$20,000,000
(Aggregate Liquidation Amount)
FIRST UNITED CAPITAL TRUST
[9.0-9.5%] Preferred Securities
(Liquidation Amount $10.00 per Preferred Security)
UNDERWRITING AGREEMENT
August __, 1999
12:00 p.m.
XXXXXX, XXXXX XXXXX, INCORPORATED and ADVEST, INC.
As Representatives of the
Several Underwriters Identified
c/o FBW In Schedule I Hereto,
0000 Xxx Xxxxxx, X.X.
Washington, D.C. 20006
Ladies and Gentlemen:
Section 1. Introduction. First United Corporation, a Maryland
corporation (the "Company"), and First United Capital Trust, 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 and Advest, Inc.
are acting as Representatives (the "Representatives"), with respect to the
proposed issuance and sale by the Trust of its ____% Preferred Securities, with
a liquidation amount of $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, dated August __, 1999 (the "Trust Agreement") among the Company
as Depositor, Bankers Trust Company, as Property Trustee and Bankers Trust
(Delaware) as Delaware Trustee. The Preferred Securities will be guaranteed by
the Company with respect to distributions and payments upon liquidation,
redemption and otherwise (the "Guarantee") pursuant to and to the extent
provided by a Guarantee Agreement (the "Guarantee Agreement"), August __, 1999,
between the Company and Bankers Trust Company, as Guarantee Trustee (the
"Guarantee Trustee").
The entire proceeds of the sale of the Securities to be issued pursuant
hereto will be used to purchase an equivalent dollar amount of junior
subordinated debentures (the "Subordinated Debentures") to be issued by the
Company pursuant to a Junior Subordinated Indenture (the "Indenture"), dated
August __, 1999, between the Company and Bankers Trust Company, as Debenture
Trustee (the "Debenture Trustee").
The Securities proposed to be sold by the Trust are referred to herein
as the "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 on Form S-3 under the Securities Act of
1933, as amended (the "Securities Act") with respect to the Preferred
Securities, the Subordinated Debentures and the Guarantee, as amended at the
time it is or was declared effective by the Securities and Exchange Commission
(the "Commission") and, in the event of any amendment thereto after the
effective date, such registration statement as so amended (but only from and
after the effectiveness of such amendment), including a registration statement
(if any) filed pursuant to Rule 462(b) of the rules and regulations of the
Commission under the Securities Act (the "Securities Act Rules and Regulations")
increasing the size of the offering registered under the Securities Act and
information (if any) deemed to be part of the registration statement at the time
of effectiveness pursuant to Rules 430A(b) and 434(d) of the Securities Act
Rules and Regulations, is hereinafter called the "Registration Statement." The
prospectus included in the Registration Statement at the time it is or was
declared effective by the Commission and any related prospectus supplement or
supplements relating to the Preferred Securities, the Guarantee or the
Subordinated Debentures as previously filed with or promptly hereafter filed
with the Commission pursuant to Rule 424(b) of the Securities Act Rules and
Regulations, is hereinafter called the "Prospectus," except that if any
prospectus (including any term sheet meeting the requirements of Rule 434 of the
Securities Act Rules and Regulations provided by the Offerors for use with a
prospectus subject to completion within the meaning of such Rule 434 in order to
meet the requirements of Section 10(a) of the Securities Act) filed by the
Offerors with the Commission pursuant to Rule 424(b) (and Rule 434, if
applicable) of the Securities Act Rules and Regulations or any other such
prospectus provided to the Underwriters by the Offerors for use in connection
with the offering of the Preferred Securities (whether or not required to be
filed by the Offerors with the Commission pursuant to Rule 424(b) of the
Securities Act Rules and Regulations) differs from the prospectus on file at the
time the Registration Statement is or was declared effective by the Commission,
the term "Prospectus" shall refer to such differing prospectus (including any
term sheet within the meaning of Rule 434 of the Securities Act Rules and
Regulations) from and after the time such prospectus is filed with the
Commission or transmitted to the Commission for filing pursuant to such Rule
424(b) (and Rule 434, if applicable) or from and after the time it is first
provided to the Underwriters by the Offerors for such use. The term "Preliminary
Prospectus" as used herein means the preliminary prospectus included in any
Registration Statement prior to the time it becomes or became effective under
the Securities Act and any prospectus subject to completion as described in Rule
430A or 434 of the Securities Act Rules and Regulations. The term "disclosed in"
when referring to the Registration Statement, the Preliminary Prospectus, or the
Prospectus includes documents that are incorporated in or made an exhibit to any
of the foregoing. The term "Material Adverse Effect" means (i) when used in
connection with the Company, any development, change or effect that is
materially adverse to the business, properties, assets, net worth, condition
(financial or other), or results of operations of the Company and the
Subsidiaries, taken as a whole and (ii) when used in connection with the Trust,
any development, change or effect that is materially adverse to the business,
properties, assets, net worth, condition (financial or other) or results of
operations of the Trust.
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-3 (File Nos.
333-83921 and 333-83921-01) under the Securities Act with respect to the
Preferred Securities, the Subordinated Debentures and the Guarantee, including a
form of prospectus subject to completion, has been prepared by the Offerors in
conformity with the requirements of the Securities Act, the Securities Act Rules
and Regulations, the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act") and the rules and regulations thereunder and has been filed with
the Commission. The Offerors have prepared and filed such amendments thereto, if
any, and such amended preliminary prospectuses, if any, as may have been
required to the date hereof, and will file such additional amendments thereto
and such amended prospectuses as may hereafter be required. If the Offerors have
elected to rely upon Rule 462(b) of the Securities Act Rules and Regulations to
increase the size of the offering registered under the Securities Act, the
Offerors will prepare and file with the Commission a registration statement with
respect to such increase pursuant to such Rule.
If the Offerors have elected not to rely upon Rule 430A of
the Securities Act Rules and Regulations, the Offerors have prepared and will
promptly file an amendment to the registration statement and an amended
prospectus (including a term sheet meeting the requirements of Rule 434 of the
Securities Act Rules and Regulations) if necessary to complete the Prospectus.
If the Offerors have elected to rely upon Rule 430A of the Securities Act Rules
and Regulations, they will prepare and file a prospectus (or a term sheet
meeting the requirements of Rule 434) pursuant to Rule 424(b) that discloses the
information previously omitted from the prospectus in reliance upon Rule 430A.
Copies of the Registration Statement, any amendment thereto
and any Preliminary Prospectus filed with the Commission, including the
exhibits, financial statements and schedules thereto, have been delivered by the
Offerors to the Representatives on behalf of the Underwriters.
(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, the Trust Indenture Act and the rules and regulations
thereunder, all federal, state, or local statutes, and any other administrative
regulation or other law enacted, adopted or issued by any governmental agency;
and every request of the Commission, or any securities authority or agency of
any jurisdiction, for additional information (to be included in the Registration
Statement or the Prospectus or otherwise) has been complied with in all material
respects. The Registration Statement, on the date it was or is declared
effective by the Commission, upon the filing or first delivery to the
Underwriters of the Prospectus (or any supplement to the Prospectus (including
any term sheet meeting the requirements of Rule 434 of the Securities Act Rules
and Regulations)) at the Closing Date 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 in conformity
with information furnished in writing to the Offerors by an Underwriter through
the Representatives or by the Delaware Trustee, the Property Trustee, the
Guarantee Trustee or the Debenture Trustee expressly for use therein (as
identified in Section 9(b) hereof) and (ii) that part of the Registration
Statement which constitutes the Statement of Eligibility and Qualification under
the Trust Indenture Act. As of the date that the Registration Statement was or
is declared effective by the Commission, as of the date that each Preliminary
Prospectus was filed with the Commission, as of the date that the Prospectus and
any amendment or supplement thereto was of is with the Commission (or if not
filed, on the date provided by the Offerors to the Underwriters in connection
with offering and sale of the Preferred Securities), at the Closing Date 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 United Bank & Trust (the "Bank 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. All eligible
deposit accounts issued by the Bank Subsidiary are insured by the Federal
Deposit Insurance Corporation (the "FDIC",) up to the maximum applicable amount
in accordance with applicable law and the rules and regulations of the FDIC and
no proceedings for the termination or revocation of such insurance are pending
or, to the best knowledge of the Offerors, threatened. Oakfirst Life Insurance
Corporation (the "Reinsurance Subsidiary") has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the State
of Arizona, its jurisdiction of incorporation. Gonder Insurance Agency, a wholly
owned subsidiary of the Bank Subsidiary (the "Insurance Agency 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.
First United Securities, Inc., a wholly owned subsidiary of the Bank Subsidiary
(the "Securities Subsidiary"), has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, its jurisdiction of incorporation. First United Auto Finance, LLC, a
wholly owned subsidiary of the Bank Subsidiary (the "Auto Financing
Subsidiary"), has been duly organized and is validly existing as a limited
liability company in good standing under the laws of the State of Maryland, its
jurisdiction of organization. First United Insurance Agency, Inc., a wholly
owned subsidiary of the Bank Subsidiary (the "Insurance 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. Each
of the Bank Subsidiary, the Reinsurance Subsidiary, the Insurance Agency
Subsidiary, the Securities Subsidiary, the Auto Financing Subsidiary and the
Insurance Subsidiary (collectively, the "Subsidiaries" and, individually, a
"Subsidiary") has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts any business so
as to require such qualification (except to the extent the lack of such
qualification will not result in a material adverse effect to the Offerors), and
has all power and authority necessary to own or hold its properties and assets
and to conduct the business in which it engages as described in or contemplated
by the Registration Statement and the Prospectus. The Subsidiaries are all of
the direct and indirect subsidiaries of the Company, and the Subsidiaries,
together with the Trust, include all of the "significant subsidiaries" of the
Company as defined in Rule 1-02 of Regulation S-X of the Commission.
