1,400,000 Preferred Securities
FCNB Capital Trust
___% Cumulative Trust Preferred Securities
(Liquidation Amount of $25 per Preferred Security)
UNDERWRITING AGREEMENT
----------------------
_______________, 1998
SANDLER ▇'▇▇▇▇▇ & PARTNERS, L.P.
Two World Trade Center, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, INCORPORATED
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
Washington, D.C. 20006
Ladies and Gentlemen:
FCNB Corp, a Maryland corporation (the "Company") and its
financing subsidiary, FCNB Capital Trust, a Delaware business trust (the
"Trust", and hereinafter together with the Company, the "Offerors"), propose
that the Trust issue and sell to Sandler ▇'▇▇▇▇▇ & Partners, L.P. and ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, Incorporated (the "Underwriters"), pursuant to the terms of this
Agreement, 1,400,000 of the Trust's ____% Cumulative Trust Preferred Securities,
with a liquidation amount of $25 per preferred security (the "Preferred
Securities"), to be issued under the Trust Agreement (as hereinafter defined),
the terms of which are more fully described in the Prospectus (as hereinafter
defined). The aforementioned 1,400,000 Preferred Securities to be sold to the
Underwriters are herein called the "Firm Preferred Securities". Solely for the
purpose of covering over-allotments in the sale of the Firm Preferred
Securities, the Offerors further propose that the Trust issue and sell to the
Underwriters, at the Underwriters' option, up to an additional 210,000 Preferred
Securities (the "Option Preferred Securities") upon exercise of the
over-allotment option granted in Section 1 hereof. The Firm Preferred Securities
and any Option Preferred Securities are herein collectively referred to as the
"Designated Preferred Securities".
The Offerors hereby confirm as follows their agreement with
the Underwriters in connection with the proposed purchase of the Designated
Preferred Securities. The terms, conditions, covenants and agreements set forth
in this Agreement supersede and preempt the terms, conditions, covenants and
agreements of the parties set forth in any and all other agreements among the
parties hereto relating to the issuance of the Preferred Securities.
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1. SALE, PURCHASE AND DELIVERY OF DESIGNATED PREFERRED SECURITIES;
DESCRIPTION OF DESIGNATED PREFERRED SECURITIES.
(a) On the basis of the representations, warranties and
agreements herein contained, and subject to the terms and conditions herein set
forth, the Offerors hereby agree that the Trust shall issue and sell to the
Underwriters and the Underwriters agree to purchase from the Trust, at a
purchase price of $25 per share (the "Purchase Price"), the Firm Preferred
Securities. Because the proceeds from the sale of the Firm Preferred Securities
will be used to purchase from the Company its Debentures (as hereinafter defined
and as described in the Prospectus), the Company shall pay to the Underwriters a
commission of $0.875 per Firm Preferred Security purchased (the "Firm Preferred
Securities Commission").
In addition, on the basis of the representations, warranties
and agreements herein contained and subject to the terms and conditions herein
set forth, the Trust hereby grants to the Underwriters, an option to purchase
all or any portion of the 210,000 Option Preferred Securities, and upon the
exercise of such option in accordance with this Section 1, the Offerors hereby
agree that the Trust shall issue and sell to the Underwriters all or any portion
of the Option Preferred Securities at the same Purchase Price per share paid for
the Firm Preferred Securities. Because the proceeds from the sale of the Option
Preferred Securities will be used to purchase from the Company its Debentures,
the Company shall pay to the Underwriters a commission of $0.875 per Option
Preferred Security for each Option Preferred Security purchased (the "Option
Preferred Securities Commission"). The option hereby granted (the "Option")
shall expire 30 days after the date upon which the Registration Statement (as
hereinafter defined) becomes effective and may be exercised only for the purpose
of covering over-allotments which may be made in connection with the offering
and distribution of the Firm Preferred Securities. The Option may be exercised
in whole or in part at any time (but not more than once) by you giving notice
(confirmed in writing) to the Trust setting forth the number of Option Preferred
Securities as to which the Underwriters are exercising the Option and the time,
date and place for payment and delivery of certificates for such Option
Preferred Securities. Such time and date of payment and delivery for the Option
Preferred Securities (the "Option Closing Date") shall be determined by you, but
shall not be earlier than two nor later than five full business days after the
exercise of such Option, nor in any event prior to the Closing Date (as
hereinafter defined). Certificates for the Option Preferred Securities will be
made available for inspection at least 24 hours prior to the Option Closing Date
at the offices of the DTC (as hereinafter defined), or its designated custodian,
or at such other location as specified by the Underwriter. The Option Closing
Date may be the same as the Closing Date (as hereinafter defined).
Payment of the Purchase Price and the Firm Preferred
Securities Commission and delivery of the Firm Preferred Securities shall be
made at the offices of Sandler ▇'▇▇▇▇▇ & Partners, L.P., Two World Trade Center,
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or such other place as shall be agreed to
by you and the Offerors, at 11:00 a.m., New York time, on _________, 1998, or at
such other time not more than five full business days thereafter as the Offerors
and you shall determine (the "Closing Date"). The Firm Preferred Securities
shall be issued in the form of one or more fully registered global securities
(the "Global Securities") in book-entry form in such denominations and
registered in the name of the nominee of The
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Depository Trust Company (the "DTC") or in such names as the Underwriters may
request in writing at least two business days before the Closing Date. The
Global Securities representing the Firm Preferred Securities shall be made
available for examination by the Underwriters and counsel to the Underwriters
not later than 9:30 a.m. Eastern Standard Time on the last business day prior to
the Closing Date. If the Underwriters exercise the option to purchase any or all
of the Option Preferred Securities, payment of the Purchase Price and Option
Preferred Securities Commission and delivery of the certificate representing the
Option Preferred Securities shall be made on the Option Closing Date at the
offices of Sandler ▇'▇▇▇▇▇ & Partners, L.P., or at such other place as the
Offerors and you shall determine. Such payments shall be made to an account
designated by the Trust by wire transfer in immediately available funds, in the
amount of the Purchase Price therefor, against delivery by or on behalf of the
Trust to you of certificates for the Designated Preferred Securities to be
purchased.
The Agreement contained herein with respect to the timing of
the Closing Date and Option Closing Date is intended to, and does, constitute an
express agreement, as described in Rule 15c6-1(a) and (d) promulgated under the
1934 Act (as defined herein), for a settlement date other than three business
days after the date of the contract.
(b) The Offerors propose that the Trust issue the Designated
Preferred Securities pursuant to an Amended and Restated Trust Agreement among
Wilmington Trust Company, as Delaware Trustee, State Street Bank and Trust
Company, as Property Trustee, the Administrative Trustees named therein
(collectively, the "Trustees"), and the Company, in substantially the form
heretofore delivered to the Underwriters, said Agreement being hereinafter
referred to as the "Trust Agreement". In connection with the issuance of the
Designated Preferred Securities, the Company proposes (i) to issue its
Subordinated Debentures ( the "Debentures") pursuant to an Indenture, dated as
of ___________, 1998, between the Company and State Street Bank and Trust
Company, as Trustee (the "Indenture") and (ii) to guarantee certain payments on
the Designated Preferred Securities pursuant to a Guarantee Agreement between
the Company and State Street Bank and Trust Company, as guarantee trustee (the
"Guarantee"), to the extent described therein.
2. REPRESENTATIONS AND WARRANTIES.
(a) The Offerors jointly and severally represent and warrant
to the Underwriters that:
(i) The reports filed with the Securities and
Exchange Commission (the "Commission") by the Company under the
Securities Exchange Act of 1934, as amended (the "1934 Act") and the
rules and regulations thereunder (the "1934 Act Regulations") during
the two year period ending on the date hereof, at the time they were
filed with the Commission, complied as to form in all material respects
with the requirements of the 1934 Act and the 1934 Act Regulations and
did not contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to
3
make the statements therein, in light of the circumstances in which
they were made, not misleading.
(ii) The Offerors have prepared and filed with the
Commission a registration statement on Form S-3 (File Numbers 333-52359
and 333-52359-01) for the registration of the Designated Preferred
Securities, the Guarantee and $40,250,000 aggregate principal amount of
Debentures under the Securities Act of 1933, as amended (the "1933
Act"), including the related prospectus subject to completion, and one
or more amendments to such registration statement may have been so
filed, in each case in conformity in all material respects with the
requirements of the 1933 Act, the rules and regulations promulgated
thereunder (the "1933 Act Regulations") and the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act") and the rules and
regulations thereunder. Copies of such registration statement,
including any amendments thereto, each Preliminary Prospectus (as
defined herein) contained therein and the exhibits, financial
statements and schedules to such registration statement, as finally
amended and revised, have heretofore been delivered by the Offerors to
the Underwriters. After the execution of this Agreement, the Offerors
will file with the Commission (A) if such registration statement, as it
may have been amended, has been declared by the Commission to be
effective under the 1933 Act, a prospectus in the form most recently
included in an amendment to such registration statement (or, if no such
amendment shall have been filed, in such registration statement), with
such changes or insertions as are required by Rule 430A of the 1933 Act
Regulations ("Rule 430A") or permitted by Rule 424(b) of the 1933 Act
Regulations ("Rule 424(b)") and as have been provided to and not
objected to by the Underwriters prior to (or as are agreed to by the
Underwriters subsequent to) the execution of this Agreement, or (B) if
such registration statement, as it may have been amended, has not been
declared by the Commission to be effective under the 1933 Act, an
amendment to such registration statement, including a form of final
prospectus, necessary to permit such registration statement to become
effective, a copy of which amendment has been furnished to and not
objected to by the Underwriters prior to (or is agreed to by the
Underwriters subsequent to) the execution of this Agreement. As used in
this Agreement, the term "Registration Statement" means such
registration statement, as amended at the time when it was or is
declared effective under the 1933 Act, including (1) all financial
schedules and exhibits thereto, (2) all documents (or portions thereof)
incorporated by reference therein filed under the 1934 Act, and (3) any
information omitted therefrom pursuant to Rule 430A and included in the
Prospectus (as hereinafter defined); the term "Preliminary Prospectus"
means each prospectus subject to completion filed with such
registration statement or any amendment thereto including all documents
(or portions thereof) incorporated by reference therein under the 1934
Act (including the prospectus subject to completion, if any, included
in the Registration Statement and each prospectus filed pursuant to
Rule 424(a) under the 1933 Act); and the term "Prospectus" means the
prospectus first filed with the Commission pursuant to Rule 424(b)(1)
or (4) or, if no prospectus is required to be filed pursuant to Rule
424(b)(1) or (4), the prospectus included in the Registration
Statement, in each case including the financial schedules and all
documents (or portions thereof) incorporated by reference therein under
4
the 1934 Act. The date on which the Registration Statement becomes
effective is hereinafter referred to as the "Effective Date."
(iii) The documents incorporated by reference in the
Preliminary Prospectus or Prospectus or from which information is so
incorporated by reference, when they became effective or were filed
with the Commission, as the case may be, complied in all material
respects with the requirements of the 1934 Act and the 1934 Act
Regulations, and when read together and with the other information in
the Preliminary Prospectus or Prospectus, as the case may be, at the
time the Registration Statement became or becomes effective and at the
Closing Date and any Option Closing Date, did not or will not, as the
case may be, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading.
(iv) No order preventing or suspending the use of any
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) has been issued by the Commission, nor has the
Commission threatened to issue such an order or instituted proceedings
for that purpose. Each Preliminary Prospectus, at the time of filing
thereof, (A) complied in all material respects with the requirements of
the 1933 Act and the 1933 Act Regulations and (B) did not contain an
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; provided, however, that this representation and warranty
does not apply to statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Offerors by the
Underwriters expressly for inclusion in the Prospectus beneath the
heading "Underwriting" (such information referred to herein as the
"Underwriters' Information").
