Exhibit 1
$20,000,000
(Aggregate Liquidation Amount)
MARINER CAPITAL TRUST
___% Preferred Securities
(Liquidation Amount $10.00 per Preferred Security)
UNDERWRITING AGREEMENT
June ___, 1998
_____ p.m.
XXXXXX, XXXXX XXXXX, INCORPORATED
As Representative of the
Several Underwriters Identified
In Schedule I Hereto,
0000 Xxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Ladies and Gentlemen:
Section 1. Introduction. First Mariner Bancorp, a Maryland corporation
(the "Company"), and Mariner Capital Trust, a statutory business trust organized
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, the "Underwriters"),
for which Xxxxxx, Xxxxx Xxxxx, Incorporated is acting as representative (the
"Representative"), with respect to the proposed issuance and sale by the Trust
of its _______% Preferred Securities, with a liquidation amount of $10.00 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 (the "Trust
Agreement") among the Company as Depositor and Wilmington Trust Company, as
Delaware Trustee and as Property Trustee. The Preferred Securities will be
guaranteed by the Company with respect to distributions and payments upon
liquidation, redemption and otherwise (the "Guarantee") pursuant to and to the
extent provided by a Guarantee Agreement (the "Guarantee Agreement"), dated
____________, 1998, between the Company and Wilmington Trust Company, as
Guarantee Trustee (the "Guarantee Trustee").
The entire proceeds of the sale of the Securities to be issued
pursuant hereto and the common securities of the Trust (the "Common Securities")
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 ___________, 1998,
between the Company and Wilmington Trust Company, as Debenture Trustee (the
"Debenture Trustee").
The 2,000,000 Securities proposed to be sold by the Trust are referred
to herein as the "Firm Securities." The Offerors also propose to grant to the
Underwriters an option to purchase up to an additional 300,000 Securities,
referred to herein as the "Additional Securities" (and, together with the Firm
Securities, the "Preferred Securities"), if requested by the Underwriters as
provided in Section 3 hereof.
The registration statement 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
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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 Securities Act Rules and Regulations.
Section 2. Representations and Warranties and Agreements
of the Offerors.
(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 and as of each Option Closing Date (as each such term is defined in
Section 5 hereof), if any, (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-1 (File Nos. 333-53789
and 000-00000-00 ) 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
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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 Representative on behalf of the Underwriters.
(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 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 and at each Option Closing Date, if any, conformed or will conform in all
material respects with the requirements of the Securities Act, the Securities
Act Rules and Regulations and the Trust Indenture Act and the rules and
regulations thereunder. 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 and at each Option Closing Date, if any,
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 and
at each Option Closing Date, if any, did not and will not include 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;
provided, however, that the foregoing representation and warranty shall not
apply to (i) any statements or omissions made in reliance upon and
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in conformity with information furnished in writing to the Offerors by an
Underwriter through the Representative 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 and at each Option 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.
(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, 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) First Mariner Mortgage Corporation (the "Mortgage
Subsidiary") 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, and 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, 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. First Mariner Bank (the "Bank Subsidiary" and, with the Mortgage
Subsidiary, the "Subsidiaries" and, individually, a "Subsidiary") is a
state-chartered trust company organized, validly existing and in good standing
under the laws of the State of Maryland, its state of organization, 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,
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. All eligible
deposit accounts issued by the Bank Subsidiary are insured by the Federal
Deposit Insurance
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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. The Subsidiaries, together with Compass
Properties, Inc. and First Mariner Investments Corporation, each of which is
inactive and conducts no business or operations, are all of the direct and
indirect subsidiaries of the Company, and the Subsidiaries, together with the
Trust, constitute 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 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 and the Guarantee Agreement. 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 and the Guarantee Agreement. The Indenture,
the Trust Agreement and the Guarantee Agreement 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 and the Guarantee Agreement
conform or will conform in all material respects to the descriptions thereof
contained in the Registration Statement
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and the Prospectus and are in substantially the forms filed as exhibits to the
Registration Statement.
(viii) The Company has all power and authority necessary to
enter into, execute, deliver and perform its obligations under and with respect
to the Subordinated Debentures. All necessary corporate proceedings of the
Company have been duly taken to authorize the execution, issuance, delivery and
performance by the Company of its obligations under the Subordinated Debentures.
The Subordinated Debentures have been duly authorized and, when issued by the
Company against payment therefor, as contemplated by the Prospectus, will be the
valid and binding obligations of the Company, enforceable against the Company in
accordance with their terms (except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, 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) and will be in the form contemplated by, and entitled to the benefits
provided by, the Indenture. The Subordinated Debentures conform or will conform
in all material respects to the description thereof contained in the
Registration Statement and the Prospectus.
(ix) The Trust has all power and authority necessary to enter
into, execute, deliver and perform its obligations under and with respect to 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 Preferred Securities. 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 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 or the applicable Option Closing Date, if any, 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 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
Preferred Securities conform or will conform in all material respects to the
descriptions thereof contained in the Registration Statement and the Prospectus.
(x) The Trust has all power and authority necessary to enter
into, execute, deliver and perform its obligations under and with respect to the
Common
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Securities. All necessary trust action on the part of the Trust has been duly
taken to authorize the execution, issuance, delivery and performance by the
Trust of its obligations under the Common Securities. The Common Securities
have been duly authorized by the Trust Agreement and, when issued and delivered
by the Trust to the Company 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 undivided beneficial interests in the
assets of the Trust, entitled to the benefits provided by the Trust Agreement.