(vi) The Trust has been duly created and is validly
existing in good standing as a business trust under the Delaware Act, has been
duly authorized to do business in each jurisdiction where such qualification is
required and has all power and authority necessary to own or hold its properties
and assets and to conduct the business in which it is engaged as described in or
contemplated by the Registration Statement and the Prospectus. The Trust has
conducted and will conduct no business other than as contemplated by the Trust
Agreement and as described in or contemplated by the Registration Statement and
the Prospectus. The Trust is not a party to or otherwise bound by any agreement
other than those described in the Prospectus. At and after such time as the
Company has purchased Common Securities equal to at least 3% of the total equity
of the Trust, the Trust will be classified for United States federal income tax
purposes as a grantor trust and not as an association taxable as a corporation
and the Trust is and will be treated as a consolidated subsidiary of the Company
pursuant to generally accepted accounting principles.
(vii) The Company has all power and authority necessary to
enter into, execute, deliver and perform its obligations under and with respect
to the Indenture, the Trust Agreement, the Guarantee Agreement and the
Subordinated Debentures. All necessary corporate proceedings of the Company have
been duly taken to authorize the execution, delivery and performance by the
Company of its obligations under the Indenture, the Trust Agreement, the
Guarantee Agreement and the Subordinated Debentures. The Indenture, the Trust
Agreement, the Guarantee Agreement and the Subordinated Debentures have been
duly authorized, and when executed and delivered by the Company, will be the
valid and binding obligations of the Company, enforceable against the Company,
in accordance with their respective terms (except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws of general application relating to or affecting the enforcement of
creditors' rights and by the application of equitable principles relating to the
availability of remedies, and except as rights to indemnity or contribution may
be limited by federal or state securities laws and the public policy underlying
such laws). The Indenture has been or will be duly qualified under the Trust
Indenture Act. The Indenture, the Trust Agreement, the Guarantee Agreement and
the Subordinated Debentures conform or will conform in all material respects to
the descriptions thereof contained in the Registration Statement and the
Prospectus and are in substantially the forms filed as exhibits to the
Registration Statement.
(viii) The Trust has all power and authority necessary to
enter into, execute, deliver and perform its obligations under and with respect
to the Common Securities and the Preferred Securities. All necessary trust
action on the part of the Trust has been duly taken to authorize the execution,
issuance, sale, delivery and performance by the Trust of its obligations under
the Common Securities and the Preferred Securities. The Common Securities and
the Preferred Securities have been duly authorized by the Trust Agreement, and
when issued by the Trust against payment therefor as contemplated by the
Prospectus, will be validly issued and (subject to the terms of the Trust
Agreement) fully paid and nonassessable 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 Common
Securities and the Preferred Securities is not subject to preemptive or other
similar rights and holders of Preferred Securities will be entitled to the same
limitation of personal liability under Delaware law as is extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. The Common Securities and the
Preferred Securities conform or will conform in all material respects to the
descriptions thereof contained in the Registration Statement and the Prospectus.
(ix) The Company has the duly authorized capital stock set
forth in the Prospectus. All of the shares of capital stock of the Company
issued and outstanding have been duly and validly authorized and issued, are
fully paid and nonassessable, without personal liability attaching to the
ownership thereof, and none of such shares have been issued or are owned or held
in violation of any preemptive or other similar rights. There are no holders of
the securities of the Company having rights to registration thereof or
preemptive or other similar rights to purchase capital stock or membership
interests of the Company and neither the filing of the Registration Statement
nor the offering or sale of the Preferred Securities or the Subordinated
Debentures as contemplated by the Registration Statement, the Prospectus and
this Agreement gives rise to any rights (other than have been waived or
satisfied) for or relating to the registration of any securities of the Company.
The capital stock of the Company conforms in all material respects to the
descriptions thereof contained in the Registration Statement and the Prospectus.
There are no options, warrants, or other rights to purchase or acquire from the
Company or from any of the Subsidiaries shares of the capital stock of the
Company or any such Subsidiary. All of the issued and outstanding shares of
capital stock of each of the Subsidiaries have been duly authorized, validly
issued and are fully paid and nonassessable and all such shares are held, in the
case of the Bank Subsidiary and the Reinsurance Subsidiary, by the Company, and
in the case of the Insurance Agency Subsidiary, the Securities Subsidiary, the
Auto Financing Subsidiary and the Insurance 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.
(x) The consolidated financial statements of the Company
and the related notes thereto incorporated by reference in the Registration
Statement and the Prospectus comply in all material respects with the
requirements of the Securities Act and the Securities Act Rules and Regulations
at the dates and for the periods indicated, are accurate in all material
respects and fairly present the financial condition, results of operations,
stockholders' equity and cash flows, and the other information of the Company
and its consolidated subsidiaries at the respective dates and for the respective
periods specified therein. Such financial statements and the related notes
thereto have been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods presented (except as
otherwise noted therein) and have been properly derived from the books and
records of the Company, and such financial statements have been audited by Xxxxx
& Young, LLP, who are independent public accountants within the meaning of the
Securities Act and the Securities Act Rules and Regulations, as indicated in
their reports filed therewith. The selected financial information and
statistical data set forth under the captions "Prospectus Summary," "Selected
Consolidated Financial Data," "Use of Proceeds", "Capitalization," in the
Prospectus fairly present the information set forth therein, have been derived
from the financial statements or operating records of the Company and have been
compiled on a basis consistent with that of the audited financial statements
incorporated by reference in the Registration Statement and the Prospectus. No
other financial statements or financial information, except that which is
contained in the Registration Statement or the Prospectus, is required by Form
S-3, the Securities Act Rules and Regulations or otherwise, to be included in
the Registration Statement or the Prospectus.
(xi) Since the respective dates as of which information is
given in the Prospectus, and except as otherwise may be stated therein or
contemplated thereby (A) none of the Subsidiaries, the Company or the Trust has
entered into any transaction or incurred any liability or obligation, direct,
contingent or otherwise, which is material to the Company and the Subsidiaries,
taken as a whole or to the Trust, (B) there has not been any material change in
the outstanding capital stock of the Company, or any issuance of options,
warrants or rights to purchase the capital stock of the Company (through any
existing stock repurchase plan, dividend reinvestment plan, employee benefit
plan or otherwise), or any material increase in the short-term or long-term debt
the Company or the Subsidiaries, except indebtedness and deposit liabilities
incurred by the Bank Subsidiary in the ordinary course of its banking business,
or any event or circumstance giving rise to a Material Adverse Effect (as
hereinafter defined) relating to the Company or the Trust; (C) none of the
Subsidiaries, the Company or the Trust has sustained any loss or damage (whether
or not insured) which has resulted in or reasonably could be expected, in the
aggregate, to result in a Material Adverse Effect to the Company or the Trust;
(D) there has not been any material interference with the business of any of the
Subsidiaries taken as a whole, the Company or the Trust from any labor dispute
or court or governmental action, order or decree; (E) there has not been any
change greater than ten percent (10%), contingent or otherwise, in the direct or
indirect control of the Company nor has there been any change in control, direct
or indirect, in the Trust and, to the best knowledge of the Company and the
Trust, there do not exist any events or conditions which would reasonably be
expected to result in such changes in the Company or the Trust, respectively;
(F) other than as set forth in the Prospectus, there are no actions, suits,
proceedings, or investigations or litigation pending, or, to the best knowledge
of the Company or the Trust, threatened or contemplated actions, suits or
proceedings against the Subsidiaries, the Company or the Trust before any court,
regulatory body, administrative agency or other governmental body which might,
in the aggregate, have a Material Adverse Effect on the Company or the Trust, or
which is required by the Securities Act and the Securities Act Rules and
Regulations to be set forth in the Registration Statement or the Prospectus
which has not been so set forth, and (G) there has not occurred any other event
and there has arisen no set of circumstances required by the Securities Act and
the Securities Act Rules and Regulations to be set forth in the Registration
Statement or the Prospectus which has not been so set forth in the Registration
Statement or Prospectus as fairly and accurately summarized therein. None of the
Subsidiaries, the Company or the Trust has any material contingent liabilities,
taken as a whole, that are not disclosed in the Prospectus.
(xii) Each of the Subsidiaries, the Company and the Trust
has filed all foreign, federal, state and local income, franchise and other
material tax returns required to be filed (or has obtained extensions with
respect thereto) and has paid all taxes shown as due thereunder and all
assessments received by it to the extent that payment has become due, and has
made all required payroll tax payments. All tax liabilities have been adequately
provided for in the consolidated financial statements of the Company and, to the
best knowledge of the Company and the Trust, there are no tax deficiencies which
have been or might be asserted against any of the Company, the Subsidiaries or
the Trust which, if so assessed, would have a Material Adverse Effect on the
Company or the Trust, as the case may be.
(xiii) The Company and each of the Subsidiaries maintains
insurance of the types and in amounts which the Company reasonably believes to
be adequate for the conduct of their respective businesses and the value of
their prospective properties and in such amounts and with such deductibles as
are customary for companies in the same or similar businesses, all of which
insurance is in full force and effect.
(xiv) Each of the Company and the Trust has all power and
authority to enter into, execute, deliver and perform its obligations under and
with respect to this Agreement. All necessary corporate or trust proceedings, as
the case may be, of the Company and the Trust have been duly taken to authorize
the execution, delivery and performance by the Company and the Trust of this
Agreement. This Agreement has been duly authorized, executed and delivered by
the Company and the Trust and constitutes a valid and binding obligation of the
Company and of the Trust, enforceable against each in accordance with its terms
(except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general application
relating to or affecting the enforcement of creditors' rights and by the
application of equitable principles relating to the availability of remedies,
and except as rights to indemnity or contribution may be limited by federal or
state securities laws and the public policy underlying such laws).