(v) At the Effective Date and at all times subsequent
thereto, up to and including the Closing Date and, if applicable, the
Option Closing Date, the Registration Statement and any post-effective
amendment thereto (A) complied and will comply in all material respects
with the requirements of the 1933 Act, the 1933 Act Regulations and the
Trust Indenture Act (and the rules and regulations thereunder) and (B)
did not and will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein, not misleading. At the
Effective Date and at all times when the Prospectus is required to be
delivered in connection with offers and sales of Designated Preferred
Securities, including, without limitation, the Closing Date and, if
applicable, the Option Closing Date, the Prospectus, as amended or
supplemented, (A) complied and will comply in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations and
the Trust Indenture Act (and the rules and regulations thereunder) and
(B) did not contain and will not contain an untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances
5
under which they were made, not misleading; provided, however, that
this representation and warranty does not apply to Underwriters'
Information.
(vi) (A) The Company is duly organized, validly
existing and in good standing under the laws of the State of Maryland,
with full corporate and other power and authority to own, lease and
operate its properties and conduct its business as described in and
contemplated by the Registration Statement and the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary
Prospectus) and as currently being conducted and is duly registered as
a bank holding company under the Bank Holding Company Act of 1956, as
amended (the "BHC Act").
(B) The Trust has been duly created and is
validly existing as a statutory business trust in good standing under
the Delaware Business Trust Act with the power and authority (trust and
other) to own its property and conduct its business as described in the
Registration Statement and Prospectus, to issue and sell its common
securities (the "Common Securities") to the Company pursuant to the
Trust Agreement, to issue and sell the Designated Preferred Securities,
to enter into and perform its obligations under this Agreement and to
consummate the transactions herein contemplated; the Trust has no
subsidiaries and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or
the ownership of its property requires such qualification, except to
the extent that the failure to be so qualified or be in good standing
would not have a material adverse effect on the Trust; the Trust has
conducted and will conduct no business other than the transactions
contemplated by this Agreement and described in the Prospectus; the
Trust is not a party to or bound by any agreement or instrument other
than this Agreement, the Trust Agreement and the agreements and
instruments contemplated by the Trust Agreement and described in the
Prospectus; the Trust has no liabilities or obligations other than
those arising out of the transactions contemplated by this Agreement
and the Trust Agreement and described in the Prospectus; the Trust is
not a party to or subject to any action, suit or proceeding of any
nature; the Trust is not, and at the Closing Date or any Option Closing
Date will not be, to the knowledge of the Offerors, classified as an
association taxable as a corporation for United States federal income
tax purposes; and the Trust is, and as of the Closing Date or any
Option Closing Date will be, treated as a consolidated subsidiary of
the Company pursuant to generally accepted accounting principles.
(vii) The Company has one direct subsidiary and FCNB
Bank (the "Bank") has three direct subsidiaries. They are listed on
Exhibit A attached hereto and incorporated herein (the "Subsidiaries").
The Company does not own or control, directly or indirectly, more than
5% of any class of equity security of any corporation, association or
other entity other than the Subsidiaries, except that the Bank has a
16% interest in Maryland Title Center - West, LLC. Each Subsidiary is a
bank, corporation, or Delaware business trust duly incorporated (or
created, as the case may be), validly existing and in good standing
under the laws of its respective jurisdiction of incorporation. Each
such Subsidiary has full corporate and other power and authority to
own, lease and operate its
6
properties and to conduct its business as described in and contemplated
by the Registration Statement and the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus) and as
currently being conducted. The deposit accounts of the Bank are insured
by the Federal Deposit Insurance Corporation up to the maximum amount
provided by law; and no proceedings for the modification, termination
or revocation of any such insurance are pending or have been
threatened.
(viii) Each of the Company and the Subsidiaries is
duly qualified to transact business as a foreign corporation and is in
good standing in each other jurisdiction in which it owns or leases
property or conducts its business so as to require such qualification
and in which the failure to so qualify would, individually or in the
aggregate, have a material adverse effect on the condition (financial
or otherwise), earnings, business, prospects or results of operations
of the Company and the Subsidiaries on a consolidated basis. All of the
issued and outstanding shares of capital stock of the Subsidiaries (A)
have been duly authorized and are validly issued, (B) are fully paid
and nonassessable except to the extent such shares may be deemed
assessable under 12 U.S.C. Sections 1815(e) or 1831o, and (C) except as
disclosed in the Prospectus (or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus), are directly owned by the
Company free and clear of any security interest, mortgage, pledge,
lien, encumbrance, restriction upon voting or transfer, preemptive
rights, claim or equity. Except as disclosed in the Prospectus, there
are no outstanding rights, warrants or options to acquire or
instruments convertible into or exchangeable for any capital stock or
equity securities of the Offerors or the Subsidiaries.
(ix) The capital stock of the Company and the equity
securities of the Trust conform to the descriptions thereof contained
in the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus). The outstanding shares of capital stock
and equity securities of each Offeror have been duly authorized and
validly issued and are fully paid and nonassessable, and no such shares
were issued in violation of the preemptive or similar rights of any
security holder of an Offeror; no person has any preemptive or similar
right to purchase any shares of capital stock or equity securities of
the Offerors. Except as disclosed in the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary
Prospectus), there are no outstanding rights, options or warrants to
acquire any securities of the Offerors, and there are no outstanding
securities convertible into or exchangeable for any such securities and
no restrictions upon the voting or transfer of any capital stock of the
Company or equity securities of the Trust pursuant to the Company's
corporate charter or bylaws, the Trust Agreement or any agreement or
other instrument to which an Offeror is a party or by which an Offeror
is bound.
(x) (A) The Trust has all requisite power and
authority to issue, sell and deliver the Designated Preferred
Securities in accordance with and upon the terms and conditions set
forth in this Agreement, the Trust Agreement, the Registration
Statement and the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary
7
Prospectus). All corporate and trust action required to be taken by the
Offerors for the authorization, issuance, sale and delivery of the
Designated Preferred Securities in accordance with such terms and
conditions has been validly and sufficiently taken. The Designated
Preferred Securities, when delivered in accordance with this Agreement,
will be duly and validly issued and outstanding, will be fully paid and
nonassessable undivided beneficial interests in the assets of the
Trust, will be entitled to the benefits of the Trust Agreement, will
not be issued in violation of or subject to any preemptive or similar
rights, and will conform in all material respects to the description
thereof in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus)
and the Trust Agreement. None of the Designated Preferred Securities,
immediately prior to delivery, will be subject to any security
interest, lien, mortgage, pledge, encumbrance, restriction upon voting
or transfer, preemptive rights, claim, equity or other title defect.
(B) The Debentures have been duly and
validly authorized, and, when duly and validly executed, authenticated
and issued as provided in the Indenture and delivered to the Trust
pursuant to the Trust Agreement, will constitute valid and legally
binding obligations of the Company entitled to the benefits of the
Indenture and will conform in all material respects to the description
thereof contained in the Prospectus.
(C) The Guarantee has been duly and validly
authorized, and, when duly and validly executed and delivered to the
guarantee trustee for the benefit of the Trust, will constitute a valid
and legally binding obligation of the Company and will conform in all
material respects to the description thereof contained in the
Prospectus.
(D) The Agreement as to Expenses and
Liabilities (the "Expense Agreement") has been duly and validly
authorized, and, when duly and validly executed and delivered by
Company, will constitute a valid and legally binding obligation of the
Company and will conform in all material respects to the description
thereof contained in the Prospectus.
(xi) The Offerors and the Subsidiaries have complied
with all federal, state and local statutes, regulations, ordinances and
rules applicable to the ownership and operation of their properties or
the conduct of their businesses as described in and contemplated by the
Registration Statement and the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus) and as currently
being conducted except where the failure to so comply would not have a
material adverse effect on the condition, financial or otherwise,
earnings, affairs, business, prospects or results of operations of the
Offerors and the Subsidiaries on a consolidated basis.
(xii) The Offerors and the Subsidiaries have all
permits, easements, consents, licenses, franchises and other
governmental and regulatory authorizations from all appropriate
federal, state, local or other public authorities ("Permits") as are
necessary to own and lease their properties and conduct their
businesses in the manner described in
8
and contemplated by the Registration Statement and the Prospectus (or,
if the Prospectus is not in existence, the most recent Preliminary
Prospectus) and as currently being conducted, except where the failure
to have such Permits would not have a material adverse effect on the
condition, financial or otherwise, earnings, affairs, business,
prospects or results of operations of the Offerors and the Subsidiaries
on a consolidated basis. All such Permits are in full force and effect
and each of the Offerors and the Subsidiaries are in all material
respects complying therewith, and no event has occurred that allows, or
after notice or lapse of time would allow, revocation or termination
thereof or will result in any other material impairment of the rights
of the holder of any such Permit, subject in each case to such
qualification as may be adequately disclosed in the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary
Prospectus), except where the failure of such Permits to be in full
force and effect or the lack of such compliance would not have a
material adverse effect on the condition, financial or otherwise,
earnings, affairs, business, prospects or results of operations of the
Offerors and the Subsidiaries on a consolidated basis. Such Permits
contain no restrictions that would materially impair the ability of the
Company or the Subsidiaries to conduct their businesses in the manner
consistent with their past practices. Neither the Offerors nor any of
the Subsidiaries has received notice or otherwise has knowledge of any
proceeding or action relating to the revocation or modification of any
such Permit.
(xiii) Neither of the Offerors nor any of the
Subsidiaries is in breach or violation of their corporate charter,
by-laws or other governing documents (including without limitation, the
Trust Agreement). Neither of the Offerors nor any of the Subsidiaries
are, and to the knowledge of the Offerors no other party is, in
violation, breach or default (with or without notice or lapse of time
or both) in the performance or observance of any term, covenant,
agreement, obligation, representation, warranty or condition contained
in (A) any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease, franchise, license, Permit or any other
agreement or instrument to which it is a party or by which it or any of
its properties may be bound, except where such breach, violation or
default would not have a material adverse effect on the condition
(financial or otherwise), earnings, affairs, business, prospects, or
results of operations of the Offerors and the Subsidiaries on a
consolidated basis, and to the knowledge of the Offerors, no other
party has asserted that the Offerors or any of the Subsidiaries is in
such violation, breach or default (provided that the foregoing shall
not apply to defaults by borrowers from the Bank), or (B) any order,
decree, judgment, rule or regulation of any court, arbitrator,
government, or governmental agency or instrumentality, domestic or
foreign, having jurisdiction over the Offerors or the Subsidiaries or
any of their respective properties the breach, violation or default of
which could have a material adverse effect on the condition, financial
or otherwise, earnings, affairs, business, prospects, or results of
operations of the Offerors and the Subsidiaries on a consolidated
basis.
(xiv) The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated by this
Agreement, the Trust Agreement, the Registration Statement and the
Prospectus (or, if the Prospectus in not in existence,
9
the most recent Preliminary Prospectus) do not and will not conflict
with, result in the creation orimposition of any material lien, claim,
charge, encumbrance or restriction upon any property or assets of the
Offerors or the Subsidiaries or the Designated Preferred Securities
pursuant to, constitute a breach or violation of, or constitute a
default under, with or without notice or lapse of time or both, any of
the terms, provisions or conditions of the charter or by-laws of the
Company or the Subsidiaries, the Trust Agreement, the Guarantee, the
Indenture, any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease, franchise, license, Permit or any other
agreement or instrument to which the Offerors or the Subsidiaries is a
party or by which any of them or any of their respective properties may
be bound or any order, decree, judgment, rule or regulation of any
court, arbitrator, government, or governmental agency or
instrumentality, domestic or foreign, having jurisdiction over the
Offerors or the Subsidiaries or any of their respective properties
which conflict, creation, imposition, breach, violation or default
would have either singly or in the aggregate a material adverse effect
on the condition, financial or otherwise, earnings, affairs, business,
prospects or results of operations of the Offerors and the Subsidiaries
on a consolidated basis. No authorization, approval, consent or order
of, or filing, registration or qualification with, any person
(including, without limitation, any court, governmental body or
authority) is required in connection with the transactions contemplated
by this Agreement, the Trust Agreement, the Indenture, the Guarantee,
the Registration Statement and the Prospectus (or such Preliminary
Prospectus), except such as may be required by, and have been obtained
under, the 1933 Act and the Trust Indenture Act and from the Nasdaq
Stock Market's National Market relating to the listing of the
Designated Preferred Securities and such as may be required under state
securities laws or Interpretations or Rules of the National Association
of Securities Dealers, Inc. ("NASD") in connection with the purchase
and distribution of the Designated Preferred Securities by the
Underwriters.