At the Closing Date and at each Option Closing Date, if any, all of the issued
and outstanding Common Securities will be directly owned by the Company 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 is not subject to preemptive or other similar rights. The Common
Securities conform or will conform in all material respects to the description
thereof contained in the Registration Statement and the Prospectus.
(xi) 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 securities
of the Company having rights to registration thereof or preemptive or other
similar rights to purchase capital stock 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. Other than as set forth in the Registration
Statement and the Prospectus, there are no options, warrants, or other rights to
purchase or acquire from the Company or either Subsidiary any shares of the
capital stock of the Company or a 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 the
Mortgage 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.
(xii) The consolidated financial statements of the Company
and the related notes and schedules thereto included 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
8
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 and schedules 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
as are audited have been examined by KPMG Peat Marwick 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--Summary Consolidated Financial Data," "Capitalization,"
"Selected Consolidated Financial Data," "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Business" 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 included 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-1, the Securities Act Rules
and Regulations or otherwise, to be included in the Registration Statement or
the Prospectus.
(xiii) 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 Company, either of the Subsidiaries 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
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 except,
with respect to options, such options as are set forth in Schedule II hereto, or
any material increase in the short-term or long-term debt the Company or either
of the Subsidiaries, except indebtedness and deposit liabilities incurred by the
Bank Subsidiary in the ordinary course of its banking business, or any event on
circumstance giving rise to a Material Adverse Effect (as hereinafter defined)
relating to the Company or the Trust; (C) none of the Company, either of the
Subsidiaries or the Trust has sustained any loss or damage (whether or not
insured) which has resulted in or reasonably could be expected, individually or
in the aggregate, to result in a Material Adverse Effect; (D) there has not been
any interference with the business of the Company or either of the Subsidiaries
or of the Trust from any labor dispute or court or governmental action, order or
decree; (E) the Company has not paid or declared any dividend or other
distribution with respect to its capital stock except that certain 10% stock
dividend paid in respect of shares of the Company's common stock, par value
$0.05 per share, on June 10, 1998 to holders of record on May 26, 1998 (the
"Stock Dividend"); (F) there has not been any change, contingent or
9
otherwise, in the direct or indirect control of the Company or the Trust and, to
the best knowledge of the Company and the Trust, there do not exist any
circumstances which would reasonably be expected to result in such a change; (G)
there is no litigation pending or, to the best knowledge of the Offerors,
threatened against the Company, either of the Subsidiaries or the Trust which
might, individually 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 (H) 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. "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 other), results
of operations, or prospects 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 other), results of operations, or prospects of
the Trust. None of the Company, either of the Subsidiaries or the Trust has any
material contingent liabilities that are not disclosed in the Prospectus.
(xiv) Each of the Company, each of the Subsidiaries 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 necessary 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,
either of 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.
(xv) 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.
(xvi) Other than as set forth in the Prospectus, there are no
pending actions, suits, proceedings, or investigations or, to the best knowledge
of the Company or the Trust, threatened or contemplated actions, suits or
proceedings, before any court, regulatory body, administrative agency or other
governmental body that (A) challenge the validity of this Agreement, or of any
action taken or to be taken by the
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Company or the Trust pursuant to or in connection herewith; (B) are required to
be disclosed in the Registration Statement or the Prospectus which are not so
disclosed; (C) if determined adversely to the Company or the Trust, reasonably
could be expected, individually or in the aggregate, to have a Material Adverse
Effect thereon; or (D) reasonably could be expected to materially and adversely
affect the consummation of this Agreement and the transactions contemplated
hereby. Any such proceedings that are set forth in the Prospectus are fairly
and accurately summarized therein.
(xvii) 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 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).
(xviii) None of the Company, either of the Subsidiaries 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, individually or in the
aggregate, have a Material Adverse Effect on the Company or the Trust, as the
case may be. 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 the Company or either of
the Subsidiaries or the Trust Agreement or the Trust's certificate of trust
filed with the state of Delaware on May 14, 1998 (the "Certificate of Trust"),
or similar constructive documents of any of them 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
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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 Company, either of the Subsidiaries 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 the Company, either such Subsidiary 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 the Company, either of
the Subsidiaries 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.
(xix) All executed agreements or copies of executed
agreements filed as exhibits to the Registration Statement to which the Company,
either of the Subsidiaries 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 the Company, such Subsidiary or the Trust, as the case may be,
and constitute the legal, valid and binding agreements of the Company, such
Subsidiary 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 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 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.
(xx) The Company and each of the Subsidiaries has 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 such as are described in the Prospectus or such as do not
materially affect the value of any such property, and do not interfere with the
use made or proposed to be made of such property by the Company or such
12
Subsidiary. Any real properties held or used by the Company or either of the
Subsidiaries under lease are held or used under valid, subsisting and
enforceable leases, such leases are in full force and effect, the Company or the
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 Subsidiary's
right as lessee under any such lease or affecting or challenging the Company's
or the 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 either of the Subsidiaries is situated in an area which is or, to the
best knowledge of the Company, will be, subject to zoning, use, or building 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 Subsidiary as described in or contemplated by the
Registration Statement and the Prospectus.