(xv) None of the Subsidiaries, the Company or the Trust is
in default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, loan
agreement, note, lease, franchise, license, bond or other evidence of
indebtedness or other agreement or instrument to which it is a party, by which
it may be bound or to which any of its assets, properties or businesses are or
may be subject, except for such defaults that would not, in the aggregate, have
a Material Adverse Effect on the Company or the Trust, as the case may be, or
which could in any way, in the aggregate, impair or delay, for twenty-four (24)
hours or more, the consummation of the transactions contemplated by this
Agreement, the Indenture, the Trust Agreement or the Guarantee Agreement, or the
issuance and sale of the Common Securities, the Preferred Securities or of the
Subordinated Debentures, or the consummation by the Company and the Trust of the
other transactions contemplated by this Agreement, the Indenture, the Trust
Agreement or the Guarantee Agreement. The Company's and the Trust's execution
and delivery of this Agreement, and the Company's execution of the Indenture,
the Trust Agreement and the Guarantee Agreement, and the consummation by the
Company and/or the Trust of the transactions contemplated hereby and thereby,
including, without limitation, the issuance, sale and delivery of the Preferred
Securities and the Common Securities by the Trust and of the Subordinated
Debentures by the Company, and the conduct of their respective businesses as
described in or contemplated by the Registration Statement and the Prospectus,
will not violate of any provision of the charter, bylaws or other governing
documents of any of the Subsidiaries, the Company or the Trust Agreement or the
Trust's certificate of trust filed with the state of Delaware on July 19, 1999
(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 under, or result in the creation or imposition
of any lien, security interest, pledge, charge, mortgage or other defect in or
encumbrance upon, any assets, property or business of the Subsidiaries, the
Company, or the Trust pursuant to the terms of any contract, indenture,
mortgage, loan agreement, note, lease, franchise, license, bond, other evidence
of indebtedness, or other agreement or instrument to which any of the
Subsidiaries, the Company or the Trust is a party, by which it may be bound or
to which any of its assets, properties or businesses are or may be subject, or,
assuming compliance with the Securities Act and applicable state securities or
Blue Sky laws, any statute, judgment, decree, order, rule or regulation
applicable to any of the Subsidiaries, the Company or the Trust of any
arbitrator, court, regulatory body, administrative agency or other governmental
body, except those, if any, that are described in the Prospectus or those which
would not, individually or in the aggregate, have a Material Adverse Effect on
the Company or the Trust, as the case may be.
(xvi) All executed agreements or copies of executed
agreements filed as exhibits to the Registration Statement to which any of the
Subsidiaries, the Company or the Trust is a party, by which any of them is or
may be bound or to which any of their respective assets, properties or
businesses are or may be subject have been duly and validly authorized, executed
and delivered by such Subsidiary, the Company or the Trust, as the case may be,
and constitute the legal, valid and binding agreements of such Subsidiary, the
Company or the Trust, enforceable against it in accordance with its terms
(except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization or other laws of general application relating to or
affecting enforcement of creditors' rights, and application of equitable
principles relating to the availability of remedies, and except as rights to
indemnity or contribution may be limited by federal or state securities laws and
the public policy underlying such laws). The descriptions and summaries
contained in the Registration Statement of contracts and other documents and the
statements set forth in the Prospectus under the captions "Description of
Preferred Securities Debentures," "Description of Junior Subordinated
Debentures," "Description of Guarantee" and "Relationship Among the Preferred
Securities, the Subordinated Debentures and the Guarantee," insofar as they
purport to constitute a summary of the terms of the Company's and the Trust's
securities, and under the captions (except, with respect to the statements under
the caption "Underwriting," for information furnished in writing to the Company
by the Underwriters through the Representatives expressly for use therein (as
identified in Section 9(b) hereof)) insofar as they purport to describe the
provisions of the laws and the provisions of documents referred to therein, are
accurate and fairly present in all material respects the information required to
be disclosed with respect thereto by the Securities Act and the Securities Act
Rules and Regulations, and there are no contracts, other documents, transactions
or circumstances which are required by the Securities Act and the Securities Act
Rules and Regulations to be described in the Prospectus, the Registration
Statement or filed as exhibits thereto which are not so described or filed. The
exhibits which have been filed are complete and correct copies of the documents
of which they purport to be copies.
(xvii) The Company and the Bank Subsidiary 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 in the ordinary course of business, and except such as are
described in the Prospectus or such as do not materially affect the value of any
such property, and do not interfere with the use made or proposed to be made of
such property by the Company or the Bank Subsidiary. Any real properties held or
used by the Company or the Bank Subsidiary under lease are held or used under
valid, subsisting and enforceable leases, such leases are in full force and
effect, the Company or the Bank Subsidiary, as the case may be, is not in
default in respect of any material terms of any such lease and enjoys peaceful
and undisturbed possession thereunder and, to the best knowledge of the Company,
there are no claims that have been asserted by any party adverse to the
Company's or the Bank Subsidiary's right as lessee under any such lease or
affecting or challenging the Company's or the Bank Subsidiary's right to
continue possession of the premises subject to any such lease which,
individually or in the aggregate, would have a Material Adverse Affect on the
Company. No real property owned, held or used by the Company or the Bank
Subsidiary is situated in an area which is or, to the best knowledge of the
Company and the Bank Subsidiary, will be, subject to zoning, use, or building
code restrictions that would prohibit (and no state of facts relating to the
actions or inaction of another person or entity or his or its ownership,
leasing, or use of any real or personal property exists or will exist which
would prevent) the continued effective ownership, holding or use of such real
property in the business of the Company or the Bank Subsidiary as described in
or contemplated by the Registration Statement and the Prospectus.
(xviii) All legally required proceedings in connection
with the issuance and sale of the Common Securities, the Preferred Securities,
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, or by The Nasdaq National Market (the "NNM") to have the Preferred
Securities listed thereon, and by the National Association of Securities
Dealers, Inc. (the "NASD") in connection with the terms and conditions set forth
in this Agreement. No consent of any party to any material contract, agreement,
mortgage, loan agreement, note, franchise, lease, bond, other evidence of
indebtedness or other agreement or instrument, or any arrangement or
understanding to which the Company or the Trust is a party, by which either of
them may be bound or to which any of their respective assets, properties or
businesses are or may be subject, is required for the execution, delivery or
performance of this Agreement, the Indenture, the Trust Agreement or the
Guarantee Agreement, or the issuance and sale of the Common Securities, the
Preferred Securities or the Subordinated Debentures, or the consummation by each
of the Company and the Trust of the transactions contemplated by this Agreement,
the Indenture, the Trust Agreement or the Guarantee Agreement.
(xix) None of the Subsidiaries, the Company or the Trust,
or the conduct of their respective businesses as described in or contemplated by
the Prospectus is in violation of any federal, state or local statute,
administrative regulation or other law, the consequence of which violation(s),
individually or in the aggregate, would have a Material Adverse Effect on the
Company or the Trust, as the case may be, or which could in any way,
individually or in the aggregate, 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.
(xx) The Company has received, subject to notice of
issuance, approval to have the Preferred Securities listed on the NNM and the
Company knows of no reason which is likely to adversely affect such approval.
(xxi) None of the Subsidiaries, the Company or the Trust
is and, after giving effect to the offering and sale of the Preferred
Securities, the Common Securities and the Junior Subordinated Debentures, will
not be, an "investment company" or an "affiliated person" of or a "promoter" or
"principal underwriter" of or an entity "controlled" by an "investment company",
as such terms are defined in the Investment Company Act of 1940 (the "Investment
Company Act").
(xxii) Each the Company, the Subsidiaries, the Company and
the Trust owns or is licensed or otherwise has sufficient right to use the
proprietary knowledge, trademarks, service marks, trade names, trademark
registrations, service mark registrations, logo marks, copyrights and rights
(collectively, "Intellectual Property") necessary for the conduct of its
business as described in or contemplated by the Registration Statement and the
Prospectus. To the best knowledge of the Company and the Trust, none of the
activities engaged in by the Company, the Subsidiaries or the Trust materially
infringes upon or otherwise materially conflicts with Intellectual Property
rights of others. No claims have been asserted or, to the best knowledge of the
Offerors, threatened against the Company, the Subsidiaries or the Trust by any
person with respect to the use of any such Intellectual Property or challenging
or questioning the validity or effectiveness of any such Intellectual Property.
(xxiii) No labor disturbance(s) by, or labor dispute(s)
with the employees of the Company or the Subsidiaries exists or, to the best
knowledge of the Offerors, is threatened or imminent which, in the aggregate,
would have a Material Adverse Effect on the Company.
(xxiv) Each of the administrators under the Trust
Agreement (each of the "Administrators") has been duly authorized to execute and
deliver the Trust Agreement.
(xxv) To the best knowledge of the Offerors, no hazardous
substances, hazardous wastes, pollutants or contaminants have been deposited or
disposed of in, on or under the properties of the Company, or any of the
Subsidiaries (including properties owned, managed or controlled by a Subsidiary
in connection with its lending activities) during the period in which the
Company or the Subsidiary has owned, occupied, managed, controlled or operated
such properties, in violation of any environmental, safety, health or similar
laws or regulations, orders, decrees or permits relating to the protection of
human health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("Environmental Regulations"), or any order,
judgment, decree or permit which would require remedial action under any
Environmental Regulations, except for any violations or remedial actions which
would not have, in the aggregate, a Material Adverse Effect on the Company. The
Company and each of the Subsidiaries (i) is in material compliance with all
applicable Environmental Regulations and (ii) has received all permits,
licenses, consents or other approvals required under applicable Environmental
Regulations to conduct its business, in each case except where the failure(s) to
do so would not, in the aggregate, have a Material Adverse Effect on the
Company.
(xxvi) The employee benefit plans, including employee
welfare benefit plans, of the Company and each of the Subsidiaries (the
"Employee Plans",) have been operated in material compliance with the applicable
provisions of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), the Internal Revenue Code of 1986, as amended (the "Code"), all
regulations, rulings and announcements promulgated or issued thereunder and all
other applicable governmental laws and regulations (except to the extent such
noncompliance would not, in the aggregate, have a Material Adverse Effect on the
Company). No reportable event under Section 4043(c) of ERISA has occurred with
respect to any Employee Plan of the Company or any of the Subsidiaries for which
the reporting requirements have not been waived by the Pension Benefit Guaranty
Corporation. No prohibited transaction under Section 406 of ERISA, for which an
exemption does not apply, has occurred with respect to any Employee Plan of the
Company or any of the Subsidiaries. There are no pending or, to the Company's
best knowledge, threatened claims by or on behalf of any Employee Plan, by any
employee or beneficiary covered under any such Plan or by any governmental
authority or otherwise involving such Plans or any of their respective
fiduciaries (other than for routine claims for benefits). All Employee Plans
that are group health plans have been operated in material compliance with the
group health plan continuation coverage requirements of Section 4980B of the
Code.
