provisions herein contained, this Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person, except that the
representations, warranties, indemnities and contribution agreements of the
Company and the Trust contained in this Agreement shall also be for the benefit
of the officers, directors, partners, employees and agents of each Underwriter
and any person or persons, if any, who control any Underwriter within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
and except that the Underwriters' indemnity and contribution agreements shall
also be for the benefit of the directors of the Company, the trustees of the
Trust, the officers of the Company who have signed the Registration Statement on
behalf of the Company or in the Company's role as Depositor under the Trust
Agreement, the Administrators of the Trust, their respective employees and
agents, and any person or persons, if any, who control the Company or the Trust
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act. No purchaser of Preferred Securities from the Underwriters will be
deemed a successor because of such purchase.
Section 16. Applicable Law; Jurisdiction. This Agreement shall be
-----------------------------
governed by and construed in accordance with the laws of the State of Maryland,
without giving effect to the choice of law or conflict of law principles
thereof. Each party hereto consents to the jurisdiction of each court in which
any action is commenced seeking indemnity or contribution pursuant to Section 9
above and agrees to accept, either directly or through an agent, service of
process of each such court.
Section 17. Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed to be an original, and all of which
together shall be deemed to be one and the same instrument.
Section 18. Amendment. This Agreement may be amended at any time, but
---------
only by a writing signed by the parties hereto.
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* * * * * * *
If the foregoing is in accordance with your understanding, please sign and
return to us three (3) counterparts hereof, and upon your acceptance hereof, on
behalf of each of the Underwriters, this letter and such acceptance hereof shall
constitute a binding agreement among each of the Underwriters, the Company and
the Trust in accordance with the terms hereof.
-33-
Very truly yours,
PROVIDENT TRUST II
By: PROVIDENT BANKSHARES
CORPORATION
Depositor
By ________________________________
Name:
Title:
PROVIDENT BANKSHARES
CORPORATION
By ________________________________
Name:
Title:
Accepted as of the date hereof
XXXX XXXXX XXXX XXXXXX, INCORPORATED
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
By: XXXX XXXXX XXXX XXXXXX, INCORPORATED
as Representative of the Underwriters
By ________________________________
Name:
Title:
XXXXXX, XXXXX XXXXX, INCORPORATED
0000 Xxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
By: XXXXXX, XXXXX XXXXX, INCORPORATED
as Representative of the Underwriters
By ________________________________
Name:
Title:
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SCHEDULE I
NUMBER OF PREFERRED SECURITIES TO BE
PURCHASED BY EACH UNDERWRITER
Number of Purchased Securities
to be Purchased from the Trust
Name of Underwriter Percentage (Liquidation Amount $25)
------------------------------------------------------------------------------------------------
Xxxx Xxxxx Xxxx Xxxxxx, ___% ____________
Incorporated
Xxxxxx, Xxxxx Xxxxx, Incorporated ___% ____________
Total ____________
Exhibit A to
Underwriting Agreement
The opinion of counsel to the Company to be delivered pursuant to Section
8(d)(i) of the Underwriting Agreement shall be substantially to the effect that:
(1) The Company is incorporated and is validly existing as a
corporation in good standing under the laws of Maryland and is duly qualified as
a foreign corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases properties
or conducts any business so as to require such qualification (except to the
extent the lack of such qualification will not result in a Material Adverse
Effect to the Company). The Company has all power and authority necessary to own
or hold its properties and assets and to conduct the business in which it is
engaged as described in or contemplated by the Prospectus (except to the extent
the lack of such power and authority will not result in a Material Adverse
Effect to the Company). The Company is duly registered as a bank holding company
under the Bank Holding Company Act of 1956, as amended.