(xv) The Offerors have all requisite corporate power
and authority to enter into this Agreement and this Agreement has been
duly and validly authorized, executed and delivered by the Offerors and
constitutes the legal, valid and binding agreement of the Offerors,
enforceable against the Offerors in accordance with its terms, except
as the enforcement thereof may be limited by general principles of
equity and by bankruptcy or other laws relating to or affecting
creditors' rights generally and except as any indemnification or
contribution provisions thereof may be limited under applicable
securities laws. Each of the Indenture, the Trust Agreement, the
Guarantee and the Expense Agreement has been duly authorized by the
Company, and, when executed and delivered by the Company on the Closing
Date, each of said agreements will constitute a valid and legally
binding obligation of the Company and will be enforceable against the
Company in accordance with its terms, except as the enforcement thereof
may be limited by general principles of equity and by bankruptcy or
other laws relating to or affecting creditors' rights generally and
except as any indemnification or contribution provisions thereof may be
limited under applicable securities laws. The Trust Agreement has been
duly authorized and, when executed by the proper officers of the Trust
and delivered by the Trust, will have been duly executed and delivered
by the Trust and will constitute the
10
valid and legally binding instrument of the Trust, enforceable in
accordance with its terms, except as the enforcementthereof may be
limited by general principles of equity and by bankruptcy or other laws
relating to or affecting creditors' rights generally and except as any
indemnification or contribution provisions thereof may be limited under
applicable securities laws. Each of the Indenture, the Trust Agreement
and the Guarantee has been duly qualified under the Trust Indenture Act
and will conform in all material respects to the description thereof
contained in the Prospectus.
(xvi) The Company and the Subsidiaries have good and
marketable title in fee simple to all real property and good title to
all personal property owned by them and material to their business, in
each case free and clear of all security interests, liens, mortgages,
pledges, encumbrances, restrictions, claims, equities and other defects
except such as are referred to in the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus) or such as
do not materially affect the value of such property in the aggregate
and do not materially interfere with the use made or proposed to be
made of such property; and all of the leases under which the Company or
the Subsidiaries hold real or personal property are valid, existing and
enforceable leases and in full force and effect with such exceptions as
are not material and do not materially interfere with the use made or
proposed to be made of such real or personal property, and neither the
Company nor any of the Subsidiaries is in default in any material
respect of any of the terms or provisions of any leases.
(xvii) ▇▇▇▇▇▇ ▇▇▇▇▇▇ & Company, LLC, who have
certified certain of the consolidated financial statements of the
Company and the Subsidiaries including the notes thereto, included or
incorporated by reference in the Registration Statement and Prospectus,
are independent public accountants with respect to the Company and the
Subsidiaries, as required by the 1933 Act and the 1933 Act Regulations.
(xviii) The consolidated financial statements
including the notes thereto, included by incorporation or otherwise in
the Registration Statement and the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus) with respect
to the Company and the Subsidiaries comply in all material respects
with the 1933 Act and the 1933 Act Regulations and present fairly the
consolidated financial position of the Company and the Subsidiaries as
of the dates indicated and the consolidated results of operations, cash
flows and shareholders' equity of the Company and the Subsidiaries for
the periods specified and have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis.
The selected and summary consolidated financial data concerning the
Offerors and the Subsidiaries included in the Registration Statement
and the Prospectus (or such Preliminary Prospectus) comply in all
material respects with the 1933 Act and the 1933 Act Regulations,
present fairly the information set forth therein, and have been
compiled on a basis consistent with that of the consolidated financial
statements of the Offerors and the Subsidiaries in the Registration
Statement and the Prospectus (or such Preliminary Prospectus). The
Company had an outstanding capitalization as set forth under
"Capitalization" in the
11
Prospectus as of the date indicated therein and there has been no
material change therein since such date except as disclosed in the
Prospectus. The other financial, statistical and numerical information
included in the Registration Statement and the Prospectus (or such
Preliminary Prospectus) comply in all material respects with the 1933
Act and the 1933 Act Regulations, present fairly the information shown
therein, and to the extent applicable have been compiled on a basis
consistent with the consolidated financial statements of the Company
and the Subsidiaries included in the Registration Statement and the
Prospectus (or such Preliminary Prospectus).
(xix) Since the respective dates as of which
information is given in the Registration Statement and the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus), except as otherwise stated therein:
(A) neither of the Offerors nor any of the
Subsidiaries have sustained any loss or interference with its
business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree which is
material to the condition (financial or otherwise), earnings,
business, prospects or results of operations of the Offerors
and the Subsidiaries on a consolidated basis;
(B) there has not been any material adverse
change in, or any development which is reasonably likely to
have a material adverse effect on, the condition (financial or
otherwise), earnings, business, prospects or results of
operations of the Offerors and the Subsidiaries on a
consolidated basis, whether or not arising in the ordinary
course of business;
(C) neither of the Offerors nor any of the
Subsidiaries have incurred any liabilities or obligations,
direct or contingent, or entered into any transactions, other
than in the ordinary course of business, which are material to
the condition (financial or otherwise), earnings, business,
prospects or results of operations of the Offerors and the
Subsidiaries on a consolidated basis;
(D) neither of the Offerors have declared or
paid any dividend, (other than the $.17 per share cash
dividend paid to the common stockholders of the Company on
April 30, 1998), and neither of the Offerors nor any of the
Subsidiaries has become delinquent in the payment of principal
or interest on any outstanding borrowings; and
(E) there has not been any change in the
capital stock, equity securities, long-term debt, obligations
under capital leases or, other than in the ordinary course of
business, short-term borrowings of the Offerors or the
Subsidiaries.
12
(xx) Except as set forth in the Registration
Statement and the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus), no charge,
investigation, action, suit or proceeding is pending or has been
threatened, against or involving the property or assets of the Offerors
or the Subsidiaries or any of their respective properties before or by
any court or any regulatory, administrative or governmental official,
commission, board, agency or other authority or body, or any
arbitrator, wherein an unfavorable decision, ruling or finding could
reasonably be expected to have a material adverse effect on the
consummation of this Agreement or the transactions contemplated herein
or the condition (financial or otherwise), earnings, affairs, business,
prospects or results of operations of the Offerors and the Subsidiaries
on a consolidated basis or which is required to be disclosed in the
Registration Statement or the Prospectus (or such Preliminary
Prospectus) and is not so disclosed.
(xxi) There are no contracts or other documents
required to be filed as exhibits to the Registration Statement by the
1933 Act or the 1933 Act Regulations or the Trust Indenture Act (or any
rules or regulations thereunder) which have not been filed as exhibits
or incorporated by reference to the Registration Statement, or that are
required to be summarized in the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus) that are not
so summarized.
(xxii) Neither of the Offerors has taken, directly or
indirectly, any action designed to result in or which has constituted
or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the
Offerors to facilitate the sale or resale of the Designated Preferred
Securities, and neither of the Offerors is aware of any such action
taken or to be taken by any officer, director, trustee or 5% or more
shareholder of the Offerors.
(xxiii) The Offerors and the Subsidiaries own, or
possess adequate rights to use, all patents, copyrights, trademarks,
service marks, trade names and other rights necessary to conduct the
businesses now conducted by them in all material respects or as
described in the Prospectus (or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus) and neither the Offerors nor
the Subsidiaries have received any notice of infringement or conflict
with asserted rights of others with respect to any patents, copyrights,
trademarks, service marks, trade names or other rights which,
individually or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a material adverse effect on
the condition (financial or otherwise), earnings, affairs, business,
prospects or results of operations of the Offerors and the Subsidiaries
on a consolidated basis, and the Offerors do not know of any basis for
any such infringement or conflict.
(xxiv) No labor dispute involving the Company or the
Subsidiaries exists or, to the knowledge of the Offerors, is imminent
which might be expected to have a material adverse effect on the
condition (financial or otherwise), earnings, affairs, business,
prospects or results of operations of the Offerors and the Subsidiaries
on a
13
consolidated basis or which is required to be disclosed in the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus). Neither the Company nor any of the
Subsidiaries has received notice of any existing or threatened labor
dispute by the employees of any of its principal suppliers, customers
or contractors which might be expected to have a material adverse
effect on the condition (financial or otherwise), earnings, affairs,
business, prospects or results of operations of the Company and the
Subsidiaries on a consolidated basis.
(xxv) The Offerors and the Subsidiaries have properly
prepared and timely filed all necessary federal, state, local and
foreign tax returns which are required to be filed and have paid all
taxes shown as due thereon and have paid all other taxes and
assessments to the extent that the same shall have become due, except
such as are being contested in good faith or where the failure to so
timely and properly prepare and file would not have a material adverse
effect on the condition (financial or otherwise), earnings, affairs,
business, prospects or results of operations of the Offerors and the
Subsidiaries on a consolidated basis. The Offerors have no knowledge of
any tax deficiency which has been or might be assessed against the
Offerors or the Subsidiaries which, if the subject of an unfavorable
decision, ruling or finding, would have a material adverse effect on
the condition (financial or otherwise), earnings, affairs, business,
prospects or results of operations of the Offerors and the Subsidiaries
on a consolidated basis.
(xxvi) Each of the material contracts, agreements and
instruments described or referred to in the Registration Statement or
the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus) and each contract, agreement and
instrument filed as an exhibit to the Registration Statement is in full
force and effect and is the legal, valid and binding agreement of the
Offerors or the Subsidiaries, enforceable in accordance with its terms,
except as the enforcement thereof may be limited by general principles
of equity and by bankruptcy or other laws relating to or affecting
creditors' rights generally. Except as disclosed in the Prospectus (or
such Preliminary Prospectus), to the knowledge of the Offerors, no
other party to any such agreement is (with or without notice or lapse
of time or both) in breach or default in any material respect
thereunder.
(xxvii) No relationship, direct or indirect, exists
between or among the Offerors or the Subsidiaries, on the one hand, and
the directors, officers, trustees, shareholders, customers or suppliers
of the Offerors or the Subsidiaries, on the other hand, which is
required to be described in the Registration Statement and the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) which is not adequately described therein.
(xxviii) No person has the right to request or
require the Offerors or the Subsidiaries to register any securities for
offering and sale under the 1933 Act by reason of the filing of the
Registration Statement with the Commission or the issuance and sale
14
of the Designated Preferred Securities except as adequately disclosed
in the Registration Statement and the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus).
(xxix) The Designated Preferred Securities have been
approved for listing on the Nasdaq National Market.
(xxx) Except as described (or referred to) in the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), there are no contractual encumbrances or
restrictions or material legal restrictions, on the ability of the
Subsidiaries (A) to pay dividends or make any other distributions on
its capital stock or to pay any indebtedness owed to the Offerors, (B)
to make any loans or advances to, or investments in, the Offerors or
(C) to transfer any of its property or assets to the Offerors.
(xxxi) Neither of the Offerors is an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended (the "Investment Company Act").
(xxxii) The Offerors have not distributed and will
not distribute prior to the Closing Date any prospectus in connection
with the Offering, other than a Preliminary Prospectus, the Prospectus,
the Registration Statement and the other materials permitted by the
1933 Act and the 1933 Act Regulations and reviewed by the Underwriters.
(xxxiii) The Company and each Subsidiary have in
place and effective such policies of insurance, with limits of
liability in such amounts, as are normal and prudent in the ordinary
scope of business similar to that of the Company and such Subsidiary in
the respective jurisdiction in which they conduct business.
