Exhibit 10.7
EXCHANGE AGENCY AGREEMENT
September 1, 1999
Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: Corporate Trust Administration
Re: USA Capital Trust I
Ladies and Gentlemen:
USABancShares, Inc., a Pennsylvania corporation, as Sponsor (the
"Company"), and USA Capital Trust I, a Delaware business trust (the "Trust"),
hereby appoint Wilmington Trust Company ("Wilmington Trust") to act as exchange
agent (the "Exchange Agent") in connection with an exchange offer by the Company
and the Trust to exchange up to $10,000,000 of the Trust's Series A 9.50%
Capital Securities, liquidation amount $1,000 per Capital Security (the "Series
A Capital Securities"). The terms and conditions of the exchange offer are set
forth in a Preliminary Prospectus, dated May 13, 1999 (as the same may be
amended or supplemented from time to time, the "Prospectus"), and in the related
Letter of Transmittal, which together constitute the "Exchange Offer." The
registered holders of the Capital Securities are hereinafter referred to as the
"Holders." Capitalized terms used herein and not defined shall have the
respective meanings described thereto in the Prospectus.
On the basis of the representations, warranties and agreements of the
Company, the Trust and Wilmington Trust contained herein and subject to the
terms and conditions hereof, the following sets forth the agreement among the
Company, the Trust and Wilmington Trust as Exchange Agent for the Exchange
Offer:
1. APPOINTMENT AND DUTIES AS EXCHANGE AGENT.
a. The Company and the Trust hereby authorize Wilmington Trust to act
as Exchange Agent in connection with the Exchange Offer and Wilmington Trust
agrees to act as Exchange Agent in connection with the Exchange Offer. As
Exchange Agent, Wilmington Trust will perform those services as are outlined
herein, including, but not limited to, accepting tenders of Series A Capital
Securities, and communicating generally regarding the Exchange Offer with
brokers, dealers, commercial banks, trust companies and other persons, including
Holders of the Series A Capital Securities.
b. The Company and the Trust acknowledge and agree that Wilmington
Trust has been retained pursuant to this Agreement to act solely as Exchange
Agent in connection with the Exchange Offer, and in such capacity, Wilmington
Trust shall perform such duties in good faith as are outlined herein.
c. Wilmington Trust will examine each of the Letters of Transmittal and
certificates for Series A Capital Securities and any other documents delivered
or mailed to Wilmington Trust by or for Holders of the Series A Capital
Securities, and any book entry confirmations received by Wilmington Trust with
respect to the Series A Capital Securities, to ascertain whether: (i) the
Letters of Transmittal and any such other documents are duly executed and
properly completed in accordance with the instructions set forth therein and
that such book entry confirmations are in due and proper form and contain the
information required to be set forth therein, (ii) the Series A Capital
Securities have otherwise been properly tendered, (iii) Series A Capital
Securities tendered in part are tendered in liquidation amounts of $1,000 per
Capital Security and that if any Series A Capital Securities are tendered for
exchange in part, the untendered liquidation amount thereof is $1,000, and (iv)
Holders have provided their correct Tax Identification Number or required
certification. Determination of all questions as to validity, form, eligibility
and acceptance for exchange of any Series A Capital Securities shall be made by
the Company and the Trust, which determination shall be final and binding. In
each case where the Letters of Transmittal or any other documents have been
improperly completed or executed of where book-entry conformations are not in
due and proper form or omit certain information, or any of the certificates for
Series A Capital Securities are not in proper form for transfer or some other
irregularity in connection with the tender or acceptance of the Series A Capital
Securities exists, Wilmington Trust will endeavor, upon request of the Company
or the Trust, to advise the tendering Holders of the irregularity and to take
any other action as the Company or the Trust may request to cause such
irregularity to be corrected. Notwithstanding the above, Wilmington Trust shall
not be under any duty to give any notification of any irregularities in tenders
or incur any liability for failure to give any such notification.