(xxi) All legally required proceedings in connection with the
issuance and sale of the Common Securities, the Preferred Securities, and 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,
from 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 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
13
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.
(xxii) None of the Company, either of the Subsidiaries 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, 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.
(xxiii) None of the Company, either of the Subsidiaries or the
Trust is in violation of any provision of its charter, bylaws, the Trust
Agreement, the Certificate of Trust, as the case may be, or other governing or
constitutive documents; none of the Company, either of the Subsidiaries or the
Trust is (or, as a result of the passage of time or based on its projected plans
of operations, will be) in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
agreement, mortgage, loan agreement, note, franchise, lease, bond, 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 which, 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, 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, and each contract, agreement, mortgage, loan agreement,
note, franchise, lease, bond, other evidence of indebtedness and other agreement
and instrument is in full force and effect and is a legal, valid and binding
obligation of the Company, the relevant Subsidiary or the Trust, as the case may
be.
(xxiv) No action has been taken with respect to the Company,
either Subsidiary or the Trust, and, to the best knowledge of the Company and
the Trust, no federal, state or local statute, administrative regulation, or
other law has been enacted,
14
adopted or issued by any governmental agency that suspends the effectiveness of
the Registration Statement, prevents or suspends the use of any Preliminary
Prospectus or the Prospectus or suspends the sale of the Preferred Securities in
any jurisdiction referred to in Section 6(c) hereof. No injunction, restraining
order or order of any nature by a federal or state court of competent
jurisdiction has been issued with respect to the Company, either Subsidiary or
the Trust that could in any way prevent the issuance of the Preferred
Securities, the Common Securities or the Subordinated Debentures, suspend the
effectiveness of the Registration Statement, prevent or suspend the use of any
Preliminary Prospectus or the Prospectus or suspend the sale of the Preferred
Securities in any jurisdiction referred to in Section 6(c) hereof; 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.
(xxv) 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 Junior 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 "Business,"
"Management," "Supervision and Regulation" and "Underwriting" (except, with
respect to the statements under the caption "Underwriting," for information
furnished in writing to the Company by the Underwriters through the
Representative 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, accurately 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.
(xxvi) 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.
(xxvii) None of the Company, either of the Subsidiaries or the
Trust is and, after giving effect to the offering and sale of the Preferred
Securities, the Common Securities and the 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").
(xxviii) Each of the Company, each of the Subsidiaries and the
Trust owns or is licensed or otherwise has sufficient right to use the
proprietary
15
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, except that
the Bank Subsidiary has not applied for a federal trademark registration for the
name "First Mariner Bank" or for its logo, and the representations herein
relating to the Intellectual Property of the Bank Subsidiary with respect to
such name and logo are based solely on the Bank Subsidiary's continuous use of
the name "First Mariner Bank" and of its logo in its market area without any
adverse claims, the service xxxx registration under Maryland law of the Bank
Subsidiary's name and logo, effective September 5, 1996, and the service xxxx
registration under Virginia law of the Bank Subsidiary's name, effective May 29,
1996. To the best knowledge of the Company and the Trust, none of the
activities engaged in by the Company, either of the Subsidiaries or the Trust
infringes upon or otherwise conflicts with Intellectual Property rights of
others. No claims have been asserted or, to the best knowledge of the Offerors,
threatened against the Company, either of 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.
(xxix) No labor disturbance(s) by, or labor dispute(s) with, the
employees of the Company or either of the Subsidiaries exists or, to the best
knowledge of the Offerors, is threatened or imminent which, individually or in
the aggregate, would have a Material Adverse Effect on the Company.
(xxx) Each of the administrators under the Trust Agreement
(each of the "Administrators") is an employee of the Company and has been duly
authorized to execute and deliver the Trust Agreement.
(xxxi) 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 either 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, 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, individually or in the aggregate, a Material Adverse Effect on
the Company. The Company and each of the Subsidiaries (i) is in 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,
16
in each case except where the failure(s) to do so would not, individually or in
the aggregate, have a Material Adverse Effect on the Company.
(xxxii) Each of the Company, each of the Subsidiaries and the
Trust is in compliance with all applicable federal or state laws and the rules
and regulations thereunder, applicable thereto including, without limitation,
all such laws, rules and regulations relating to discrimination in the hiring,
promotion or pay of employees, any applicable federal or state wages and hours
law, and the provisions of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), applicable to their respective businesses, except where
such noncompliance would not, individually or in the aggregate, have a Material
Adverse Effect on the Company or the Trust, as the case may be.
(xxxiii) The employee benefit plans, including employee welfare
benefit plans, of the Company and each of the Subsidiaries (the "Employee
Plans") have been operated in compliance with the applicable provisions of
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, individually or in the aggregate, have a Material
Adverse Effect on the Company). No reportable event under Section 4043(b) of
ERISA or any prohibited transaction under Section 406 of ERISA has occurred with
respect to any employee benefit plan maintained by the Company or either 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 compliance with the group health plan continuation
coverage requirements of Section 4980B of the Code in all material respects.