(xxxiv) The provisions of any employee pension
benefit plan ("Pension Plan") as defined in Section 3(2) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
in which the Company or any Subsidiary is a participating employer are
in substantial compliance with ERISA, and neither the Company nor any
Subsidiary is in violation of ERISA in any material respect. The
Company, each Subsidiary, or the plan sponsor thereof, as the case may
be, has duly and timely filed the reports required to be filed by ERISA
in connection with the maintenance of any Pension Plans in which the
Company or any Subsidiary is a participating employer, and no facts,
including any "reportable event" as defined by ERISA and the
regulations thereunder, exist in connection with any Pension Plan in
which the Company or any Subsidiary is a participating employer which
might constitute grounds for the termination of such plan by the
Pension Benefit Guaranty Corporation or for the appointment by the
appropriate U.S. District Court of a trustee to administer any such
plan. The provisions of any employee benefit welfare plan, as defined
in Section 3(1) of ERISA, in which the
15
Company or any Subsidiary is a participating employer, are in
substantial compliance with ERISA, and the Company, any Subsidiary, or
the plan sponsor thereof, as the case may be, has duly and timely filed
the reports required to be filed by ERISA in connection with the
maintenance of any such plans.
3. OFFERING BY THE UNDERWRITER. After the Registration
Statement becomes effective or, if the Registration Statement is already
effective, after this Agreement becomes effective, the Underwriters propose to
offer the Firm Preferred Securities for sale to the public upon the terms and
conditions set forth in the Prospectus. Because the NASD is expected to view the
Preferred Securities as interests in a direct participation program, the
offering of the Preferred Securities is being made in compliance with the
applicable provisions of Rule 2810 of the NASD's Conduct Rules. The Underwriters
may from time to time thereafter reduce the public offering price and change the
other selling terms, provided the proceeds to the Trust shall not be reduced as
a result of such reduction or change.
The Underwriters may reserve and sell such of the Designated
Preferred Securities purchased by the Underwriters as the Underwriters may elect
to dealers chosen by it (the "Selected Dealers") at the public offering price
set forth in the Prospectus less the applicable Selected Dealers' concessions
set forth therein, for re-offering by Selected Dealers to the public at the
public offering price. The Underwriters may allow, and Selected Dealers may
re-allow, a concession set forth in the Prospectus to certain other brokers and
dealers.
4. CERTAIN COVENANTS OF THE OFFERORS. The Offerors jointly and
severally covenant with the Underwriters as follows:
(a) The Offerors shall use their best efforts to cause the
Registration Statement and any amendments thereto, if not effective at the time
of execution of this Agreement, to become effective as promptly as possible. If
the Registration Statement has become or becomes effective pursuant to Rule 430A
and information has been omitted therefrom in reliance on Rule 430A, then, the
Offerors will prepare and file in accordance with Rule 430A and Rule 424(b)
copies of the Prospectus or, if required by Rule 430A, a post-effective
amendment to the Registration Statement (including the Prospectus) containing
all information so omitted and will provide evidence satisfactory to the
Underwriters of such timely filing.
(b) The Offerors shall notify you immediately, and confirm
such notice in writing:
(i) when the Registration Statement, or any
post-effective amendment to the Registration Statement, has become
effective, or when the Prospectus or any supplement to the Prospectus
or any amended Prospectus has been filed;
(ii) of the receipt of any comments or requests from
the Commission;
16
(iii) of any request of the Commission to amend or
supplement the Registration Statement, any Preliminary Prospectus or
the Prospectus or for additional information; and
(iv) of the issuance by the Commission or any state
or other regulatory body of any stop order or other order suspending
the effectiveness of the Registration Statement, preventing or
suspending the use of any Preliminary Prospectus or the Prospectus, or
suspending the qualification of any of the Designated Preferred
Securities for offering or sale in any jurisdiction or the institution
or threat of institution of any proceedings for any of such purposes.
The Offerors shall use their best efforts to prevent the issuance of
any such stop order or of any other such order and if any such order is
issued, to cause such order to be withdrawn or lifted as soon as
possible.
(c) The Offerors shall furnish to the Underwriters, from time
to time without charge, as soon as available, as many copies as the Underwriters
may reasonably request of (i) the registration statement as originally filed and
of all amendments thereto, in executed form, including exhibits, whether filed
before or after the Registration Statement becomes effective, (ii) all exhibits
and documents incorporated therein or filed therewith, (iii) all consents and
certificates of experts in executed form, (iv) each Preliminary Prospectus and
all amendments and supplements thereto, and (v) the Prospectus, and all
amendments and supplements thereto.
(d) During the time when a prospectus is required to be
delivered under the 1933 Act, the Offerors shall comply to the best of their
ability with the 1933 Act and the 1933 Act Regulations and the 1934 Act and the
1934 Act Regulations so as to permit the completion of the distribution of the
Designated Preferred Securities as contemplated herein and in the Trust
Agreement and the Prospectus. The Offerors shall not file any amendment to the
registration statement as originally filed or to the Registration Statement and
shall not file any amendment thereto or make any amendment or supplement to any
Preliminary Prospectus or to the Prospectus of which you shall not previously
have been advised in writing and provided a copy a reasonable time prior to the
proposed filings thereof or to which you or counsel to the Underwriters shall
object. If it is necessary, in the Company's reasonable opinion or in the
reasonable opinion of the Company's counsel to amend or supplement the
Registration Statement or the Prospectus in connection with the distribution of
the Designated Preferred Securities, the Offerors shall forthwith amend or
supplement the Registration Statement or the Prospectus, as the case may be, by
preparing and filing with the Commission (provided you or counsel to the
Underwriters does not reasonably object), and furnishing to you, such number of
copies as you may reasonably request of an amendment or amendments of, or a
supplement or supplements to, the Registration Statement or the Prospectus, as
the case may be (in form and substance reasonably satisfactory to you and
counsel to the Underwriters). If any event shall occur as a result of which it
is necessary to amend or supplement the Prospectus to correct an untrue
statement of a material fact or to include a material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, or if for any reason it is necessary at any time to amend or
supplement the Prospectus to comply with the 1933 Act and the 1933 Act
Regulations, the Offerors shall, subject to the second sentence of this
subsection (d),
17
forthwith amend or supplement the Prospectus by preparing and filing with the
Commission, and furnishing to you, such number of copies as you may reasonably
request of an amendment or amendments of, or a supplement or supplements to, the
Prospectus (in form and substance satisfactory to you and counsel to the
Underwriters) so that, as so amended or supplemented, the Prospectus shall not
contain an untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(e) The Offerors shall cooperate with you and counsel to the
Underwriters in order to qualify the Designated Preferred Securities for
offering and sale under the securities or blue sky laws of such jurisdictions as
you may reasonably request and shall continue such qualifications in effect so
long as may be advisable for distribution of the Designated Preferred
Securities; provided, however, that the Offerors shall not be required to
qualify to do business as a foreign corporation or file a general consent to
service of process in any jurisdiction in connection with the foregoing. The
Offerors shall file such statements and reports as may be required by the laws
of each jurisdiction in which the Designated Preferred Securities have been
qualified as above. The Offerors will notify you immediately of, and confirm in
writing, the suspension of qualification of the Designated Preferred Securities
or threat thereof in any jurisdiction.
(f) The Offerors shall make generally available to their
security holders in the manner contemplated by Rule 158 of the 1933 Act
Regulations, and furnish to you, as soon as practicable, but in any event not
later than 15 months after the Effective Date, a consolidated earnings statement
of the Offerors conforming with the requirements of Section 11(a) of the 1933
Act and Rule 158.
(g) The Offerors shall use the proceeds from the sale of the
Designated Preferred Securities to be sold by the Trust hereunder in the manner
specified in the Prospectus under the caption "Use of Proceeds."
(h) For five years from the Effective Date, the Offerors shall
furnish to the Underwriters copies of all reports and communications (financial
or otherwise) furnished by the Offerors to the holders of the Designated
Preferred Securities as a class, copies of all reports and financial statements
filed with or furnished to the Commission (other than portions for which
confidential treatment has been obtained from the Commission) or with any
national securities exchange or the Nasdaq National Market and such other
documents, reports and information concerning the business and financial
conditions of the Offerors as the Underwriters may reasonably request, other
than such documents, reports and information which the Offerors have a legal
obligation not to reveal to the Underwriters.
(i) For a period of 180 days from the Effective Date, the
Offerors shall not, directly or indirectly, offer for sale, sell or agree to
sell or otherwise dispose of any Designated Preferred Securities other than
pursuant to this Agreement, any other beneficial interests in the assets of the
Trust or any securities of the Trust or the Company that are substantially
similar to
18
the Designated Preferred Securities or the Debentures, including any guarantee
of such beneficial interests or substantially similar securities, or securities
convertible into or exchangeable for or that represent the right to receive any
such beneficial interest or substantially similar securities, without the prior
written consent of the Underwriters.
(j) If the Designated Preferred Securities are exchanged for
Debentures, the Company will use its best efforts to have the Debentures
promptly listed on the Nasdaq National Market or other organization on which the
Designated Preferred Securities are then listed, and to have the Debentures
promptly registered under the Exchange Act.
(k) Subsequent to the date of this Agreement and through the
date which is the later of (i) the day following the date on which the
Underwriters' option to purchase the Option Preferred Securities shall expire or
(ii) the day following the Option Closing Date with respect to any Option
Preferred Securities that the Underwriters shall elect to purchase, except as
described in or contemplated by the Prospectus, neither the Offerors nor any of
the Subsidiaries shall take any action (or refrain from taking any action) which
will result in the Offerors or the Subsidiaries incurring any material liability
or obligation, direct or contingent, or enter into any material transaction,
except in the ordinary course of business, and there will not be any material
change in the capital stock, or any material increase in long-term debt,
obligations under capital leases or short-term borrowings of the Offerors and
the Subsidiaries on a consolidated basis.
(l) The Offerors shall not, for a period of 180 days after the
date hereof, without the prior written consent of the Underwriters, purchase,
redeem or call for redemption, or prepay or give notice of prepayment (or
announce any redemption or call for redemption, or any repayment or notice of
prepayment) of any of the Preferred Securities.
(m) The Offerors shall not take, directly or indirectly, any
action designed to result in or which has constituted or which might reasonably
be expected to cause or result in a violation of the Commission's Regulation M
and the Offerors are not aware of any such action taken or to be taken by any
affiliate of the Offerors.
(n) Prior to the Closing Date (and, if applicable, the Option
Closing Date), the Offerors will not issue any press release or other
communication directly or indirectly or hold any press conference with respect
to the Offerors, the Subsidiaries or the offering of the Designated Preferred
Securities (the "Offering") without your prior written consent, which consent
will not be unreasonably withheld.
(o) The Offerors will use their best efforts to satisfy or
cause to be satisfied the conditions to the obligations of the Underwriters in
Section 6 hereof.
(p) The Trust shall comply in all respects with the
undertakings given by the Trust in connection with the qualification or
registration of the Designated Preferred Securities for offering and sale under
the Blue Sky Laws.
19
5. PAYMENT OF EXPENSES.
(a) Whether or not this Agreement is terminated or the sale of
the Designated Preferred Securities to the Underwriters is consummated, the
Company covenants and agrees that it will pay or cause to be paid (directly or
by reimbursement) all costs and expenses incident to the performance of the
obligations of the Offerors under this Agreement, including:
(i) the preparation, printing, filing, delivery and
shipping of the initial registration statement, the Preliminary Prospectus or
Prospectuses, the Registration Statement and the Prospectus and any amendments
or supplements thereto, and the printing, delivery and shipping of this
Agreement and any other underwriting documents (including, without limitation,
selected dealers agreements), the certificates for the Designated Preferred
Securities and the Preliminary and Final Blue Sky Memoranda and any legal
investment surveys and any supplements thereto;
(ii) all fees, expenses and disbursements of the
Offerors' counsel and accountants;
(iii) all fees and expenses incurred in connection
with the qualification of the Designated Preferred Securities, Debentures and
the Guarantee under the securities or blue sky laws of such jurisdictions as you
may request, including all filing fees and reasonable fees and disbursements of
counsel to the Underwriters in connection therewith, including, without
limitation, in connection with the preparation of the Preliminary and Final Blue
Sky Memoranda and any legal investment surveys and any supplements thereto;
(iv) all fees and expenses incurred in connection
with filings made with the NASD;
(v) any applicable fees and other expenses incurred
in connection with the listing of the Designated Preferred Securities and, if
applicable, the Guarantee and the Debentures on the Nasdaq National Market;
(vi) the cost of furnishing to you copies of the
initial registration statements, any Preliminary Prospectus, the Registration
Statement and the Prospectus and all amendments or supplements thereto;
(vii) the costs and charges of any transfer agent or
registrar and the fees and disbursements of counsel to any transfer agent or
registrar;
(viii) all costs and expenses (including stock
transfer taxes) incurred in connection with the issuance and delivery of the
Designated Preferred Securities to the Underwriters;
20
(ix) all expenses incident to the preparation,
execution and delivery of the Trust Agreement, the Indenture and the Guarantee;
and
(x) all other costs and expenses incident to the
performance of the obligations of the Company hereunder and under the Trust
Agreement that are not otherwise specifically provided for in this Section 5.