d. With the approval of the Trust and the President, any Senior Vice
President, any Executive Vice President, any Vice President or the Treasurer or
any Assistant Treasurer of the Company, (such approval, if given orally, to be
confirmed in writing) or any other party designated by any such officer,
Wilmington Trust is authorized to waive any irregularities in connection with
any tender of Series A Capital Securities pursuant to the Exchange Offer.
e. Tenders of Series A Capital Securities may be made only as set forth
in the Letter of Transmittal and in the section of the Prospectus captioned "The
Exchange Offer" and Series A Capital Securities shall be considered properly
tendered only when tendered in accordance with such procedures set forth
therein. Notwithstanding the provisions of this paragraph, Series A Capital
Securities which the Trust and the President, any Senior Vice President, any
Executive Vice President, any Vice President or the Treasurer, any Assistant
Treasurer or any other designated officer of the Company, shall approve (such
approval, if given orally, to be confirmed in writing) as having been properly
tendered shall be considered to be properly tendered.
f. Wilmington Trust shall advise the Company and the Trust with respect
to any Series
A Capital Securities received as soon as possible after 5:00 p.m., New York City
time, on the Expiration Date and accept its instructions with respect to
disposition of such Series A Capital Securities.
g. Wilmington Trust shall deliver certificates for Series A Capital
Securities tendered in part to the transfer agent for split-up and shall return
any untendered Series A Capital Securities or Series A Capital Securities which
have not been accepted by the Company and the Trust to the Holders promptly
after the expiration or termination of the Exchange Offer.
h. Upon acceptance by the Company and the Trust of any Series A Capital
Securities duly tendered pursuant to the Exchange Offer (such acceptance if
given orally, to be confirmed in writing), the Company and the Trust will cause
Series B Capital Securities in exchange therefor to be issued as promptly as
practicable and Wilmington Trust will deliver such Series B Capital Securities
on behalf of the Company and the Trust at the rate of $1,000 liquidation amount
of Series B Capital Securities for each $1,000 liquidation amount of Series A
Capital Securities tendered as promptly as practicable after acceptance by the
Company and the Trust of the Series A Capital Securities for exchange and notice
(such notice if given orally, to be confirmed in writing) of such acceptance by
the Company and the Trust. Unless otherwise instructed by the Company or the
Trust, Wilmington Trust shall issue Series B Capital Securities only in
denominations of $1,000 or any integral multiple of $1,000 in excess thereof.
i. Tenders pursuant to the Exchange Offer are irrevocable, except that,
subject to the terms and the conditions set forth in the Prospectus and the
Letter of Transmittal, Series A Capital Securities tendered pursuant to the
Exchange Offer may be withdrawn at any time on or prior to the Expiration Date
in accordance with the terms of the Exchange Offer.
j. Notice of any decision by the Company and the Trust not to exchange
any Series A Capital Securities tendered shall be given by the Company and the
Trust either orally (if given orally, to be confirmed in writing) or in a
written notice to Wilmington Trust.
k. If, pursuant to the Exchange Offer, the Company and the Trust do not
accept for exchange all or part of the Series A Capital Securities tendered
because of an invalid tender, the occurrence of certain other events set forth
in the Prospectus under the caption "The Exchange Offer -- Conditions to the
Exchange Offer" or otherwise, Wilmington Trust shall, upon notice from the
Company and the Trust (such notice if given orally, to be confirmed in writing),
promptly after the expiration or termination of the Exchange Offer return such
certificates for unaccepted Series A Capital Securities (or effect appropriate
book-entry transfer), together with any related required documents and the
Letters of Transmittal relating thereto that are in Wilmington Trust's
possession, to the persons who deposited such certificates.
l. Certificates for reissued Series A Capital Securities, unaccepted
Series A Capital Securities or Series B Capital Securities shall be forwarded by
(a) first-class certified mail, return receipt requested under a blanket surety
bond obtained by Wilmington Trust protecting Wilmington
Trust, the Company and the Trust from loss or liability arising out of the
non-receipt or non-delivery of such certificates or (b) by registered mail
insured by Wilmington Trust separately for the replacement value of each such
certificate.