(xxvii) None of the Company, the Subsidiaries or the Trust
is party to or otherwise subject to any consent decree, memorandum of
understanding, written commitment or other supervisory agreement (restricting
the activities of the Company, the Subsidiaries or the Trust in a material way)
with the Board of Governors of the Federal Reserve System or any Federal Reserve
Bank (the "Federal Reserve"), the FDIC, the Maryland Commissioner of Financial
Regulation (the "Maryland Commissioner") or any other federal or state authority
or agency responsible for the supervision, regulation or insurance of depository
institutions, mortgage companies and their subsidiaries and holding companies
(any "Bank Regulator").
(xxviii) None of the Company, the Subsidiaries, the Trust
or, to the best knowledge of the Offerors, any other person associated with or
acting on behalf of the Company, any of the Subsidiaries or the Trust,
including, without limitation, any director, officer, agent, or employee of any
of the Subsidiaries or the Company has, directly or indirectly, while acting on
behalf of such Subsidiary, the Company or the Trust (i) used any corporate funds
for unlawful contributions, gifts, entertainment, or other unlawful expenses
relating to political activity; (ii) made any unlawful contribution to any
candidate for foreign or domestic office, or to any foreign or domestic
government officials or employees or other person charged with similar public or
quasi-public duties, other than payments required or permitted by the laws of
the United States or any jurisdiction thereof or to foreign or domestic
political parties or campaigns from corporate funds, or failed to disclose fully
any contribution in violation of law; (iii) violated any provision of the
Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any other
payment of funds of the Company or a Subsidiary or retained any funds which
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.
(xxix) The Bank Subsidiary is in good standing with the
Division of Financial Regulations of the Department of Licensing and Regulations
and the activities of the Company and the Bank Subsidiary are permitted under
applicable federal and state banking laws, rules and regulations. The Company
and each of the Subsidiaries have all necessary approvals, including approvals
of each Bank Regulator having jurisdiction over it. The Company and each
Subsidiary has filed with the appropriate governmental authorities each and
every statement, report, information or form required to be filed by it pursuant
to any applicable law, regulation, license, permit or order, except where the
failure(s) to so file would not, in the aggregate, have a Material Adverse
Effect on the Company, all such filings or submissions were in compliance in all
material respects with applicable laws and regulations when filed, and no
deficiencies have been asserted by any regulatory commission, agency or
authority with respect to such filings or submissions, except where the
failure(s) to so file or cure would not, in the aggregate, have such a Material
Adverse Effect in the Company. No report or application filed by the Company or
any of the Subsidiaries with any Bank Regulator (each such report or
application, together with all exhibits thereto, a "Regulatory Report"), as of
the date it was filed, contained 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 filed each Regulatory Report
that it was required to file with any Bank Regulator except where the failure(s)
to so file would not, in the aggregate, have a Material Adverse Effect on the
Company.
(xxx) The books, records and accounts and systems of
internal accounting controls of the Company and of each of the Subsidiaries
comply in all material respects with the requirements of Section 13(b)(2) of the
Exchange Act.
(xxxi) The minute books of the Company and each of the
Subsidiaries are current and contain a correct record, in all material respects,
of all corporate action reflected therein as taken by the Boards of Directors
and shareholders of the Company and the Subsidiaries and a correct and complete
record of the ratification by the Boards of Directors of the Company and the
Subsidiaries of all corporate action taken by such Boards for which such minute
books do not contain a record, and all signatures contained therein are true
signatures of the persons whose signatures they purport to be.
(xxxii) Except pursuant to this Agreement, the Company has
not incurred, directly or indirectly, any liability for a fee, commission or
other compensation or reimbursement on account of the employment of a broker,
finder agent, investment adviser or otherwise in connection with the
transactions contemplated by this Agreement, the Indenture, the Trust Agreement,
or the Guarantee Agreement.
(xxxiii) As of March 18, 1999, there are no business
relationships or related party transactions of the nature described in Item 404
of Regulation S-K of the Commission involving the Company, the Subsidiaries or
the Trust and any person referred to in Items 401 or 404 of Regulation S-K,
except as required to be described, and as so described, in the Prospectus.
(xxxiv) 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.
(xxxv) The conditions for use of Form S-3, 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 Representatives or to counsel to
the Underwriters shall be deemed a representation and warranty by the Company
and each of the Subsidiaries or of the Trust, as the case may be, to the
underwriters as to the matters covered thereby.
Section 3. Purchase of Securities by the Underwriters. On the basis of
the representations, warranties, covenants and agreements herein contained, and
subject to the terms and conditions herein set forth, the Trust agrees to issue
and sell to 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 Representatives, on behalf of the
several Underwriters, a commission of $0.35 per Firm Security ($700,000 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
Representatives, on behalf of the several Underwriters, a commission of $0.35
per Additional Security purchased on such Option Closing Date (up to an
aggregate of $105,000).
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 Representatives
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.
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
l5c6-l(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
Representatives by the Company, at such place as the Representatives 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 Representatives 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 Representatives 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 wire transfer
of same-day funds, payable to the order of the Trust to an account designated
thereby. Delivery of the Preferred Securities may be made by credit through full
fast transfer to the accounts at The Depository Trust Company designated by the
Representatives. The Preferred Securities shall be represented in the form of
one or more fully registered global notes (the "Global Notes") in book-entry
form registered in the name of the nominee of The Depository Trust Company. The
Global Notes representing the Preferred Securities shall be made available for
examination by the Representatives not later than 10:00 a.m., Washington, DC
time, on the last business day prior to the Closing Date 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 and Xxxxxxx, P.A.,
Twentieth Floor, 00 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000-0000, or
such other location as the Representatives 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) and location as is
mutually agreed upon by the parties hereto, at which meeting(s) the final drafts
of the documents to be delivered pursuant to the preceding paragraph will be
available for review by the parties hereto.
Section 6. Covenants of the Company and the Trust. The Offerors,
jointly and severally, covenant and agree with each of the Underwriters as
follows:
(a) The Offerors will use their respective best efforts to
cause the Registration Statement, if not effective at the time of execution of
this Agreement, to become effective as promptly as practicable thereafter. If
required, the Offerors will file the Prospectus and any amendments or
supplements thereto with the Commission in the manner and within the time period
required by Rule 424(b) under the Securities Act. During any time when a
prospectus relating to the Preferred Securities is required to be delivered
under the Securities Act, each of the Offerors will comply in all material
respects with all requirements imposed by the Securities Act and the Securities
Act Rules and Regulations to the extent necessary to permit the continuance of
sales of or dealings in the Preferred Securities in accordance with the
provisions hereof and as contemplated by the Registration Statement and the
Prospectus. With respect to any registration statement, prospectus, amendment
(including any post-effective amendment), or supplement to be filed with the
Commission in connection with the Preferred Securities, the Offerors will
provide a copy of each such document to the Representatives a reasonable time
prior to the date such document is proposed to be filed with the Commission and
will not file any such document without the consent of the Representatives. Any
such registration statement, prospectus, amendment or supplement, when filed,
will comply in all material respects with the Securities Act and the Securities
Act Rules and Regulations. In the event that the Registration Statement is
effective at the time of execution of this Agreement, but the total number of
Preferred Securities subject to this Agreement exceeds the number of Preferred
Securities covered by the Registration Statement, the Offerors promptly will
file with the Commission the date hereof a registration statement pursuant to
Rule 462(b) of the Rules and Regulations in accordance with the requirements of
such Rule and will make payment of the filing fee therefor in accordance with
the requirements of Rule 111(b) of the Rules and Regulations.
(b) The Offerors will advise the Representatives promptly and,
if requested by the Representatives, will confirm such advice in writing (i)
when the Registration Statement, as amended, has become effective; (ii) if the
provisions of Rule 430A of the Securities Act Rules and Regulations will be
relied upon, when the Prospectus has been filed in accordance with said Rule
430A; (iii) when any post-effective amendment to the Registration Statement
becomes effective; (iv) of any request made by the Commission for amendments or
supplements to the Registration Statement, any Preliminary Prospectus or
Prospectus or for additional information; (v) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration Statement or
any post-effective amendment thereto or any order preventing or suspending the
use of any Preliminary Prospectus or Prospectus or any amendment or supplement
thereto or the qualification of the securities for offering or sale in any
jurisdiction, or the institution or threat of any investigation or proceedings
for any such purpose by the Commission, any state securities commission or any
other regulatory authority; and (vi) of the receipt of any comments from the
Commission regarding the Registration Statement, any post-effective amendment
thereto, the Preliminary Prospectus, the Prospectus, or any amendment or
supplement thereto. The Offerors will use their best efforts to prevent the
issuance of any stop order by the Commission, and if at any time the Commission
shall issue any stop order, the Offerors will use their best efforts to obtain
the withdrawal of such stop order at the earliest possible moment.
(c) The Offerors will cooperate with the Representatives, the
Underwriters and counsel to the Underwriters in qualifying or registering the
Preferred Securities for sale, or obtaining an exemption therefrom, under the
securities or Blue Sky laws of such jurisdictions as the Representatives shall
designate, and will continue such qualifications or registrations or exemptions
in effect so long as requested by the Representatives 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
Representatives and will prepare and file with the Commission an amendment to
the Registration Statement or an amendment or supplement to the Prospectus which
will correct such statement or omission or effect such compliance. The Offerors
will provide a copy of each such amendment or supplement to the Representatives
a reasonable time prior to the date on which it is proposed to be filed with the
Commission and will not file any such amendment or supplement without the
consent of the Representatives.