(2) The Bank Subsidiary is a state bank organized, validly existing
and in good standing under the laws of Maryland and is duly qualified as a
foreign corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases properties
or conducts any business so as to require such qualification (except to the
extent the lack of such qualification will not result in a Material Adverse
Effect to the Company). The Bank Subsidiary has all power and authority
necessary to own or hold its properties and assets and to conduct the business
in which it is engaged as described in or contemplated by the Prospectus (except
to the extent the lack of such power and authority will not result in a Material
Adverse Effect to the Company and the Bank Subsidiary, taken as a whole). All
eligible deposit accounts issued by the Bank Subsidiary are insured by the FDIC
to the full extent permitted under applicable law.
(3) Each of the Subsidiaries is incorporated and is validly existing
as a corporation in good standing under the laws of the respective state of its
incorporation, is duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other jurisdiction in
which the conduct of its business (to the knowledge of such counsel) requires
such qualification (except to the extent the lack of such qualification will not
result in a Material Adverse Effect to the Company) and has the corporate power
and authority necessary to own or hold its properties and assets and to conduct
the business in which it is engaged as described in the Prospectus (except to
the extent the lack of such power and authority will not result in a Material
Adverse Effect to the Company and the Subsidiaries, taken as a whole).
(4) The Trust Agreement has been duly qualified under the Trust
Indenture Act.
(5) Each of the Company and the Trust has the corporate or trust, as
the case may be, power and authority necessary to enter into, execute, deliver
and perform its obligations under the Underwriting Agreement, the Indenture, the
Trust Agreement, the Guarantee
A-1
Agreement and the Subordinated Debentures, as applicable, and to effect the
transactions contemplated thereby and by the Prospectus. The performance of the
Company's and/or the Trust's obligations under the Underwriting Agreement, the
Indenture, the Trust Agreement, the Guarantee Agreement and the Subordinated
Debentures, as applicable, have been duly authorized by all necessary corporate
or trust action, as the case may be. The Underwriting Agreement, the Indenture,
the Trust Agreement, the Guarantee Agreement and the Subordinated Debentures
have been duly authorized, executed and delivered by the Company, the Trust,
and/or the Administrators, as applicable, and each constitutes the valid and
binding obligations of the Company and/or the Trust, as the case may be,
enforceable against the Company and/or the Trust in accordance with their
respective terms (except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of general
application relating to or affecting the enforcement of creditors' rights and by
the application of equitable principles relating to the availability of
remedies, and except as rights to indemnity or contribution may be limited by
federal or state securities laws and the public policy underlying such laws).
(6) The Company has the duly authorized capital stock set forth in
the Prospectus. All of the shares of capital stock of the Company issued and
outstanding have been duly and validly authorized and issued, are fully paid and
non-assessable, without personal liability attaching to the ownership thereof.
To such counsel's knowledge, based solely upon the stock ledger of the Company
and a certificate of the officers of the Company, none of such shares have been
issued or are owned or held in violation of any preemptive or other similar
rights. To such counsel's knowledge, based solely upon the stock ledger of the
Company and a certificate of the officers of the Company, other than as set
forth in the Prospectus, there are no options, warrants, or other rights to
purchase or acquire from the Company or any of the Subsidiaries any shares of
the capital stock of the Company or any such Subsidiary. Such counsel is not
aware of any holders of the securities of the Company having rights to
registration thereof or preemptive rights to purchase capital stock of the
Company and, to the best of such counsel's knowledge, based solely upon the
stock ledger of the Company and a certificate of the officers of the Company,
neither the filing of the Registration Statement nor the offering or sale of the
Preferred Securities or the Subordinated Debentures as contemplated by the
Underwriting Agreement and the Prospectus gives rise to any rights (other than
have been waived or satisfied) for or relating to the registration of any
securities of the Company.
(7) All of the issued and outstanding shares of capital stock of each
of the Subsidiaries have been duly authorized, validly issued and are fully paid
and nonassessable, all such shares are held, in the case of the Bank Subsidiary,
by the Company, and in the case of each other Subsidiary, by the Bank
Subsidiary, free and clear of any liens, security interests, pledges, charges,
mortgages or other defects or encumbrances of any kind or nature.