m. Wilmington Trust is not authorized to pay or offer to pay any
concessions, commissions or solicitation fees to any broker, dealer, commercial
bank, trust company or other nominee or to engage or use any person to solicit
tenders.
n. As Exchange Agent, Wilmington Trust:
i. shall have no duties or obligations other than those
specifically set forth herein or in the Prospectus or in the related
Letter of Transmittal;
ii. will make no representations and will have no
responsibilities as to the validity, value or genuineness of any of the
certificates for the Series A Capital Securities deposited pursuant to
the Exchange Offer, and will not be required to and will make no
representation as to the validity, value or genuineness of the Exchange
Offer;
iii. shall not be obligated to take any legal action hereunder
which might in Wilmington Trust's reasonable judgment involve any
expense or liability, unless Wilmington Trust shall have been furnished
with indemnity satisfactory to it and additional fees for taking of
such action;
iv. may reasonably rely on and shall be protected in acting in
reliance upon any certificate, instrument, opinion, notice, letter,
telegram or other document or security delivered to Wilmington Trust
and reasonably believed by Wilmington Trust to be genuine and to have
been signed by the proper party or parties;
v. may reasonably act upon any tender, statement, request,
comment, agreement or other instrument whatsoever not only as to its
due execution and validity and effectiveness of its provisions, but
also as to the truth and accuracy of any information contained therein,
which Wilmington Trust believes in good faith to be genuine and to have
been signed or represented by a proper person or persons acting in a
fiduciary or representative capacity;
vi. may rely on and shall be protected in acting upon written
or oral instructions from the President, Chief Financial Officer, any
Executive Vice President or Corporate Counsel of the Company;
vii. may consult with its own counsel with respect to any
questions relating to Wilmington Trust's duties and responsibilities
and the advice of such counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted to
be taken by Wilmington Trust hereunder in good faith and in accordance
with the advice of such counsel; and
viii. shall not advise any person tendering Series A Capital
Securities pursuant to the Exchange Offer as to whether to tender or
refrain from tendering all or any portion of its Series A Capital
Securities or as to the market value, decline or appreciation in market
value of any Series A Capital Securities that may or may not occur as a
result of the Exchange Offer or as to the market value of the Series B
Capital Securities. Wilmington Trust shall furnish copies of the
Prospectus, Letter of Transmittal and the Notice of Guaranteed Delivery
or such other forms as may be approved from time to time by the Company
and the Trust, to all persons requesting such documents from Wilmington
Trust.
o. Wilmington Trust shall advise orally and promptly thereafter confirm
in writing to the Company and the Trust and such other person or persons as the
Company and the Trust may request, daily (and more frequently during the week
immediately preceding the Expiration Date and if otherwise reasonably requested)
up to and including the Expiration Date, the aggregate principal amount of
Series A Capital Securities which have been tendered pursuant to the terms of
the Exchange Offer and the items received by Wilmington Trust pursuant to the
Exchange Offer and this Agreement. In addition, Wilmington Trust will also
provide, and cooperate in making available to the Company and the Trust, or any
such other person or persons upon request (such request if made orally, to be
confirmed in writing) made from time to time, such other information in its
possession as the Company and the Trust may reasonably request. Such cooperation
shall include, without limitation, the granting by Wilmington Trust to the
Company and the Trust, and such person or persons as the Company and the Trust
may request, access to those persons on Wilmington Trust's staff who are
responsible for receiving tenders, in order to ensure that immediately prior to
the Expiration Date the Company and the Trust shall have received adequate
information in sufficient detail to enable the Company and the Trust to decide
whether to extend the Exchange Offer. Wilmington Trust shall prepare a final
list of all persons whose tenders were accepted, the aggregate principal amount
of Series A Capital Securities tendered, the aggregate principal amount of
Series A Capital Securities accepted and deliver said list to the Company and
the Trust.
p. Letters of Transmittal, book-entry confirmations and Notices of
Guaranteed Delivery shall be stamped by Wilmington Trust as to the date and the
time of receipt thereof and shall be preserved by Wilmington Trust as to the
date and the time of receipt thereof and shall be preserved by Wilmington Trust
for a period of time at least equal to the period of time Wilmington Trust
preserves other records pertaining to the transfer of securities, or one year,
whichever is longer, and thereafter shall be delivered by Wilmington Trust to
the Company and the Trust. Wilmington Trust shall dispose of unused Letters of
Transmittal and other surplus materials by returning them to the Company or the
Trust.