(e) As soon as practicable, but in any event not later than
forty-five (45) calendar days after the end of the twelve (12) month period
beginning on the day after the end of the fiscal quarter of the Offerors during
which the effective date of the Registration Statement occurs (ninety (90)
calendar days in the event that such quarter is the last fiscal quarter), the
Offerors, to the extent not exempt pursuant to the Securities Act, the
Securities Act Rules and Regulations or the exemptive authority of the
Commission, will make generally available to their security holders, in the
manner specified in Rule 158(b) of the Securities Act Rules and Regulations, and
will deliver to the Representatives, an earnings statement (which need not be
audited) which will be in the detail required by, and will otherwise comply
with, the provisions of Section 11(a) of the Securities Act and Rule 158(a) of
the Securities Act Rules and Regulations, which statement need not be audited
unless required by the Securities Act or the Securities Act Rules and
Regulations, covering a period of at least twelve (12) consecutive months after
the effective date of the Registration Statement.
(f) For a period of three (3) years commencing with the date
hereof, as promptly as practical after filing or release, as the case may be,
each of the Offerors will furnish to the Representatives copies of (i) all
annual reports, quarterly reports and current reports filed thereby with the
Commission on Forms 10-K, 10-Q and 8-K, or such other similar forms as may be
designated by the Commission; (ii) such other documents, proxy statements,
reports and information as are furnished thereby to its security holders
generally; (iii) each report filed thereby with the NNM; (iv) each press release
in respect thereof; (v) and such other public information relating to the
Offerors as the Representatives may reasonably request.
(g) The Offerors will furnish, without charge, to the
Representatives or on the Representative's request, at such place as the
Representatives may designate, copies of each Preliminary Prospectus, the
Registration Statement and any amendments thereto, any registration statement
filed pursuant to Rule 462(b) (of which copies two (2) will be signed and will
include all financial statements and exhibits) and the Prospectus, and all
amendments and supplements thereto, in each case as soon as available and in
such quantities as the Representatives may reasonably request.
(h) Each of the Offerors will use its best efforts to cause
the Preferred Securities to be duly approved for listing on the NNM, subject to
notice of issuance, prior to the Closing Date and to cause the Preferred
Securities to remain listed for at least thirty-six (36) months thereafter.
(i) None of the Offerors, the Subsidiaries or any of their
officers or directors, trustees or affiliates, (within the meaning of the
Securities Act Rules and Regulations) will take, directly or indirectly, any
action designed to, or which might reasonably be expected to, cause or result in
stabilization or manipulation of the price of any securities of the Offerors.
(j) The Offerors will apply the net proceeds from the sale of
the Preferred Securities and the Subordinated Debentures in the manner and for
the purposes set forth in the Prospectus and will make such disclosures of the
application of such proceeds as may be required by Rule 463 of the Securities
Act Rules and Regulations. Pending application of the net proceeds of the sale
of the Common Securities, the Preferred Securities and the Subordinated
Debentures in such manner, the Offerors and each of the Subsidiaries will
operate their businesses in such manner and for such purposes and each will
invest such net proceeds in such securities, so as not to become an "investment
company" as such term is defined under the Investment Company Act.
(k) To the extent not exempt pursuant to the Securities Act,
the Securities Act Rules and Regulations or the exemptive authority of the
Commission, each of the Offerors will timely file all such reports, forms or
other documents as may be required from time to time, under the Securities Act,
the Securities Act Rules and Regulations, the Exchange Act and the rules and
regulations thereunder, and all such reports, forms and documents so filed will
materially comply as to form and substance with the applicable requirements
under the Securities Act, the Securities Act Rules and Regulations, the Exchange
Act and the rules and regulations thereunder which may from time to time be
applicable thereto. Each of the Offerors shall comply with the provisions of all
undertakings contained in the Registration Statement.
(l) Neither of the Offerors shall, 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 Representatives are substantially similar to the Preferred
Securities, without the prior written consent of the Representatives.
(m) The Offerors will not, without the prior written consent
of the Representatives, which shall not be unreasonably withheld, 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.
(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 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. Notwithstanding the foregoing, the reasonable out of
pocket costs, fees and expenses of the Underwriters, its agents or counsel,
charged to the Company, shall not exceed seventy-five thousand dollars
($75,000).
(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 is not consummated or by reason of Section 11(a)
hereof, the Company shall pay all reasonable costs, expenses and fees incident
to the performance of its obligations and those of the Trust under this
Agreement and shall reimburse the several Underwriters for their reasonable
out-of-pocket expenses (including but not limited to reasonable counsel fees and
disbursements) in connection with any investigation made by them, and any
preparation made by them in respect of marketing of the Firm Securities or in
contemplation of the performance by them of their obligations hereunder,
provided, however, that in no event shall the amount of such reimbursement
exceed $35,000 in the aggregate.
Section 8. Conditions of the Underwriters' Obligations. The obligations
of each Underwriter to purchase and pay for the number of 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 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 (which may, in the
absolute and sole discretion of the Underwriters, be waived, in whole or in
part):
(a) The Registration Statement shall have been declared
effective, and the Prospectus (containing the information omitted pursuant to
Rule 430(A)) shall have been filed with the Commission not later than the
Commission's close of business on the second business day following the date
hereof or such later time and date to which the Representatives shall have
consented. No stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereto or any order preventing or
suspending the use of any Prospectus or any amendment or supplement thereto
shall have been issued, and no proceedings for that purpose shall have been
instituted or pending or, to the best knowledge of the Offerors or the
Representatives, shall be contemplated or threatened by the Commission. The
Offerors shall have complied with any request of the Commission for additional
information (to be included in the Registration Statement or the Prospectus or
otherwise). No stop orders suspending the sale of the Preferred Securities in
any jurisdiction referred to in Section 6(c) shall have been issued, and no
proceedings for that purpose shall have been instituted or shall be pending or,
to the best knowledge of the Offerors or the Representatives, shall be
contemplated or threatened by the officials of any such jurisdiction.
(b) The Representatives shall not have advised the Offerors
that the Registration Statement contains an untrue statement of fact which the
Representatives reasonably believe is material, or omits to state a fact which
the Representatives reasonably believe is material and is required to be stated
therein or is necessary to make the statements therein not misleading, or that
the Prospectus, or any supplement thereto, contains an untrue statement of fact
which the Representatives reasonably believe is material, or omits to state a
fact which the Representatives reasonably believe is material and is required to
be stated therein or is necessary to make the statements therein not misleading.
(c) On or prior to the Closing Date and each Option Closing
Date, if any, the Representatives shall have received from counsel to the
Underwriter, such opinion or opinions with respect to the issuance and sale of
the Common Securities, the Preferred Securities and the Subordinated Debentures,
the Registration Statement and the Prospectus and such other related matters as
the Representatives reasonably may request, and such counsel shall have received
such documents and other information as it requests to enable it to pass upon
such matters.
(d) On the Closing Date and each Option Closing, if any, the
Representatives shall receive:
(i) The favorable opinion, dated as of the Closing Date or
such Option Closing Date, of Xxxxxx, Xxxxxxxxx, Xxxxxxx, Xxxxxxxxxx & Xxxxxxxxx,
LLC, 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 is justified in relying thereon. Insofar as such opinions
involve factual matters, such counsel may rely, to the extent such counsel deems
proper, upon certificates of officers and trustees of the Company, the
Subsidiaries and the Trust, as the case may be, and certificates of public
officials, provided that copies of all such certificates shall be attached to or
referenced in the opinion.
(ii) The favorable opinion, dated the Closing Date or such
Option Closing Date, of White & Case, counsel to Bankers Trust (Delaware), as
the Delaware Trustee, and 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
Representatives and (B) counsel shall state in its opinion that it believes that
it is justified in relying thereon. Insofar as such opinions involve factual
matters, such counsel may rely, to the extent such counsel deems proper, upon
certificates of officers and trustees of the Company, the Subsidiaries and the
Trust, as the case may be, and certificates of public officials, provided that
copies of all such opinions shall be attached to or referenced in the opinion.
(e) On or prior to the Closing Date 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 Representatives shall have received
a "comfort" letter from Xxxxx & Young, LLP, independent certified public
accountants, dated such date and addressed to the Underwriters, in form and
substance satisfactory to the Representatives, 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 Representatives shall have received from Ernst & Xxxxx, 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
Chairman of the Board/Chief Executive Officer and President/Chief Financial
Officer of the Company to the effect that each such person has carefully
examined the Registration Statement, to the best knowledge of each such person,
and the Prospectus and any amendments or supplements thereto and this Agreement,
and that:
(i) The representations and warranties of the Company in
this Agreement are true and correct in all material respects, as if made on and
as of the Closing Date or the applicable Option Closing Date, as the case may
be, and the Company has complied with all agreements and covenants and
satisfied, in all material respects, all conditions contained in this Agreement
on its part to be performed or satisfied at or prior to the Closing Date 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,
and any and all filings required by Rule 424, Rule 430A and Rule 462(b) have
been timely made; and
(iii) The Registration Statement and Prospectus and, if
any, each amendment and each supplement thereto, contain all statements and
information required to materially comply with the Securities Act or the
Securities Act Rules and Regulations to be included therein, and neither the
Registration Statement or the Prospectus nor any amendment or supplement thereto
includes any untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein
not materially misleading.
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 Registration Statement and the Prospectus and any amendments or
supplements thereto and this Agreement, and that, to the best knowledge of each
person:
(i) the representations and warranties of the Trust in
this Agreement are true and correct in all material respects, as if made on and
as of the Closing Date and each Option Closing Date, if any, and the Trust has
complied with all agreements and covenants and satisfied, in all material
respects, all conditions contained in this Agreement on its part to be performed
or satisfied at or prior to the Closing Date or such Option Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto or suspending the
use of any Prospectus in any amendment or supplement thereto, or the
qualification of the Preferred Securities for offering or sale has been issued
has been issued, and no proceedings for that purpose have been instituted or are
pending or, to the best knowledge of each such person, are contemplated or
threatened under the Securities Act, and any and all filings required by Rule
424, Rule 430A and Rule 462(b) have been timely made; and
(iii) the Registration Statement and Prospectus and, if
any, each amendment and supplement thereto, contain all statements and
information required to materially comply with the Securities Act and the Rules
and the Securities Act Regulations to be included therein, and neither the
Registration Statement or the Prospectus nor any amendment or supplement thereto
includes any untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein
not materially misleading.