(8) Other than as set forth in the Prospectus, counsel has no
knowledge of any pending proceedings or investigations or threatened or
contemplated proceedings or investigations, before any court or other
governmental body that (A) are required to be disclosed in the Registration
Statement or Prospectus, which are not so disclosed; (B) reasonably could be
expected, individually or in the aggregate, to have a Material Adverse Effect on
the Company or the Trust; or (C) reasonably could be expected to materially and
adversely affect the
A-2
consummation of the Underwriting Agreement, the Indenture, the Trust Agreement
or the Guarantee Agreement and the transactions contemplated thereby.
(9) None of (A) the filing of the Registration Statement or any
amendment thereto; (B) the Company's and the Trust's execution and delivery of
the Underwriting Agreement, the Indenture, the Trust Agreement and the Guarantee
Agreement, as applicable; or (C) the consummation by the Company and the Trust
of the transactions contemplated thereby and by the Prospectus will (X) violate
any provision of the charter, bylaws or other governing documents of the Company
of the Subsidiaries, or the Trust Agreement or the Certificate of the Trust, as
applicable; (Y) to such counsel's knowledge, without independent investigation
or verification violate, result in the breach of, or be in contravention of, or
constitute a default under, any agreement or instrument to which the Company,
the Subsidiaries or the Trust is a party or by which it may be bound or to which
any of its assets, properties or businesses are or may be subject; or (Z)
violate any statute, judgment, decree, order, rule or regulation applicable to
the Company, the Subsidiaries or the Trust, except those, if any, that are
described in the Prospectus or those which would not, individually or in the
aggregate, have a Material Adverse Effect on the Company or the Trust, as the
case may be.
(10) No consent, authorization, approval, order, registration,
license, certificate, declaration or permit of or from, or filing with, any
court or other governmental body, is required of the Company and the Trust in
connection with the execution and delivery of the Underwriting Agreement, the
Indenture, the Trust Agreement or the Guarantee Agreement, or the issuance and
sale of the Subordinated Debentures, or the consummation by the Company and the
Trust of the other transactions contemplated by the Underwriting Agreement, the
Indenture, the Trust Agreement or the Guarantee Agreement, except such as may be
required under the Securities Act, which has been obtained, or under state
securities or Blue Sky laws as to which no opinion is expressed.
(11) The statements set forth in the Registration Statement under the
captions "Description of Preferred Securities," "Description of Junior
Subordinated Debentures," "Description of Guarantee," "Relationship Among the
Preferred Securities, the Junior Subordinated Debentures and the Guarantee" and
"Supervision and Regulation," insofar as they purport to describe the provisions
of the laws and the provisions of documents referred to therein, are accurate
and fairly summarize such provisions in all material respects and there are no
other provisions of law or of documents which are required by the Securities Act
or the Securities Act Rules and Regulations to be described therein.
(12) The statements of law or legal conclusions and opinions set forth
in the Registration Statement under the caption "Certain Federal Income Tax
Consequences", constitute an accurate summary of the matters discussed therein,
subject to the assumptions and conditions described therein and accurately and
fairly reflect such counsel's opinion in all material respects .
(13) The Registration Statement was declared effective under the
Securities Act as of the date and time specified in such opinion, the Prospectus
has been filed as required by the Underwriting Agreement, if necessary, and to
the best of counsel's knowledge (A) after telephonic inquiry of the Commission,
no stop order suspending the effectiveness of the
A-3
Registration Statement has been issued and (B) no proceedings for that purpose
are pending or have been initiated or threatened by the Commission.
(14) The descriptions in the Registration Statement and Prospectus of
contracts, instruments and other documents and any contracts, instruments or
other documents filed as exhibits to the Registration Statement, and the
description of statutes, legal and governmental proceedings and rulings, are
accurate in all material respects and fairly present the information required to
be disclosed, and counsel does not know of any statutes, legal or governmental
proceedings or rulings required to be described in the Prospectus that are not
described, or, to the best of such counsel's knowledge, of any contracts,
instruments or other documents of a character required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that were not described and filed as required. The
Registration Statement (including the information deemed to be part of the
Registration Statement at the time of effectiveness pursuant to Rule 430A, if
applicable), the Prospectus and each amendment or supplement thereto (except for
the financial statements and other statistical or financial data included
therein, as to which such counsel need express no opinion) made prior to the
Closing Date when it or they became effective or were filed with the Commission,
as the case may be, and, in each case, at the Closing Date, complied as to form
in all material respects with the requirements of the Securities Act, the
Securities Act Rules and Regulations, the Trust Indenture Act and the rules and
regulations thereunder.