2. COMPENSATION.
$3,000.00 will be payable to Wilmington Trust in its capacity as
Exchange Agent; provided, that Wilmington Trust reserves the right to receive
reimbursement from the Company for any
reasonable out-of-pocket expenses incurred as Exchange Agent in performing the
services described herein.
3. INDEMNIFICATION.
a. The Company and the Trust hereby agree to protect, defend, indemnify
and hold harmless Wilmington Trust against and from any and all costs, losses,
liabilities, taxes, expenses (including reasonable counsel fees and
disbursements) and claims imposed upon or asserted against Wilmington Trust on
account of any action taken or omitted to be taken by Wilmington Trust in
connection with its acceptance of or performance of its duties under this
Agreement and the documents related thereto as well as the reasonable costs and
expenses of defending itself against any claim or liability arising out of or
relating to this Agreement and the documents related thereto. This
indemnification shall survive the release, discharge, termination and/or
satisfaction of this Agreement. Anything in this Agreement to the contrary
notwithstanding, neither the Company nor the Trust shall be liable for
indemnification or otherwise for any loss, liability, cost or expense to the
extent arising out of Wilmington Trust's bad faith, gross negligence or willful
misconduct. In no case shall the Company or the Trust be liable under this
indemnification agreement with respect to any claim against Wilmington Trust
until the Company and the Trust shall be notified by Wilmington Trust, by
letter, of the written assertion of a claim against Wilmington Trust or of any
other action commenced against Wilmington Trust, promptly after Wilmington Trust
shall have received any such written assertion or shall have been served with a
summons in connection therewith; provided, that, Wilmington Trust's failure to
give such notice shall not excuse the Company or the Trust from its obligations
hereunder. The Company and the Trust shall be entitled to participate at their
own expense in the defense of any such claim or other action, and, if the
Company and the Trust so elect, the Company or the Trust may assume the defense
of any pending or threatened action against Wilmington Trust in respect of which
indemnification may be sought hereunder with counsel reasonably acceptable to
Wilmington Trust; provided that the Company and the Trust shall not be entitled
to assume the defense of any such action if the named parties to such action
include the Company or the Trust and Wilmington Trust and representation of the
parties by the same legal counsel would, in the reasonable opinion of counsel
for Wilmington Trust , be inappropriate due to actual or potential conflicting
interests between them. In the event that the Company or the Trust shall assume
the defense of any such suit with counsel reasonably acceptable to Wilmington
Trust, the Company or the Trust, as applicable, shall not be liable for the fees
and expenses incurred by Wilmington Trust of any counsel retained by Wilmington
Trust subsequent to such assumption of defense by the Company or the Trust.
b. The Company agrees to indemnify and hold harmless the Trust from and
against any and all losses, claims, damages and liabilities whatsoever, as due
from the Trust under this Section.
4. TAX INFORMATION.
The Company or the Trust shall arrange to comply with all requirements
under the tax laws of the United States, including those relating to missing Tax
Identification Numbers, and shall file
any appropriate reports with the Internal Revenue Service. The Company and the
Trust understand that they may be required, in certain instances, to deduct 31%
with respect to interest paid on the Series B Capital Securities and proceeds
from the sale, exchange, redemption or retirement of the Series B Capital
Securities from Holders who have not supplied their correct Taxpayer
Identification Number or required certification. Such funds will be turned over
to the Internal Revenue Service.
5. GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware (without regard to conflict
of laws principles).
6. NOTICES. Any communication or notice provided for hereunder shall be in
writing and shall be given (and shall be deemed to have been given upon receipt)
by delivery in person, telecopy, or overnight delivery or by registered or
certified mail (postage prepaid, return receipt requested) to the applicable
party at the addresses indicated below:
If to the Company: USABancShares, Inc.