If the sale of Designated Preferred Securities contemplated by
this Agreement is not completed for any reason whatsoever (other than as a
result of the Underwriters' refusal to proceed, without cause), whether or not
such termination is allowable hereunder, the Company will pay you your
accountable out-of-pocket expenses in connection herewith or in contemplation of
the performance of your obligations hereunder, including without limitation
travel expenses, reasonable fees, expenses and disbursements of counsel or other
out-of-pocket expenses incurred by you in connection with any discussion of the
Offering or the contents of the Registration Statement, any investigation of the
Offerors and the Subsidiaries, or any preparation for the marketing, purchase,
sale or delivery of the Designated Preferred Securities, in each case following
presentation of reasonably detailed invoices therefor.
(b) In addition to the expenses to be borne by the Company
pursuant to the preceding paragraph (a), the Company agrees to reimburse the
Underwriters, upon request made from time to time, for their reasonable
out-of-pocket expenses incurred in connection with the Offering, regardless of
whether the Offering is consummated, including, without limitation, legal fees
and expenses, marketing, syndication and travel expenses.
6. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations of the
Underwriters to purchase and pay for the Firm Preferred Securities and,
following exercise of the option granted by the Offerors in Section 1 of this
Agreement, the Option Preferred Securities, are subject, in your sole
discretion, to the accuracy of and compliance with the representations and
warranties and agreements of the Offerors herein as of the date hereof and as of
the Closing Date (or in the case of the Option Preferred Securities, if any, as
of the Option Closing Date), to the accuracy of the written statements of the
Offerors made pursuant to the provisions hereof, to the performance by the
Offerors of their covenants and obligations hereunder and to the following
additional conditions:
(a) If the Registration Statement or any amendment thereto
filed prior to the Closing Date has not been declared effective prior to the
time of execution hereof, the Registration Statement shall become effective not
later than 11:00 a.m., New York time, on the first business day following the
time of execution of this Agreement, or at such later time and date as you may
agree to in writing. If required, the Prospectus and any amendment or supplement
thereto shall have been timely filed in accordance with Rule 424(b) and Rule
430A under the 1933 Act and Section 4(a) hereof. No stop order suspending the
effectiveness of the Registration Statement or any amendment or supplement
thereto shall have been issued under the 1933 Act or any applicable state
securities laws and no proceedings for that purpose shall have been instituted
or shall be pending, or, to the knowledge of the Offerors or the Underwriters,
shall
21
be contemplated by the Commission or any state authority. Any request on the
part of the Commission or any state authority for additional information (to be
included in the Registration Statement or Prospectus or otherwise) shall have
been disclosed to you and complied with to your satisfaction and to the
satisfaction of your counsel.
(b) The Underwriters shall not have advised the Company at or
before the Closing Date (and, if applicable, the Option Closing Date) that the
Registration Statement or any post-effective amendment thereto, or the
Prospectus or any amendment or supplement thereto, contains an untrue statement
of a fact which, in your reasonable opinion, is material or omits to state a
fact which, in your reasonable opinion, is material and is required to be stated
therein or is necessary to make statements therein (in the case of the
Prospectus or any amendment or supplement thereto, in light of the circumstances
under which they were made) not misleading.
(c) All corporate proceedings and other legal matters incident
to the authorization, form and validity of this Agreement, the Trust Agreement,
and the Designated Preferred Securities, and the authorization and form of the
Registration Statement and Prospectus, other than financial statements and other
financial data, and all other legal matters relating to this Agreement and the
transactions contemplated hereby or by the Trust Agreement shall be reasonably
satisfactory in all respects to counsel to the Underwriters, and the Offerors
and the Subsidiaries shall have furnished to such counsel all documents and
information relating thereto that they may reasonably request to enable them to
pass upon such matters.
(▇) ▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇, L.L.P., counsel to the Offerors,
shall have furnished to you their signed opinion, dated the Closing Date or the
Option Closing Date, as the case may be, in form and substance reasonably
satisfactory to counsel to the Underwriters, to the effect that:
(i) The Company has been duly incorporated and is
validly existing and in good standing under the laws of the State of
Maryland, and is duly registered as a bank holding company under the
BHC Act. Each of the Subsidiaries is duly incorporated, validly
existing and in good standing under the laws of its jurisdiction of
incorporation. Each of the Company and the Subsidiaries has full
corporate power and authority to own or lease its properties and to
conduct its business as such business is described in the Prospectus
and is currently conducted in all material respects. The Company and
each Subsidiary are qualified to do business as foreign corporations
under the corporation laws of each jurisdiction in which the Company or
such Subsidiary, as the case may be, owns or leases properties, has an
office, or in which business is conducted and such qualification is
required. All outstanding shares of capital stock of the Subsidiaries
have been duly authorized and validly issued and are fully paid and
nonassessable except to the extent such shares may be deemed assessable
under 12 U.S.C. Sections 1815(e) or 1831o and, to such counsel's actual
knowledge, except as disclosed in the Prospectus, there are no
outstanding rights, options or warrants to purchase any such shares or
securities convertible into or exchangeable for any such shares.
22
(ii) The capital stock, Debentures and Guarantee of
the Company and the equity securities of the Trust conform to the
description thereof contained in the Prospectus in all material
respects. The capital stock of the Company authorized and issued as of
March 31, 1998 is as set forth under the caption "Capitalization" in
the Prospectus, has been duly authorized and validly issued, and is
fully paid and nonassessable. To such counsel's actual knowledge, there
are no outstanding rights, options or warrants to purchase, no other
outstanding securities convertible into or exchangeable for, and no
commitments, plans or arrangements to issue, any shares of capital
stock of the Company or equity securities of the Trust, except as
described in the Prospectus.
(iii) The issuance, sale and delivery of the
Designated Preferred Securities and Debentures in accordance with the
terms and conditions of this Agreement, the Trust Agreement and the
Indenture have been duly authorized by all necessary corporate actions
of the Offerors. All of the Designated Preferred Securities have been
duly and validly authorized and, when delivered in accordance with this
Agreement will be duly and validly issued, fully paid and
nonassessable, and will conform in all material respects to the
description thereof in the Registration Statement, the Prospectus and
the Trust Agreement. There are no preemptive or other rights to
subscribe for or to purchase, and other than as disclosed in the
Prospectus no restrictions upon the voting or transfer of, any shares
of capital stock or equity securities of the Offerors or the
Subsidiaries pursuant to the corporate charter, by-laws or other
governing documents (including without limitation, the Trust Agreement)
of the Offerors or the Subsidiaries, or, to such counsel's actual
knowledge, any agreement or other instrument to which either Offeror or
any of the Subsidiaries is a party or by which either Offeror or any of
the Subsidiaries may be bound.
(iv) The Offerors have all requisite corporate and
trust power to enter into and perform their obligations under this
Agreement, and this Agreement has been duly and validly authorized,
executed and delivered by the Offerors and constitutes the legal, valid
and binding obligations of the Offerors enforceable in accordance with
its terms, except as the enforcement hereof or thereof may be limited
by general principles of equity and by bankruptcy or other laws
relating to or affecting creditors' rights generally, and except as the
indemnification and contribution provisions hereof may be limited under
applicable laws.
(v) Each of the Indenture, the Trust Agreement and
the Guarantee has been duly qualified under the Trust Indenture Act,
has been duly authorized, executed and delivered by the Company, and is
a valid and legally binding obligation of the Company enforceable in
accordance with its terms, subject to the effect of bankruptcy,
insolvency, reorganization, receivership, moratorium and other laws
affecting the rights and remedies of creditors generally and of general
principles of equity.
23
(vi) The Debentures have been duly authorized,
executed, authenticated and delivered by the Company, are entitled to
the benefits of the Indenture and are legal, valid and binding
obligations of the Company enforceable against the Company in
accordance with their terms, subject to the effect of bankruptcy,
insolvency, reorganization, receivership, moratorium and other laws
affecting the rights and remedies of creditors generally and of general
principles of equity.
(vii) The Expense Agreement has been duly authorized,
executed and delivered by the Company, and is a valid and legally
binding obligation of the Company enforceable in accordance with its
terms, subject to the effect of bankruptcy, insolvency, reorganization,
receivership, moratorium and other laws affecting the rights and
remedies of creditors generally and of general principles of equity.
(viii) To such counsel's actual knowledge, neither of
the Offerors nor any of the Subsidiaries is in breach or violation of,
or default under, with or without notice or lapse of time or both, its
corporate charter, by-laws or governing document (including without
limitation, the Trust Agreement). The execution, delivery and
performance of this Agreement, the Trust Agreement, the Guarantee
Agreement, the Expense Agreement and the Indenture, the issue and sale
of the Designated Preferred Securities and the Debentures, the
compliance by the Company with the provisions of the Designated
Preferred Securities, the Debentures, the Indenture and this Agreement
and the consummation of the transactions contemplated by this Agreement
and the Trust Agreement do not and will not conflict with, result in
the creation or imposition of any material lien, claim, charge,
encumbrance or restriction upon any property or assets of the Offerors
or the Subsidiaries or the Designated Preferred Securities pursuant to,
or constitute a material breach or violation of, or constitute a
material default under, with or without notice or lapse of time or
both, any of the terms, provisions or conditions of the charter,
by-laws or governing document (including without limitation, the Trust
Agreement) of the Offerors or the Subsidiaries, or any material
contract, indenture, mortgage, deed of trust, loan or credit agreement,
note, lease, franchise, license or any other agreement or instrument to
which either Offeror or the Subsidiaries is a party or any order,
decree, judgment, franchise, license, Permit, rule or regulation of any
court, arbitrator, government, or governmental agency or
instrumentality known to such counsel having jurisdiction over the
Offerors or the Subsidiaries which, in each case, is material to the
Offerors and the Subsidiaries on a consolidated basis. No
authorization, approval, consent or order of, or filing, registration
or qualification with, any person (including, without limitation, any
court, governmental body or authority) is required under New York law
in connection with the transactions contemplated by this Agreement in
connection with the purchase and distribution of the Designated
Preferred Securities by the Underwriters, except such as may be
required under state securities laws, as to which no opinion need be
rendered.
(ix) To such counsel's actual knowledge, holders of
securities of the Offerors either do not have any right that, if
exercised, would require the Offerors to
24
cause such securities to be included in the Registration Statement or
have waived such right. To such counsel's actual knowledge, neither the
Offerors nor any of the Subsidiaries is a party to any agreement or
other instrument which grants rights for or relating to the
registration of any securities of the Offerors.
(x) Except as set forth in the Registration Statement
and the Prospectus, to such counsel's actual knowledge, (i) no action,
suit or proceeding at law or in equity is pending or threatened to
which the Offerors or the Subsidiaries is or may be a party, and (ii)
no action, suit or proceeding is pending or threatened against or
affecting the Offerors or the Subsidiaries or any of their properties,
before or by any court or governmental official, commission, board or
other administrative agency, authority or body, or any arbitrator,
wherein an unfavorable decision, ruling or finding could reasonably be
expected to have a material adverse effect on the consummation of this
Agreement or the issuance and sale of the Designated Preferred
Securities as contemplated herein or the condition (financial or
otherwise), earnings, affairs, business, or results of operations of
the Offerors and the Subsidiaries on a consolidated basis or which is
required to be disclosed in the Registration Statement or the
Prospectus and is not so disclosed.