(15) None of the Company, the Subsidiaries or the Trust is and, after
giving effect to the offering and sale of the Preferred Securities and the
Subordinated Debentures, will be, an "investment company" or an "affiliated
person" of or a "promoter" or "principal underwriter" of or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940.
(16) The Bank Subsidiary is in good standing with the Office of the
Maryland Commissioner of Financial Regulation and the activities of the Company
are permitted under applicable federal and state banking laws, rules and
regulations. The Company and the Bank Subsidiary have all necessary approvals,
including approvals of the Federal Reserve, the FDIC, the Office of the Maryland
Commissioner of Financial Regulation and other bank regulating authorities
having jurisdiction over it to conduct their respective business.
(17) Each of the Subsidiaries has, in effect, all consents,
authorizations, approvals, orders, registrations, licenses and permits of all
regulatory bodies, administrative agencies, or other governmental bodies and
other regulating authorities having jurisdiction over it that are reasonably
required to conduct its business in the manner that, to such counsel's
knowledge, such business is currently being conducted, except to the extent the
failure will not result in a Material Adverse Effect to the Company.
(18) To the best knowledge of counsel, the Trust is not required to be
authorized to do business in any other jurisdiction, and the Trust is not a
party to or otherwise bound by any agreement, other than those described in the
Prospectus.
A-4
(19) No Tax Event, Capital Treatment Event or Investment Company Event
(as each such term is defined in the Indenture) has occurred.
In addition, counsel shall state in a separate letter that in the
course of the preparation of the Registration Statement and the Prospectus, such
counsel has participated in conferences with officers and Representatives of the
Company and the Trust, with the Company's independent public accountants, and
with the Representative, at which conferences the content of the Registration
Statement and the Prospectus were discussed and at which conferences counsel
made inquiries of such officers, Representatives and accountants and, on the
basis of the foregoing, nothing has come to counsel's attention that would lead
such counsel to believe that either the Registration Statement or any amendment
thereto, as of the date the Registration Statement or such amendment is or was
declared effective, and as of the Closing Date, or the Prospectus as of the date
thereof and as of the Closing Date, contained or contains any 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 therein, in the light of the
circumstances under which they were made, not misleading (it being understood
that such counsel need not express any belief with respect to the financial
statements, and the notes and schedules related thereto and other financial
information or statistical data included in the Registration Statement, any
amendment thereto, or the Prospectus).
A-5
Exhibit B to
Underwriting Agreement
The opinion of counsel to the Property Trustee and the Delaware Trustee
under the Trust Agreement, the Indenture Trustee under the Indenture and the
Guarantee Trustee under the Guarantee to be delivered pursuant to Section
8(d)(ii) of the Underwriting Agreement shall be substantially to the effect
that:
(A) Bankers Trust Company is duly incorporated and is validly
existing in good standing as a banking corporation with trust powers under the
laws of the State of New York.
(B) Bankers Trust Company, as the Indenture Trustee, has the
requisite power and authority to execute, deliver and perform its obligations
under the Indenture, and has taken all necessary corporate action to authorize
the execution, delivery and performance by it of the Indenture.
(C) Bankers Trust Company, as the Guarantee Trustee, has the
requisite power and authority to execute, deliver and perform its obligations
under the Guarantee Agreement, and has taken all necessary corporate action to
authorize the execution, delivery and performance by it of the Guarantee
Agreement.
(D) Bankers Trust Company, as the Property Trustee, has the requisite
power and authority to execute and deliver the Trust Agreement, and has taken
all necessary corporate action to authorize the execution and deliver of the
Trust Agreement .