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 material change in the business or properties of the
Company, any of the Subsidiaries or the Trust which change, taken as a whole,
makes it reasonably impractical or inadvisable in the Representative's
reasonable 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.
(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 Representatives shall have designated or an exemption therefrom shall be
available;
(m) 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 Representatives 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 Representatives 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, in all material respects, or waived by the Representatives, 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 Representatives), or the Offerors, except for the
expenses to be paid by the Company pursuant to Section 7 hereof and except to
the extent provided in Section 9 hereof.
Section 9. Indemnification and Contribution.
(a) The Offerors agree, jointly and severally, to indemnify
and hold harmless each Underwriter, and its officers, directors, partners,
employees and agents and each person, if any, who controls such Underwriter
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, against any and all losses, claims, damages, liabilities or
expenses whatsoever (which shall include, for all purposes of this Section 9,
but not be limited to, attorneys' fees and any and all fees and expenses
whatsoever incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim whatsoever and any and all
amounts paid in settlement), joint or several (and actions in respect thereof),
to which such Underwriter, officer, partner, employee, agent, counsel or
controlling person may become subject, under the Securities Act or other federal
or state statutory law or regulation, at common law or otherwise, insofar as
such losses, claims, damages, liabilities, expenses or actions arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement or the Prospectus or any
Preliminary Prospectus, or any Blue Sky application or other document executed
by the Offerors specifically for the purposes of qualifying, or based upon
written information furnished by the Offerors in any state or other jurisdiction
in order to qualify, any or all of the Preferred Securities under the securities
or Blue Sky laws thereof (any such application, document or information being
hereinafter called a "Blue Sky Application"), or arise out of or are based upon
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse, as incurred, expenses of such Underwriter, partner, employee,
agent or controlling person in connection with investigating, defending or
appearing as a third party witness in connection with any such loss, claim,
damage, liability, expense or action; provided, however, that neither of the
Offerors will be liable in any such case to the extent that any such loss,
claim, damage, liability, expense or action arises out of or is based upon any
untrue statement or alleged untrue statement or omission or alleged omission
made in any of such documents in reliance upon and in conformity with
information furnished in writing to the Offerors on behalf of such Underwriter
through the Representatives expressly for use therein (as identified in Section
9(b) hereof), or provided, that such indemnity with respect to any Preliminary
Prospectus shall not inure to the benefit of any Underwriter (or to the benefit
of any person controlling such Underwriter) from whom the person asserting any
such loss, claim, damage, liability or action purchased Preferred Securities
which are the subject thereof to the extent that any such loss, claim, damage,
liability or action (i) results from the fact that such Underwriter failed to
send or give a copy of the Prospectus to such person at or prior to the
confirmation of the sale of such Preferred Securities to such person in any case
where such delivery is required by the Securities Act or (ii) arises out of or
is based upon an untrue statement or omission of a material fact contained in
such Preliminary Prospectus that was corrected in the Prospectus, unless such
failure resulted from non-compliance by the Offerors with Section 6(d) hereof.
The indemnity agreement in this Section 9(a) shall be in addition to any
liability which the Offerors may otherwise have. Notwithstanding the foregoing,
the Offerors shall not be liable for any losses, claims, damages, liabilities or
expenses that a court having jurisdiction shall have determined such loss,
claim, damage, liability or expenses resulted from any of the Underwriters'
gross negligence or willful misconduct.
(b) Each of the Underwriters agrees severally, but not
jointly, to indemnify and hold harmless the Offerors, each of their respective
directors or trustees, as the case may be, each of their respective officers or
Administrators, as the case may be, who has signed the Registration Statement,
their respective employees and agents and each person, if any, who controls
either of the Offerors within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act against any and all losses, claims, damages,
liabilities or expenses whatsoever (which shall include, for all purposes of
this Section 9, but not be limited to, attorneys' fees and any and all fees and
expenses whatsoever incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever and any and all
amounts paid in settlement), (and actions in respect thereof) to which the
Offerors or any such director, trustee, Administrator, officer, employee, agent
or controlling person may become subject, under the Securities Act or other
federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages, liabilities, expenses or actions arise
out of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement or the Prospectus or any
Preliminary Prospectus, or in any Blue Sky Application, or arise out of or are
based upon the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with information furnished by the
Underwriters through the Representatives to the Offerors expressly for use
therein. The Company and the Trust acknowledge that the statements with respect
to the public offering of the Preferred Securities set forth under the caption
"Underwriting" and the stabilization legend in the Prospectus have been
furnished by the Underwriters to the Offerors expressly for use therein and
constitute the only information furnished in writing by or on behalf of the
Underwriters for inclusion in the Prospectus. The indemnity agreement contained
in this Section 9(b) shall be in addition to any liability which the
Underwriters may otherwise have. Each Underwriter will severally reimburse any
legal fees or other expenses reasonably incurred by the Offerors, or any such
director, officer, or controlling person in connection with investigating or
defending any such claims or threatened claim, and from any and all claims or
threatened claims resulting from failure of such Underwriter to deliver a copy
of the Prospectus, if the person asserting such claim or threatened claim
purchased Preferred Securities from such Underwriter and a copy of the
Prospectus (as then amended if the Offerors shall have amended the Prospectus)
was not sent or given by or on behalf of such Underwriter to such person, if
required by law so to have been delivered, at or prior to the written
confirmation of the sale of the Preferred Securities to such person, and if the
Prospectus (as so amended) would have cured the defect giving rise to such Claim
(unless such failure was due to a failure by the Company and the Trust to
provide sufficient copies of the Prospectuses (as so amended) to each
Underwriter).
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof 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 additional to those
available to the indemnifying party, the indemnified party or parties shall have
the right to select separate counsel to assume such legal defenses and otherwise
to participate in the defense of such action on behalf of such indemnified party
or parties. Upon receipt of notice from the indemnifying party to such
indemnified party of its election so to assume the defense of such action and
approval by the indemnified party of counsel which approval shall not be
unreasonably denied or delayed, the indemnifying party will not be liable to
such indemnified party under this Section 9 for any legal or other expenses
(other than the reasonable costs of investigation) subsequently incurred by such
indemnified party in connection with the defense thereof unless (i) the
indemnified party has employed such counsel in connection with the assumption of
such different or additional legal defenses in accordance with the proviso to
the immediately preceding sentence, (ii) the indemnifying party has not employed
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of commencement of the
action, or (iii) the indemnifying party has authorized in writing the employment
of counsel for the indemnified party at the expense of the indemnifying party.
It is understood that the indemnifying party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
reasonable fees and expenses for more than one separate firm (and appropriate
local counsel) for all such indemnified parties, except to the extent such
counsel advises the indemnifying party of a conflict of interest whereby the
indemnifying party shall be liable for the reasonable fees and expenses for
additional counsel for all such indemnified parties to remedy the conflict of
interest. The indemnifying party shall not be liable for any settlement or any
proceeding effected without its written consent but if settled with such consent
or if there be a final judgment for the plaintiff, the indemnifying party agrees
to indemnify the indemnified party from and against any loss or liability by
reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 9 is
unavailable or insufficient to hold harmless an indemnified party under Section
9(a) or Section 9(b) above in respect of any losses, claims, damages,
liabilities or expenses (or actions in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages, liabilities
or expenses (or actions in respect thereof) (i) in such proportion as is
appropriate to reflect the relative benefits received by each of the
contributing parties, on the one hand, and the party to be indemnified, on the
other hand, from the offering of the Preferred Securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of each of the
contributing parties, on the one hand, and the party to be indemnified, on the
other hand in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. In any case where the Company and/or the Trust is a contributing
party and the Underwriters are the indemnified party, the relative benefits
received by the Company and/or the Trust on the one hand, and the Underwriters,
on the other hand, shall be deemed to be in the same proportion as the total net
proceeds 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 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
Representatives, in their sole discretion, shall release the Preferred
Securities for the sale to the public, unless prior to such time the
Representatives shall have received written notice from the Company on behalf of
itself and the Trust that they elect that this Agreement shall not become
effective, or the Representatives shall have given written notice to the
Offerors that the Representatives on behalf of the Underwriters elects that this
Agreement shall not become effective; provided, however, that the provisions of
this Section 11 and of Section 7 and Section 9 hereof shall at all times be
effective. For purposes of this Section 1l(a), the Preferred Securities to be
purchased hereunder shall be deemed to have been so released upon the earlier of
notification by the Representatives to securities dealers releasing such
Preferred Securities for offering or the release by the Representatives for
publication of the first newspaper advertisement which is subsequently published
relating to the Preferred Securities.
(b) This Agreement (except for the provisions of Sections 7
and 9 hereof) may be terminated by the Representatives by written notice to the
Company and the Trust in the event that either of the Offerors has failed to
comply in any material respect with any of the provisions of this Agreement
required on its part to be complied with at or prior to the Closing Date or any
Option Closing Date, or if any of the representations or warranties of the
Offerors are not materially accurate in any respect or if the covenants,
agreements or conditions of, or applicable to, the Offerors herein contained
have not been complied with in any material respect or satisfied within the time
specified or the Closing Date or any Option Closing Date, as the case may be, or
if prior to the Closing Date or Option Closing Date:
(i) the Company or the Subsidiaries, taken as a whole, or
the Trust shall have sustained a loss by strike, fire, flood, accident or other
calamity of such a character, in the judgment of the Representatives, as to
interfere materially with the conduct of the business and operations of the
Company, the Subsidiaries or the Trust, as the case may be, regardless of
whether or not such loss was insured;
(ii) trading in the securities of the Company or in
securities generally on the New York Stock Exchange or the NNM shall have been
suspended or a material limitation on such trading shall have been imposed or
minimum or maximum prices shall have been established on either such exchange or
market;
(iii) a banking moratorium shall have been declared by
Maryland, Delaware or United States authorities;
(iv) there shall have been an outbreak or escalation of
hostilities between the United States and any foreign power or an outbreak or
escalation of any other insurrection or armed conflict involving the United
States which, in each Representatives' reasonable judgment, will materially
affect the general securities market or make it inadvisable, in their sole,
reasonable judgement, to proceed with the sale of and payment for the Preferred
Securities;
(v) there shall have been commenced any action, suit or
proceeding at law or in equity against the Company, the Bank Subsidiary or the
Trust, or by any federal, state or other commission, board or agency, wherein,
in the reasonable judgment of the Representatives, any unfavorable decision
would have a Material Adverse Effect on the Company or the Trust;
(vi) there shall have occurred the enactment, publication,
decree or other promulgation of any federal or state statute, regulation, rule
or order of any court or other governmental authority that in the reasonable
judgment of the Representatives has or will have a Material Adverse Effect on
the Company or the Trust;
(vii) there shall have been taken any action by any
federal, state or local government or agency in respect of its monetary or
fiscal affairs that in the reasonable judgment of the Representatives has a
material adverse effect or will materially adverse affect the financial markets
in the United States; or
(viii) the Company's independent public accountants shall
have imposed qualifications in certifying to, or its attorneys in opining upon,
material items including, without limitation, information in the footnotes to
the financial statements or matters incident to the issuance and sale of the
Common Securities, the Preferred Securities or the Subordinated Debentures,
corporate proceedings or other subjects; or
(ix) there shall have been a material adverse change in
(A) general economic, political or financial conditions or (B) the present or
prospective business or condition (financial or other) of the Company, the
Subsidiaries or the Trust, as the case may be that, in each case, in the
judgment of the Representatives, makes it impracticable or inadvisable to make
or consummate the public offering, sale or delivery of the Preferred Securities
on the terms and in the manner contemplated in the Prospectus and the
Registration Statement.