(xxxiv) Each of the Company, each of the Subsidiaries and the
Trust has all power and authority necessary, has obtained, maintained in effect
and holds all consents, authorizations, approvals, orders, registrations,
licenses, certificates, declarations and permits of and from, and has made all
declarations and filings with all courts, regulatory bodies, administrative
agencies, or other governmental bodies, necessary to own, lease, license and use
its assets and properties and to conduct its business in the manner described in
or contemplated by the Registration Statement and Prospectus. None of the
Company, either of the Subsidiaries or the Trust has received any notice of
proceedings relating to the use of its assets and properties as to the conduct
of its business, and, to the best knowledge of the Company, no governmental body
is considering limiting, suspending, modifying or revoking, any such consent,
authorization, approval, order, registration, license certificate, declaration
or permit which, individually
17
or in the aggregate, if the subject of an unfavorable determination, would have
a Material Adverse Effect on the Company. None of the Company, either of the
Subsidiaries or the Trust is party to or otherwise subject to any consent
decree, memorandum of understanding, written commitment or other supervisory
agreement with the Board of Governors of the Federal Reserve System or any
Federal Reserve Bank (the "Federal Reserve"), the 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"). Except as disclosed
in the Registration Statement and the Prospectus, to the best knowledge of the
Offerors there are no pending changes under any law, regulation, license, permit
or order that, individually or in the aggregate, would have a Material Adverse
Effect on the Company or the Trust. None of the Company, either of the
Subsidiaries or the Trust has received any notice of, and to the best knowledge
of the Company and the Trust, has not been threatened with, and/or has not been
sued and is not under investigation with respect to, a violation or a possible
violation of any provision of any law, regulation, license, permit or order,
except such violation(s) as would not, individually or in the aggregate, have a
Material Adverse Effect on the Company or the Trust, as the case may be.
(xxxv) None of the Company, either of the Subsidiaries, the
Trust or, to the best knowledge of the Offerors, any other person associated
with or acting on behalf of the Company, either of the Subsidiaries or the
Trust, including, without limitation, any director, officer, agent, or employee
of the Company or either of the Subsidiaries has, directly or indirectly, while
acting on behalf of the Company, such Subsidiary 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 constitutes 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.
(xxxvi) The Bank Subsidiary is in good standing with the
Maryland Commissioner 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 has all necessary
approvals, including approvals of each Bank
18
Regulator having jurisdiction over it. 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, individually or 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, individually or in the aggregate,
have such a Material Adverse Effect in the Company. No report or application
filed by the Company or either 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 an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading when made 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 timely filed each
Regulatory Report that it was required to file with any Bank Regulator.
(xxxvii) 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.
(xxxviii) None of the Company, either of the Subsidiaries or the
Trust or any of their respective officers, directors, trustees or affiliates
(within the meaning of the Securities Act Rules and Regulations) has taken,
directly or indirectly, any action designed to or that might reasonably be
expected to result in stabilization or manipulation of the price of any
securities of the Company or the Trust.
(xxxix) None of the Company, either of the Subsidiaries, or the
Trust or any other person associated with or acting on behalf of the Company,
either of the Subsidiaries or the Trust has distributed or will distribute any
prospectus or other offering material in connection with the offering or sale of
the Preferred Securities other than a Preliminary Prospectus, Prospectus or
other materials permitted by the Securities Act and the Securities Act Rules and
Regulations to be distributed by the Company and the Trust.
(xl) The minute books of the Company and each of the
Subsidiaries are current and contain a correct record 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
19
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.
(xli) Except as described in the Prospectus, to the best
knowledge of the Company there is no loss or threatened loss of any one or more
customers, suppliers, or accounts of either of the Subsidiaries which loss(es)
would, individually or in the aggregate, have a Material Adverse Effect on the
Company.
(xlii) 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.
(xliii) 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, either of 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.
(xliv) To the best knowledge of the Offerors, 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. 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 not
misleading.
(xlv) The conditions for use of Form S-1, as set forth in the
General Instructions thereto, have been satisfied.
(b) Any certificate signed by any officer of the Company or
Administrator of the Trust and delivered to the Representative 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.
20
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 each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Trust, the respective number of
Firm Securities set forth opposite the name of each such Underwriter in Schedule
I hereto at a purchase price of $10.00 per Firm 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 Representative, on behalf of the
several Underwriters, a commission of $0.37 per Firm Security ($740,000 in the
aggregate).
On the basis of the representations, warranties, covenants and agreements
herein contained, and subject to the terms and conditions herein set forth, the
Offerors agree to issue and sell to each of the Underwriters, and each of the
Underwriters shall have the right to purchase from the Trust, severally and not
jointly from time to time, up to an aggregate of 300,000 Additional Securities
at the Purchase Price. Additional Securities may be purchased as provided in
Section 5 hereof solely for the purpose of covering over-allotments, if any,
made in connection with the offering of the Firm Securities. If any Additional
Securities are to be purchased, each Underwriter, severally and not jointly,
agrees to purchase the number of Additional Securities that bears the same
proportion to the total number of Additional Securities to be purchased as the
number of Firm Securities set forth opposite the name of such Underwriter in
Schedule I bears to the total number of Firm Securities. 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, or any Option Closing Date
the Company hereby agrees to pay to the Representative, on behalf of the several
Underwriters, a commission of $0.37 per Additional Security purchased on such
Option Closing Date (up to an aggregate of $111,000).
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 Firm Securities, on the terms and conditions set forth in
the Registration Statement from time to time as and when the Representative
deems advisable after the Registration Statement becomes effective. Because the
NASD is expected to view the Firm 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.