(E) Each of the Indenture and the Guarantee Agreement has been duly
executed and delivered by the Indenture Trustee and the Guarantee Trustee,
respectively, and constitutes a valid and binding obligation of the Indenture
Trustee and the Guarantee Trustee, respectively, enforceable against the
Indenture Trustee and the Guarantee Trustee, respectively, in accordance with
its respective terms, except that certain payment obligations may be enforceable
solely against the assets of the Trust and except that such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium, liquidation,
fraudulent conveyance and transfer or other similar laws affecting the
enforcement of creditors' rights generally, and by principles of equity,
including, without limitation, concepts of materiality, reasonableness, good
faith and fair dealing (regardless of whether such enforceability is considered
in a proceeding in equity or at law), and by the effect of applicable public
policy on the enforceability of provisions relating to indemnification or
contribution.
(F) The Junior Subordinated Debentures delivered on the Closing Date
have been duly authenticated by the Indenture Trustee in accordance with the
terms of the Indenture.
B-1
Exhibit C to
Underwriting Agreement
The opinion of special Delaware counsel to the Company and the Trust to be
delivered pursuant to Section 8(d)(iii) of the Underwriting Agreement shall be
substantially to the effect that:
(A) The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Act, and all filings required as
of the date hereof under the Delaware Act with respect to the creation and valid
existence of the Trust as a business trust have been made.
(B) Under the Trust Agreement and the Delaware Act, the Trust has all
trust power and authority necessary to own property and to conduct its business,
all as described in the Prospectus.
(C) The Trust Agreement constitutes a valid and binding obligation of
the Company and each of the Property Trustee, the Delaware Trustee and each of
the Administrators, and is enforceable against the Company and each of the
Property Trustee, the Delaware Trustee, and each of the Administrators, in
accordance with its terms.
(D) Under the Trust Agreement and the Delaware Act, the Trust has the
trust power and authority (i) to execute and deliver, and to perform its
obligations under, the Underwriting Agreement and (ii) to issue, and to perform
its obligations under, the Preferred Securities and the Common Securities.
(E) Under the Trust Agreement and the Delaware Act, the execution and
delivery by the Trust of the Underwriting Agreement, and the performance by it
of its obligations thereunder, have been duly authorized by all necessary trust
action on the part of the Trust.
(F) Under the Delaware Act, the certificate attached to the Trust
Agreement as Exhibit D is an appropriate form of certificate to evidence
ownership of the Preferred Securities. The Preferred Securities have been duly
authorized for issuance by the Trust Agreement and, when issued, delivered and
paid for in accordance with the terms of the Trust Agreement and the
Underwriting Agreement, and as described in the Prospectus, will be validly
issued, fully paid undivided beneficial interests in the assets of the Trust.
The holders of the Preferred 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.
This opinion need not address the liability of any holder of a Preferred
Security that is, was or becomes a named trustee of the Trust. In addition, this
opinion may note that the holders of the Preferred Securities may be required to
make payment or provide indemnity or security as set forth in the Trust
Agreement.
(G) The Common Securities have been duly authorized for issuance by
the Trust Agreement and, when issued, delivered and paid for in accordance with
the terms of the
C-1
Trust Agreement and as described in the Prospectus, will be validly issued fully
paid undivided beneficial interests in the assets of the Trust.
(H) Under the Trust Agreement and the Delaware Act, the issuance of
the Preferred Securities and the Common Securities is not subject to preemptive
or similar rights.
(I) The issuance and sale by the Trust of the Preferred Securities
and the Common Securities, the purchase by the Trust of the Subordinated
Debentures, the execution, delivery and performance by the Trust of the
Underwriting Agreement, the consummation by the Trust of the transactions
contemplated by the Underwriting Agreement and the Prospectus and compliance by
the Trust with its obligations under the Underwriting Agreement do not violate
(i) any of the provisions of the Certificate of Trust or the Trust Agreement or
(ii) any applicable Delaware law or Delaware administrative regulation.
C-2