(c) Termination of this Agreement shall be without liability
of any party to any other party other than as provided in Sections 7 and 9
hereof.
Section 12. Substitution of Underwriters. If one or more of the
Underwriters shall fail or refuse (otherwise than for a reason sufficient to
justify the termination of this Agreement under the provisions of Section 8 or
11 hereof) to purchase and pay for the number of Preferred Securities agreed to
be purchased by such Underwriter or Underwriters (pursuant to Section 3 hereof)
upon tender of such number of Preferred Securities in accordance with the terms
hereof, and the number of such Preferred Securities shall not exceed ten percent
(10%) of the Preferred Securities required to be purchased on the Closing Date,
then, each of the non-defaulting Underwriters shall purchase and pay for (in
addition to the number of such Preferred Securities which it has severally
agreed to purchase hereunder) its proportionate share (based on the monetary
obligations of the several Underwriters hereunder on account of the purchase of
Preferred Securities, excluding the Preferred Securities allocable to the
defaulting Underwriter or Underwriters) which the defaulting Underwriter or
Underwriters shall have so failed or refused to purchase on such Closing Date.
In such case, the Representatives, on behalf the Underwriters, shall have the
right to postpone the Closing Date to a date not exceeding seven (7) full
business days after the date originally fixed as such Closing Date pursuant to
the terms hereof in order that any necessary changes in the Registration
Statement, the Prospectus or any other documents or arrangements may be made.
If one or more of the Underwriters shall fail or refuse
(otherwise than for a reason sufficient to justify the termination of this
Agreement under the provisions of Section 8 or 11 hereof) to purchase and pay
for the number of Preferred Securities agreed to be purchased by such
Underwriter or Underwriters upon tender to the Representatives on behalf thereof
of such Preferred Securities in accordance with the terms hereof and the number
of such Preferred Securities shall equal or exceed ten percent (10%) of the
Preferred Securities required to be purchased by all the Underwriters on the
Closing Date (unless within forty-eight (48) hours after such default
arrangements to the satisfaction of the Representatives shall have been made for
the purchase of the defaulted Preferred Securities by an Underwriter or
Underwriters) and subject to the provisions of Section 1l(b) hereof, this
Agreement will terminate without liability on the part of any non-defaulting
Underwriter or on the part of the Company or the Trust except as otherwise
provided in Sections 7 and 9 hereof. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 12. Nothing in this Section 12, and no action taken hereunder, shall
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
Section 13. Default by the Company or the Trust. If the Trust shall
fail at the Closing Date to sell and deliver the number of Preferred Securities
which it is obligated to sell hereunder or the Company fails to deliver the
number of Subordinated Debentures required to be delivered pursuant to the Trust
Agreement, then this Agreement shall terminate without any liability on the part
of any non-defaulting party. Nothing in this Section 13 shall relieve the Trust
or the Company so defaulting from liability, if any, in respect of such default.
Section 14. Notices. All communications hereunder shall be in writing
and if sent to the Representatives shall be mailed or delivered or sent by
facsimile transmission and confirmed by letter to Xxxxxx, Xxxxx Xxxxx,
Incorporated at 0000 Xxx Xxxxxx, XX, Xxxxxxxxxx, XX 00000, Attention: Xxxx Xxxxx
(facsimile number: (000) 000-0000) or, if sent to the Company or the Trust,
shall be mailed or delivered or sent by facsimile transmission and confirmed by
letter to the Company at 00 Xxxxx Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000,
Attention: Xxxxxxx X. Xxxxx (facsimile number: (000) 000-0000), with a copy to
Xxxxxxx X. Xxxxxx, Xxxxxx, Xxxxxxxxx, Xxxxxxx, Xxxxxxxxxx & Xxxxxxxxx, LLC, 000
Xxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000 (facsimile number: (410)
576-4246).
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.
* * * * * * *
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,
FIRST UNITED CAPITAL TRUST
By: FIRST UNITED CORPORATION
Depositor
By ________________________________
Name:
Title:
FIRST UNITED CORPORATION
By ________________________________
Name:
Title:
Accepted as of the date hereof
XXXXXX, XXXXX XXXXX, INCORPORATED
0000 Xxx Xxxxxx, X.X.
Washington, D.C. 20006
By: XXXXXX, XXXXX XXXXX, INCORPORATED
a Representative of the Underwriters
By ________________________________
Name:
Title:
ADVEST, INC.
Xxx Xxxxxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, New York 10020
By: ADVEST, INC.
a Representative of the Underwriters
By ________________________________
Name:
Title:
SCHEDULE I
NUMBER OF PREFERRED SECURITIES TO BE
PURCHASED BY EACH UNDERWRITER
Number of Purchased Securities
to be Purchased from the Trust
Name of Underwriter Percentage (Liquidation Amount $10)
---------------------------------------------------------------------------------------------------------------
Xxxxxx, Xxxxx Xxxxx, Incorporated ___% ____________
The Advest Group, Incorporated ___% ____________
Total 2,000,000
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 (except to the extent the lack of such qualification will not
result in a Material Adverse Effect to the Company). The Company has all power
and authority necessary to own or hold its properties and assets and to conduct
the business in which it is engaged as described in or contemplated by the
Prospectus. The Company is duly registered as a bank holding company under the
Bank Holding Company Act of 1956, as amended.
(2) The Bank Subsidiary is a state bank organized, validly
existing and in good standing under the laws of Maryland and has been duly
qualified as a foreign corporation for the transaction of business and is in
good standing under the laws of each other jurisdiction in which it owns or
leases properties or conducts any business so as to require such qualification
(except to the extent the lack of such qualification will not result in a
Material Adverse Effect to the Company). The Bank Subsidiary has all power and
authority necessary to own or hold its properties and assets and to conduct the
business in which it is engaged as described in or contemplated by the
Prospectus. All eligible deposit accounts issued by the Bank Subsidiary are
insured by the FDIC to the full extent permitted under applicable law.
(3) Each of the Subsidiaries has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
respective state of its 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 the conduct of its business (to the
knowledge of such counsel) requires such qualification (except to the extent the
lack of such qualification will not result in a Material Adverse Effect to the
Company) and has the corporate power and authority necessary to own or hold its
properties and assets and to conduct the business in which it is engaged as
described in the Prospectus.
(4) The Trust Agreement has been duly qualified under the
Trust Indenture Act.
(5) Each of the Company and the Trust has the corporate power
and authority necessary to enter into, execute, deliver and perform its
obligations under the Underwriting Agreement, the Indenture, the Trust
Agreement, the Guarantee Agreement and the Subordinated Debentures, as
applicable, and to effect the transactions contemplated thereby and by the
Prospectus. The performance of the Company's and/or the Trust's obligations
under the Underwriting Agreement, the Indenture, the Trust Agreement, the
Guarantee Agreement and the Subordinated Debentures, as applicable, have been
duly authorized by all necessary corporate or
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trust action, as the case may be. The Underwriting Agreement, the Indenture, the
Trust Agreement, the Guarantee Agreement and the Subordinated Debentures have
been duly authorized, executed and delivered by the Company, the Trust, and/or
the Administrators, as applicable, and each constitutes the valid and binding
obligations of the Company and/or the Trust, as the case may be, enforceable
against the Company and/or the Trust in accordance with their respective terms
(except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general application
relating to or affecting the enforcement of creditors' rights and by the
application of equitable principles relating to the availability of remedies,
and except as rights to indemnity or contribution may be limited by federal or
state securities laws and the public policy underlying such laws).
(6) The Company has the duly authorized capital stock set
forth in the Prospectus. All of the shares of capital stock of the Company
issued and outstanding have been duly and validly authorized and issued, are
fully paid and non-assessable, without personal liability attaching to the
ownership thereof. To such counsel's knowledge, based solely upon the stock
ledger of the Company and a certificate of the officers of the Company, none of
such shares have been issued or are owned or held in violation of any preemptive
or other similar rights. To such counsel's knowledge, based solely upon the
stock ledger of the Company and a certificate of the officers of the Company,
other than as set forth in the Prospectus, there are no options, warrants, or
other rights to purchase or acquire from the Company or any of the Subsidiaries
any shares of the capital stock of the Company or any such Subsidiary. Such
counsel is not aware of any holders of the securities of the Company having
rights to registration thereof or preemptive rights to purchase capital stock of
the Company and to such counsel's knowledge, based solely upon the stock ledger
of the Company and a certificate of the officers of the Company, neither the
filing of the Registration Statement nor the offering or sale of the Preferred
Securities or the Subordinated Debentures as contemplated by the Underwriting
Agreement and the Prospectus gives rise to any rights (other than have been
waived or satisfied) for or relating to the registration of any securities of
the Company.