21
Section 5. Delivery of and Payment for the Preferred Securities.
(a) Delivery to the Underwriters of, and payment to the Trust for,
the Firm Securities shall be made at 10:00 a.m., Washington, DC time, on the
third (or if the Firm Securities are priced, as contemplated by Rule 15c6-1(c)
under the Exchange Act, after 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 Firm Securities as advised to the Representative
by the Company, at such place as the Representative shall designate.
(b) Delivery to the Underwriters of and payment for any Additional
Securities to be purchased by the Underwriters shall be made at such place as
the Representative shall designate, at 10:00 a.m., Washington, DC time, on such
date or dates (individually, an "Option Closing Date" and collectively, the
"Option Closing Dates"), which may be the same as the Closing Date but shall in
no event be earlier than the Closing Date, as shall be specified in a written
notice from the Representative to the Offerors of the Underwriters'
determination to purchase a number, specified in said notice, of Additional
Securities. Any such notice may be given at any time within thirty (30) calendar
days after the effective date of this Agreement.
(c) The Preferred Securities will be delivered by the Trust to the
Underwriters on the Closing Date or the applicable Option Closing Date, as the
case may be, against payment of the Purchase Price therefor by certified or
official bank check or 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 Representative. 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 Note(s) representing
the Preferred Securities shall be made available for examination by the
Representative not later than 10:00 a.m., Washington, DC time, on the last
business day prior to the Closing Date or the applicable Option Closing Date, as
the case may be, 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.
(d) The documents to be delivered on the Closing Date or on an Option
Closing Date, as the case may be, 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 Xxxxxxx, Xxxxxxx and Xxxxxx, LLP, 1800 Mercantile
Bank & Trust Building,
22
0 Xxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000, or such other location as the
Representative may designate (the "Closing Location").
(e) A meeting will be held at the Closing Location at 2:00 p.m.,
Washington, DC time, on the business day next preceding Closing Date and each
Option Closing Date, if any, or at such other time(s) 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 Representative a reasonable time
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 Representative. 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 on 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 Representative promptly and, if
requested by the Representative, 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
23
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 Representative, 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 Representative shall
designate, and will continue such qualifications or registrations or exemptions
in effect so long as requested by the Representative 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 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 not
misleading, or if it becomes necessary at any time to amend or supplement the
Prospectus to comply with the Securities Act or the Securities Act Rules and
Regulations, the Offerors promptly will so notify the Representative 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
24
amendment or supplement to the Representative 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 Representative.
(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 Representative, 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 five (5) 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 Representative 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
Representative may reasonably request.
(g) The Offerors will furnish, without charge, to the Representative
or on the Representative's order, at such place as the Representative 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
Representative 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 Closing Date and to cause the Preferred
Securities to remain listed for at least thirty-six (36) months thereafter.
25
(i) None of the Offerors, either of 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
Common Securities, 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
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, prior to the exercise in full or
expiration of the Underwriters' option to purchase Additional Securities, 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
Representative are substantially similar to the Preferred Securities, without
the prior written consent of the Representative.
(m) The Offerors will not, prior to the exercise in full or
termination or expiration of the Underwriters' option to purchase the Additional
Securities, 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.
26
(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.
Section 7. Expenses.
(a) If the Underwriters purchase the Firm 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, without limitation, 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 Firm Securities as herein contemplated is
not consummated for any reason other than the Underwriters' default under this
Agreement or by reason of Section 11(a) hereof, the Company shall pay all 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 out-of-pocket expenses (including but not limited to counsel fees and
disbursements) in connection with any investigation made by them, and any
preparation made by them in respect of marketing of the Firm Securities or in
contemplation of the performance by them of their obligations hereunder.
Section 8. Conditions of the Underwriters' Obligations. The
obligations of each Underwriter to purchase and pay for the number of Firm
Securities set forth opposite the name of such Underwriter in Schedule I on the
Closing Date and the ratable portion of any Additional Securities on any Option
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 and as of any such Option Closing Date, as the case
27
may be, as if they had been made on and as of the Closing Date or any such
Option Closing Date; the accuracy, on and as of the Closing Date or any such
Option 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 or any such Option Closing Date, of
their respective covenants and agreements hereunder; and the following
additional conditions:
(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 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 Representative 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 Representative, shall be contemplated or
threatened by the Commission. The Offerors shall have complied 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
Representative, shall be contemplated or threatened by the officials of any such
jurisdiction.
(b) The Representative shall not have advised the Offerors that the
Registration Statement contains an untrue statement of fact which, in the
Representative's opinion, is material, or omits to state a fact which, in the
Representative's opinion, 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, in the
Representative's opinion, is material, or omits to state a fact which, in the
Representative's opinion, 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 and each Option Closing Date, if
any, the Representative 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
Representative 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.
28
(d) On the Closing Date and each Option Closing, if any, the
Representative shall receive:
(i) The favorable opinion, dated as of the Closing Date or such
Option Closing Date, of Ober, Kaler, Xxxxxx & Xxxxxxx, 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 law. In rendering such opinion, counsel may
rely upon an opinion or opinions, each dated the Closing Date or such Option
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 Underwriter and
(B) counsel to the Company shall state in its opinion that it and the
Underwriters are justified in relying thereon. Insofar as such opinions involve
factual matters, such counsel may rely, to the extent such counsel deems proper,
upon certificates of officers and trustees of the Company, either of 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
the opinion.