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Telecopier No.: (000) 000-0000
Confirmation: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxx
President and Chief Executive Officer
With a copy (which Klehr, Harrison, Xxxxxx, Branzburg & Xxxxxx, LLP
shall not constitute 000 X. Xxxxx Xxxxxx
notice) to: Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Telecopier No.: (000) 000-0000
Confirmation No.: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxxx, Esquire
If to the Trust: USA Capital Trust I
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Telecopier No.: (000) 000-0000
Confirmation: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxx
President and Chief Executive Officer
With a copy (which Klehr, Harrison, Xxxxxx, Branzburg & Xxxxxx, LLP
shall not constitute 000 X. Xxxxx Xxxxxx
notice) to: Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Telecopier No.: (000) 000-0000
Confirmation No.: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxxx, Esquire
If to Exchage Agent: Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Telecopier No.: (000) 000-0000
Confirmation No.: (000) 000-0000
Attn: Xxxx St. Amand, Corporate Trust Administration
With a copy (which Xxxxxxxx, Xxxxxx & Finger, P.A.
shall not constitute One Xxxxxx Square
notice) to: X.X. Xxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Telecopier No.: (000) 000-0000
Confirmation No.: (000) 000-0000
Attention: Xxxxxxx Xxxxxx Xxxxx, Esquire
or, as to each party, at such other address as shall be designated by such party
in a written notice complying as to delivery with the terms of this Section.
7. PARTIES IN INTEREST. This Agreement shall be binding upon and inure solely to
the benefit of each party hereto and nothing in this Agreement, express or
implied, is intended to or shall confer upon any other person any right, benefit
or remedy of any nature whatsoever under or by reason of this Agreement. Without
limitation to the foregoing, the parties hereto expressly agree that no holder
of Capital Securities shall have any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement.
8. COUNTERPARTS; SEVERABILITY. This Agreement may be executed in one or more
counterparts, and by different parties hereto on separate counterparts, each of
which when so executed shall be deemed an original, and all of such counterparts
shall together constitute one and the same agreement. If any term or other
provision of this Agreement or the application thereof is invalid, illegal or
incapable of being enforced by any rule of law, or public policy, all other
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the agreements contained herein is
not affected in any manner adverse to any party. Upon such determination that
any term or provision or the application thereof is invalid, illegal or
unenforceable, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in a mutually acceptable manner in order that the agreements contained
herein may be performed as originally contemplated to the fullest extent
possible.
9. CAPTIONS. The descriptive headings contained in this Agreement are included
for convenience or reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
10. ENTIRE AGREEMENT; AMENDMENT. This Agreement constitutes the entire
understanding of the parties hereto with respect to the subject matter hereof.
This Agreement may not be amended or modified nor may any provision hereof be
waived except in writing signed by each party to be bound thereby.
11. TERMINATION. This Agreement shall terminate upon the earlier of (a) the 90th
day following the expiration, withdrawal, or termination of the Exchange Offer,
(b) the close of business on the date of actual receipt of written notice by
Wilmington Trust from the Company and the Trust stating that this Agreement is
terminated, (c) one year following the date of this Agreement, or (d) the time
and date on which this Agreement shall be terminated by mutual consent of the
parties hereto.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Kindly indicate your willingness to act as Exchange Agent and
Wilmington Trust's acceptance of the foregoing provisions by signing in the
space provided below for that purpose and returning to the Company a copy of
this Agreement so signed, whereupon this Agreement and Wilmington Trust's
acceptance shall constitute a binding agreement among Wilmington Trust, the
Company and the Trust.
Very truly yours,
USABANCSHARES, INC.
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Chief Financial Officer
USA CAPITAL TRUST I
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Adminstrative Trustee
Accepted and agreed to as of
the date first written above:
WILMINGTON TRUST COMPANY
By: /s/ Xxxx X. St. Xxxxx
-------------------------------
Name: Xxxx X. St. Amand
Title: Assistant Vice President