(xi) No authorization, approval, consent or order of
or filing, registration or qualification with, any person (including,
without limitation, any court, governmental body or authority) is
required in connection with the transactions contemplated by this
Agreement, the Trust Agreement, the Guarantee Agreement, the Expense
Agreement, the Indenture, the Registration Statement and the
Prospectus, except such as have been obtained under the 1933 Act, and
except such as may be required under state securities laws or
Interpretations or Rules of the NASD in connection with the purchase
and distribution of the Designated Preferred Securities by the
Underwriters, as to which no opinion need be rendered.
(xii) The Registration Statement and the Prospectus
and any amendments or supplements thereto (other than the financial
statements or other financial or statistical data included therein or
omitted therefrom and Underwriters' Information, as to which such
counsel need express no opinion) comply as to form in all material
respects with the requirements of the 1933 Act and the 1933 Act
Regulations as of their respective dates of effectiveness and in case
at the Closing Date or any Option Closing Date.
(xiii) To such counsel's actual knowledge, there are
no contracts, agreements, leases or other documents of a character
required to be disclosed in the Registration Statement or Prospectus or
to be filed as exhibits to the Registration Statement that are not so
disclosed or filed.
(xiv) The statements under the captions, "Description
of the Preferred Securities", "Description of the Subordinated
Debentures", "Book-Entry Issuance", "Description of the Guarantee",
"Relationship Among the Preferred Securities,
25
Subordinated Debentures and the Guarantee", "Certain Federal Income Tax
Consequences", and "ERISA Considerations" in the Prospectus insofar as
such statements constitute a summary of legal and regulatory matters,
documents, instruments or proceedings referred to therein are accurate
in all material respects, other than financial or statistical data as
to which such counsel need express no opinion or belief.
(xv) The Registration Statement has become effective
under the 1933 Act; any required filing of the Prospectus pursuant to
Rule 424(b) has been made within the time period required by Rule
424(b); no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for a stop order are
pending or threatened by the Commission.
(xvi) Except as set forth (or referred to) in the
Prospectus, to such counsel's actual knowledge, there are no
contractual encumbrances or restrictions, or material legal
restrictions on the ability of the Subsidiaries (A) to pay dividends or
make any other distributions on its capital stock or to pay
indebtedness owed to the Offerors, (B) to make any loans or advances
to, or investments in, the Offerors or (C) to transfer any of its
property or assets to the Offerors.
(xvii) To such counsel's actual knowledge, the
business and operations of the Offerors and the Subsidiaries comply in
all material respects with all statutes, ordinances, laws, rules and
regulations applicable thereto which are material to the Offerors and
the Subsidiaries on a consolidated basis, except in those instances
where non-compliance would not materially impair the ability of the
Offerors and the Subsidiaries to conduct their business.
(xviii) The Trust is not an "investment company" or
an entity "controlled" by an "investment company," as such terms are
defined in Investment Company Act of 1940, as amended.
In giving the above opinion, such counsel may state that,
insofar as such opinion involves factual matters, they have relied upon
certificates of officers of the Offerors, including, without limitation,
certificates as to the identity of any and all material contracts, indentures,
mortgages, deeds of trust, loans or credit agrements, notes, leases, franchises,
licenses or other agreements or instruments, and all material permits,
easements, consents, licenses, franchises and government regulatory
authorizations, and certificates of public officials. In giving such opinion,
such counsel may rely as to matters of Delaware law upon the opinion of
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ and ▇▇▇▇▇▇ described herein. In giving the opinion in paragraph
(xv) above, if the order of the Commission declaring the Registration Statement
effective is not available at the time the opinion is delivered, such counsel
may state that such opinion is based on advice by the staff of the Commission,
stating in reasonable detail the identity of the staff member and the date and
time such advice was received.
26
Such counsel shall also confirm that, in connection with the
preparation of the Registration Statement and Prospectus, such counsel has
participated in conferences with officers and representatives of the Offerors
and with their independent public accountants and with you and your counsel, at
which conferences such counsel made inquiries of such officers, representatives
and accountants and discussed in detail the contents of the Registration
Statement and Prospectus and such counsel has no reason to believe (A) that the
Registration Statement or any amendment thereto (except for the financial
statements and related schedules and statistical data included therein or
omitted therefrom or Underwriters' Information, as to which such counsel need
express no opinion), at the time the Registration Statement or any such
amendment became effective, contained any untrue statement of a material fact or
omitted to state any 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 or (B) that the Prospectus or any amendment or
supplement thereto (except for the financial statements and related schedules
and statistical data included therein or omitted therefrom or Underwriters'
Information, as to which such counsel need express no opinion), at the time the
Registration Statement became effective (or, if the term "Prospectus" refers to
the prospectus first filed pursuant to Rule 424(b) of the 1933 Act Regulations,
at the time the Prospectus was issued), at the time any such amended or
supplemented Prospectus was issued, at the Closing Date and, if applicable, the
Option Closing Date, contained or contains any untrue statement of a material
fact or omitted or omits to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or (C) that
there is any amendment to the Registration Statement required to be filed that
has not been filed.
(e) ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.A., as Delaware counsel to
the Offerors, shall have furnished to you their signed opinion, dated as of
Closing Date or the Option Closing Date, as the case may be, in form and
substance satisfactory to counsel to the Underwriters, to the effect that:
(i) The Trust has been duly created and is validly
existing in good standing as a business trust under the Delaware
Business Trust Act, 12 Del. C. ▇▇.▇▇. 3801 et seq. (the "Delaware
Act"), with the business trust power and authority to (a) own its
property and conduct its business as described in the Prospectus, (b)
execute and deliver, and perform its obligations under, this Agreement,
and (c) issue and perform its obligations under the Preferred
Securities. All filings required under the laws of the State of
Delaware with respect to the creation and valid existence of the Trust
as a business trust have been made.
(ii) The Trust Agreement constitutes a legal, valid
and binding obligation of the Company and the trustees of the Trust in
accordance with its terms, except to the extent that enforcement
thereof may be limited by (a) bankruptcy, insolvency, receivership,
liquidation, fraudulent conveyance, reorganization, moratorium and
similar laws of general applicability relating to or affecting
creditors' rights and remedies, (b) general principles of equity
including applicable law relating to fiduciary
27
duty (regardless of whether considered and applied in a proceeding in
equity or at law) and (c) public policy with respect to
indemnification.
(iii) Under the Trust Agreement and the Delaware Act,
all necessary trust action has been taken on the part of the Trust to
duly authorize the execution and delivery of this Agreement by the
Trust and the performance of its obligations hereunder.
(iv) The Preferred Securities have been duly
authorized for issuance by the Trust and, when issued and delivered in
accordance with the terms of the Trust Agreement and this Agreement and
as described in the Prospectus, will be validly issued and (subject to
the terms of the Trust Agreement) fully paid and non-assessable
undivided beneficial interests in the assets of the Trust. The holders
of the Preferred Securities will be entitled to the benefits of the
Trust Agreement (subject to the limitations set forth in paragraph (ii)
above) and will be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit
organized under the Delaware General Corporation Law. Such 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.
(v) Under the Trust Agreement and the Delaware Act,
the issuance of the Preferred Securities is not subject to preemptive
rights.
(vi) The issuance and sale by the Trust of the
Preferred Securities and the Common Securities, the purchase by the
Trust of the Debentures, the execution, delivery and performance by the
Trust of this Agreement, and the consummation by the Trust of the
transactions contemplated by this Agreement will not (a) constitute a
violation of or default under any indenture, mortgage, deed of trust,
loan agreement or other agreement to which the Trust is a party, (b)
violate any of the provisions of the Certificate of Trust or the Trust
Agreement or (c) violate any applicable Delaware law or administrative
regulation.
(vii) Assuming that the Trust derives no income from
or connected with sources within the State of Delaware and has no
assets, activities (other than having a Delaware trustee as required by
the Delaware Act and the filing of documents with the Secretary of
State of the State of Delaware) or employees in the State of Delaware,
no filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any Delaware court or
Delaware governmental authority or agency (other than as may be
required under the securities or blue sky laws of the State of Delaware
as to which such counsel need express no opinion) is necessary or
required to be obtained by the Trust solely in connection with the due
authorization, execution and delivery of this Agreement by the Trust or
the offering, issuance, sale or delivery of the Preferred Securities by
the Trust in accordance with the Trust Agreement and the Prospectus.
28
(viii) To such counsel's knowledge, there are no
actions, suits or proceedings pending or judgments outstanding against
the Trust in any court or agency or instrumentality of the United
States of America that relate to or place or may place in question the
validity or enforceability of this Agreement or the issuance and sale
of the Preferred Securities and the Common Securities by the Trust or
the purchase of the Debentures by the Trust.
(ix) The Common Securities have been duly authorized
by the Trust Agreement and are duly and validly issued undivided
beneficial interests in the assets of the Trust and are entitled to the
benefits of the Trust Agreement.
Such opinion may state that it is limited to the laws of the
State of Delaware. Such counsel shall state that ▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇, L.L.P.
may rely upon their opinion in rendering the opinions required by Section 6 (d)
hereof.
(▇) ▇▇▇▇▇▇▇ ▇▇▇▇ LLP, counsel to State Street Bank and Trust
Company ("State Street") shall have furnished to you their signed opinion, dated
the Closing Date or the Option Closing Date, as the case may be, in form and
substance reasonably satisfactory to counsel to the Underwriters, to the effect
that:
(i) State Street is duly incorporated and is validly
existing in good standing as a banking corporation with trust powers
under the laws of the Commonwealth of Massachusetts.
(ii) State Street, as 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.
(iii) State Street, as 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.
(iv) State Street, as 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 delivery of the Trust Agreement.
(v) Each of the Indenture, the Guarantee Agreement
and the Trust Agreement has been duly executed and delivered by State
Street, as Indenture Trustee, Guarantee Trustee and Property Trustee,
respectively, and constitutes a legal, valid and binding obligation of
the Indenture Trustee, the Guarantee Trustee and the Property Trustee,
respectively, enforceable against the Indenture Trustee, the Guarantee
Trustee and the Property Trustee, respectively, in accordance with its
respective terms, except that,
29
such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium, liquidation, fraudulent conveyance and
transfer of other similar laws affecting the enforcement of creditors'
rights generally, and by general 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.
(vi) The Debentures delivered on the date hereof have
been duly authenticated by State Street as Indenture Trustee, in
accordance with the terms of the Indenture.
(g) ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.A., counsel to Wilmington
Trust Company ("Wilmington Trust") shall have furnished to you their signed
opinion, dated the Closing Date or the Option Closing Date, as the case may be,
in form and substances reasonably satisfactory to counsel to the Underwriters,
to the effect that:
(i) Wilmington Trust is duly incorporated and is
validly existing in good standing as a banking corporation with trust
powers under the laws of the State of Delaware.
(ii) Wilmington Trust, as Delaware Trustee, has the
requite power and authority to execute and deliver the Trust Agreement,
and has taken all necessary corporate action to authorize the execution
and delivery of the Trust Agreement.
(iii) The Trust Agreement has been duly executed and
delivered by Wilmington Trust, as Delaware Trustee, and constitutes a
legal, valid and binding obligation of the Delaware Trustee,
enforceable against the Delaware Trustee in accordance with its terms.
Such counsel shall state that ▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇,
L.L.P. may rely upon their opinion in rendering the opinions
required by Section 6(d) hereof.
(h) ▇▇▇▇▇▇ & Aguggia LLP, counsel to the Underwriters, shall
have furnished you their signed opinion, dated the Closing Date or the Option
Closing Date, as the case may be, with respect to the sufficiency of all
corporate procedures and other legal matters relating to this Agreement, the
validity of the Designated Preferred Securities, the Registration Statement, the
Prospectus and such other related matters as you may reasonably request and
there shall have been furnished to such counsel such documents and other
information as they may request to enable them to pass on such matters. In
giving such opinion, ▇▇▇▇▇▇ & Aguggia LLP may rely as to matters of fact upon
statements and certifications of officers of the Offerors and of other
appropriate persons and may rely as to matters of law, other than law of the
United States, and upon the opinions of ▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇, L.L.P. described
herein.