(ii) The favorable opinion, dated the Closing Date or such Option
Closing Date, of Xxxxxxx, Xxxxxx & Finger, counsel to Wilmington Trust Company,
as the Delaware Trustee, 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 or such
Option Closing Date, of Xxxxxxxx, Xxxxxx & Finger, 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 or
such Option 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 Representative
and (B) counsel shall state in its opinion that it believes that it and the
Underwriters are justified in relying thereon. Insofar as such opinions involve
factual matters, such counsel may rely, to the extent such counsel deems proper,
upon certificates of officers and trustees of the Company, either of 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 the
opinion.
29
(e) On or prior to the Closing Date and each Option Closing Date, if
any, 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 Representative shall have received a "cold
comfort" letter from KPMG Peat Marwick LLP, independent certified public
accountants, dated such date and addressed to the Underwriters, in form and
substance satisfactory to the Representative, with respect to the financial
statements and certain financial information contained in the Registration
Statement and the Prospectus.
(g) On the Closing Date, and each Option Closing Date, if any, the
Representative shall have received from KPMG Peat Marwick 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 and each Option Closing Date, if any, the
Underwriters shall have received a certificate, dated such date, of the
principal executive officer and the principal financial or accounting officer of
the Company to the effect that each such person has carefully examined the
Registration Statement 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, as if made on and as of the Closing Date or the
applicable Option Closing Date, as the case may be, and the Company has complied
with all agreements and covenants and satisfied all conditions contained in this
Agreement on its part to be performed or satisfied at or prior to the Closing
Date or such Option 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 or
any applicable state securities or Blue Sky statute, and any and all filings
required by Rule 424, Rule 430A and Rule 462(b) have been timely made;
(iii) the Registration Statement and Prospectus and, if any,
each amendment and each supplement thereto, contain all statements and
information required by the Securities Act or the Securities Act Rules and
Regulations to be included therein,
30
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 misleading; and
(iv) Since the respective dates as of which information is given
in the Registration Statement and the Prospectus or any amendment or supplement
thereto, and except as otherwise may be stated therein (A) none of the Company
or either of the Subsidiaries has entered into any transaction or incurred any
liability or obligation, contingent or otherwise, which is material to the
Company and the Subsidiaries, taken as a whole; (B) there has not been any
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 except,
with respect to options, such options as set forth in Schedule II hereto, or any
material increase in the short-term or long-term debt the Company or either of
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;
(C) none of the Company or either of the Subsidiaries has sustained any loss or
damage (whether or not insured) which has resulted in or reasonably could be
expected, individually or in the aggregate, to result in a Material Adverse
Effect on the Company; (D) there has not been any interference with the business
of the Company or either of the Subsidiaries from any labor dispute or court or
governmental action, order or decree; (E) the Company has not paid or declared
any dividend or other distribution with respect to its capital stock except the
Stock Dividend; (F) there has not been any change, contingent or otherwise, in
the direct or indirect control of the Company or the Trust nor, to the best
knowledge of the Company, do there exist any circumstances which would
reasonably be expected to result in such a change; (G) there is no litigation
pending or, to the best knowledge of such officer, threatened against the
Company or either of the Subsidiaries which might, individually or in the
aggregate, have a Material Adverse Effect on the Company 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 or an amendment or supplement
thereto which has not been so set forth; and (H) there has not occurred any
event required by the Securities Act and the Securities Act Rules and
Regulations to be set forth in the Registration Statement or the Prospectus or
an amendment or supplement thereto which has not been so set forth.
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.
(i) On the Closing Date and each Option Closing Date, if any, the
Underwriters shall have received a certificate, dated the Closing Date, of the
Administrators to the effect that each such Administrator has carefully
examined the
31
Registration Statement and the Prospectus and any amendments or supplements
thereto and this Agreement, and that:
(A) the representations and warranties of the Trust in this
Agreement are true and correct, as if made on and as of the Closing Date and
each Option Closing Date, if any, and the Trust has complied with all agreements
and covenants and satisfied all conditions contained in this Agreement on its
part to be performed or satisfied at or prior to the Closing Date or such Option
Closing Date;
(B) 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 or any applicable state securities or Blue
Sky statute, and any and all filings required by Rule 424, Rule 430A and Rule
462(b) have been timely made; and
(C) the Registration Statement and Prospectus and, if any, each
amendment and supplement thereto, contain all statements and information
required by 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 misleading.
References to the Registration Statement and the Prospectus in this
Section 8(i) are to such documents as amended and supplemented at the date of
the certificate required hereby.
(j) 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 or the applicable Option Closing Date, as the case may be, there
has not been any change, or any development involving a prospective change, in
the business or properties of the Company, either of the Subsidiaries or the
Trust which change makes it impractical or inadvisable in the Representative's
judgment to proceed with the public offering or the delivery of the Preferred
Securities as contemplated by the Prospectus.
(k) Prior to the Closing Date, the Preferred Securities shall have
been duly authorized for listing on the NNM.