(7) All of the issued and outstanding shares of capital stock
of each of the Subsidiaries have been duly authorized, validly issued and are
fully paid and nonassessable, all such shares are held, in the case of the Bank
Subsidiary and the Reinsurance Subsidiary, by the Company, and in the case of
the Insurance Agency Subsidiary, the Securities Subsidiary, the Auto Financing
Subsidiary and the Insurance Subsidiary, by the Bank Subsidiary, free and clear
of any liens, security interests, pledges, charges, mortgages or other defects
or encumbrances of any kind or nature.
(8) Other than as set forth in the Prospectus, counsel has no
knowledge of any pending proceedings or investigations or threatened or
contemplated proceedings or investigations, before any court or other
governmental body that (A) are required to be disclosed in the Registration
Statement or Prospectus which are not so disclosed; (B) reasonably could be
expected, individually or in the aggregate, to have a Material Adverse Effect on
the Company or the Trust; or (C) reasonably could be expected to materially and
adversely affect the consummation of the Underwriting Agreement, the Indenture,
the Trust Agreement or the Guarantee Agreement and the transactions contemplated
thereby.
A-2
(9) None of (A) the filing of the Registration Statement or
any amendment thereto; (B) the Company's and the Trust's execution and delivery
of the Underwriting Agreement, the Indenture, the Trust Agreement and the
Guarantee Agreement, as applicable; or (C) the consummation by the Company and
the Trust of the transactions contemplated thereby and by the Prospectus will
(X) violate any provision of the charter, bylaws or other governing documents of
the Company of the Subsidiaries, or the Trust Agreement or the Certificate of
the Trust, as applicable; (Y) to such counsel's knowledge, without independent
investigation or verification violate, result in the breach of, or be in
contravention of, or constitute a default under, any agreement or instrument to
which the Company, the Subsidiaries or the Trust is a party or by which it may
be bound or to which any of its assets, properties or businesses are or may be
subject; or (Z) violate any statute, judgment, decree, order, rule or regulation
applicable to the Company, the Subsidiaries or the Trust, except those, if any,
that are described in the Prospectus or those which would not, individually or
in the aggregate, have a Material Adverse Effect on the Company or the Trust, as
the case may be.
(10) No consent, authorization, approval, order,
registration, license, certificate, declaration or permit of or from, or filing
with, any court or other governmental body, is required in connection with the
execution and delivery of the Underwriting Agreement, the Indenture, the Trust
Agreement or the Guarantee Agreement, or the issuance and sale of the
Subordinated Debentures, or the consummation by the Company and the Trust of the
other transactions contemplated by the Underwriting Agreement, the Indenture,
the Trust Agreement or the Guarantee Agreement, except such as may be required
under the Securities Act, which has been obtained, or under state securities or
Blue Sky laws.
(11) The statements set forth in the Registration Statement
under the captions "Description of Preferred Securities," "Description of Junior
Subordinated Debentures," "Description of Guarantee," "Relationship Among the
Preferred Securities, the Junior Subordinated Debentures and the Guarantee" and
"Supervision and Regulation," insofar as they purport to describe the provisions
of the laws and the provisions of documents referred to therein, are accurate
and fairly summarize such provisions and there are no other provisions of law or
of documents which are required by the Securities Act or the Securities Act
Rules and Regulations to be described therein.
(12) The statements of law or legal conclusions and opinions
set forth in the Registration Statement under the caption "Certain Federal
Income Tax Consequences", constitute an accurate summary of the matters
discussed therein, subject to the assumptions and conditions described therein
and accurately and fairly reflect such counsel's opinion.
(13) The Registration Statement was declared effective under
the Securities Act as of the date and time specified in such opinion, the
Prospectus has been filed as required by the Underwriting Agreement, if
necessary, and to the best of counsel's knowledge (A) after telephonic inquiry
of the Commission, no stop order suspending the effectiveness of the
Registration Statement has been issued and (B) no proceedings for that purpose
are pending or have been initiated or threatened by the Commission.
A-3
(14) The descriptions in the Registration Statement and
Prospectus of contracts, instruments and other documents and any contracts,
instruments or other documents filed as exhibits to the Registration Statement,
and the description of statutes, legal and governmental proceedings and rulings,
are accurate in all material respects and fairly present the information
required to be disclosed, and counsel does not know of any statutes, legal or
governmental proceedings or rulings required to be described in the Prospectus
that are not described, or 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 Indenture Act and the rules and regulations
thereunder.
(15) None of the Company, the Subsidiaries or the Trust is
and, after giving effect to the offering and sale of the Preferred Securities
and the Subordinated Debentures, will be, an "investment company" or an
"affiliated person" of or a "promoter" or "principal underwriter" of or an
entity "controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940.
(16) The Bank Subsidiary is in good standing with the Maryland
Commissioner and the activities of the Company and the Reinsurance 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.
(17) Each of the Subsidiaries has, in effect, all consents,
authorizations, approvals, orders, registrations, licenses and permits of all
regulatory bodies, administrative agencies, or other governmental bodies and
other regulating authorities having jurisdiction over it that are reasonably
required to conduct its business in the manner that, to such counsel's
knowledge, such business is currently being conducted, except to the extent the
failure will not result in a Material Adverse Effect to the Company.
(18) To the best knowledge of counsel, the Trust is not
required to be authorized to do business in any other jurisdiction, and the
Trust is not a party to or otherwise bound by any agreement, other than those
described in the Prospectus.
(19) No Tax Event, Capital Treatment Event or Investment
Company Event (as each such term is defined in the Indenture) has occurred.
A-4
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 Representatives,
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 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).
A-5
Exhibit B to
Underwriting Agreement
The opinion of counsel to the Property Trustee and the Delaware Trustee
under the Trust Agreement, the Indenture Trustee under the Indenture and the
Guarantee Trustee under the Guarantee to be delivered pursuant to Section
8(d)(ii) of the Underwriting Agreement shall be substantially to the effect
that:
(A) Bankers Trust Company is duly incorporated and is validly
existing in good standing as a banking corporation with trust powers under the
laws of the State of New York.
(B) Bankers Trust Company, as the Indenture Trustee, has the
requisite power and authority to execute, deliver and perform its obligations
under the Indenture, and has taken all necessary corporate action to authorize
the execution, delivery and performance by it of the Indenture.
(C) Bankers Trust Company, as the Guarantee Trustee, has the
requisite power and authority to execute, deliver and perform its obligations
under the Guarantee Agreement, and has taken all necessary corporate action to
authorize the execution, delivery and performance by it of the Guarantee
Agreement.
(D) Bankers Trust Company, as the Property Trustee, has the
requisite power and authority to execute and deliver the Trust Agreement, and
has taken all necessary corporate action to authorize the execution and deliver
of the Trust Agreement.
(E) Each of the Indenture and the Guarantee Agreement has been
duly executed and delivered by the Indenture Trustee and the Guarantee Trustee,
respectively, and constitutes a valid and binding obligation of the Indenture
Trustee and the Guarantee Trustee, respectively, enforceable against the
Indenture Trustee and the Guarantee Trustee, respectively, in accordance with
its respective terms, except that certain payment obligations may be enforceable
solely against the assets of the Trust and except that such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium, liquidation,
fraudulent conveyance and transfer or other similar laws affecting the
enforcement of creditors' rights generally, and by principles of equity,
including, without limitation, concepts of materiality, reasonableness, good
faith and fair dealing (regardless of whether such enforceability is considered
in a proceeding in equity or at law), and by the effect of applicable public
policy on the enforceability of provisions relating to indemnification or
contribution.
(F) The Junior Subordinated Debentures delivered on the
Closing Date (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.
B-1
Exhibit C to
Underwriting Agreement
The opinion of special Delaware counsel to the Company and the Trust to
be delivered pursuant to Section 8(d)(iii) of the Underwriting Agreement shall
be substantially to the effect that:
(A) The Trust has been duly created and is validly existing
in good standing as a business trust under the Delaware Act, and all filings
required as of the date hereof under the Delaware Act with respect to the
creation and valid existence of the Trust as a business trust have been made.
(B) Under the Trust Agreement and the Delaware Act, the Trust
has all trust power and authority necessary to own property and to conduct its
business, all as described in the Prospectus.
(C) The Trust Agreement constitutes a valid and binding
obligation of the Company and each of the Property Trustee, the Delaware Trustee
and each of the Administrators, and is enforceable against the Company and each
of the Property Trustee, the Delaware Trustee and each of the Administrators in
accordance with its terms.
(D) Under the Trust Agreement and the Delaware Act, the Trust
has the trust power and authority (i) to execute and deliver, and to perform its
obligations under, the Underwriting Agreement and (ii) to issue, and to perform
its obligations under, the Preferred Securities and the Common Securities.
(E) Under the Trust Agreement and the Delaware Act, the
execution and delivery by the Trust of the Underwriting Agreement, and the
performance by it of its obligations thereunder, have been duly authorized by
all necessary trust action on the part of the Trust.
(F) Under the Delaware Act, the certificate attached to the
Trust Agreement as Exhibit D is an appropriate form of certificate to evidence
ownership of the Preferred Securities. The Preferred Securities have been duly
authorized for issuance by the Trust Agreement and, when issued, delivered and
paid for in accordance with the terms of the Trust Agreement and the
Underwriting Agreement, and as described in the Prospectus, will be validly
issued, fully paid undivided beneficial interests in the assets of the Trust.
The holders of the Preferred Securities will be entitled to the same limitation
of personal liability extended to stockholders of private corporations for
profit organized under the General Corporation Law of the State of Delaware.
[This opinion need not address the liability of any holder of a Preferred
Security that is, was or becomes a named trustee of the Trust. In addition, this
opinion may note that the holders of the Preferred Securities may be required to
make payment or provide indemnity or security as set forth in the Trust
Agreement.]
(G) The Common Securities have been duly authorized for
issuance by the Trust Agreement and, when issued, delivered and paid for in
C-1
accordance with the terms of theTrust Agreement and as described in the
Prospectus, will be validly issued fully paid 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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