30
(i) On the date of this Agreement and on the Closing Date
(and, if applicable, any Option Closing Date), the Underwriters shall have
received from ▇▇▇▇▇▇ ▇▇▇▇▇▇ & Company, LLC a letter, dated the date of this
Agreement and the Closing Date (and, if applicable, the Option Closing Date),
respectively, in form and substance satisfactory to the Underwriters, confirming
that they are independent public accountants with respect to Company, within the
meaning of the 1933 Act and the 1933 Act Regulations, and stating in effect
that:
(i) In their opinion, the consolidated financial
statements of the Company audited by them and included in the
Registration Statement comply as to form in all material respects with
the applicable accounting requirements of the 1933 Act and the 1933 Act
Regulations.
(ii) On the basis of the procedures specified by the
American Institute of Certified Public Accountants as described in SAS
No. 71, "Interim Financial Information", inquiries of officials of the
Company responsible for financial and accounting matters, and such
other inquiries and procedures as may be specified in such letter,
which procedures do not constitute an audit in accordance with U.S.
generally accepted auditing standards, nothing came to their attention
that caused them to believe that, if applicable, the unaudited interim
consolidated financial statements of the Company included in the
Registration Statement do not comply as to form in all material
respects with the applicable accounting requirements of the 1933 Act
and 1933 Act Regulations or are not in conformity with U.S. generally
accepted accounting principles applied on a basis substantially
consistent, except as noted in the Registration Statement, with the
basis for the audited consolidated financial statements of the Company
included in the Registration Statement.
(iii) On the basis of limited procedures, not
constituting an audit in accordance with U.S. generally accepted
auditing standards, consisting of a reading of the unaudited interim
financial statements and other information referred to below, a reading
of the latest available unaudited condensed consolidated financial
statements of the Company, inspection of the minute books of the
Company since the date of the latest audited financial statements of
the Company included in the Registration Statement, inquiries of
officials of the Company responsible for financial and accounting
matters and such other inquiries and procedures as may be specified in
such letter, nothing came to their attention that caused them to
believe that:
(A) as of a specified date not more than
five days prior to the date of such letter, there have been
any changes in the consolidated capital stock of the Company,
any increase in the consolidated debt of the Company, any
decreases in consolidated total assets or shareholders equity
of the Company, or any changes, decreases or increases in
other items specified by the Underwriters, in each case as
compared with amounts shown in the latest unaudited interim
consolidated statement of financial condition of the Company
included in the Registration Statement except in each case for
changes, increases or decreases
31
which the Registration Statement specifically discloses, have
occurred or may occur or which are described in such letter;
and
(B) for the period from the date of the
latest unaudited interim consolidated financial statements
included in the Registration Statement to the specified date
referred to in Clause (iii)(A), there were any decreases in
the consolidated interest income, net interest income, or net
income of the Company or in the per share amount of net income
of the Company, or any changes, decreases or increases in any
other items specified by the Underwriters, in each case as
compared with the comparable period of the preceding year and
with any other period of corresponding length specified by the
Underwriters, except in each case for increases or decreases
which the Registration Statement discloses have occurred or
may occur, or which are described in such letter.
(iv) In addition to the audit referred to in their
report included in the Registration Statement and the limited
procedures, inspection of minute books, inquiries and other procedures
referred to in paragraphs (ii) and (iii) above, they have carried out
certain specified procedures, not constituting an audit in accordance
with U.S. generally accepted auditing standards, with respect to
certain amounts, percentages and financial information specified by the
Underwriters which are derived from the general accounting records and
consolidated financial statements of the Company which appear in the
Registration Statement specified by the Underwriters in the
Registration Statement, and have compared such amounts, percentages and
financial information with the accounting records and the material
derived from such records and consolidated financial statements of the
Company have found them to be in agreement.
In the event that the letters to be delivered referred to
above set forth any such changes, decreases or increases as specified in Clauses
(iii)(A) or (iii)(B) above, or any exceptions from such agreement specified in
Clause (iv) above, it shall be a further condition to the obligations of the
Underwriters that the Underwriters shall have determined, after discussions with
officers of the Company responsible for financial and accounting matters, that
such changes, decreases, increases or exceptions as are set forth in such
letters do not (x) reflect a material adverse change in the items specified in
Clause (iii)(A) above as compared with the amounts shown in the latest unaudited
consolidated statement of financial condition of the Company included in the
Registration Statement, (y) reflect a material adverse change in the items
specified in Clause (iii)(B) above as compared with the corresponding periods of
the prior year or other period specified by the Underwriters, or (z) reflect a
material change in items specified in Clause (iv) above from the amounts shown
in the Preliminary Prospectus distributed by the Underwriters in connection with
the offering contemplated hereby or from the amounts shown in the Prospectus.
(j) At the Closing Date and, if applicable, the Option Closing
Date, you shall have received certificates of the chief executive officer and
the chief financial and accounting officer of the Company, which certificates
shall be deemed to be made on behalf of the Company
32
dated as of the Closing Date and, if applicable, the Option Closing Date,
evidencing satisfaction of the conditions of Section 6(a) and stating that (i)
the representations and warranties of the Company set forth in Section 2(a)
hereof are accurate as of the Closing Date and, if applicable, the Option
ClosingDate, and that the Offerors have complied with all agreements and
satisfied all conditions on their part to be performed or satisfied at or prior
to such Closing Date; (ii) since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not been any
material adverse change in the condition (financial or otherwise), earnings,
affairs, business, prospects or results of operations of the Offerors and the
Subsidiaries on a consolidated basis; (iii) since such dates there has not been
any material transaction entered into by the Offerors or the Subsidiaries other
than transactions in the ordinary course of business; and (iv) they have
carefully examined the Registration Statement and the Prospectus as amended or
supplemented and nothing has come to their attention that would lead them to
believe that either the Registration Statement or the Prospectus, or any
amendment or supplement thereto as of their respective effective or issue dates,
contained, and the Prospectus as amended or supplemented at such Closing Date
(and, if applicable, the Option Closing Date), contains any untrue statement of
a material fact, or omits to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and (v) covering such
other matters as you may reasonably request. The officers' certificate of the
Company shall further state that no stop order affecting the Registration
Statement is in effect or has been threatened.
(k) At the Closing Date and, if applicable, the Option Closing
Date, you shall have received a certificate of an authorized representative of
the Trust to the effect that to the best of his or her knowledge based upon a
reasonable investigation, the representations and warranties of the Trust in
this Agreement are true and correct as though made on and as of the Closing Date
(and, if applicable, the Option Closing Date); the Trust has complied with all
the agreements and satisfied all the conditions required by this Agreement to be
performed or satisfied by the Trust on or prior to the Closing Date and since
the most recent date as of which information is given in the Prospectus, except
as contemplated by the Prospectus, the Trust has not incurred any material
liabilities or obligations, direct or contingent, or entered into any material
transactions not in the ordinary course of business and there has not been any
material adverse change in the condition (financial or otherwise) of the Trust.
(l) On the Closing Date, you shall have received duly executed
counterparts of the Trust Agreement, the Guarantee, the Indenture and the
Expense Agreement.
(m) The NASD, upon review of the terms of the public offering
of the Designated Preferred Securities, shall not have objected to the
Underwriters' participation in such offering. The Preferred Securities, the
Guarantee and the Debentures shall have been qualified or registered for sale,
or subject to an available exemption from such qualification or registration,
under the Blue Sky Laws of such jurisdictions as shall have been reasonably
specified by the Underwriters.
33
(n) Prior to the Closing Date and, if applicable, the Option
Closing Date, the Offerors shall have furnished to you and counsel to the
Underwriters all such other documents, certificates and opinions as they have
reasonably requested.
All opinions, certificates, letters and other documents shall
be in compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to you. The Offerors shall furnish you with
conformed copies of such opinions, certificates, letters and other documents as
you shall reasonably request.
If any of the conditions referred to in this Section 6 shall
not have been fulfilled when and as required by this Agreement, this Agreement
and all of the Underwriters' obligations hereunder may be terminated by you on
notice to the Company at, or at any time before, the Closing Date or the Option
Closing Date, as applicable. Any such termination shall be without liability of
the Underwriters to the Offerors.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Offerors jointly and severally agree to indemnify and
hold harmless the Underwriters, each of their directors, partners, officers and
agents, and each person, if any, who controls the Underwriters within the
meaning of the 1933 Act, against any and all losses, claims, damages,
liabilities and expenses (including reasonable costs of investigation and
reasonable attorney fees and expenses), joint or several, arising out of or
based upon (i) any untrue statement or alleged untrue statement of a material
fact made by the Company or the Trust contained in the Registration Statement,
any Preliminary Prospectus or the Prospectus, or in any amendment or supplement
thereto, (ii) any blue sky application or other document executed by the Company
or the Trust specifically for that purpose or based upon written information
furnished by the Company or the Trust filed in any state or other jurisdiction
in order to qualify any of the Designated Preferred Securities under the
securities laws thereof (any such application, document or information being
hereinafter referred to as a "Blue Sky Application"), (iii) any omission or
alleged omission to state a material fact in the registration statement as
originally filed or the Registration Statement, any Preliminary Prospectus or
the Prospectus, or in any amendment or supplement thereto, or in any Blue Sky
Application required to be stated therein or necessary to make the statements
therein not misleading, and against any and all losses, claims, damages,
liabilities and expenses (including reasonable costs of investigation and
attorney fees), joint or several, arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus or the Prospectus, or in any amendment or supplement
thereto, or arising out of or based upon any omission or alleged omission to
state therein 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 or (iv) the enforcement of this indemnification provision
or the contribution provisions of Section 7(d); and shall reimburse each such
indemnified party for any reasonable legal or other expenses as incurred, but in
no event less frequently than 30 days after each invoice is submitted, incurred
by them in connection with investigating or defending against or appearing as a
third-party witness in connection with any such loss, claim, damage, liability
or action, notwithstanding the
34
possibility that payments for such expenses might later be held to be improper,
in which case such payments shall be promptly refunded; provided, however, that
the Offerors shall not be liable in any such case to the extent, but only to the
extent, that any such losses, claims, damages, liabilities and expenses arise
out of or are based upon any untrue statement or omissionor allegation thereof
that has been made or omitted in reliance upon and in conformity with the
Underwriters' Information; provided, that the indemnification contained in this
paragraph with respect to any Preliminary Prospectus shall not inure to the
benefit of the Underwriters (or of any person controlling the Underwriters) to
the extent any such losses, claims, damages, liabilities or expenses directly
results from the fact that the Underwriters sold Designated Preferred Securities
to a person to whom there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the Prospectus (as amended or supplemented
if any amendments or supplements thereto shall have been furnished to you in
sufficient time to distribute same with or prior to the written confirmation of
the sale involved), if required by law, and if such loss, claim, damage,
liability or expense would not have arisen but for the failure to give or send
such person such document. The foregoing indemnity agreement is in addition to
any liability the Company or the Trust may otherwise have to any such
indemnified party.
(b) The Underwriters agree to indemnify and hold harmless each
Offeror, each of its directors and agents, each of its officers and trustees who
signed the Registration Statement and each person, if any, who controls an
Offeror within the meaning of the 1933 Act, to the same extent as required by
the foregoing indemnity from the Company to the Underwriters, but only with
respect to the Underwriters' Information or information relating to the
Underwriters furnished in writing to an Offeror through the Underwriters by or
on behalf of it expressly for use in a Blue Sky Application. The foregoing
indemnity agreement is in addition to any liability which the Underwriters may
otherwise have to any such indemnified party.