32
(l) Prior to the Closing Date, the Preferred Securities shall have
been qualified under the securities or Blue Sky laws of such jurisdictions as
the Representative shall have designated or an exemption therefrom shall be
available;
(m) Prior to the Closing Date, the legality and sufficiency of the
authorization, issuance and sale or transfer and sale of the Preferred
Securities hereunder, the execution and delivery of this Agreement and all
corporate proceedings and other legal matters incident thereto, and the form of
the Registration Statement and the Prospectus (except financial statements)
shall have been approved by counsel to the Underwriters exercising reasonable
judgment.
(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 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 Representative and to
counsel for the Underwriters. The Offerors shall furnish the Underwriters with
manually signed or conformed copies of such opinions, certificates, letters and
documents in such quantities as the Representative reasonably requests. 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 or any Option Closing Date is not so
satisfied or waived by the Representative, in its discretion, this Agreement, at
the Representative's election, will terminate upon notification to the Offerors
without liability on the part of any Underwriter (including the Representative),
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.
(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
33
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), joint or several (and actions in respect thereof),
to which such Underwriter, officer, director, 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 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 Representative expressly for use therein (as identified in Section
9(b) hereof), and provided, further, 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.
(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,
34
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 in writing by that Underwriters through
the Representative 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.
(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 it 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 so to 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
35
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.
(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 from the initial offering and issuance of the Preferred
Securities (before deducting expenses) 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
36
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 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 Representative,
in its sole discretion, shall release the Preferred Securities for the sale to
the public, unless prior to such time
37
the Representative 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 Representative shall have given written notice to the Offerors
that the Representative 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 11(a), the Preferred Securities to be
purchased hereunder shall be deemed to have been so released upon the earlier of
notification by the Representative to securities dealers releasing such
Preferred Securities for offering or the release by the Representative 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 Representative by written notice to the Company
and the Trust in the event that either of the Offerors has failed to comply in
any 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 any Option Closing Date, or
if any of the representations or warranties of the Offerors are not 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 respect or
satisfied within the time specified or the Closing Date or any Option Closing
Date, as the case may be, or if prior to the Closing Date or Option Closing
Date:
(i) the Company, either of the Subsidiaries or the Trust shall
have sustained a loss by strike, fire, flood, accident or other calamity of such
a character, in the judgment of the Representative, as to interfere materially
with the conduct of the business and operations of the Company, the affected
Subsidiary or the Trust, as the case may be, regardless of whether or not such
loss was insured;
(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;
38
(v) there shall have been commenced any action, suit or
proceeding at law or in equity against the Company, either of the Subsidiaries
or the Trust, or by any federal, state or other commission, board or agency,
wherein, in the judgment of the Representative, any unfavorable decision would
have a Material Adverse Effect on the Company, or the Trust, as the case may be;
(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 judgment of the
Representative 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 judgment of the Representative has a material adverse effect or will
have a material adverse effect on the financial markets in the United States;
(viii) there shall have occurred any material adverse market
conditions in the judgment of the Representative;
(ix) 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
(x) 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, either of
the Subsidiaries or the Trust, as the case may be that, in each case, in the
judgment of the Representative, 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.
(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 upon tender of such number of
Preferred Securities in accordance with the terms hereof, and the number of such
Preferred Securities shall not
39
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 of 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 Representative 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 Representative shall have been made for the purchase of the defaulted
Preferred Securities by an Underwriter or Underwriters) and subject to the
provisions of Section 11(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 Representative shall be mailed or delivered or sent by
facsimile transmission and confirmed by letter to Xxxxxx, Xxxxx Xxxxx,
Incorporated at 0000 Xxx Xxxxxx, XX, Xxxxxxxxxx, XX 00000, Attention: Xxxxxx X.
Xxxx (facsimile number: (000) 000-0000)
40
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 0000 Xxxxx
Xxxxxxx Xxxxxx, Xxxxxxxxx, XX 00000, Attention Xxxxxx X. Xxxxxx (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.
41
* * * * * * *
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.
Very truly yours,
MARINER CAPITAL TRUST
By: FIRST MARINER BANCORP
Depositor
By ________________________________
Name:
Title: Administrator
FIRST MARINER BANCORP
By ________________________________
Name:
Title:
Accepted as of the date hereof
XXXXXX, XXXXX XXXXX, INCORPORATED
0000 Xxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
By: XXXXXX, XXXXX XXXXX, INCORPORATED
On behalf of each of the Underwriters
By: ______________________________
Name:
Title:
42
SCHEDULE I
NUMBER OF PREFERRED SECURITIES TO BE
PURCHASED BY EACH UNDERWRITER
Number of Preferred Securities
Name of Underwriter Percentage to be Purchased from the Trust
-------------------- ------------- -----------------------------------
Xxxxxx, Xxxxx Xxxxx, Incorporated
SCHEDULE II
RECENT STOCK OPTION ISSUANCES
(Pursuant to Section 2(a)(xii) and Section 8(h)(iv))
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 has been duly incorporated and is validly existing as
a corporation in good standing under the laws of Maryland and 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.
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. The Company is duly registered as a bank holding
company under the Bank Holding Company Act of 1956, as amended.
(2) The Mortgage Subsidiary has been duly incorporated and is validly
existing as a corporation in good standing under the laws of [Maryland] and 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. The Mortgage 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.
(3) The Bank Subsidiary is a state bank organized, validly existing
and in good standing under the laws of Maryland and 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. 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. All eligible deposit accounts issued by the Bank
Subsidiary are insured by the FDIC to the full extent permitted under applicable
law.
(4)The Trust Agreement has been duly qualified under the Trust
Indenture Act.
(5) Each of the Company and the Trust has all power and authority
necessary to enter into, execute, deliver and perform its obligations under the
Underwriting Agreement, the Indenture, the Trust Agreement and the Guarantee
Agreement, 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 and the
Guarantee Agreement, 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 and the Guarantee Agreement 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 all power and authority necessary to enter into,
execute, deliver and perform its obligations under and with respect to the
Subordinated Debentures. The Subordinated Debentures are in the form
contemplated by the Indenture, have been duly authorized, executed and delivered
by the Company and, when authenticated by the Debenture Trustee in the manner
provided for in the Indenture and delivered against payment therefor, will
constitute the valid and binding obligations of the Company, enforceable against
the Company in accordance with their terms (except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, 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).
(7) 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,
and none of such shares have been issued or are owned or held in violation of
any preemptive or other similar rights. Other than as set forth in the
Prospectus, there are no options, warrants, or other rights to purchase or
acquire from the Company or either Subsidiary any shares of the capital stock of
the Company or a Subsidiary. There are no holders of the securities of the
Company having rights to registration thereof or preemptive rights to purchase
capital stock 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 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.
A-2
(8) 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 non-assessable, all such shares are held, in the case of the Bank
Subsidiary, by the Company, and in the case of the Mortgage 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.
(9) Other than as set forth in the Prospectus, there are no pending
proceedings or investigations or, to the best knowledge of counsel, 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 consummation of the Underwriting Agreement, the Indenture,
the Trust Agreement or the Guarantee Agreement and the transactions contemplated
thereby.
(10) 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
or either of the Subsidiaries, or the Trust Agreement or the Certificate of the
Trust, as applicable; (Y) violate, result in the breach of, or be in
contravention of, or constitute a default under, any agreement or instrument to
which the Company, either of 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, either of 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.
(11) 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 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
A-3
obtained, or under state securities or Blue Sky laws.
(12) 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 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.
(13) 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.
(14) 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 Registration Statement has
been issued and (B) no proceedings for that purpose are pending or have been
initiated or threatened by the Commission.
(15) 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 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 (or an Option Closing Date, as the case may be) 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 (or Option Closing Date, as the case
may be), complied as to form in all material respects with the requirements of
the Securities Act, the Securities Act Rules and Regulations, the Trust
A-4
Indenture Act and the rules and regulations thereunder.
(16) None of the Company, either of 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.
(17) The Bank Subsidiary is in good standing with the Maryland
Commission 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 the Bank Subsidiary have all necessary approvals,
including approvals of the Federal Reserve, the FDIC, the Maryland Commissioner
and other bank regulating authorities having jurisdiction over it.
(18) The Mortgage Subsidiary is in good standing with the Maryland
Commissioner and the activities of the Mortgage Subsidiary are permitted under
applicable federal and state laws, rules and regulations. The Mortgage
Subsidiary has obtained, maintained in effect and holds all necessary consents,
authorizations, approvals, orders, registrations, licenses, certificate,
declarations and permits of and from, and has made all declarations and filings
with all courts, regulatory bodies, administrative agencies, or other
governmental bodies including approvals of the Maryland Commissioner and other
mortgage bank regulating authorities having jurisdiction over it.
(19) 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.
(20) 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 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 any Option Closing Date, as the case may be, or the
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Prospectus as of the date thereof and as of the Closing Date or any Option
Closing Date, as the case may be, 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).
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Exhibit B to
Underwriting Agreement
The opinion of counsel to the Property 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) Wilmington Trust Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of Delaware.
(B) Wilmington Trust Company has all power and authority necessary to
execute, deliver and perform its obligations as Property Trustee under the Trust
Agreement, Indenture Trustee under the Indenture and Guarantee Trustee under the
Guarantee Agreement and has taken all necessary action to authorize the
execution, delivery and performance, by it, of the Trust Agreement, the
Indenture and the Guarantee Agreement.
(C) Each of the Trust Agreement, the Indenture and the Guarantee
Agreement has been duly authorized, executed and delivered by Wilmington Trust
Company and constitutes a legal, valid and binding obligation of Wilmington
Trust Company, enforceable against Wilmington Trust Company, in accordance with
its terms.
(D) The execution, delivery and performance by Wilmington Trust
Company of the Trust Agreement, the Indenture and the Guarantee Agreement do not
conflict with or constitute a breach of the charter or by-laws of Wilmington
Trust Company.
(E) No consent, approval or authorization of, or registration with or
notice to, any governmental authority or agency of the State of Delaware or the
United States of America governing the banking or trust powers of Wilmington
Trust Company is required for the execution, delivery or performance by
Wilmington Trust Company of the Trust Agreement, the Indenture and the Guarantee
Agreement.
(F) The Junior Subordinated Debentures delivered on the Closing Date
(or an Option Closing Date, as the case may be) have been duly authenticated by
the Indenture Trustee in accordance with the terms of the Indenture.
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 and non-assessable 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 Trust Agreement and as described in the
Prospectus, will be validly issued fully paid and nonassessable undivided
beneficial interests in the assets of the Trust. [This opinion may note that
the holders of the Common Securities may be required to make payment or provide
indemnity or security as set forth in the Trust Agreement.]
(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
administrative regulation.
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