(c) If any action or claim shall be brought or asserted
against any indemnified party or any person controlling an indemnified party in
respect of which indemnity may be sought from the indemnifying party, such
indemnified party or controlling person shall promptly notify the indemnifying
party in writing, and the indemnifying party shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to the indemnified
party and the payment of all expenses; provided, however, that the failure so to
notify the indemnifying party shall not relieve it from any liability which it
may have to an indemnified party otherwise than under such paragraph, and
further, shall only relieve it from liability under such paragraph to the extent
prejudiced thereby. Any indemnified party or any such controlling person shall
have the right to employ separate counsel in any such action and to participate
in the defense thereof, but the fees and expenses of such counsel shall be at
the expense of such indemnified party or such controlling person unless (i) the
employment thereof has been specifically authorized by the indemnifying party in
writing, (ii) the indemnifying party has failed to assume the defense or to
employ counsel reasonably satisfactory to the indemnified party or (iii) the
named parties to any such action (including any impleaded parties) include both
such indemnified party or such controlling person and the indemnifying party and
such indemnified party or such controlling person shall have been advised by
counsel that there may be one or more legal defenses available to it that are
different from or in addition to those available to the indemnifying party (in
which
35
case, if such indemnified party or controlling person notifies the indemnifying
party in writing that it elects to employ separate counsel at the expense of the
indemnifying party, the indemnifying party shall not have the right to assume
the defense of such action on behalf of such indemnified party or such
controlling person);it being understood, however, that the indemnifying party
shall not, in connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel) separate from their own counsel at any time and for all such
indemnified parties and controlling persons, which firm shall be designated in
writing by the indemnified party. Each indemnified party and each controlling
person, as a condition of such indemnity, shall use reasonable efforts to
cooperate with the indemnifying party in the defense of any such action or
claim. The indemnifying party shall not be liable for any settlement of any such
action effected without its written consent, but if there be a final judgment
for the plaintiff in any such action, the indemnifying party agrees to indemnify
and hold harmless any indemnified party and any such controlling person from and
against any loss, claim, damage, liability or expense by reason of such
settlement or judgment.
An indemnifying party shall not, without the prior written
consent of each indemnified party, settle, compromise or consent to the entry of
any judgment in any pending or threatened claim, action, suit or proceeding in
respect of which indemnity may be sought hereunder (whether or not such
indemnified party or any person who controls such indemnified party within the
meaning of the 1933 Act is a party to such claim, action, suit or proceeding),
unless such settlement, compromise or consent includes a release of each such
indemnified party reasonably satisfactory to each such indemnified party and
each such controlling person from all liability arising out of such claim,
action, suit or proceeding or unless the indemnifying party shall confirm in a
written agreement with each indemnified party, that notwithstanding any federal,
state or common law, such settlement, compromise or consent shall not alter the
right of any indemnified party or controlling person to indemnification or
contribution as provided in this Agreement.
(d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
paragraphs (a), (b) or (c) hereof in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then each indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages, liabilities or expenses (i) in such proportion as is appropriate to
reflect the relative benefits received by the Offerors on the one hand and the
Underwriters on the other from the offering of the Designated 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 the Offerors on the one hand and the Underwriters on the other in
connection with the statements or omissions that resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Offerors on the
one hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total proceeds from
36
the offering of the Designated Preferred Securities (before deducting expenses)
received by the Offerors bear to the total underwriting discounts, commissions
and compensation received by the Underwriters, in each case as set forth in the
table on the cover page of the Prospectus. The relative fault of the Offerors on
the one hand and of the Underwriters on the other shall be determined by
reference to, among other things, whether the untrue or alleged untruestatement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Offerors or by the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The Offerors and the
Underwriters agree that it would not be just and equitable if contribution
pursuant to this paragraph (d) were determined by pro rata allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages, liabilities and expenses
referred to in the first sentence of this paragraph (d) shall be deemed to
include, subject to the limitations set forth above, 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
paragraph (d), the Underwriters shall not be required to contribute any amount
in excess of the Firm Preferred Securities Commissions received by them. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 1933 Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
Neither party shall be liable for contribution for claims
settled without such party's consent, provided such consent shall not be
unreasonably withheld, conditioned or delayed.
For purposes of this paragraph (d), each person who controls
the Underwriters within the meaning of Section 15 of the 1933 Act, the partners,
directors, officers, employees and agents of the Underwriters shall have the
same rights to contribution as the Underwriters, and each person who controls an
Offeror within the meaning of Section 15 of the 1933 Act, each officer and
trustee of an Offeror who shall have signed the Registration Statement and each
director and each agent of an Offeror shall have the same rights to contribution
as the Offerors subject in each case to the preceding sentence. The obligations
of the Offerors under this paragraph (d) shall be in addition to any liability
which the Offerors may otherwise have and the obligations of the Underwriters
under this paragraph (d) shall be in addition to any liability that the
Underwriters may otherwise have.
(e) The indemnity and contribution agreements contained in
this Section 7 and the representations and warranties of the Offerors set forth
in this Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of the Underwriters or
its partners, directors, officers, employees or agents (or any person
controlling the Underwriters) or by or on behalf of the Offerors, or their
directors, trustees or officers (or any person controlling an Offeror), (ii)
acceptance of any Designated Preferred Securities and payment therefor hereunder
and (iii) any termination of this Agreement. A successor of the Underwriters or
its partners, directors, officers, employees or agents, or of an Offeror, or its
directors, trustees or officers (or of any person controlling the Underwriters
or an
37
Offeror) shall be entitled to the benefits of the indemnity, contribution and
reimbursement agreements contained in this Section 7.
(f) The Company agrees to indemnify the Trust against any and
all losses, claims, damages or liabilities that may become due from the Trust
under this Section 7.
8. TERMINATION. You shall have the right to terminate this Agreement at
any time at or prior to the Closing Date or, with respect to the Underwriters'
obligation to purchase the Option Preferred Securities, at any time at or prior
to the Option Closing Date, without liability on the part of the Underwriters to
the Offerors, if:
(a) Either Offeror shall have failed, refused, or been unable
to perform any agreement on its part to be performed under this Agreement, or
any of the conditions referred to in Section 6 shall not have been fulfilled,
when and as required by this Agreement;
(b) The Offerors or any of the Subsidiaries shall have
sustained any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree which in the
judgment of the Underwriters materially impairs the investment quality of the
Designated Preferred Securities;
(c) There has been since the respective dates as of which
information is given in the Registration Statement or the Prospectus, any
materially adverse change in, or any development which is reasonably likely to
have a material adverse effect on, the condition (financial or otherwise),
earnings, affairs, business, prospects or results of operations of the Offerors
and the Subsidiaries on a consolidated basis, whether or not arising in the
ordinary course of business;
(d) Any event shall have occurred or shall exist that makes
untrue or incorrect in any material respect any statement or information
contained in the Registration Statement or that is not reflected in the
Registration Statement but should be reflected therein to make the statements or
information contained therein not misleading in any material respect; or
(e) There has occurred any outbreak of hostilities or other
calamity or crisis or material change in general economic, political or
financial conditions, or internal conditions, the effect of which on the
financial markets of the United States is such as to make it, in your reasonable
judgment, impracticable to market the Designated Preferred Securities or enforce
contracts for the sale of the Designated Preferred Securities;
(f) Trading generally on the New York Stock Exchange, the
American Stock Exchange or the Nasdaq National Market shall have been suspended,
or minimum or maximum prices for trading shall have been fixed, or maximum
ranges for prices for securities shall have been required, by any of said
exchanges or market system or by the Commission or any other governmental
authority;
38
(g) A banking moratorium shall have been declared by either
federal or Maryland authorities; or
(h) Any action shall have been taken by any government in
respect of its monetary affairs which, in your reasonable judgment, has a
material adverse effect on the United States securities markets.
If this Agreement shall be terminated pursuant to this Section
8, the Offerors shall not then be under any liability to the Underwriters except
that the provisions of Sections 5 and 7 hereof shall survive any termination of
this Agreement.
9. EFFECTIVE DATE OF AGREEMENT. If the Registration Statement is not
effective at the time of execution of this Agreement, this Agreement shall
become effective on the Effective Date at the time the Commission declares the
Registration Statement effective. The Company shall immediately notify the
Underwriters when the Registration Statement becomes effective.
If the Registration Statement is effective at the time of
execution of this Agreement, this Agreement shall become effective at the
earlier of 11:00 a.m. Eastern time, on the first full business day following the
day on which this Agreement is executed, or at such earlier time as the
Underwriters shall release the Designated Preferred Securities for initial
public offering. The Underwriters shall notify the Offerors immediately after
they have taken any action which causes this Agreement to become effective.
Until such time as this Agreement shall have become effective,
it may be terminated by the Offerors, by notifying the Underwriters, or by you,
by notifying either Offeror, except that the provisions of Sections 5 and 7
shall at all times be effective.
10. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY. The
representations, warranties, indemnities, agreements and other statements of the
Offerors and their officers and trustees set forth in or made pursuant to this
Agreement and the agreements of the Underwriters contained in Section 7 hereof
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Offerors or controlling persons of
either Offeror, or by or on behalf of the Underwriters or controlling persons of
the Underwriters or any termination or cancellation of this Agreement and shall
survive delivery of and payment for the Designated Preferred Securities.
11. NOTICES. Except as otherwise provided in this Agreement, all
notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if delivered by hand, mailed by registered or
certified mail, return receipt requested, or transmitted by any standard form of
telecommunication and confirmed. Notices to either Offeror shall be sent to ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (with a copy
to ▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇, L.L.P. ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.); and notices to the
Underwriters shall be sent to Sandler ▇'▇▇▇▇▇ & Partners, L.P., Two World Trade
Center, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
39
Attention: ▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, Incorporated, ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.,▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, Attention ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
(with a copy to Breyer & Aguggia LLP, ▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇ Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.).
12. PARTIES. The Agreement herein set forth is made solely for the
benefit of the Underwriters and the Offerors and, to the extent expressed,
directors, trustees and officers of the Offerors, partners, directors, officers,
employees and agents of the Underwriters, any person controlling the Offerors or
the Underwriters, and their respective successors and assigns. No other person
shall acquire or have any right under or by virtue of this Agreement. The term
"successors and assigns" shall not include any purchaser, in his or her status
as such purchaser, from the Underwriters of the Designated Preferred Securities.
The Company on behalf of itself and its Subsidiaries (including,
without limitation, the Trust), hereby irrevocably submits to the jurisdiction
of the federal and New York State courts located in the City of New York in
connection with any suit, action or proceeding related to this agreement or any
of the matters contemplated hereby, irrevocably waives any defense of lack of
personal jurisdiction and irrevocably agrees that all claims in respect of any
suit, action or proceeding may be heard and determined in any such court. The
Company, on behalf of itself and the Subsidiaries (including, without
limitation, the Trust), irrevocably waives, to the fullest extent it may
effectively do so under applicable law, any objection which it may now or
hereafter have to the laying of venue of any such suit, action or proceeding
brought it any such court and any claim that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum.
13. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of New York, without giving effect to the choice of law or conflicts of
law principles thereof.
14. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, and when a counterpart has been executed by each party hereto all
such counterparts taken together shall constitute one and the same Agreement.
[Remainder of page intentionally left blank]
40
If the foregoing is in accordance with the your understanding
of our agreement, please sign and return to us a counterpart hereof, whereupon
this shall become a binding agreement between the Company, the Trust and you in
accordance with its terms.
Very truly yours,
FCNB CORP
By:
----------------------------------------
Name:
Title:
FCNB CAPITAL TRUST
By:
----------------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
as of ____________, 1998.
BY: ▇▇▇▇▇▇▇ ▇'▇▇▇▇▇ & PARTNERS, L.P.
by ▇▇▇▇▇▇▇ ▇'▇▇▇▇▇ & Partners Corp.,
the sole general partner
By:
----------------------------------------
Name:
Title:
BY: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, INCORPORATED
By:
----------------------------------------
Name:
Title:
41
EXHIBIT A
LIST OF SUBSIDIARIES
--------------------
Subsidiaries of the Company
---------------------------
FCNB Bank
FCNB Capital Trust
Subsidiaries of the Bank
------------------------
FCNB Investment Holding Corporation - Delaware
Monocacy Management Company - Maryland
First Choice Insurance Agency, Inc. - Maryland
Maryland Title Center - West, LLC (16% interest) - Maryland
